Effective license position (ELP)

An ELP is a reconciliation of your current license entitlement against your current software consumption. It’s essentially an assessment that helps organizations understand whether they’re compliant with their software licenses. An ELP not only helps you avoid costly penalties for non-compliance but also optimizes your software spending, making it an essential part of IT governance and cost management.

It’s essential to maintain your ELP, particularly in the context of software asset management (SAM) and software license compliance. Software vendors have the right to audit their customers, and non-compliance can lead to costly penalties, fines and legal actions. An accurate ELP helps you identify and rectify compliance gaps before they become legal issues.

An ELP also helps control costs by mitigating over- and under-licensing, which can lead to unnecessary software expenses. Resources can also be allocated effectively by understanding usage to redistribute licenses to those who need them most.

In order to calculate your organization’s ELP you must assess your current software inventory, compare it to your license entitlements and determine whether you are over-licensed (have more licenses than necessary) or under-licensed (have fewer licenses than needed). Because this can be a tedious and time-consuming process to perform manually, most organizations opt to use a software asset management (SAM) tool.

It’s no secret that out-of-date software can pose security risks. Maintaining an ELP can help lessen those risks. An ELP helps organizations identify and track applications in use, and it can streamline the patch and update process to combat security breaches. Additionally, your ELP can help identify instances of shadow IT, or software that is not officially sanctioned or supported by the IT department. Because it may not receive regular updates or security monitoring, shadow IT can pose significant security risks—but by identifying and addressing unauthorized software you can better maintain a secure environment.