Salesforce SELA

Managing a Salesforce SELA: Maximizing Value and Avoiding Pitfalls During the Term

Managing a Salesforce SELA

Managing a Salesforce SELA

Signing a Salesforce Enterprise License Agreement (SELA) is just the beginning โ€“ CIOs and IT leaders must actively manage the agreement throughout its term to ensure full value.

This article advises enterprise teams on governing a SELA after signing, covering license usage monitoring, avoiding waste, and preparing for a successful renewal.

Read Salesforce SELA: Pros, Cons, and How to Decide if Itโ€™s Right for Your Enterprise.

Monitor and Optimize License Usage

Once a SELA is in place, continuous monitoring of usage is crucial. Treat the SELA like a large software asset that needs oversight:

  • Track Usage and Drive Adoption: Continuously monitor how each Salesforce product in the SELA is used. Use admin dashboards or a license management app to see active users. If some licenses or features are underused, take action: provide training, communicate features to users, and reallocate unused licenses to where they are needed. Treat the SELAโ€™s allotments as a pool of assets to optimize.
  • Quarterly Usage Audits: Conduct regular internal audits comparing your entitlements to actual use. Identify any surplus (shelfware) or shortfall against caps. For example, if you have 10,000 licenses but only 7,500 active users, note that 25% is unused. These findings should inform how you boost adoption now and adjust contract quantities at renewal.

Prevent Shelfware and Overage Surprises

Even with careful planning, a multi-year deal can bring surprises.

Two pitfalls to actively avoid are shelfware (paid-for licenses/modules not being used) and overages (exceeding contract limits):

  • Minimize Shelfware: Continuously identify and eliminate unused licenses or products. If a Salesforce module isnโ€™t gaining adoption, either increase its use or plan to drop it at renewal. Make sure stakeholders know that unused features still incur costs.
  • Watch Usage Caps: Monitor any limits in your SELA (users, API calls, etc.) closely. If youโ€™re approaching a cap, address it proactively โ€“ either control the usage or negotiate an adjustment with Salesforce before it triggers a penalty.
  • Avoid Unnecessary Scope: Donโ€™t enable every Salesforce feature just because itโ€™s available. Only roll out modules that have clear business value. This prevents a bloated environment and makes it easier to reduce scope later if needed.

Prepare Early for Renewal

As you manage the SELA, always watch the end of the term. Start renewal planning 6โ€“12 months in advance:

  • Refresh Usage Data for Negotiations: Use the data youโ€™ve gathered (actual user counts, what was utilized vs. wasted) to set your renewal strategy. This data-driven approach will highlight where you can cut costs or make changes.
  • Time Your Approach: Engage your Salesforce rep strategically. Often, negotiating at Salesforceโ€™s end-of-quarter or end-of-year can motivate them to offer better discounts. But donโ€™t wait so long that youโ€™re rushedโ€”give yourself a few months of buffer to work out a favorable deal.
  • Negotiate the Details: Enter renewal talks with a clear list of asks. For example, remove any products you didnโ€™t use, try to secure rights like a true-down (ability to reduce licenses) for the next term, and push for pricing that matches the best discounts you deserve. Treat it like a fresh negotiation โ€“ nothing carries over unless you make it part of the new deal.

Read Renewing or Exiting a Salesforce SELA: End-of-Term Strategies for CIOs.

Recommendations

  • Assign a Dedicated SELA Manager: Appoint a person or team to oversee the SELA day-to-day. They should track license use, coordinate across business units, and serve as the point of contact with Salesforce.
  • Maintain a Usage Dashboard: Report SELA utilization to stakeholders quarterly. Show whatโ€™s being used vs. not used so you can take action during the term and avoid surprises later.
  • Document Everything: Keep detailed records of your SELA contract, any amendments, and all communications with Salesforce. This prevents misunderstandings and helps new team members quickly get up to speed.
  • Promote Full Utilization: Encourage teams to leverage the tools available under the SELA (within reason). Youโ€™re paying for them, so drive adoption via training and internal campaigns to maximize ROI.
  • Stay Within Contract Bounds: Monitor for any activity that might violate terms (like too many API calls or unlicensed usage via integrations). Staying compliant avoids giving Salesforce a reason to audit or penalize you.
  • Start Renewal Prep Early: Donโ€™t wait until the last minute. Begin internal discussions and data gathering well before the renewal date, and approach Salesforce early with your intentions and requirements.

FAQ

Q1: Can we reduce our SELA commitment mid-term if our usage drops?
A: Generally, no โ€“ SELAs are โ€œuse it or lose it.โ€ You cannot reduce the fees or licenses mid-term. The best you can do is maximize use of what youโ€™ve paid for, and negotiate flexibility for the next term.

Q2: What if weโ€™re not using one of the products in our SELA?
A: You canโ€™t reduce costs mid-term; focus on driving that productโ€™s adoption or plan to drop it at renewal if unnecessary. You might also raise the issue with Salesforce โ€“ occasionally, if itโ€™s early in the term, they may allow swapping one product for another, but donโ€™t count on it.

Q3: How do I handle adding users or a new acquisition mid-term?
A: Adding users is fine (within your agreed caps) โ€“ just provision them, since youโ€™ve essentially prepaid. If you acquire a company, work with Salesforce on an amendment to bring those new users into your SELA at your negotiated rates.

Q4: Are we allowed to reassign licenses within the company?
A: Yes. One benefit of SELA is the flexibility to shuffle licenses across departments or subsidiaries. If one division downsizes and another grows, you can repurpose those licenses where needed, as long as you stay within overall limits.

Q5: What happens if we exceed a usage cap inadvertently?
A: Salesforce will charge you for exceeding a cap, possibly as a true-up at renewal or even immediately if itโ€™s large. Always try to negotiate an adjustment in advance if you foresee an overage.

Q6: Can we get out of a SELA early if necessary?
A: Unfortunately, there is usually no early termination clause. Youโ€™d have to pay the contract to exit, which is prohibitively expensive. In practice, youโ€™re committed for the full term, so focus on making the most of it.

Q7: How do we measure ROI on a SELA during the term?
A: Track adoption (percentage of licenses actively used) and business outcomes from Salesforce (e.g., sales or service KPIs) to quantify ROI throughout the term. Regularly report these metrics to leadership to show value or highlight underuse.

Q8: Should we involve our Salesforce rep if weโ€™re underusing our licenses?
A:ย Generally, you handle it internally. Underutilization is best solved with training and adoption efforts โ€“ informing Salesforce may just mark you as a target for upsell rather than fixing the problem.

Q9: Can we add a new Salesforce product mid-term (e.g., a new Cloud service)?
A: Not automatically. Youโ€™d have to negotiate an add-on order (co-terminus to your SELA) to include a new Salesforce product during the term. This will come with its own cost unless you have pre-negotiated it.

Q10: What internal governance model works best for managing a SELA?
A: Set up a cross-functional team (IT, procurement/finance, key user groups) to manage the SELA. Regular governance meetings will keep everyone aligned on usage and contract decisions and ensure nothing falls through the cracks.

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  • Fredrik Filipsson has 20 years of experience in Oracle license management, including nine years working at Oracle and 11 years as a consultant, assisting major global clients with complex Oracle licensing issues. Before his work in Oracle licensing, he gained valuable expertise in IBM, SAP, and Salesforce licensing through his time at IBM. In addition, Fredrik has played a leading role in AI initiatives and is a successful entrepreneur, co-founding Redress Compliance and several other companies.

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