What is Entitlements?

What is Entitlements?

In a SaaS business ecosystem, entitlements are the rights granted to customers to use certain features or products. They hold great significance as companies adjust this concept as per business needs. They are considered benefits that customers receive as part of their link with a business. These entitlements are often stated in service agreements, warranties, loyalty programs, and terms of service. They are important as they derive customer satisfaction.

It can also be said that entitlements ascertain that customers gain the value promised to them via business. For instance, in a subscription-based service, customers are given a certain level of service, such as access to specific features or continuous support. They are often outlined in the subscription agreement to ensure customers are aware of the benefits they must expect from the offerings.

What are the kinds of entitlements?

There are numerous types of entitlements. They include:

Software Entitlements

Software entitlements are the permissions for using a particular software product. Here, it can mean stand-alone software or cloud software consumers use by subscription. They are:

Feature-based entitlements: These provide access to particular software features based on a license or subscription. For instance, some software plans might open up advanced features that only premium users have access to​.

Usage-based entitlements: These are tied to the volume or amount of software use; for example, a cap on the number of installations, API calls, or transactions a customer can have in a month.

User permission rights: These specify what users can do in an application, i.e., view, edit, or delete information. They are usually associated with user roles like “admin,” “manager,” or “regular user​.”

Service-based entitlements

These can be defined as a level of service a customer is entitled to get, stated in support agreements or service level agreements. For instance, a customer can enjoy around-the-clock customer support for their premium subscription.

Service entitlements include:

Support entitlements: You likely provide email, chat, or phone support to your customers as part of your product package. To enterprise customers, you likely provide priority service or an account manager. These describe the amount of support a customer is entitled to receive.

Response and resolution time: These stipulate the duration within which a customer may obtain a response or resolution to the problem. As an illustration, you can guarantee that any requests for support would be answered in 24 hours.

Geographic or business activity restrictions: Certain services are only eligible for certain regions or businesses, limiting use by geographic area or type of business.

Employee Entitlements

In some companies, employees are given certain benefits or privileges when they offer full-time services. These privileges could be insurance coverage, health coverage, a provident fund, paid leaves, etc.

Compliance and digital product entitlements

Compliance entitlements mean a person is given certain usage parameters for a software application.

• Access levels (read-only, edit, or admin)
• Feature usage (storage capacity, number of users)
• Content access (specific music libraries, as in the case of Spotify)
• Time-based usage (subscription periods or trial versions)
• Device or platform restrictions

These entitlements make sure users are compliant with the software vendor’s terms and conditions, licensing agreements, and regulatory requirements.

For instance:

A company purchases a software license for Microsoft Office 365, which includes compliance entitlements such as:

• User limit: 100 employees
• Storage capacity: 1 TB per user
• Feature access: Microsoft Word, Excel, PowerPoint, and Outlook
• Device restriction: Only company-owned devices can access the software.

What are the benefits of entitlements for businesses?

Entitlements have numerous benefits to offer for businesses. They are beneficial as they allow:

Cost optimization: Entitlements help to manage software costs by allocating licenses to the users who need them.

License Compliance: It helps to maintain compliance with software license terms and conditions, minimizing the risk of non-compliance and resultant penalties.

Streamlined User Management: Entitlements help with user onboarding and offboarding, as well as role updates, by making them easier by automating entitlement assignments.

Enhanced Security: They limit the exposure of sensitive information and functions, minimizing the attack surface and defending against unapproved access.

Increased Visibility: They offer a single point of visibility into entitlements, simplifying monitoring and auditing of user access.

Benefits to Individuals:

Streamlined Access: It guarantees that users have uncomplicated access to the software programs and functions required to do their work.

Personalized Experience: Entitlements suit the software experience to an individual’s requirement, boosting productivity and user happiness.

Less Frustration: They lower the likelihood of access denial or feature limitation, minimizing frustration and maximizing overall user experience.

Through the adoption of entitlements, organizations can achieve a balance between compliance, security, and user experience, while individuals are able to benefit from an easier and more tailored software experience.

How does software entitlement management work?

In the context of software licensing, entitlement offers real-time control over licensing rights of how to use software. For example, entitlement management must encompass user rights from small to high levels of subscriptions, such as complex consumption models, metered or user-based models, etc.

