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Software Asset Management: Importance, Benefits, and Features 

Software asset management

For all businesses using technology, software assets make up a crucial component of their IT infrastructure. Operating systems, applications, cloud based and on-premise  software make up the software IT inventory and they have a significant impact on a company’s daily operations. Managing the usage, procurement, and security of these assets comes under the scope of ‘software asset management’.

In essence, software asset management (SAM) includes all the necessary processes to plan, control and protect your investments in software assets throughout each phase of their lifecycle. Having a well-defined software asset management mechanism reduces licensing risks, minimizes overhead costs, and eliminates software hoarding while also acting as a valuable strategic asset for your company.

However, before you jump into implementing a software asset management process, it is important to understand software asset management risks – or more precisely, the risks of poor software asset management. For example, devising a process without clear goals and objectives and without employee training may fail to serve its purpose – a topic we’ll cover in another blog.

First, let’s explore what software asset management is, why it’s pertinent, and the benefits it brings to your business.

Why does your business need software asset management?

1. Costs of over-licensing

Did you know that companies in the UK and US alone were reported to overspend $38 billion on their software assets in 2016? The numbers show the same trend of IT wastage today as more businesses move towards the cloud and SaaS subscriptions but tend to squander resources on unused software. However, now, more businesses are trying to focus on curbing the costs of over licensing. 

Without an effective SAM solution in place, there is a higher probability that your financial resources are draining without your knowledge due to over licensing.

2. Manual tracking

Manually tracking your software assets is labor intensive and inefficient. When tracking them via spreadsheets, you don’t get real-time data on license states, their usage, and the custody of these assets. Spreadsheets also lack the capability to monitor employees’ activity if they log in to a software. 

Lack of a software asset management tool may result in unauthorized user access, unaccounted software, and using an expired license that can put your company at potential compliance and fiscal risks.

3. Software hoarding

Software hoarding is the accumulation of redundant data within an organizational system, a practice that leads to digital clutter. This happens due to inadequate data management strategies including insufficient data governance, lack of awareness about data relevance and hesitancy in deleting seemingly inactive information. 

Software hoarding isn’t an anomaly. In fact, according to a 2018 report by Veritas Research, over 50% of the data stored by companies is redundant. This unwanted accumulation of data results in avoidable storage costs, which amounted to $891 billion in 2020 alone. Besides incurring heavy expenses, this unused data leaves sensitive information vulnerable to cyber attacks, convoluting your IT landscape further.

cost of unneeded data that software asset management solution can help reduce

4. Regulatory compliance

Without a proactive approach towards software asset management, you may end up with expired licenses, delayed renewals, and outdated software versions. IT regulators have now drawn up strict guidelines to counter the practice of using non-compliant software products. 

By not adhering to proper regulatory guidelines, users unintentionally expose the organization to hefty penalties and reputational damages. On average, one non-compliance event alone results in a $4 million dollar penalty!

5. Employee access

With the remote and hybrid culture on the rise, employees need access to different software from different networks. Manually granting access to every employee can be quite tedious and time-taking, which may affect the timely completion of tasks.

 It may also lead to misallocation of licenses which can result in a software’s overutilization or under-utilization. Some team members might lack access to important tools, which can eventually hinder their productivity.

Benefits of a streamlined software asset management process

A streamlined software asset management process offers numerous financial, operational, and regulatory benefits. In order to make the most of this process, it is important to mitigate software asset management risks – or more precisely, the risks of poor software asset management processes

Implementation & management of software tools

By implementing an IT asset management solution across the organization, you get a transparent view of the state of your software assets. Through it, you can effectively manage a range of software assets as well including operating systems, productivity tools like Google Workspace, software licenses, cloud software and antivirus tools.

In addition, software asset management creates a smooth workflow that starts from a software request and concludes at its installation. This workflow is defined and automated, mitigating the risk of incorrect assignment. Most software asset management tools integrate with active directories, so you can easily fetch employees data and provision assigned devices against them. 

Another key benefit is the maintenance of an updated software inventory. You can achieve this by continually tracking software assets in real-time including updates, installations and cancellations. Beyond inventory management, software asset management lets you implement access control, which prevents unauthorized people from accessing your systems. Two-factor authentication, identity management integration and software download permission are a few examples of this.


Software asset management systems facilitate asset audits to verify that your software assets comply with licensing agreements, protecting you from compliance penalties and inadvertent piracy related risks. The process begins with collecting data on software usage, including licenses, installations and user access. This data is then compared with the terms outlined in the agreements. In case of any discrepancy, the IT teams will be notified automatically so that they can rectify any non-compliance issues.

Monitoring & usage tracking

With automatic agent-based scans, you’re able to view how each software is being used on your company-owned devices. For instance, you can whitelist or blacklist certain applications or programs, ensuring only certain types of software are being used in your company. As an IT administrator, you can also enable download permissions for the users so they can only install authorized software. 

