8 Best Practices for Successful Software License Management

This article explains the main drivers for Software Asset Management, and why a software license management program needs to be included in your larger ITAM strategy.

You’ll learn which vendors to focus on, and how to implement these 8 best practices for successful software license management:

  1. Document and standardize your procurement processes
  2. Clean up and organize your license inventory
  3. Catalog your software
  4. Inventory all of your systems (don’t forget open source systems!).
  5. Determine software usage
  6. Measure how many licenses you need per software usage
  7. Keep updating your license and software inventories
  8. Manage your licenses more efficiently

What is software license management?

Software license management is the tools and processes that an organization uses to document and manage their software licenses in an effort to ensure compliance with the developer’s software license.

Software license management gives you transparency into your enterprise’s software assets, usage, licenses, and contracts so that you can understand what software is being used, how much, where and by whom. With full visibility into your company-wide software usage, you can optimize your licenses, cut costs, and protect your future software investment.

Given the fact that Forrester Research predicts the global cloud computing market to exceed $200 billion in 2019, it’s more critical than ever that you have the tools and solutions in place for cloud cost management, in addition to managing and reporting on your on-premises licensing environment.


Quick Guide to Maximize Your Software ROI and Mitigate Audit Risks

Read our Software Asset Management Program Guide and get all the insights you need to get your SAM ball rolling.

How software license management fits into your ITAM or ITSM strategy

IT Asset Management (ITAM) and IT Service Management (ITSM) are the strategies for handling IT assets and IT services for a business. Software license management and Software Asset Management (SAM) are a key piece of ITAM or ITSM.

Central IT planning is a significant challenge in today’s business environment. Many large companies opt to decentralize, which gives individual business units the flexibility they need to stay competitive. And while this is great for the individual business units, it can lead to unnecessary IT expenses.

By monitoring installations, usage, and configurations, central IT can keep software expenses down by making important purchasing and license allocation decisions. A software license management tool can make managing even highly decentralized spending decisions easy without sacrificing essential flexibilities.

The foundation for software asset management

At its core, there are 3 main drivers for Software Asset Management:

  1. Compliance: Control costs, risks, and complexity with transparency
  2. Optimization: Get more mileage out of your licenses by knowing what’s in them and how you’re using them
  3. Savings: Use SAM insights to lower licensing costs and save time

People Always Ask:

Why is Software Asset Management important?

Software Asset Management is the business strategy that reclaims budget and maximizes savings by actively controlling and automating procurement, usage, and deployment of software licenses. With a software license management strategy in place, businesses are empowered to make better software licensing decisions that lower costs and protect your company’s investment.

Choosing your focus software vendors

Software license management is a journey, not a destination. You’re not going to be able to do everything at once, so selecting specific vendors is key for successful software license management. But which ones do you start with? Here are some rules of thumb to help you choose which software vendors to focus on:

  • Start with the vendor you spend the most on – IBM, Microsoft, Oracle, and SAP are often at the top of the list.
  • Look at your stakeholders and choose a vendor that leads to direct benefits for them Is a larger project coming up like migrating to a new version or cloud migration?
  • Do you have an upcoming contract renewal with a major vendor?
  • Are there vendors whose complex licensing metrics or contracts make it especially hard to ensure compliance and create a license overview?

Knowing which vendors to start with will also help to define the scope of your SAM project and help you to choose concrete and actionable goals. This will put you – and your stakeholders – on the way to Software Asset Management success.

Remember to gather data to illustrate the problem. Get all of the details including any relevant reports, invoices, and anything else that might bolster your case.

Software license management best practices

With these fundamentals in mind, let’s dive deeper into SAM strategy and examine 8 best practices for successful software license management.

    1. Document and standardize your procurement processes - It’s important to know who and how each business unit buys software licenses. Make sure that you define standardized processes and rules for license procurement, and establish standardized processes for storing licenses and license certificates.
    2. Clean up and organize your license inventory - Use this as an opportunity to create a central license inventory (if you don’t already have one) and move all licensing agreements and software maintenance contracts to the inventory. Establish an organizational system (responsible people and processes) that allows you to locate licensing documents and information easily. Next you need to learn what your license metrics are in order to measure the licenses you need. Finally, appoint a license manager to administer/maintain the your inventory.
    3. Catalog your software - Now it’s time to use your discovery and inventory tools to find out what software is actually installed in your environment. Normalize software titles to make sure you can match a license to them.
    4. Inventory all of your systems (don’t forget open source systems!) - When cataloging your software, it can be easy to miss things installed on systems not currently running or not currently hooked up to the network, so make sure that discovery tools are installed on all systems in order to not miss anything. You’ll want to inventory open source systems (like Linux) because while the OS might not need a paid license, it might still be running software that does.
    5. Determine software usage - Here’s your chance to find out when a software title is being used and how it’s installed (or not e.g. cloud), configured, and accessed. You might be surprised at what you own vs. how it’s actually being utilized.
    6. Measure how many licenses you need per software usage - Once you’ve cataloged your entire system and recorded usage data it’s time to review your license inventory and make sure that your licenses cover all of the ways in which the software is installed and used. Pro-tip: apply product use rights to get the full value of your licenses and save costs.
    7. Keep updating your license and software inventories - Here’s where the detective work comes into play. Look for licensing models that best fit your software usage habits and IT environment, making sure that you’re tracking usage to maintain compliance. In the meantime, you’ll continuously be updating:
      a) Software titles to track users downloading new software, upgrading programs, or entering the cloud
      b) The software usage and IT environment data
      c) The license inventory to track contract milestones, and capture new purchases and changes to licenses like upgrades or downgrades
    8. Manage your licenses more efficiently - Congratulations! The fruitful results of your SAM process and data transparency will allow you to use your licenses more efficiently. You’ll now be able to clearly see where you’re over- and under-licensed. With this knowlesge, you can reallocate your available licenses to cover your needs, saving you money on new licenses and reducing audit risk. It’s important that you don’t forget maintenance! If you’re not using a license, then it’s recommended that you cancel the maintenance contract. When contract renewals come up, use your SAM insights to negotiate better agreements for your company.

Software license management isn’t hard if you know what to look for

Want to find out everything you need to consider, launch, and grow an enterprise software license management program? Wherever you are on your journey, we’re here to support you!


FAQ: Who are SAM stakeholders – and why does it matter?

Stakeholders are key influencers or decision-makers that work outside the ITAM department. Identify your stakeholders early in the process and build relationships with these key players. This alignment—to have everyone on board, is critical for project success and organizational change. Software Asset Management stakeholders include leaders from Procurement, various IT departments, Finance, and C-Level Executives.

FAQ: How can you measure software license management success?

It’s important to set up initial program achievement factors (KPI’s) that measure and recognize the results of your software license management program. This helps prepare you to sell your SAM successes to stakeholders and your larger organization. Break your software license management project into smaller, manageable chunks that define attainable program milestones; consider balancing both proactive and reactive goals. Make sure that you create a plan to communicate your wins regularly to stakeholders.

FAQ: How can you ensure clean data?

Clean data is the foundation for successful software license management. The quality of your software license data means the difference between saving and spending. If your data isn’t accurate, then the license optimization results won’t be either. Normalization is a step-by-step process that systematically cleans and identifies the data, from filtering out what’s unneeded to standardizing the information that is kept. Certain software license management tools feature a built-in normalization process that automatically performs all of this manual work for you. Find out more >>


Quick Guide to Maximize Your Software ROI and Mitigate Audit Risks

Read our Software Asset Management Program Guide and get all the insights you need to get your SAM ball rolling.


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