What is Entitlement Management?
Entitlement management can be defined as how access to software, devices, systems and content is administered. Entitlement management systems give software producers, channel partners and end customers control over who has access (or use rights) to specific resources, with the power to grant, issue, enforce and revoke access to users. Licensing and entitlement management solutions provide a platform for these controls, in line with an organization's authorizations, permissions, privileges, access management, and policies.
Entitlement management ensures enterprises only have access to the products they’ve acquired based on the contract terms negotiated with the supplier. only authorized users have access. In this article, we explore entitlement management in more detail, including how insights provided by management solutions can support software monetization, improve the customer experience, and inform software license management.
How does software entitlement management work?
Software entitlement management, particularly in the context of software licensing, provides real-time control and management on how the rights to use licensed software are assigned. As a result, entitlement and software licensing are closely aligned, with entitlement management relating to license enforcement.
For instance, entitlement management solutions should be able to enforce use rights from simple subscriptions for 200 users to more complex consumption models, such as concurrent, metered, or user-based.
Management systems also help to remove the pain from software and systems administration as they move toward increased operational efficiency. They enable software vendors and systems administrators to automate time-consuming manual processes and vastly reduce the risk of human error by assigning and activating entitlements to software applications in one single place. Typically, the entitlement management platform will feature a dashboard where software licensing, access management, authentication, and assigning entitlements can be handled centrally, and therefore in the most efficient way possible.
Some solutions also include self-service portals where users can perform tasks or request access management changes themselves, further reducing the cost and resources needed to provide support and assistance.
CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) systems do have some overlaps with entitlement, and are sometimes used to manage entitlements, but in general they are built to assign and manage hardware assets rather than digital assets like software. To use a CRM or ERP system to manage entitlement, there may be a degree of customization involved to do things like linking assets to entitlements, storing activations, tracking devices and all license and entitlement lifecycle events, and handling data and reporting. That usually means high consulting and development costs to adapt hardware management systems to support software entitlement – a task they are generally not designed to do.
The R&D Dilemma: Build or Buy Systems for Entitlement, Licenses and Usage Management
Entitlement Management’s role in Software Monetization
Entitlement systems can be used by end customers and enterprises to assign and manage entitlements internally, or by software vendors and channel partners as part of their software monetization strategy. Entitlement management systems also enable software developers to repackage software applications or offer new features to adapt to changes in the market or to serve new groups of customers.
Entitlement management solutions can also continuously monitor and report on the adoption and utilization of individual software applications and features. That level of feedback, insights and reporting can help inform software developers about how different groups of customers respond to different features, which products generate the highest revenue, and if any products should be sunsetted or discontinued. By revealing customer behavior, an entitlements solution can help developers focus their efforts on how to improve customer satisfaction and retention.
Ultimately, entitlement management software reduces the burden on software producers, partners or the end customer who previously spent inefficient amounts of time and resources on time-consuming manual tasks relating to assigning, managing and reporting on software entitlements. By automating those tasks, entitlement management solutions reduce the risk of error and improve cost efficiency.
IDC PlanScape: Managing Customer Entitlements Efficiently