If such an instance has not yet been established in your company, awareness is already raised at this point that the managing director is always fully responsible for ensuring that their company is adequately licensed. Whether the software was purchased with a one-time payment, is based on a rental model that brings recurring annual operational costs, or is merely a cloud-based usage agreement, the lifecycle and compliance obligation begin at that very moment.
Additionally, the company often commits to concluding a maintenance and software support contract, which, in addition to further costs, includes the permanent installation of updates and upgrades.
Growing over a period of just one year, a zoo of software products and applications comes together that can no longer be managed seriously even at this stage.

Establishment of License Management in the Company

Based on this entrepreneurial responsibility, it is recommended to install a license management system through which software procurement, review of license terms, cost monitoring, and management of licensing metrics are handled.
The intensity with which this function is established and perceived can vary from company to company.
For small companies with manageable clients and software products, a uniform procurement process and regular reporting of costs and a software overview with purchased license quantities in constant comparison to the required number – keyword license balance – is recommended.
It becomes more interesting for medium-sized companies, where a deeper look behind the scenes is worthwhile in addition to monetary asset and contract management.
In particular, individual usage behavior, license pooling within the company, and the right choice of sometimes very differently offered licensing metrics can already have a significant impact on the economic efficiency and flexibility of the entire organization.
However, this requires far more extensive processes already during deployment, i.e., software distribution and allocation. Supplied license keys must be uniquely assigned to users or devices at this point to be able to perform so-called “metering”. Software metering thus provides all information about the usage behavior of the respective programs and thus forms the basis for analyzing all usage data including inventory.

Support Through the Use of Software Asset Management Tools

Certainly interesting for medium-sized companies as well, and almost indispensable for large companies and corporations, is professional management with the help of a Software Asset Management Tool (SAM Tool).
There are a large number of established manufacturers here (see Gartner Quadrant)

Gartner Magic Quadrant for Software Asset Management Tools (2019)

Careful technical fine-tuning to the respective needs, as well as thorough testing during a proof of concept, are fundamental prerequisites.
Furthermore, when making the decision, in addition to the usual economic and technical factors, it is urgent to look beyond the box. Project planning and implementation by the manufacturer often show shortcomings in support during the migration of data from legacy systems. The standard catalogs of manufacturers stored in the tool, including the preset metrics, form a special quality feature, and the product roadmap for the next releases should also receive decisive consideration.
The aim is to establish a long-term and, above all, partnership-based business relationship with the manufacturer.

Automatically generated inventory analyses (optionally on a daily basis), taking into account the manufacturer’s license metrics, allow the license manager to react ad hoc and distribute licenses

• redistribute elsewhere
• terminate
• reorder
• change metric models

This tool also significantly eases the work of the license manager in determining the true-up reports required by some software manufacturers, i.e., quantity changes during an accounting period.
The following image illustrates the diverse interfaces to other tools, servers, and databases that must be established and stabilized.

Overview of the Software Asset Management Tool Interfaces

Bidirectional data streams enable reliability and security with regard to ‘compliance’ and the resilience of figures, reports, and analyses from the SAM tool, providing a perfect foundation for preparing for a smooth vendor audit.

Conclusion

Regardless of which approach your company decides to take in dealing with license management, it remains crucial to maintain high sensitivity and attention to ensure compliance-compliant licensing at all times and to always be able to make economical decisions in this environment.