What is the purpose of reconciliation in Software Asset Management?

Reconciliation in Software Asset Management is a critical process that involves comparing an organization's software entitlements (licenses owned) with its software inventory (licenses used). The primary purpose of this comparison is to determine the organization's compliance position—whether it is over-licensed, under-licensed, or in compliance with software licensing agreements. This process ensures that an organization fully understands its software usage in relation to what it is entitled to use, enabling better decision-making and management of software assets. By accurately producing a compliance position, organizations can mitigate risks associated with unintentional software misuse and avoid potential legal penalties from vendors.

The other options, while related to software asset management, do not capture the specific intent of the reconciliation process. Automating software upgrades pertains to the deployment and update processes, creating new software licenses involves procurement activities rather than compliance assessments, and establishing a software purchasing plan focuses on future acquisitions rather than the current state of compliance.