With in-built license modules, you’re able to track the number of licenses issued, usage limits, and available software users. By implementing this, you can significantly reduce software misuse and prevent unauthorized users from accessing, mitigating security related vulnerabilities. 

Reallocation of software applications

By monitoring software usage patterns, you can easily identify underutilized licenses and therefore stop paying  for surplus licenses. As you track software usage patterns, you can easily identify the number of underutilized licenses. This protects you from paying  for surplus or unused licenses. 

Apart from saving expenses, reallocating your software to the right resources optimizes budget allocation and software usage companywide. Once your software distribution aligns with your business’s actual needs, you’ll be able to make more accurate and cost-effective software investments.

Vendor relation management

It is very critical for companies to maintain a solid relationship with suppliers aka IT vendors. SAM systems  contain a comprehensive and up-to-date record of all your software vendors. Having an accurate directory of all vendors allows you to streamline your software procurement with features like pre-built purchase orders. 

Beyond record keeping, most SAM tools offer centralized contract management that consolidate all contracts, payments, and renewal details in a single dashboard. The streamlined approach lets you track contract expiration dates, manage renewals, and make timely payments.

Software asset management best practices

1. Identify trends with custom reports 

custom reports in a software asset management tool

As a business owner, you need transparent insights into how your software assets are being used company-wide. With this visibility, you can decipher usage trends and make future decisions related to license purchases, asset allocation, and budget spending. For greater clarity in these trends, keep track of metrics such as peak usage periods, underutilization rates, software performance metrics, renewal and extension rates. 

By regularly analyzing these metrics, you’ll be able to stay proactive in software management and respond quickly to changing business needs. To support your procurement efforts further, you should assess how each software is being installed, configured, used and accessed. Having a clear idea of the number of licenses your company needs will let you establish a standardized process of procuring licenses.

2. Utilize unused licenses 

According to a report by Nexthink, more than 50% of software that companies pay for is going unused. With a software asset management process, you can first identify these dormant licenses. Once identified, you can strategically re-allocate them to departments and teams experiencing higher demand. 

By utilizing the existing software, you can ensure that the number of licenses you’ve purchased are being used to their full extent. This significantly reduces the expenses that are associated with unused or underused licenses.

3. Manage software expenditure 

You should be particular about cost optimization and avoiding any unnecessary expenses. To manage your IT expenditure effectively, you need insights into software usage, with a detailed breakdown of how each software is used across different departments. Technology spend reports provide a comprehensive breakdown, detailing technology spend per employee, location, department and year.

Once you have access to this clarity, you can implement different strategies to curtail spending. This includes negotiating contracts with vendors based on actual usage, switching to more cost-friendly alternative software, or eliminating redundant applications.

4. Automate IT processes

Implementing software asset management practices or solutions reduces manual workflows and your dependency on IT personnel for routine tasks. Spreadsheets are likely to miss out on license information when tracking assets manually as they’re not tangible. In addition, manually entering contract information, vendor details, and license renewal dates for every software being used organization-wide can be quite tedious. 

Even one inadvertent omission or incorrectly mentioned detail can cause compliance complications and compromise the accuracy of your software data. To avoid these hassles, implement workflows such as automated software discovery, asset tracking, license tracking, contract management, and compliance monitoring.

5. Automate billing and keep track of renewals, expiries, extensions

You need to keep a close eye on software renewals, expiry dates, and extensions to continue using these applications without facing non-compliance. Manually performing these tasks is likely to cause human oversight when tracking multiple licenses, delayed response to renewals, and overlooking critical updates. Failure to upgrade to the latest versions or using expired software unknowingly exposes your company to license breach penalties.

To avoid these hurdles, you must implement best licensing practices that can  save approximately  30% of your software budget and maintain compliance with industry regulations. One such practice is automated notification alerts well in advance of license renewal dates, payments and expiries so that you don’t have to memorize them. Besides licensing, you can improve contract management with notifications for contract approvals, expiry, and activation. 

These alerts can also be configured for a range of other events including check-in/check-out, reservations, service event, asset tracking and purchase orders. You can achieve even greater timeliness and efficacy by integrating an automatic billing method to vendors, which will generate invoices based on actual software usage.

6. Role-based access control

Cyberattacks are one of the leading risks for companies, estimated to cause annual losses worth $10.3 trillion by 2023. You need robust measures to counter cyberattacks such as data theft, hacking and embezzlement. One way is by implementing Role-Based Access Control (RBAC). RBAC makes sure that employees have access to information and functionalities that are relevant to their roles. This prevents unauthorized people from accessing sensitive company data and eliminates the misuse of your software tools. 

To implement RBAC, you can define user roles and associated permissions based on job responsibilities. SAM systems  usually provide administrative controls that let you configure access rights for different users. This control ensures that only authorized persons can make changes to software configurations, view license information, and grant user permissions.

