Cost Recovery Challenges in Software Licensing

Despite a decrease in university funding, the need for students, faculty, and staff to become digitally literate continues to increase. Many schools undertake initiatives to improve digital literacy by expanding the number of academic resources made available to constituents, resulting in a strain on budgets. Many have turned to cost recovery, where end users are charged a nominal fee to recoup costs associated with software licensing.

“If students are going to become more digitally literate, Vanderbilt needs to make the tools available to both the students and the faculty in order for them to develop proficiency using digital media.” – Vanderbilt University¹

What makes cost recovery so complex?

Even with cost recovery in place schools are unable to scale their efforts, resulting in a continued net loss. In many cases an administrative role and the costly analysis of purchasing data is required to support digital literacy initiatives through cost recovery.

In addition to a resource burden, it is the absence of “a centrally managed strategy for campus-wide software investments and licensing”² that hinders cost recovery efforts. “Non-centralized purchasing and licensing for broadly-used software tools exacts a toll across the entire campus.”²

How non-centralized purchasing complicates cost recovery

While departments may experience more freedom in non-centralized software procurement, any financial benefits gained through volume license purchasing are lost. The work required to manage users and licenses is duplicated for each department which further adds to the cost of non-centralized purchasing.

The process of collecting funds is time-consuming and cumbersome as it involves obtaining an internal billing code for every user, or having to cater for a variety of payment methods like credit card, PayPal etc. The transaction then needs to be accurately tracked and accounted for manually. This tedious and impractical task ends up needlessly engaging IT staff, diverting them from their core tasks.

Attempts to resolve the above primary problems, invariably lead to secondary complications:

1. Institutions allocate cash handling responsibilities to various departments such as the bookstore or library
   1. Not only does this increase the department workload but also adds to the difficulty as locations of cash collection and license fulfilment do not coincide
   2. A single digital asset could have varying terms and conditions to the sale depending on end user category, making it difficult to determine and isolate the cost recovery terms specific to the person acquiring the license
2. Tedious systems requiring manual collection and entry of data
   1. Manual methods are often prone to errors therefore resulting in frustration
   2. Manual systems are incapable of appropriately handling Personally Identifiable Information (PII) or other sensitive data
   3. Manual resources can only be made available during business hours
3. The accounting and tracking become even more complex when systems are applied institution wide, with multiple end points.

A proposal by the IT Service Management Board³ recommends “an operational excellence approach of centralizing campus site-licensed software to reduce redundant operations occurring across the institution as well as stabilizing inconsistent practices for purchasing and distributing site-licensed software.”

How the Kivuto Cloud platform overcomes the cost recovery challenge

1. The platform enables the centralization of license management and distribution through a single easy to use platform.
2. Access can be given to different departments to help them customize offerings while all still centrally controlled.
3. The platform automates user and license management thereby freeing IT staff from time consuming manual work.
4. Different terms and conditions can be applied to each asset (For example access terms and pricing).
5. Use user groups to segment user types and present them with different terms and conditions.
6. The platform supports several payment methods for end users including credit card, PayPal, internal billing code, and more.
7. End user support is included to reduce the burden placed on IT resources.
8. Our robust reporting engine provides complete visibility over resource usage along with detailed insights into institution-wide transactions, making accounting a much simpler task.

The unique advantages of Kivuto Cloud

Kivuto has been the world leader in digital distribution for education for more than two decades. Its cloud-based platform simplifies cost recovery and end user management, helping your institution maintain the affordability of higher education, and in turn enable student success – thereby achieving major organizational goals.

The sophisticated reporting capabilities and an error proof rules engine simplifies asset management and accounting, contributing to enhanced Data Management and Governance, leading you towards becoming a more Data-Enabled Institution.

Distinguishing features of Kivuto Cloud enable smooth and efficient cost recovery:

• SSO integrations
• E-commerce
• Rules Engine
• User group management
• Data security and PII protection
• Reporting

Sources:

¹ https://cdn.vanderbilt.edu/vu-news/files/20190417212805/Definition-and-Statement-on-Digital-LiteracyFINAL.pdf

² IT Service Management Board Campus Software License Proposal

³ IT Service Management Board Campus Software License Proposal