Featured Article from Software Licensing

A friend of mine once made a wise statement in terms of financial literacy. When talk of trying to figure out how other people manage – or fail to manage – their money, he advised that you don’t try to do it. You’ll never get inside their heads. He’s right – there are some who have a high income that never seem to have any money and others who shouldn’t be able to afford to go to Disney (News - Alert) World every year, but they do – without debt.

In some cases, individuals have it figured out. They know how to live the life they want without accumulating a pile of debt. Others are still struggling, wondering how their six figure salary is still falling short. The same weird anomaly appears to be happening in the corporate environment as well when it comes to software asset management. Software licensing often outlines what a company can and cannot do with the software they’ve purchased.

Why does this matter, and what does it have to do with financial literacy? The concept behind financial literacy often focuses on the value of money and what it means to invest. The typical conversation around interest, for instance, tends to be understood correctly by 57 percent of the population, according to a Standard and Poor survey featured in this Flexera Software blog. In investments, the consumer might be asked where their assets are deployed. In the corporate environment, the question would center on software.

Not knowing the answer to either question puts you at risk. The consumer that doesn’t understand the spread of his portfolio or why money is split a certain way has little control over the success of his earnings. The decision maker within the corporation who doesn’t have a clear idea of where software assets are deployed is at risk of high fees being assessed for being out of compliance. In both cases, a lack of understanding costs money, with the potential for a significant amount.

At the same time, companies should be using their software investments to their fullest. It’s silly to ensure you are compliant without optimizing solutions. Fully optimizing utilization of assets can ultimately reduce software costs – as long as you’re also compliant. And, while higher financial literacy helps to lower debt and increase retirement savings, a higher maturity in terms of software licensing and asset management means a reduction in manual effort, associated IT labor costs, lower licensing costs and a reduction in the risk of a software audit.

Therefore, it’s time to increase your literacy in software licensing and finances, if you’re not already there. Your wallet and your bottom line will thank you.