5 Best Practices For Software License Management

Rohit Rao

20th September, 2023


Inefficient software license management can significantly affect organizations, impacting both time and SaaS budgets. This, in turn,‌ affects overall productivity and efficiency. 

Fortunately, by adopting software license management best practices, organizations can rectify these issues, streamline their processes, and achieve improved productivity and efficiency.

Surprisingly, many organizations still rely on manual methods to manage their software licenses. This archaic approach makes it challenging to keep track of acquired licenses and determine which are still necessary, leading to inaccuracies when auditing software usage within the organization.

Consequently, it has a detrimental effect on the efficiency and productivity of your IT teams. Moreover, mismanagement of licenses exposes organizations to unwanted security risks, further complicating matters.

As a growing enterprise, wasting resources and precious time is an untenable proposition. To understand why automation testing is better than manual testing and why switching to an automated software license management solution makes sense, and what are the software license management best practices, let's first get a grasp on what it is and why it's crucial for business.

What is Software License Management?

Software license management, often abbreviated as SLM, is a comprehensive organizational process responsible for procuring, tracking, and strategically managing software licenses. This multifaceted practice involves the acquisition of licenses, monitoring their deployment across the organization, and ensuring their proper utilization, all while adhering to the terms and conditions stipulated in licensing agreements.

At its core, software license management aims to balance optimizing the organization's software assets and minimizing costs. There are several common types of software licenses:

  • Proprietary Licenses: These licenses are typically sold by software vendors and come with specific terms and conditions. Examples include licenses for widely used software, such as Microsoft Office, Adobe Creative Cloud, and Oracle Database.

  • Subscription-Based License: In this type of license, users pay a recurring fee to access the software. This model often includes regular updates and support. Microsoft 365 and Adobe Creative Cloud are prominent examples of subscription-based licensing.

  • Freeware & Shareware: Freeware refers to software that is provided at no cost, but it may have limited functionality, and users often don't have the right to modify it. Examples include applications like Skype and Dropbox.

    Shareware is distributed on a trial basis, typically with an option to purchase a full license. Common examples are software like WinZip and WinRAR, which allow users to try before they buy.

  • Permissive Licenses: These licenses grant access to the source code and are often free. Examples include the GNU General Public License (GPL) and the Apache License. They promote collaboration and sharing of code.

Why is Software License Management Important?

There are several reasons why SLM is crucial for your organization; a few of them are stated below.

  • Compliance: Adherence to software licensing agreements is of paramount importance to avoid legal and financial repercussions. Non-compliance can result in substantial fines, damage to the organization's reputation, and disruptions to operations.

  • Cost Control: Effective license management empowers organizations to exercise control over expenses by preventing unnecessary expenditures on unused or redundant licenses. This prudent cost control ensures that SaaS budgets are allocated optimally, preventing wasteful spending.

  • Security: License management is indispensable in ensuring that all software within an organization is up-to-date and secure. Unmanaged software can become vulnerable to security breaches and cyberattacks.

  • Audit Readiness: Organizations must be prepared for software audits at any given time. Effective license management ensures that accurate records are readily available for auditing purposes..

  • IT Asset Management: Proper software license management guarantees that employees have uninterrupted access to the software they require, precisely when they need it. This, in turn, contributes to increased productivity and operational efficiency. Software asset management ensures the organization has an accurate inventory of its software assets, which is crucial for budgeting, planning, and decision-making.

Now, let's proceed toward the software license management best practices your organization can implement to smoothen the flow of work.

Top 5 Software License Management Best Practices 

Software license management is essential for efficient business processes and cost control. Implementing these five software license management best practices will help streamline your software license management process and ensure compliance with software licensing agreements:

1. Establish a Centralized License Inventory

One crucial aspect of SLM that deserves significant attention is creating and maintaining a centralized license inventory. This inventory serves as a cornerstone for streamlined and efficient SLM practices. 

  • Visibility and Control: A central inventory brings all licenses under one roof, granting a bird's-eye view of their usage. This centralization enhances software asset control and prevents licenses from slipping through the cracks.

