The Annual Software Review

What Is on the Agenda?

Five findings on the table.

Utilisation sits near half

One in every two licences paid for returns nothing. The shortage is not of software; what got bought never entered the work. Money left, systems went in, the job stayed identical.

Some of it never gets opened

Zero-activity tools form their own category. Not lightly used but entirely unused, and automatic renewal keeps them running for years. Nobody pauses to question them.

Application counts are falling for the first time

The accumulation era is closing. Companies are cutting the count and trying to genuinely use what remains. The shift is deliberate.

Waste gets measured per employee

A total sum stayed abstract. Calculated per head it became concrete. Concrete figures are also hard to defend in a budget meeting.

AI tools repeat the pattern

The latest generation of tools brought the same behaviour back. Their low price keeps them off the finance radar, so they slip past every stocktake.

Why Is the Question Being Asked Now?

Four reasons.

Purchasing scattered

Buying software needs a card and five minutes. No approval process, no record. What got easier multiplied, and nobody sees the total.

The invoice became visible

As budget pressure rose, the software line started getting examined. A per-person figure also ends the argument quickly. There is little left to say against it.

The confusion cost got noticed

The deeper problem is not money. The same data sits in three places and nobody knows which is correct. That cost never appears on an invoice. But it gets paid daily and nobody keeps the tally.

Tool counts became unmanageable

Past a certain number, nobody knows the whole set. Even which tool to teach a new hire turns uncertain, so training stays half-finished. New joiners learn by trial, which is slow and error-prone.

What Is Wrong?

Four approach errors break the arrangement.

Leaving the review to a crisis

When budgets tighten, everything gets cancelled at once. Decisions made in haste turn out wrong; a genuinely used tool gets shut down and the work stops. A regular rhythm beats a panic cut, and calm decisions do not get reversed.

Reducing the decision to a price tag

A cheap subscription causes damage too. It crowds the screen and splits the information. When the choice gets made by looking at the figure, the real loss never enters the calculation.

Building the inventory without deciding

The list stays a document. An inventory changes nothing by itself; the actual work is reaching a verdict on every line. Drawing up the list is the easy half.

Treating the review as a big project

When it looks like months of work, nobody starts. Yet in a small business the annual session runs an afternoon. Four hours, once a year, is enough.

The Real Mechanism

The annual arrangement has four parts.

Part 1: the inventory

What are you paying for? A list drawn from bank statements takes an hour. Four columns suffice: tool name, monthly cost, owner, last use date.

Part 2: the decision

Every row gets one of two verdicts: bring it into the work or end the contract. Suspending judgement is not a third path and carries the highest price. The reason gets written in a single line too, or the same argument returns in six months.

Part 3: the switch

Anything marked “use” needs a plan. A single process, a named person, a fixed deadline. Miss this stage and your verdict evaporates; the tool keeps gathering dust and turns up again twelve months later.

Part 4: the calendar

Every roll-over date goes into a diary, flagged four weeks early. That flag is what forces somebody to weigh the item up. Skip the flag and the contract turns over unnoticed, buying you another twelve months of the same.

Who Is Affected, and How?

The same rhythm works differently in four situations.

The one-person business

The inventory takes fifteen minutes. Deciding is easy too; nobody needs persuading. The single risk here is the absence of a prompt: with nobody asking, the annual session never happens. One calendar entry closes that gap.

The small team

The most efficient scale. Everyone knows what they use and the list comes together fast. The common omission here is skipping the reason; a cancelled tool gets bought again months later because nothing records why it went.

The departmentalised business

Sales bought its own software, accounting bought another. Combining the lists reveals multiple subscriptions for one need. The real gain here is stripping out the overlaps. Consolidating into one tool lowers the invoice and the disorder together.

The rapidly expanding business

Every new requirement gets met instantly with a subscription and the pace leaves no room to look back. After twenty-four months the list holds lines you do not recognise. In such a structure a twelve-month interval is insufficient; six months works better because the pile-up happens far faster.

Decision Order

Four steps, in order.

One: put the annual session in the calendar

Pick a fixed date, financial year start or new year. Work with no place in the calendar does not get done.

Two: put the list on the table

Collect the payments that went out regularly over the past year. Annually billed items only appear across that span.

Three: work line by line

Bring each entry into service or end it, noting briefly why. Without this stage the spreadsheet stays a spreadsheet.

Four: give the survivors a rollout plan

Pick one process, name one person, set one deadline. Without that scaffolding the rollout never starts and the verdict you reached counts for nothing.

Where to Start?

The first session, one afternoon.

First hour: open the statements

Mark each regular payment one by one. Items renewing quietly for years surface at this stage; the person who bought them may have left.

Second hour: separate the dead lines

Set aside anything with no logins for three months. Tools with unclear ownership join the same group, and the two criteria usually flag the same items.

Third hour: settle each line

One of two paths gets chosen for every row. Note beside it why you decided that way; a year later that note saves you rethinking it.

Fourth hour: build the calendar

Renewal dates and reminders a month ahead. Next year’s session goes in at the same time, so the rhythm continues by itself.

What Not to Do?

Four application errors.

Cancelling in bulk

Shutting things down en masse under budget pressure is risky. Genuinely used tools end up on the list and work stops. Deciding line by line is slower but more accurate.

Deciding without a reason

When nothing records why something closed, the same tool gets bought again months later. A one-line note breaks that loop and takes ten seconds to write.

Saying “use it” without planning the switch

The decision got made but nobody carried it. The tool sits idle another year and the same line meets you at the next session. Diagnosing the cause prevents that repeat.

Skipping the rhythm once

Miss one year and the second gets missed too. The accumulation returns quickly and the list reverts. A calendar entry is what holds it.

What to Watch?

Four indicators.

Total tool count

Up or down against last year? Growth happens by itself; reduction requires a decision.

Idle line count

How many tools went unopened for three months? Near zero means the arrangement works. Growing means the rhythm slipped.

Tools without owners

How many rows have an empty owner field? A blank field shows nobody is tracking that tool, and an unowned line becomes a permanent one.

Completed switches

How many “use it” tools genuinely entered the work? A low number means decisions get made but not applied, and what is missing is the switch plan.

How Does This Period End?

Three separations will show.

Accumulators will be forced to simplify

Past a certain count the estate becomes unmanageable. At that point simplifying stops being a choice and becomes compulsory. Simplification done in haste produces errors of its own.

AI tools will enlarge the same pile

Buying sped up when the latest generation landed. Low prices keep these subscriptions off the stocktake entirely. The disorder they create costs exactly as much though, and the same picture returns within a few years.

Those with a rhythm will pull ahead

A business holding one session a year never lets the accumulation form. The others run a big clear-out every three years and make mistakes during it. Regular turns out both cheaper and more accurate.

A Solid Digital Foundation

Four documents, each one page.

The estate record

What it is called, what it costs each month, whose name sits beside it, when someone last logged in. Refreshed once every twelve months.

The decision note

Which line closed or stayed, and why? One line suffices and it prevents repeats.

The billing diary

Every contract’s roll-over date, flagged four weeks in advance. That flag is the moment somebody weighs it up.

The pre-purchase check

Is this capability already sitting somewhere in the estate? And who will carry the rollout through? Nothing gets ordered until both blanks are filled.

Frequently Asked Questions