Photo: ”Business Models Inc meeting” by Sebastiaan ter Burg / CC BY. Adapted from original.

What is a Software License Audit?

Software license audit is a verification activity in ITAM (IT Asset Management) which ensures effective management (tracking, monitoring, optimum utilization, triaging the discrepancies {like over-usage of licenses}, and reporting) of software licenses in an organization.

Why Software License Audit is necessary for organizations?

Software license audits are very much necessary for the organizations (for the benefit of organization) as:

  • It will help you stop overbuying software licenses and reduce costs,
  • It will achieve compliance with respect agreements, and prevents wastage of money on penalizations,
  • It will enable you to have authorized and approved software, preventing any kind of incompatibility issues or any breakdown of IT services,
  • It will enable you to detect the prohibited software in advance, and will help the organization’s time and resources,
  • It will enable you to track the software usage and allocations,
  • It will help you in consolidating all license purchases at one place.

Want to do a software license audit?

Here is an approach for conducting software license audit, in simple language as mentioned below:

  • Approach your release and configuration manager/ team to understand what the different software installed on all CI’s (laptops, desktops, servers, virtual machines, etc.). Generally, this Release manager/ Configuration manager would bring the reports or snapshots from the respective tool and would show that these are the software that is live on CI’s (Configuration items)

Note: Information collected from reports (from configuration management tools) doesn’t mean you have collected all information about your installed software. Or some baseliner information a year back, also doesn’t depict the real statistics in operational environment.

  • Conduct an awareness program/ training to all the employees about software license audits and its penalizations.
  • If there are no discovery tools in the organization, ask all your employees to send the complete list of software installed on their PC’s (with respect to personal use and official use).
  • If there is a procurement team or any specific team which maintains the purchase orders/ invoices of the licenses, get the details of the purchased licenses and evidences.
  • Perform physical audits to identify the software that was installed for personal use, and inform all the employees to uninstall the irrelevant software (which was not purchased).
  • Based on information gathered from configuration management tools and licensing tools, categorize the information collected with respect to – software name, license model (device licenses, processor based licenses, CAL, XXX), versions, editions, publishers, entitlements, deployment details, machine owner, installation date, etc.
  • Identify what are the software licenses which are overused, breaching the agreements (with respect to license purchase and license deployments).
  • Identify the computers where the software is being unused or used at times– Reuse those licenses on those computers where there is a necessity.
  • Identify the shortage of licenses, and implement the necessary decision either procuring more licenses/ uninstalling the software.
  • Make it a continuous activity, by conducting internal audits regularly (once in 2 months).

To know more information on defining software license management process, implementing license management, and improving your license management operations; please check my book GUIDANCE FOR ITAM (IT Asset Management) @

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Kiran Kumar Pabbathi has 10 plus years of experience, he is a Master in business administration (IT), Bachelor in Computer Applications, and a certified professional in ITIL Expert, PRINCE2 (Foundation and Practitioner), Six Sigma Green Belt, ISO/IEC20K Foundation, Cloud Computing Foundation, TMAP Foundation (Test Management Professional), MCP in SharePoint 2003 Customizations, and MCTS in MS Project 2007. He is the author of 8 books: "PDCA for ITIL" published by TSO, UK (available HERE and also HERE) and "Guidance for ITAM", "Guidance for Enterprise Asset Management (EAM)", "Focus on IAM", "Guidance for Incident Management", "Guidance for Problem Management", "Guidance for Change Management" published by Servicemanagers.Org (all available HERE at Amazon). He worked for various conglomerates in the IT industry focusing on ITSM domain, which gave him detailed insight of ITSM, ITAM (IT Asset Management), IAM (Identity and Access Management), Quality assurance, Project management, Test management, and Technical writing. Currently, Kiran works as an IT Process manager and ITIL Trainer in Shanghai Bizenit Information Technology, China. You can reach him on Linkedin (click here)