Why Usage Analytics Is Central to License Optimization
Optimizing ServiceNow licensing shouldn’t be a frantic yearly scramble — it works best as a continuous, data-driven process. By leveraging ServiceNow’s license usage analytics, you get hard evidence of how each module and license is actually used, replacing guesswork with real data. This proactive approach uncovers “silent shelfware” — features that are deployed but rarely touched — so you can eliminate waste early.
For example, a logistics company discovered only 18% of its HR Service Delivery (HRSD) licenses saw any activity in the past quarter. They promptly trimmed their HRSD licenses and saved 22% on that spend with no impact on service delivery.
Pro Tip: ServiceNow usage reports aren’t just compliance tools — they’re cost-control dashboards in disguise. When you treat these reports as windows into value, you start spotting opportunities to save money long before your contract renewal comes up.
And by monitoring usage continuously, nothing at renewal time will catch you off guard — your data will already show what you truly need (and what you don’t).
Read our comprehensive guide, ServiceNow License Optimization: Rightsizing, Recycling & Shelfware Cuts.
Step 1 – Set Up the Right Data Sources
Getting a clear picture of license usage starts with pulling data from the right places. In ServiceNow, leverage native tools like Subscription Management, Performance Analytics, and the built-in license usage dashboard to gather insight.
For instance, Subscription Management shows how many subscriptions (licenses) are allocated vs. unallocated across modules. Performance Analytics lets you create reports such as “Active users per module,” “Last login date per user,” and “Transaction activity by role.” These reports highlight who is using what (and who isn’t). The license usage dashboard, if available in your instance, provides an overview of usage trends and license consumption.
Beyond ServiceNow’s built-in reports, consider integrating external data sources for a fuller picture. Many organizations use dedicated IT Asset Management tools like Snow License Manager, Flexera, or ServiceNow’s own SAM Pro to enrich usage analytics.
External tools can merge ServiceNow usage data with other context — for example, tying into HR databases to verify if licensed users are still active employees.
By integrating usage data with HR records, you might discover licenses assigned to employees who have left the company — immediate candidates for reclamation. Using multiple data streams (e.g., login reports plus transaction logs) ensures a usage drop is real and not just seasonal.
Step 2 – Track the Right Metrics
Not all data is equally useful — focus on the metrics that clearly indicate usage versus waste. Here’s a checklist of metrics to monitor for optimization:
- Active vs. Inactive Users: What percentage of your licensed users actually used each module in the last reporting period.
- Module Utilization: Percentage of each module’s license capacity in use (e.g., 20 of 100 licenses = 20% used).
- Login Frequency: How often users log in (very infrequent use might mean a user’s license can be downgraded).
- Transaction Count: How many tickets or tasks each user handles (very low activity can signal an excess license).
- Role Activity: Usage by role type (e.g., if a user has a full Fulfiller license but only ever approves requests, they are over-licensed).
Monitoring these core metrics will highlight obvious gaps. For example, if 40% of users assigned to the IT Service Management (ITSM) module haven’t logged a single ticket in three months, that’s a red flag. Similarly, tracking module-level adoption helps identify underutilized products like HR Service Delivery, IT Operations Management (ITOM), or Customer Service Management (CSM). If a certain module’s adoption is low across the board, you might question whether you need all those licenses or perhaps need more training to boost its usage.
Pro Tip: If a module’s activity stays below about 30% of its licensed capacity for two consecutive quarters, it’s a prime downgrade candidate. Consistently low utilization is a clear sign you’re overspending on that product or tier.
A well-designed license usage dashboard makes patterns obvious. For example, set up panels for Active Users % by Module, an Inactive License Count Trend, and Module Adoption Over Time. This kind of visualization lets you see at a glance if a module’s usage is plateauing or dropping while you’re still paying for it. These visual cues quickly highlight where to investigate further.
Recycle licenses to keep costs low. Implementing a License Recycling Program in ServiceNow.
