The Ins And Outs of Software Compliance

Sophie Danby October 2, 2023
- 13 min read

Software compliance protects your organization from legal, regulatory, and reputational damage. Done well, it stands as a fundamental pillar of your IT Asset Management (ITAM), by  helping you keep track of your software assets and manage licenses effectively. 

Here, we will explore what this practice entails and how it can benefit your business both from an administrative and a financial perspective. We will also oversee possible challenges when implementing it and how InvGate Insight can aid you in streamlining some key software compliance processes.

Are you ready to learn more about it? Let's start.



Software compliance definition

Software compliance involves deploying and using software per the licensing conditions. Within the scope of Compliance Management, it is the process of ensuring that your company only uses software authorized and licensed to use. 

The compliance process involves tracking software installations and usage, record keeping, understanding software license terms and conditions, and tracking software across its lifecycle, including patching, updates, and retirement.

Software Compliance Management helps organizations answer important questions such as:

  • What software is installed in your estate?
  • What licenses are in place?
  • Is the software authorized, safe, and appropriately patched?
  • What version is supposed to be installed?
  • Who is using the software, and how much are they using it? 

Why is software license compliance important?

In short, it keeps you out of trouble! In all seriousness, it is an important part of your overall compliance portfolio. 

Software compliance helps organizations understand what is licensed versus what is installed, ensuring that the correct licenses are in place and that all contractual requirements between the organization and the software vendor are met. 

This practice also helps reduce the risk of being over and under-licensed, reducing the risk of increased audits and fines for non-compliance. 

Benefits and challenges of Software Compliance Management

Implementing software compliance brings a wide range of benefits that go beyond adhering to regulations. Some of them include:

  • Increased compliance - This one is quite straightforward, but Software Compliance Management ensures that organizations have the appropriate licenses and meet all relevant copyright laws, preventing fines and legal action.

  • Stronger support for IT security - Non-compliance can also expose an organization to IT security risks, such as vulnerabilities and data breaches, as unlicensed or outdated software can be more susceptible to cyber attacks. Maintaining compliance helps mitigate these risks by ensuring that only authorized and secure software is deployed and that it's up to date with security patches and updates.

  • Better audit performance - The practice promotes regular internal audits. Organizations can identify and fix potential issues by having internal audits before an external audit identifies them. 

  • More efficient Resource Management  - Compliance involves tracking and managing software assets across their lifecycle. This can lead to better and improved resource allocation and the elimination of redundant or unused software, resulting in cost savings and improved efficiency. 

  • Cost savings -This practice can also cut costs and support efficient IT Financial Management by reducing the potential for penalties and fines imposed for non-compliance and preventing the organization from purchasing more licenses than needed.

  • Increased colleague productivity - Compliance Management ensures that only up-to-date, patched, licensed software is available, preventing incidents and service disruptions caused by license shortages or expired software.

  • Improved vendor relationships - Maintaining software compliance will support better relationships with software vendors. By being proactive in Compliance and License Management, vendors will be more engaged and more likely to help rather than immediately fine if discrepancies are found. When suppliers and partners see that the customer organization is appropriately licensed and on top of maintenance and updates, they may be more willing to negotiate favorable terms and provide additional support to maintain the revenue and the relationship.

  • Competitive advantage - Some sectors require strict adherence to software compliance, so demonstrating this will act as a competitive differentiator. Companies that demonstrate compliance may also have a competitive advantage when bidding for contracts or partnerships.

  • Support for sustainability - Software compliance can support more sustainable ways of working by reducing unnecessary spending on licenses and minimizing the environmental impact of software production and disposal.

However, all this added value doesn't come without some associated obstacles that have to be addressed. The main challenges of software compliance are:

  • Complex licensing agreements - Software vendors can have complex licensing agreements with detailed and complicated terms and conditions. Understanding them and ensuring compliance can be difficult, so when reviewing these agreements, having someone from your legal team on hand can be helpful to ensure there is no room for misunderstandings.

