Software License Management Policy
A policy for tracking software licences, managing renewals, ensuring compliance, and avoiding audit penalties.
Purpose
This Software License Management Policy ensures that all software used within the organisation is properly licensed, compliant with vendor terms, and cost-optimised. Non-compliance with software licensing can result in audit penalties ranging from ₹5,00,000 to ₹50,00,000 for Indian SMEs, depending on the vendor and severity.
Scope
This policy covers all software installed on company-owned devices, software-as-a-service (SaaS) subscriptions, cloud platform licences, development tool licences, and any software procured through company funds and installed on personal devices (BYOD).
License Register Requirements
Maintain a central software license register with the following fields for each licence:
- Software name and version: Exact product name and edition.
- Vendor and publisher: Company that owns the software.
- License type: Perpetual, subscription, concurrent user, named user, or site licence.
- Purchase date and cost: Date of procurement and total cost in INR.
- Licence count: Number of licences purchased vs number deployed.
- Renewal date: For subscription licences, the next renewal date and auto-renewal status.
- Assigned users/devices: Who or what is covered by each licence.
- Contract/PO reference: Link to the purchase order or contract document.
Compliance Rules
- No software may be installed without prior approval from IT Head.
- The number of installations must never exceed the purchased licence count.
- Subscription licences must be tracked for renewal to avoid service disruption.
- Unused licences must be identified quarterly and either reassigned or allowed to expire.
- Open source software must be reviewed for license compatibility with commercial products.
Audit Preparation
Major software vendors (Microsoft, Adobe, Autodesk) conduct licence audits in India. When an audit notice arrives, you typically have 30 days to produce: proof of purchase for all licences, deployment report showing installations vs licences, and evidence of licence reassignment or retirement processes. A properly maintained licence register makes audit response a one-hour exercise instead of a week-long panic.
Put this into practice with workro desk.