This article explains how eADM can reduce licence costs by assigning every licence based on documented need, and who should use these principles: IT managers, system owners and HR administrators in organisations that use eADM.
Why licence optimisation matters
Licences for Microsoft 365, Citrix and similar systems are a large and growing cost. Many organisations assign licences in bulk. A whole department receives the same licence, because "almost everyone" there needs it. This approach pays for licences that nobody uses.
eADM holds both the position and the workplace of each employee. It can therefore assign licences individually, according to need, and remove them when the need ends.
The guiding principle is simple: all licence assignment in the organisation should be based on need, not on mass assignment. Active use must prove the need continuously.
Example: how many downgrades give a saving of NOK 90,000 per year?
The number of downgrades needed to reach a given saving depends on the price difference between the two licences:
Number of licences = annual saving ÷ (monthly price difference × 12)
This example downgrades Microsoft 365 E3 to Microsoft 365 F3. The prices below are illustrative list prices per user, excluding VAT, with an annual subscription.
|
Item |
Illustrative value |
|---|---|
|
Microsoft 365 E3, per user per month |
NOK 380–400 |
|
Microsoft 365 F3, per user per month |
NOK 130–150 |
|
Price difference per user per year |
NOK 2,900–3,100 |
In other words, downgrading 35ish licenses will get you an annual saving of more than 100 000 NOK!
Note: The prices in this example are illustrative. Licence prices change over time, and each organisation has its own agreed prices. Replace the values with the prices in the organisation's own agreement before using the calculation.
Many public sector organisations buy licences through a framework agreement and receive a discount. With a discount of 20–30 per cent, the price difference is smaller. The organisation then needs approximately 40–45 downgrades to reach the same saving.
The example shows that a small number of downgrades gives a clear saving. A municipality with 1,000 to 1,500 employees often has many frontline positions where F3 can be sufficient, for example in care services, cleaning, caretaking and kindergarten assistance. The saving potential can therefore be much higher than NOK 100,000.
1. Assign licences based on position code and workplace
A department is not a good basis for licence assignment. Employees in the same department often have different positions with different needs. An employee in a department where most staff need Microsoft 365 E3 may have a position where Microsoft 365 F3 is sufficient. Another employee may meet the requirements for an A3 licence.
eADM should therefore assign every licence based on two factors together:
|
Factor |
Purpose |
|---|---|
|
Position code |
Identifies the tasks of the employee and the licence level that those tasks require. |
|
Workplace |
Identifies where the employee works, which affects licence type and access to systems. For example, the same position code can need a different licence in a school than in an administration. |
A rule that uses only the department, or only the position code, will give some employees a licence that is too expensive or too limited.
2. Assign the cheapest licence in cases of doubt
Some combinations of position code and workplace do not give a clear answer. In these cases, eADM should assign the cheapest suitable licence.
If the employee has a concrete need for more functionality, the manager can upgrade the licence. The need is then documented and approved, instead of assumed in advance.
Note: This approach moves the burden of proof. A higher licence level requires a reason. A lower level does not.
3. Review users who do not use their licences
A licence that the user does not use has no value. eADM can use last logon data to identify these users. Review each of them and select one of these actions:
-
Change the user to a mailbox-only account, if the user needs only email.
-
Downgrade the user to the cheapest Microsoft 365 licence.
-
Remove the licence completely, if the user has no need for it.
-
A grace period for new employees prevents licences from being removed before the user has had time to log on for the first time.
The article Manage Licenses Based on User Activity describes how to configure automatic rules based on last logon data.
4. Handle leave of absence
Employees on leave rarely use their licences. The correct action depends on the type of leave.
|
Type of leave |
Recommended action |
|---|---|
|
Leave without pay |
Close the user account and remove access. |
|
Leave with pay, for example parental leave |
Consider a temporary downgrade of the licence. Restore the original licence when the employee returns. |
Note: These rules require that leave information is available in eADM, normally from the HR source system. Check which leave data the source system provides before configuring the rules.
5. Apply the same principle to Citrix and other licences
Licence optimisation is not limited to Microsoft 365. The same principle applies to every system with licence costs. Citrix and Adobe licences that are not in use must be removed.
Summary of recommendations
-
Assign each licence based on both position code and workplace.
-
Assign the cheapest suitable licence in cases of doubt. The manager upgrades when a concrete need exists.
-
Review users who do not use their licences. Change them to a mailbox-only account or the cheapest Microsoft 365 licence.
-
Close accounts for employees on leave without pay. Consider a temporary downgrade during leave with pay.
-
Remove Citrix licences and other licences that are not in use.
-
Prove the need continuously through active use.
Organisations that follow these recommendations can achieve significant savings on licence costs.
Note: Contact Identum for help with configuring rules in eADM to optimise licence usage. A re:ADM review is a good starting point for a review of the full setup.
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