  • The vendor landscape - Managing compliance with multiple software vendors, each with its own licensing models and terms, can be challenging. Leveraging the SIAM framework can come in handy for this. Also, if you have a Supplier Management function, ask for their help to maintain a positive relationship with suppliers, vendors, and partners.

  • Evolving regulatory requirements - Software compliance is subject to changing laws and regulations. Keeping up with these changes and adjusting your working practices to align with them can be challenging.

  • Shadow IT - Employees may install unauthorized software on their devices or within the organization, making it challenging to maintain compliance. It's important to have a clear policy on software installations supported by the appropriate access control to maintain compliance. 

  • Complex service ecosystems - Organizations often use a mix of servers, operating systems, software platforms, and underpinning hardware devices. Ensuring compliance across different platforms can be difficult, so it's important to have policies and procedures in place to ensure compliance no matter what type of asset is in play.

  • Remote working - The increase of remote and hybrid work models and mobile devices has made tracking and controlling software installations and usage challenging, especially if colleagues are using a mix of personal and corporate devices.

  • Human error - With so much information going around, making mistakes or missing certain aspects in software procurement, installation, and patching can lead to non-compliance. 

  • Third-party dependencies - Some software may rely on third-party systems or components, each with its own licensing requirements, which can complicate compliance tasks. 

  • Cultural and training challenges - Everyone has a role in software compliance, so it's important that colleagues at every level, from technical to business, ensure their roles and responsibilities as well as where to go to help.  

All these hurdles might seem a little overwhelming, but many of them can be addressed with an ITAM tool that incorporates compliance capabilities. Join us as we take a look at the process and how the right solution can streamline compliance activities.

The software compliance process

Now that we’ve seen how it can benefit your organization, and some challenges to look out for, let’s break down the implementation roadmap. The software compliance process is made up of the following steps:

  1. Planning: It's important to plan for software compliance. Describe how the process will be conducted throughout the service lifecycle. This includes documenting how the process is managed, roles and responsibilities, scope, and how changes are made in a way that doesn't adversely impact License Management and verification and audit activities. Without a documented plan, software assets may likely be missed, incomplete, or cause unnecessary work because of a lack of version and document control. 

  2. Baselining: Taking a snapshot of your state to identify all software assets within the organization, and incorporate them into your IT asset inventory to be managed. This includes commercial software, open-source software, and in-house developed applications. This stage determines where software is installed and captures the version and license information.  

  3. License assessment: Review software licensing agreements to understand the different terms and conditions. Match software installations with available licenses to check for compliance and ensure the appropriate licenses are in place.

  4. Change control: Software installation is a major point of control. If you have Change Enablement and Release Management practices in your organization, lean into them to ensure that software installation on corporate devices is managed effectively, efficiently, and safely. Consider implementing physical and virtual controls to prevent unauthorized software installations, for example, locking down devices or using group policies to control installation permissions. Use a central point of installation or a definitive media library to push software centrally.

  5. Usage monitoring: Regularly monitor software usage to ensure that licenses are not exceeded. If you have a specific Event Management team, ask if they can monitor license compliance as part of normal monitoring activities. 

  6. Maintenance and patching: Use security patches to keep software up to date and ensure a process is in place for handling certificate renewals in good time. To reduce operational risk, consider automating Risk Management activities to ensure updates are installed as soon as possible.

  7. Supplier Management: Establish and maintain positive relationships with software vendors. Have regular service review meetings to manage potential issues and stay informed about licensing terms and conditions changes. 

  8. Communication: Generate regular compliance reports for management and stakeholders to make the process transparent.  

  9. Status accounting: It is important to track licenses and their linked assets throughout their lifecycle, not just when the license is purchased and the software is installed. You must manage that license from the procurement to the retirement and disposal stages.

  10. Decommissioning and retirement: Develop procedures for retiring or decommissioning software and associated licenses when no longer needed to ensure that the license is de-allocated and there is no room for error. 

  11. Verification: Conduct regular compliance audits, both internally and in response to vendor-initiated audits. Prepare for audits by maintaining accurate records and documentation. Address any compliance issues discovered during internal audits quickly to address any issues before the vendor audit.

