Software Asset Management: What It Is And Why You Should Care

Software Asset Management: What It Is And Why You Should Care

How much do you know about your software licenses? Do you know whether or not your company is in compliance with the legal agreements that came with the software licenses they purchased? Is your software asset management program as effective as it needs to be?

This is a question any IT procurement manager or CIO should be asking. Software asset management is a crucial part of IT software procurement. Failing to manage your software licenses correctly could havemajor ramifications for your company.

This post will discuss what software asset management is and why your organization needs it. We will also provide you with some helpful tips to help you ensure compliance with your license agreements.

What Is Software Asset Management?

Software asset management is the practice of making sure that your organization is in full compliance with the legal agreements that are included with the software your company uses. It also means ensuring that your company has the right processes and tools in place to monitor software usage, reallocate licenses as they become available, have the right level of vendor support, and ensure you maximize your software acquisition dollars.

Why It’s Necessary

Software asset management is crucial to the success of any IT organization. When a company has a comprehensive and efficient license management program in place, it reduces costs and ensures that the organization remains in compliance.

Here are some of the main benefits:

  • Managing your software assets impacts your bottom line.  When you have visibility into how your software is being used (or not being used), you avoid unnecessary spending and you become more efficient in the use of your software licenses.
  • You are in a better position to manage risk by knowing which software products are vendor supported vs. those products the vendor is no longer supporting.
  • Your company is in a better position to avoid fines and expensive true-up costs resulting from a vendor audit or an audit by the Business Software Alliance (BSA).

    In recent years, the BSA, which is an organization tasked with ensuring that companies are in compliance with software license regulations, has been cracking down on companies who misuse their software licenses. As a matter of fact, they are offering a $1 million reward to any whistle-blowers who report unlicensed software use in their own organizations.  These audits can result in hefty fines and in some cases, could result in jail time.

    Additionally, many of the major software vendors have increased the number of audits they perform. This increases the likelihood that companies that are not in compliance will be discovered. This is a serious issue. Fortunately, if your IT organization is diligent about properly managing your software licenses, you can avoid many of the problems this could cause.

When you manage your software licenses effectively, your organization as a whole will benefit. It can save your IT organization a lot of money and hassles over the long-term.

Some Helpful Tips

If you want to manage your software license management correctly, there are some steps you can take. These steps can help you ensure that you are remaining in compliance with the vendor’s license agreement.

Make sure you understand the license agreement

When you are presented with the license agreement, take the time to review it thoroughly. Don’t be afraid to ask questions if there are parts that you do not understand. Better yet, have your general counsel review the agreement with you. This will help you ensure that you fully understand what regulations your company is expected to comply with.

Do a What-If Analysis

When deciding how many licenses to purchase, take into account any potential growth. If you know how much growth is expected over the term of the agreement, factor the growth into your calculations.

Audit Yourself

Don’t wait for the vendor or the BSA to conduct their audit. Do it yourself. If there are any discrepancies, it’s better that you figure this out beforehand rather than letting the vendor find it for you. By then, it could be too late and your organization will be subject to fines.

Hire Professionals

Comprehensive software license management can be a very involved and time-consuming process. It many cases, it would make more sense to hire a firm that has the expertise to ensure that your license management processes are up-to-date and effective.

Software license management is an essential component of any IT organization. Without it, your organization could be overspending, or opening itself up to legal action.