Step 3 – Analyze Trends and Patterns
Raw metrics at a single point in time only tell part of the story. The real insights come from looking at trends. As you review your usage data month over month, watch for modules or license types with a steady decline in activity.
A downward trend might indicate a team that completed its project or switched tools, meaning those licenses are now ripe for reduction. Conversely, an upward trend in usage could hint that a team is adopting a module more heavily — a sign you should be ready to allocate more licenses there to avoid future shortages.
It’s also important to correlate usage patterns with business events. For example, if you know a big project ended in Q2, you might expect a drop in use of certain project-related modules in Q3.
Analytics can validate this. For instance, a financial services firm noticed a sharp drop in ITOM (IT Operations Management) node usage after consolidating servers in a data center. Because analytics flagged the decline, they confidently cut the excess ITOM node licenses without risking performance — the data clearly showed those nodes were no longer in use.
Look for explanations behind the numbers. A dip in HRSD usage might coincide with an HR team restructuring or a hiring freeze.
By overlaying business context (projects, org changes, seasonality) onto the usage data, you turn raw numbers into actionable stories. For example, if a module’s use always spikes every December and drops every March, you can adjust license counts ahead of time instead of scrambling after the fact.
Pro Tip: Trends matter more than snapshots. One quiet quarter doesn’t automatically equal shelfware, but if you see three straight quarters of minimal activity in a module, it’s probably safe to call it underused and take action.
Step 4 – Turn Insights into Action
Analytics are only valuable if they lead to action; once you identify clear cases of underuse, it’s time to rightsize or recycle those licenses. Set thresholds that automatically trigger a review (e.g., if a user has been inactive for 90 days).
When those triggers hit, initiate a workflow to investigate and potentially reclaim or downgrade the license. Many organizations implement automated reclamation: if a user is inactive for 90 days, their license is downgraded or removed, freeing it for someone else.
Usage insights should also feed directly into your renewal negotiations. Vendors respond when you bring detailed usage reports — a statement like “We have 50 licenses untouched all year” is hard to dispute. It shifts the conversation from sales pitches to practical reality.
Pro Tip: Clean, hard usage data is negotiation gold. It converts “we feel like we’re overspending” into “we know exactly where we’re overspending.” When ServiceNow (or any vendor) sees you have the numbers, you’re in a strong position to secure a better deal or adjust your license mix.
Finally, create an ongoing cadence for optimization. Don’t wait until a month before renewal to start scrambling over reports. Set a schedule (monthly for large deployments, quarterly for smaller ones) to review key usage metrics with ITAM, procurement, and finance stakeholders.
These regular check-ins keep everyone aware of usage patterns and potential savings well in advance, and allow license changes to be made in a timely fashion rather than in a last-minute rush.
Optimize by negotiation, Negotiating Givebacks – Recouping Value from ServiceNow Shelfware.
Step 5 – Continuous Improvement
Making analytics-driven optimization part of your culture means automating and sharing the process. Configure automated reports or scheduled dashboards for the relevant teams.
For example, send a monthly “License Usage Summary” to IT managers to highlight which teams have the most inactive licenses. Also set up alerts when certain thresholds are crossed (say, if inactive licenses exceed 10% of the total). By regularly pushing this information out, you ensure potential issues are caught early, not after money has been wasted for months.
It’s also smart to establish benchmarks and goals using your data. For instance, if last year 22% of licenses were inactive and you reduced that to 8%, set a new target (perhaps aim to keep it under 10% idle) and keep improving.
Over six months of continuous tracking and rightsizing, one company cut its ServiceNow spend by 15% and reduced inactive licenses from 22% to 8%. Results like that aren’t one-time wins — they come from an ongoing commitment to measure and adjust. Each review cycle can uncover new savings, whether it’s a few more unused accounts to reclaim or a team that can share licenses instead of each member having their own.
Pro Tip: Make your analytics dashboard the first warning system, not a post-renewal regret report. By monitoring continuously, you catch inefficiencies when they’re small and correct course before they become expensive problems.
Read about our ServiceNow Optimization Services.