  12. Continuous improvement: Build improvement activities into your practice to ensure they align with business needs. Regularly review and update software compliance policies and procedures. Look for ways to improve compliance processes based on lessons learned and changes in the software compliance landscape.

How to do software compliance with InvGate Insight

InvGate Insight’s Software Compliance module combines data from the contracts logged on your instance with the reported software usage.

As we’ve seen, ensuring compliance across your organization’s software assets means at the same time overseeing many different vendors, requirements, and dates. To make this process easier and avoid possible mistakes or mix ups, InvGate Insight’s Software Compliance feature allows you to monitor both compliance and software usage all from the same place.

This module works by crossing different information sources to ensure that your purchased software matches what is installed in your IT environment. Then, it reports on elements such as unused or out of compliance installations and potential cost saving opportunities. This way the feature allows you to identify and address these issues promptly, avoiding the unnecessary consequences.

Software compliance best practices

Here are some software compliance best practices to keep in mind when implementing the activity:

  • Set your scope. Software Compliance Management is a complex undertaking, and you can't do everything at once, so it's really important to set a scope. Speak to your IT, legal, and risk teams, start with your biggest exposure area, and work from there. If in doubt, focus on organization-wide licensing provided by large vendors such as Microsoft, Adobe, and Oracle.   
  • Look to other practices for support. Don't reinvent the wheel - look at what is in place already; for example, your information security policy will have guidance on what can be installed. The service desk will act as a point of contact for licensing queries, and Change Management/Enablement ensures that only authorized software can be deployed to corporate devices.
  • Make sure your documentation is appropriate. Ensure all your policies, processes, and procedures are up to date, regularly reviewed, and stored in a central location.  
  • Training and education. Software compliance affects everyone, from the intern on their first day to the CEO. Ensure you have training and education programs so everyone understands their responsibilities. One of the best measures of success is if everyone in an organization accepts it as part of their day-to-day job, from end users understanding the basic dos and don'ts at induction to the compliance team running the process to the risk team checking for exceptions.
  • Have a plan in place for responding to audit requests. Define the process for audits in your procedures and build up a bank of templates for things like response emails, meeting requests, and communications. Ensure only authorized personnel with the appropriate training talk to software vendors / external auditors to prevent any confusion. Run regular internal audits so that if your organization has missed something - it can be corrected immediately.

What is a software compliance audit?

Software vendor’s will conduct a compliance audit to ensure that all legal and compliance activities are carried out and organizations are following the agreed terms. Depending on the vendor, this process can take place every one to three years. 

With the appropriate compliance measures in place, and in particular by planning and running internal audits periodically, you will be able to catch any issues early, fix them, and avoid disruptions or fines. 

Final notes

Software Compliance Management is no small undertaking. To guarantee organizations meet all their legal, regulatory, and financial obligations, it has to look over the whole software state and ensure it is managed, controlled, and protected thoroughly.

By following the activities, processes, and tips we have listed throughout this article, the process can be made simpler. And, of course, InvGate Insight can help you not only meet software compliance requirements, but also streamline your overall ITAM processes.

See for yourself by booking a free trial and exploring the tool in your own time! And if you need more personalized assistance, you can always book a call with our experts.

Frequently Asked Questions

What is the role of software compliance? 

Software compliance ensures that only authorized, safe, licensed software is installed and that the organization meets its legal and regulatory requirements. 

How do you ensure software compliance? 

You ensure compliance by implementing, running, and improving Software Compliance Management activities and working with your stakeholders, colleagues, and vendors to ensure they are in place and working correctly. 

What does Software Compliance Management do? 

Software Compliance Management manages the software provision by meeting license and usage regulations.

What is a software compliance report? 

A software compliance report establishes data security accountability for businesses operating within certain industry regulations. It reports on the current state of software compliance, calls out any exceptions, and recommends remediation activities. 

How do we carry out audit plans for software compliance? 

Have a schedule for audits and underpin this with internal audits so that you can address any issues or concerns.


Read other articles like this : IT software, Software Audits, ITAM, InvGate Insight, it compliance, software license monitoring

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