I've been struggling with tracking Microsoft 365 licenses lately and would love to hear how others are handling this issue. It's a common problem in smaller companies—when someone leaves, their license often remains active. Sometimes, it's not even the IT department purchasing these licenses; it could be finance or HR just going into the Microsoft portal and adding users. Before you know it, there are a bunch of E5 licenses assigned to people who haven't been with the company for months! In larger organizations, the dynamics change, but the result is the same: high turnover and a lack of urgency in cleaning up unused licenses lead to thousands of dollars wasted each year. How do you keep this situation in check? Are there automated processes you use, or is it still managed through spreadsheets? Do you have monthly or quarterly reviews? I've been trying to set up a workflow where HR informs IT about offboarding, but it often falls through the cracks. I'm interested to know if anyone uses dedicated tools for this or if it's just something everyone knows needs fixing but keeps delaying.
4 Answers
For us, all license purchases need to go through IT. We have discussions between IT and HR regarding how many licenses we need based on staff levels. When someone offboards, it’s up to HR to notify IT. I send a monthly report of active licenses to HR, asking them to confirm which employees are still with us. This way, we hold HR accountable for keeping track of employees and managing licenses properly.
It’s definitely a bigger security risk than just a financial one. Every time someone leaves, their account should be disabled immediately. In my last job, we had an automated system that would check the HR database daily and make updates based on employment status. We also sent out weekly emails to managers of anyone who was marked as gone to ensure they filled out the offboarding paperwork. It’s crucial to manage this effectively to avoid unnecessary costs.
At my company, all license management goes through the IT department. We buy our licenses through a managed service provider, which notifies me about renewals, helping me plan ahead. When a new user starts, HR notifies IT through our helpdesk system, which includes a checklist so nothing gets missed. It could be more automated, but right now, this method works well for us and ensures that we account for all licenses.
We switched to group-based licensing, which simplifies things a lot. You just add someone to the group, and they automatically get a license. If you remove them from the group, the license is taken away too. This way, it’s super easy to track who has licenses and who doesn’t. We also have a lot of freelancers that come and go, so this system allows us to keep their accounts active without having unnecessary licenses hanging around.
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