Important features of software asset management solutions

must-have features in a software asset management tool

1. License management

License management is an important component of the software asset management lifecycle and usually contains the following features:

  • Compliance monitoring: It uses algorithms to compare how existing software is being used with relation to the terms and conditions specified in the license agreement. In case of any deviations, you will be notified to avoid any compliance risk.
  • Automated alerts: Alert notifications keep you well-informed in advance about license expiry dates. These alerts are directed to the relevant stakeholders such as IT staff or procurement teams so that they can make timely renewals.
  • Audit trail: An audit trail logs all changes and activities related to software licenses. This increases transparency and lets you trace every action taken.

2. Automated discovery 

Built-in agent-based scans continually monitor your organization’s network to give you real-time visibility into your software inventory:

  • Continuous scanning: This automated process constantly monitors changes in your software landscape including new installations, removals and updates, and keeps your inventory up-to-date.
  • Device recognition: The discovery agent recognizes all devices connected within your organization’s network. These include company owned-computers, servers, remote devices and Bring Your Own Devices (BYOD). This lets you create a standardized catalog of all software installed on recognized devices. 
  • Hardware Inventory: Automated Discovery extends beyond software recognition and identifies all physical devices connected to the network. It even includes detailed information such as device specification, configurations and geographical location. With hardware inventory visibility, your overall IT asset management process becomes more streamlined.

3. Third-Party integrations

Modern IT infrastructures are interconnected and integrate seamlessly with each other to ensure optimized IT processes. A good software asset management software must integrate with the existing IT service management tools to simplify the jobs of IT personnel and to help enhance customer and employee experience. Examples include integrations with Zendesk and Jira. When an ITAM or SAM tool is acting as a single source of information and actions, IT teams can perform these actions on the tickets without having to constantly switch between tabs and tally information. 

Other must-have integrations are with Google Workspace and Okta directory. With the former, you can track the usage of all software associated with Google Workspace. Okta, which is a leading identity and access management solution, lets you put user access and role-based access control (RBAC) in place.

Other important integrations are with mobile device management solutions like Workspace One and network asset management integrations. The former enhances security and control across your network. Network asset integrations allow you to properly manage assets like routers, switches, servers, firewalls and printers. With a controlled network infrastructure, you’re able to protect your system from network disruptions and operational halts.

4. Access and identity management

Access and identity management gives secure access to critical company resources such as emails, databases, software, data and applications to verified individuals. You can enhance your security protocols by having password-protected systems and requiring sign-ins from company emails only. 

To add an extra layer of security, set up multi-factor authentication as a prerequisite to access the network. For swift access, software asset management systems  should support integration with Single Sign On (SSO) solutions so that teams can access multiple applications with the same credentials.

5. Application usage control

To strengthen your network security and compliance initiatives, a robust software asset management solution gives you freedom over defining the types of software permitted. This can be done by blacklisting or whitelisting certain applications. 

Blacklisting restricts the usage of unauthorized or potentially risky software. For example, you might want to blacklist peer-to-peer file sharing tools, outdated and insecure software versions. Your teams can then not download or access these tools.

Whitelisting, on the other hand, means that your employees can access only pre-approved and authorized software. These may include Microsoft Office Suite, project management workflows like Zendesk, Jira, and proprietary company applications. Having a whitelisting mechanism in place ensures that only applications that are compliant with regulations, company policies and security standards are being used company-wide.

6. Usage tracking and reporting capabilities

You’re likely spending thousands of dollars every month for a software license but the real question remains – are they being used to their full capacity? To understand this better, software asset management solutions incorporate different metrics that demonstrate usage patterns. 

These are activity per user or device, usage per processor, peak usage periods, percentage of inactive license and department-specific usage. This level of specificity, combined with customizable report generation, lets you make informed and data-driven business decisions.


IT assets, whether they’re hardware or software, require significant investment and form the backbone of your business. If not managed properly, these assets can quickly turn into a liability and pour your investment down the drain. Software assets require even greater vigilance as they’re not tangible and can go unnoticed. 

To address these hurdles, implementing a software asset management process is a strategic choice and a smart investment. With compliance monitoring, usage tracking and license management, you’ll not only protect your systems from data breaches and penalties but also utilize the full potential of your software assets. 

Frequently Asked Questions (FAQs) 

1. What are the key business challenges that software asset management addresses?

Some common challenges that it solves are overspending on software, unused licenses,  and compliance penalties. 

2. How does software asset management contribute to increased security and compliance?

Software Asset Management identifies patches in software vulnerabilities and checks whether your assets are adhering to licensing agreements or not. This, coupled with role based user access, prevents unauthorized people from accessing your systems and maintains compliance standards.

3. How can software asset management help me reduce business costs?

Software Asset Management curtails over-licensing. This ensures that you’re not spending money on software that is not needed by your company. It also highlights under-utilized software that can be reallocated to other departments and teams. Instead of purchasing new licenses, you can use the existing ones, thereby reducing procurement costs.

4. What integrations does software asset management support?

Common Software Asset Management solutions can be integrated with project management workflows like Zendesk and Jira. You can also integrate them with Google Workspace, access management tools like Okta directory, and network management tools like Open-AudIT.

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