Mangement Cousel Newsletter: Issue 2
Managing Computer Software

Computer software is an important part of an organization's intellectual property portfolio. For software developers, the software represents their revenue. And for almost every organization, computer software is a fundamental part of their operation.

Computer software is normally subject to a license. The license grants the licensee certain rights: how many (if any) copies may be made; how many computer processing units can use the software; what liability the licensee will assume for errors (normally very limited where allowed by law); and other terms.

Three areas that organizations should manage are: integration; outcomes; and, legal consequences.

Integration in an organization is critical to its success. Information and its supporting systems are fundamental to achieving integration. When licensing in computer software, organizations sometimes neglect to consider how this software will integrate with other software in the organization.

A common problem occurs when two groups in the same organization must work together, but each group uses different types of computer software e.g. local area networks or word processing.

The documentation from the software licensor will often state that the different systems will work together. But, the licenses for the software will almost assuredly not provide any such warranty. So, the organization is left trying to get the integration to work -- costing greatly in administrative time and lost opportunities.

Outcomes from using computer software are of significant concern. The software licenses will most likely not provide any warranty as to the correctness of calculations or results made by the software. For example, what if you use a piece of software to develop a project schedule, but there is a fault in the software logic? The organization will likely be liable for this outcome, even though the error is in the software.

Legal consequences from inappropriate use of computer software are substantial. The Canadian Alliance Against Software has been formed to identify unlicensed software usage (what amounts to software theft) and seek prosecution for copyright infringement.
Conviction under the Copyright Act for infringement can result in a fine of up to one million dollars, and imprisonment for up to five years (depending on the seriousness of the offence).

Often the software license will include a termination provision so that a breach of the terms (such as copying) will terminate the license.

If the software is an integral part of the business, this could have significant consequence.

Preventive Actions

Organizations can maximize the benefits from computer software:
ensure software is acquired through a single point where compatibility and integrity can be examined
insist on testing the software first: to validate its outcomes and to ensure its integration
maintain clear and complete records of all software, copies, licenses and who has access
establish a clear no piracy policy that forms part of every employment agreement: unauthorized copying is a matter of dismissal
audit to ensure copies are not being made -- include home based PC's in this audit
apply these principles to the documentation as well as.