  • Optimization: By analyzing usage patterns across the entire software portfolio, a centralized inventory helps spot opportunities for reallocating license terms as per actual business needs. This optimization minimizes costs and maximizes efficiency.

  • Simplified Upgrades and Renewals: Managing software upgrades and renewals becomes a walk in the park when licenses are organized centrally. It allows for easy tracking of license statuses, expiration dates, and upgrade availability, ensuring compliance and cost-effectiveness.

2. Identify the number of licenses required

Another software license management best practise is dentifying the number of software licenses required is crucial for organizations, especially as they grow and evolve. Overspending on licenses can strain budgets while having too few licenses can hinder productivity. To make informed decisions regarding software licensing or future software investments, consider the following factors:

  • Number of Users: Determine how many users within your organization will require access to the software. Counting users accurately is fundamental in ensuring you have enough licenses to meet demand without overpaying for unused ones.

  • License Types: Understand the specific types of licenses needed. Some software licenses are perpetual, meaning they grant indefinite access, while others are subscription-based, requiring regular payments. Assess which type aligns with your organization's needs and budget.

  • Growth Plans and Future Needs: Anticipate your organization's growth and evolving software needs. Consider future expansions, new projects, or additional departments that might require access to the software. Planning for the long term ensures scalability.

  • Budget and Financial Constraints: Evaluate your organization's budget and financial constraints. It's essential to balance acquiring the necessary licenses and staying within budgetary limits. Overspending on licenses can strain finances unnecessarily.

By considering these factors, organizations can accurately identify their required licenses. This information allows for the right-sizing of licenses to suitable tiers, ensuring you pay for what you use. Avoiding unnecessary expenses on unused licenses conserves resources and enables reallocating funds to procure licenses essential for other critical business operations.

3. Ensure compliance with software license agreements

Ensuring compliance with software license agreements is imperative as a software license management best practice. These agreements are legally binding contracts between software vendors and users, outlining the terms and conditions governing software usage.

Compliance requirements are essential because they ensure that software is employed in alignment with the vendor's stipulated rules. These rules can encompass restrictions on the number of users, the duration of usage, and specific permitted use cases.

Failure to comply with software license agreements can result in severe consequences. 

  • Legal Action: Failure to comply with software license agreements can lead to legal action initiated by the software vendor, potentially culminating in hefty fines and legal disputes. 

  • Unforeseen Expenses: Non-compliance may entail unforeseen expenses, such as purchasing additional licenses or upgrading to more expensive software versions to meet business strategy requirements.

  • Security Risks: Using unlicensed or non-compliant software can expose organizations to data breaches and security vulnerabilities, posing a significant risk to sensitive information and systems.

4. Eliminate redundant software licenses

Eliminating redundant software licenses is crucial software license management practice to optimize software expenditures, enhance operational efficiency, and bolster cybersecurity measures. Redundant software licenses refer to acquiring multiple licenses for software applications that offer similar functionalities, often inadvertently, which can result in unnecessary expenditures and administrative burdens.

Large organizations are particularly susceptible to this issue due to the complex nature of their software ecosystems. In many cases, IT teams resort to manual methods to identify and manage redundant software, a process that can be both time-consuming and costly. This manual approach not only drains financial resources but also hampers overall productivity.

Consider a scenario where an organization holds multiple redundant licenses for the same software. This essentially means paying multiple times for identical software functionalities. Managing these various licenses can be challenging and may require clarification from the IT team when confronted with duplicate functionality. This complicates software asset management and increases the likelihood of overspending on licenses.

To address this issue effectively, organizations should leverage automation to identify and eliminate redundant software licenses. Automation streamlines the process of pinpointing duplicate functionalities across various software applications. 

By automating the identification process, organizations can systematically track individual software features and assess which software provides the same functionality. Consequently, organizations can eliminate unnecessary software licenses, avoiding superfluous expenditures.

Eliminating redundant licenses offers a multitude of advantages beyond cost savings. It greatly benefits inventory management and reporting, simplifying software asset tracking, planning, and budgeting. This ensures that organizations maintain a lean software portfolio and allocate resources judiciously. 

