Management and Reconciliation of Software Licenses

IT Asset Management Practices Resource Centre Software | 0 comments

by | October 28, 2015

Reconciling your software entitlement.

Reconciling licenses has been a focus point within the industry for the last few years and its importance is rapidly growing, but what does reconciling your licenses actually entail and what can you expect from the outcome?

Understanding how your software is being utilized within your organization can ensure you remain compliant and save money – fact – but what work needs to be done to reap these benefits? In this article we explore the ins and outs of reconciling your data, the possible outcomes and what these can mean.

What is reconciling your licenses?

Reconciling your licenses involves comparing your inventory consumption data with your license entitlement and ensuring the information matches. This information is required by vendors when it comes to annual audits so they can clearly see how you’re using their software and, if needed, where they sell you licenses to ensure you are compliant.

It’s usually this stage of the SAM process that organizations realize the lack of control that surrounds their software estate and if that happens when a vendor is requesting an audit, they can end up with a hefty bill.

Collecting quality data

Gathering good quality data is arguably the most important aspect of your reconciliation process as the output is only as good as the information you have gathered. If there are gaps in your data you will not be aware of the software that is in use, leaving you blind to a chunk of assets your software audit could suddenly discover.

Using multiple sources to gather your MSI, EXE, virtualization and metered data is highly recommended as there is no tool that has total coverage yet – not forgetting Active Directory (or anti-virus tools) to establish what is accessing your network at any given time (including retired devices). Trust the value that is given to you from each toolset, take advantage of the multiple sources specific to each vendor and compare your discovery data with your Active Directory output to ensure you understand the actual coverage of your estate. Once you have gathered this information, having a tool that can read and understand all the relevant data is the next important stage.

How do you reconcile your software licenses?

The reconciliation process includes:
*Gathering all your entitlement records – which can be kept in a vendor portal, with IT procurement or the employee that purchased the software. A major point to understand here is what the vendor will accept as a license entitlement (sometimes an invoice won’t be enough. Place great care when linking licenses to upgrades, creating links between multiple maintenance renewals and be aware of grandfathering rights to ensure you know what you’re actually allowed to install, irrespective of what your licensing documents say.
*Collecting your inventory information – this includes, MSI data, EXE data and software metered data, which may come from multiple discovery tools.
*Comparing the information to produce your baseline report.

Reconciliation is a highly important task and should be done regularly but, without the proper tool or knowledge in place, this is a manual and time consuming job. We have found that there are tools on the market that claim to have the built in knowledge needed to automatically reconcile your consumptions data with your license entitlements, but this is not the case. The work is manually done in the form of spreadsheets then imported into the tool to present to customers, basically a glorified repository for your software assets – this is great if it’s not you doing the legwork behind the reconciliation but not ideal if you want to maximize optimization opportunities on a regular basis.

If you are wanting to manage your software assets in-house then ensure you have a tool that has the built in knowledge and automation to reconcile the majority of your assets. There will always be a few that may need a little look into but if you take away most of the legwork you are saving yourself a considerable amount of time and money. Alternatively, outsourcing your license management will free you completely of the administration reconciling tasks and give you access to specialists and start optimizing your licenses.

Know your software license terms and conditions

Once you have the data, you need to know how you’re allowed to be using the software. Unfortunately, knowing that you have 100 licenses and 100 installs isn’t the way forward. Different licenses have different rules, you could have 100 licenses that have geographical restrictions but are deployed across your network globally – opening you to risk. Alternatively, you could have 100 licenses but only 50 copies of the software are actually in use. Don’t be afraid to ask for help, license specialists are there to assist you and can help ensure you are using your licenses within the correct parameters.

The Outcome: Over- or Under-licensed

There are three possible outcomes from your reconciliation process and each time you perform the process you could have a different result as your business doesn’t stand still – people move on or get promoted, acquisitions occur that need new licenses or new technologies emerge that are more beneficial to your organization than the last. The best possible end result is that you come out compliant – no need to panic, you are in control of your software assets, spending the correct amount of money and ready to pass your baseline report on to your vendor. Of course, this isn’t always the case and more often than not, over or under licensed is what companies discover:
*Under-licensed means you have discovered you do not have the correct amount of licenses to cover the software deployed across your estate, this is a breach in your terms and conditions. If you are found to be under-licensed during a software audit you will be forced to purchase the licenses needed to bring you up to date then and there, and in some cases, we have also seen clients being handed a support and maintenance bill at the same time.
*Over-licensed means you have more licenses then you need – overspending on your software assets is extremely common, we have seen organizations over spend by 30% which amounts to a significant figure. Reconciliation will help eliminate these extra costs and you can start to optimize your estate with re-harvesting licenses or moving licenses to another employee if their colleague doesn’t use the software.

These outcomes can be rectified but at what cost to your organization if reconciliation isn’t done properly?

In Summary

We recommend that you regularly perform reconciliation tasks to understand where your organization currently stands, don’t leave it until a vendor asks for your license position as you may be in for some nasty shocks. If you do choose to take this process on within your organization, ensure you have a tool that holds licensing knowledge and can assist you in your process rather than become a burden or, if you decide to outsource your reconciliation then take advantage of the experts you have at hand – they can help you with any licensing rules you may be unsure of.

About the Author

Libby PhillippsLibby Phillipps | Marketing and Events Co-ordinator with License Dashboard | Connect with Libby

Always looking to make the working lives of her clients that little bit easier, Libby Phillipps is dedicated to helping IT, Finance, Procurement and SAM professionals deliver savings to their organization with License Dashboard. She is also crazy about her pooch Kes and have a love hate relationship with aerobics and running…

About License Dashboard

License-Dashboard-Company-Logo-(RGB)A global leader in Software Asset Management, License Dashboard combine unrivalled software licensing expertise with professionally-developed software solutions designed to help both large and fast-growing organizations manage their software expenditure, minimize costs, optimize utilization and streamline the entire software lifecycle.


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