Digital transformation has led to multitudes of companies using software applications for automating various business functions ranging from operations management to marketing. According to a report by Okta, a leading identity management firm, about 10% of the world’s businesses use more than 200 software applications.
As companies move from “all-in-one” software vendors to “best-of-breed” solutions, their software repository increases significantly. This makes software license compliance a top priority for businesses.
What is software license compliance?
Software license compliance refers to the process of ensuring that the employees in your organization are only using the software applications they are authorized to use and to comply with the vendor-specific regulations.
An effective way to achieve this is by comparing the number of software installations or users against the license seats purchased per software. This involves keeping a real-time record of software use, and license agreements, and staying up-to-date with renewals, etc.
Why is license compliance essential for businesses?
From a regulatory and operational perspective, license compliance is of key importance and offers various benefits that help businesses stay ahead of their competition.
- Reduced risk: A primary benefit of license compliance is reduced risk of regulatory non-compliance, legal penalties, or lawsuits.
- Lower overheads: An efficient software licensing policy decreases the possibility of audit fines and true-up costs, should your business undergo a surprise audit.
- Strong reputation: When you comply with industry standards, you develop a strong market reputation which increases the confidence of your stakeholders — investors, partners, and customers.
- Improved business continuity: With watertight license compliance, you can use your enterprise applications without any interruption or account holds from the software vendors.
4 best practices to ensure software license compliance for your organization
Below, we list four ways you can strengthen software compliance in your business.
1. Define a software licensing policy
Your first step towards license compliance is to design and implement a software licensing policy. This is an official document that lists the kind of software and license types that your company supports.
It also indicates specific versions and platforms of supported software along with their fair use guidelines by teams and individual employees. The policy also details any procedures in case of license expiries, warranty renewals, and identification or rectification of rogue software.
Your company software licensing policy can also include details of the authorized personnel your employees must contact to get access rights to different software.
Furthermore, it should list down any rogue software that must not be used by employees and classify such enterprise apps as blacklisted.
2. Maintain an inventory of all software applications in use
Most organizations maintain a constant check of their hardware devices, however, they often ignore keeping real-time track of software inventories. A key step in software licensing is to keep a record of which software is actually being used by your employees and compare it with your current software inventory records.
You can discover the software applications in use by the following methods:
- Poll individual teams or locations: Talk to the heads in each department or location and ask them which apps their teams are using, for what purpose, and who has access to them.
- Review the identity management applications: Using your active directory system, extract reports on employee login history to discover the software that your employees are frequently accessing using the company’s IP address and login protocol.
- Determine software installed on servers or devices: There are automated discovery tools in the market that scan your organization’s servers and devices to collect data on installed software.
Now that you have all the relevant information, you can record it. The inventory record may include details such as software name, vendor data, account owner and number of actual users, kind of data processed, security controls, etc.
You can also make a note of any exceptions i.e software applications that are obsolete but are still being used by certain teams for a specific purpose.
3. Create and track licenses against users
With an actual software asset and usage record, you are now ready to create licenses against each software. For each license agreement, you can enter the following information:
- Name and contact of the parties involved (i.e. your company department and the vendor)
- Duration of the license agreement
- Usage permissions and distributions
- Number (and names) of entitled users per license
- Licensing cost and payment schedule
- Terms of revocation or any owed recovery charges in case of non-compliance
Once you’ve created licenses against each software, you can set alerts for expiry and warranty renewal dates to stay on top of your compliance requirements.
Furthermore, you can analyze utilization trends for each software, for instance, whether the software is being over or underused by employees in order to optimize the license spend per publisher.
Tracking cloud software licenses per user is an effective way to avoid the risk of non-compliance and reduce licensing costs.
4. Monitor license use per hardware
Another efficient way to ensure software compliance is by tracking license usage across hardware devices i.e servers or workstations. You can either use the auto-discovery tools in the market or search for installed programs on each device to determine the actual number of machine entitlements that are needed.
For added security measures, you can identify if any rogue applications are installed on your computers and blacklist them in your licensing policy. Running a detailed health check of installed software also enables you to decide on the patch management strategy.
Pro tip! Having a system that stores data of both hardware and software inventory makes the process easier.
Implement effective software license compliance with ITAM software
An ITAM solution dedicated to storing and managing hardware, software, and employee data is your perfect pick for watertight software license compliance.
AssetSonar helps you accomplish just that!
Set up a consolidated inventory of hardware assets along with software installed on them using the ITAM discovery agent. You can also import data regarding your employees and the cloud software applications they log into by integrating AssetSonar with your active directory platform.
Create licenses against your software inventory and assign entitlement rights to employees added to your AssetSonar account. You can also use the Alerts module to set alerts for key licensing milestones such as recurring license payments, expiries, and warranty renewals.
Analyze and detect any gaps in your software licensing framework with detailed reports and Avoid penalties and license true-up costs by detecting all instances of unlicensed software on your network.
Read more: What Is Software Asset Management?