Compelling Software License Management – Events that Propel Organizations to Manage Software Licenses

By Greg Larsen

As a consultant, I sometimes find it difficult to convince IT managers to invest in software license management (SLM) as a business discipline, even when it will cut their costs and improve their efficiency. They just don’t want to spend the money right now. And in this economy, who can really blame them?

Let’s face it; software license management is not a priority in any company without a compelling event to make it so. What do I mean by a compelling event? Something must often happen first, before IT management makes SLM a priority; something that opens their eyes to costs, risks and inefficiencies that are centered on their software licensing and how it’s treated within the organization.

Getting the Message

When conducting software license compliance audits of end-users, the audits are often the compelling event. IT management is forced to address – to a degree, that is – how they are using the software they’d contracted to use and whether there are any compliance issues to come out of the audit process. Granted, this awareness is for product(s) from one publisher and not all the software the company uses, but it helps to “grease the skids.”

What are some other compelling events that can start a company on the path to SLM? There are many, and I’ll try to cover some of them here.

Internal Audit

An internal audit may reveal deficiencies in how software is used and purchased, especially when there are excessive costs that are tied to software used in the business. These excessive costs precipitate the internal audit. Resolving any audit findings may require improved software license management.

External Audit

Other than the vendor compliance audit already mentioned there are other situations that may bring on an external audit for software compliance. Examples include a whistleblower who contacts the Business Software Alliance (BSA) or Software & Information Industry Association (SIIA) to notify them of a situation at their place of employment where they are aware of unlicensed software use. If this company is still in business after the payment of any fines and fees and all the associated negative publicity, they may be compelled to invest in more stringent SLM.

Sarbanes-Oxley Requirements

The accurate accounting of assets required by laws such as the Sarbanes-Oxley Act of 2002 for public companies that are registered with the SEC means that in the IT audit portion of SOX testing, software license compliance is included.

Initial Public Offering (IPO)

Preparations involved in an IPO tend to include an analysis of various aspects of the business, including areas of needed improvement, such as inefficiencies that must be addressed in IT to bring the department into tip-top shape. This may include an initiative towards software license management. This doesn’t mean that after the IPO, the initiative for SLM can fall by the wayside and fail. Once the processes are in place, a good IT Director will want to continue as license management tends to make an IT department run more efficiently and, of course, realize substantial cost savings.

Mergers & Acquisitions

With every merger or acquisition there is a due diligence analysis done to ensure that the merger runs smoothly, similar to an IPO. An easy way to be non-compliant to software contracts is to forego the due diligence on what software is brought into the mix and accounted for in the merge process. Knowing that there are a certain number of software licenses that the acquired company owns of a specific product that can be brought in under your contract is an integral part of managing those licenses. It is also important to know what you need to purchase when the acquired company does not own the licenses it needs to effectively merge with your company and the software you use.

Rapid Growth

For companies that experience rapid growth, software licensing seems to always be on a back burner, as it is more imperative that people be able to do their jobs than it is to have appropriately licensed software. This tends to come back and bite you when the vendor comes knocking and wants to conduct an audit, though, as the company has rarely budgeted the expense it now needs for software compliance.

There are other compelling events besides these, such as IT security issues and needed software upgrades, which are addressed through proper software license management. You may have experienced other events besides those mentioned that triggered your entry into managing your software licenses or you may have experienced multiple compelling events.

In the end, your compelling event (or events) is pushing you to have more control over your software licensing and is, therefore, a good thing with positive results.

About the Author

Greg Larsen

Animus Solutions

Solutions Consultant