Software entitlements remove the operational burden from managers as they are not worried about administration. Thereby increasing operational efficiency. They allow software vendors and systems administrators to automate lengthy manual processes and minimize the possibility of human errors by provisioning and activating entitlements to software applications in a single location.

Ideally, the entitlement management platform will have a dashboard where software licensing, access handling, authentication, and entitlement assigning can be managed centrally and thus in the most cost-effective manner.

A number of solutions also involve self-service portals where users are able to complete tasks or request changes in access management themselves, cutting further costs and resources for providing support and help.

What is the difference between a software license and an entitlement?

Software licensing is the legal contract that stipulates the conditions of software use, and an entitlement management solution is the technology that enforces the conditions by managing user access and permissions within the licensed software.

The software license establishes the rules for customer experience, and the software entitlement management solution enforces that users can only get access to what they are entitled to according to their licensing contract.

The key differences between both of them are:

A software license is a legal contract that indicates conditions for software use. It establishes rules for customer experience and defines terms of use, such as limits, restrictions, and even requirements. It typically involves fees, warranties, and liabilities.

Entitlement management solution is the technology that ensures implementation of the conditions of software license. It helps manage user access and permissions within the licensed software. It helps ensure users stick to what they are eligible for or allowed access to, based on the licensing contract. This helps avoid unauthorized usage, reduces the risk of non-compliance, and optimizes software revenue.

What are the limitations of entitlement management?

Although there are myriads of advantages of entitlements, there are certain limitations to the implementation of entitlement management. They include:

Maintenance issue

Implementation and maintenance of entitlement management systems could be complicated. This is particularly the case for large organizations that possess data assets and numerous applications. Additionally, integration with current systems and realization of smooth data flow can be complicated.

Security Risk

Over time, users can amass excessive entitlements, generating a security hazard. This often happens when the users maintain entitlements that have become unnecessary. Periodic auditing and maintenance are essential to prevent this but tend to be lengthy.

Compromised Security

Handling entitlements over unstructured data is more complex compared to handling structured data. It has a tendency to result in security holes, as privileged information becomes subject to exposure.

User Permissions

Entitlement management can get challenging when working with a range of systems that don’t share the same standard for how they handle users and user permissions.

Adaptability

The entitlement management system should be adaptable to cope with the technological advancements. As business needs and regulations evolve, entitlement management should also evolve to the current tech requirements.

Does software entitlement improve customer-business relationships?

Software entitlement can improve customer-business relationships in many ways, such as:

Personalized experience

Entitlement management allows businesses to personalize software experiences as per customer needs. Thus, customers receive access to relevant features enhancing their overall experience.

Simplified licensing

Entitlement management helps customers to easily handle their licenses and ensure compliance, minimizing penalties and disputes. It also ensures a reduced administrative burden.

Improved Communication

Entitlement data offers valuable insights about customer needs and usage. Businesses can utilize these insights to target support, offer proactive maintenance, and offer timely updates.

Customer Satisfaction

When customers are satisfied with the services offered with transparency and clarity, it is likely that they will renew their subscriptions from time to time. It means that entitlements offer satisfaction among customers as well as loyalty towards the brand/services offered.

What are some best practices for entitlement management?

Careful planning and ongoing maintenance after execution are needed for flawless entitlement management. Here we have curated some best practices to help businesses optimize their processes:

Clarity

You must establish clear policies that showcase user access, usage rights, and permissions. Policies must be clearly communicated to customers, employees, and partners.

Role-Based Access Control

Using RBAC, you can ensure that users only have access to necessary features and data. Moreover, regular review and role updates are necessary to gauge changing business requirements.

Risk Assessment

Audit entitlements regularly to ensure compliance with policies and regulations from the customer’s end. Identify any potential risks, such as excessive user permissions or unauthorized access.

Collaboration

It is crucial to ensure cross-functional teams’ collaboration and communication, such as sales, customer support, and marketing teams, to ensure alignment on entitlement processes.

Allow Automation

Make use of automation tools to streamline entitlement management tasks such as user onboarding, offboarding, and role updates. Automation can improve work efficiency and reduce the hassle of manual handling of repetitive tasks.