It pays to know your software

Using pirated and under-licensed software puts your business at risk. Here are tips to avoid costly penalties and security vulnerabilities.

Companies use software for a myriad of activities--typing out documents, accessing the Internet, and managing finance--yet many fail to invest time and effort in managing their software.

Proper software management is important for several reasons.

First, poor software management can mask software piracy, an illegal activity that can impose costly consequences to the business, both from a legal and a security standpoint.

Many governments across Asia are now taking a tougher stance on copyright infringement. In many countries, willful copyright infringement can result in criminal liabilities. Many organizations don’t realize that under-licensing--where, for example, a company with only one license installs the software on five PCs-- is also a form of software piracy. This, in addition to the use of illegal software, can land businesses into hot soup with the authorities.


Illegal software also exposes an organization’s computers to malicious code and virus attacks that can destroy valuable data and bring down an entire network.

Second, software is a valuable asset that, when properly managed, can offer many business benefits, ranging from cost savings to gains in employee productivity and efficiency.

What about SAM?
In a nutshell, software asset management (SAM) is a business process that enables an organization to identify and eliminate unauthorized software, and addresses under-licensing issues. While software inventory and tracking are integral parts of SAM, so are the policies, procedures, technologies, procurement, delivery, deployment, and support of a company's software assets.

Step 1: Know what you need
As a start, each company should know exactly what software it needs. This is valuable to ensure effective and efficient purchasing and use of software.

To determine what is needed, answer these questions:

  • Are you using the right software to optimize efficiency and effectiveness?
  • Are staff satisfied with their current software applications?
  • Are there other software programs that would enable your staff to operate more effectively and efficiently?
  • Are there software programs you now have but don’t need anymore?
Step 2: Know what you have

Only by knowing what software assets the company has would it be able to determine what it needs in the future. This inventory-taking process can also root out software that is not need. Here’s a check-list of issues to look out for:

  • Are you using the most recent and suitable version of programs for your needs?
  • Are you using outdated or unnecessary programs?
  • Are there other programs you should get to be more productive or efficient?
  • Does each employee have the correct set of programs?
  • Are employees properly trained to use the software?
  • Do you have illegal, unauthorized or unlicensed programs?
Remember that having an original CD for the software does not mean the firm can install it on as many computers as it likes.
Items to note down in the inventory check-list include version numbers, serial numbers and product names, as well as all material related to software on the computers, such as media (floppy disks and CDs), documentation (manuals and reference materials), licenses and administrative paperwork related to the purchase of this software, such as invoices, receipts and other documents that prove the legitimacy of the software.

Step 3: Compare installed software against licenses

With the inventory in hand, take the following steps:

  • Compare the software that is installed against what is allowed under the terms of the license agreements
  • If you identify any illegal software, delete them immediately
  • Compare the legal software with the needs of your organization as identified in step 1 This is also the time to decide which software the firm legally has that it wants to keep or upgrade, which software to discard, and then plan or budget accordingly.
Remember that having an original CD for the software does not mean the firm can install it on as many computers as it likes. Check license agreements to determine the details. Any extra copies made or installed outside the number stipulated in the license are deemed illegal.

Step 4: Make SAM a continuous process

Effective software management requires continuous supervision and periodic spot checks. Make SAM an ongoing process by doing the following:

  • Appoint a software manager who is responsible for SAM
  • Schedule regular audits
  • Coordinate your business’ software needs with your software manager
  • Issue a company policy statement outlining the organization’s commitment to use only legal, licensed software
  • Conduct random checks
  • Send out periodic reminders on using only legal software

By going through these four steps, the company would have taken the basic measures to ensure that it uses legal and licensed software, and more importantly, better manage and harness the software assets for greater cost savings, productivity and efficiency.

Jeffrey Hardee is the vice president and regional director for Asia with the Business Software Alliance.