Moreover, it reduces the risk of potential security breaches, as fewer software applications need to be monitored and secured.

5. Conduct regular audits

Conducting regular audits within an organization's software license management process is a crucial practice that offers numerous advantages. 

  • Real-time Insights: Audits provide real-time insights into software license usage and compliance, offering a clear view of how licenses are utilized.

  • Discrepancy Resolution: Audits help organizations identify and rectify discrepancies between actual software usage and purchased licenses, reducing the risk of legal issues and fines.

  • Cost Optimization: Audits pinpoint underutilized or redundant licenses, leading to substantial cost savings.

  • License Control: Audits enable IT teams to maintain control over license statuses, renewal schedules, and overall software inventory, facilitating effective budgeting, planning, and reporting.

  • Enhanced Security: Audits serve as a vital security measure by identifying potential risks or vulnerabilities associated with unlicensed, outdated, or unused software, promoting a robust cybersecurity posture.

    While the software license best practices mentioned earlier are essential for effective software license management, implementing them manually can be a daunting task, especially for organizations with a vast and diverse software ecosystem. This is where  software license management tools come in as a game-changing solution. Zluri is a cutting-edge SaaS management platform designed to simplify, automate, and optimize the entire process.

Elevate Your Software License Management with Zluri

Zluri's SaaS management platform (SMP) provides comprehensive visibility into your organization’s software assets and licenses. This centralized control center serves as a pivotal tool for effectively managing software resources. Within this platform, Zluri offers a robust set of features that enable users to gain full insight and control over their software ecosystem.

1. Comprehensive Visibility

One of the primary advantages of Zluri is its ability to provide a bird's-eye view of your software inventory. Through this platform, you can effortlessly monitor the entire spectrum of software tools in use across your organization. This includes identifying the applications and understanding the specific licenses associated with each one.

Zluri employs nine powerful discovery methods to ensure that no software license goes unnoticed within your organization. These methods include MDMs, IDPs & SSO, direct integration with apps, finance & expense management systems, CASBs, HRMS, directories, desktop agents (optional), and browser extension (optional), making Zluri a versatile solution that can adapt to your organization's unique needs.

Zluri’s 9 robust discovery methods

Zluri’s nine discovery methods

2. Usage Monitoring

With Zluri's usage monitoring, you can closely track how your organization utilizes software. This level of visibility provides a clear picture of which software applications are heavily used and which ones are underutilized. Such granular insights enable you to make data-driven decisions about your software resources.


 One of the key advantages of this feature is its capacity to help you identify areas where costs can be trimmed. You can streamline your software portfolio, eliminate unnecessary expenses, and ensure efficient resource allocation by pinpointing underused licenses or redundant software applications.

The data obtained through usage monitoring empowers your team to take proactive steps in managing software assets effectively. You can ensure that each software license is put to its fullest potential, maximizing the value derived from your software investments.

3. Vendor Management 

Vendor management is a critical aspect of Zluri's software management capabilities that goes beyond the confines of internal operations. Zluri extends its functionalities to include the monitoring and tracking of software licenses used by external partners, such as freelancers, consultants, and vendors. 


This feature is instrumental in helping your organization maintain compliance, even in collaborative ventures that transcend your organizational boundaries.

By incorporating external partners into its purview, Zluri ensures that you have a holistic view of software license utilization, regardless of whether the users are within or outside your organization. This comprehensive oversight allows you to effectively manage and optimize your software resources, ensuring that licenses are allocated efficiently and in accordance with licensing agreements.

Furthermore, this capability aids in compliance management by providing real-time insights into the usage of licensed software by external entities. It enables you to track the usage patterns and license types employed by vendors and partners, helping you to stay in compliance with licensing agreements and regulations.

 4. License Renewal Reminders

Zluri serves as a reliable partner in the critical task of managing license renewals. Within its suite of features, the renewal calendar stands out as an essential tool that ensures you remain on top of your license renewal obligations.

License Renewal Reminders

The renewal calendar is designed to be your proactive ally. It sends you timely reminders, guaranteeing you never overlook a renewal deadline. This functionality is invaluable in preventing any interruptions or disruptions caused by lapsed licenses.

One of the standout advantages of Zluri's renewal calendar is its flexibility. You have the ability to customize and tailor reminders to align precisely with your organization's unique contractual obligations. This means you can configure the system to send alerts well before important contract renewals and payment deadlines.

For license contracts, you'll receive timely alerts at various intervals:

  • 30 days before contract expiration

  • 15 days before contract expiration

  • 1 day before contract expiration

Similarly, for license payments, you'll receive alerts at the following intervals:

  • 7 days before payment due date

  • 1 day before payment due date

By leveraging this feature, you can stay ahead of the curve when it comes to managing your software licenses. You won't find yourself rushing at the last minute to renew licenses or facing the consequences of missing deadlines, such as service interruptions or compliance issues.

5. Automated License Lifecycle Management 

Zluri excels in the realm of automated license lifecycle management, streamlining essential processes that span the entire spectrum of license management. This comprehensive automation covers every crucial aspect, from the initial license requisition and approval stages all the way through to license deprovisioning.

One of the standout features of Zluri's automation capabilities is its ability to efficiently handle license provisioning. When new employees join your organization, Zluri ensures that they swiftly gain access to the required software licenses without unnecessary delays or administrative bottlenecks. 

This enhances productivity and minimizes the risk of underutilized licenses, effectively optimizing your license resources.

Onboarding workflow

Conversely, Zluri shines in the area of license deprovisioning as well. When employees leave your organization or no longer require specific software licenses, Zluri automates the deprovisioning process with precision and efficiency. This proactive approach eliminates wastage and reduces the chances of paying for unused licenses, thereby contributing to cost savings.

Offboarding workflows

6. Contextual Recommendations

Zluri goes the extra mile in software management by providing contextual-based app recommendations and in-app suggestions that enhance the user experience. These recommendations are not your standard, one-size-fits-all suggestions; instead, they are finely tuned to meet the unique needs of individual employees within your organization.

Zluri's contextual recommendations take into account various factors, including an employee's job role, seniority level, and department. By analyzing these key aspects, the platform can suggest relevant software applications that can boost productivity and efficiency in a personalized manner.

Contextual Recommendations

Contextual-based app recommendations

In-app Suggestions

In-app Suggestions

This feature is engineered for simplicity and accessibility. You don't need to be a coding expert or navigate complex settings to benefit from Zluri's contextual recommendations. The platform's user-friendly interface ensures that these tailored suggestions are easily accessible to employees, helping them discover and leverage the right tools for their specific tasks and responsibilities.

7. Employee App Store (EAS)

Zluri's Employee App Store (EAS) is a game-changing self-serve solution designed to enhance the efficiency and agility of your organization's software acquisition process. With EAS, employees have the ability to access and acquire new applications as needed, simplifying the traditionally cumbersome process of software requests and approvals.

Employee App Store

One of the most significant advantages of EAS is its capacity to eliminate the need for a time-consuming ticketing system. In a traditional setup, employees would typically have to raise a ticket, wait for approval, and then finally receive access to the required software. This process often resulted in delays and frustrations, hindering productivity.

However, with Zluri's Employee App Store, this paradigm shifts dramatically. Employees can independently browse, select, and install the required software within a user-friendly and intuitive platform. This speeds up the software acquisition process and empowers your employees to take control of their own software needs.

The impact of EAS extends beyond just reducing wait times. Streamlining the software acquisition process frees up valuable time and resources for your IT and procurement teams. They can redirect their efforts towards more mission-critical tasks, such as optimizing software licenses, enhancing security, and providing strategic IT support.

Additionally, Zluri conducts regular internal audits and automatically generates accurate reports on licenses required, how frequently the software is being used, and non-compliant software licenses. That enables you to be updated on all the software licenses' statuses, which will help you decide whether to continue with the license or shift to other potential alternatives.

Even after learning all the benefits, it might not be convincing. The best solution over here is to give it a try by yourself. now! And check out the exclusive features that Zluri offers.

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