Application License Management (ALM) is the process of capturing, integrating and maintaining demographic, technical and financial information about managed applications and their licenses from requisition through disposal. The process provides the means by which the Service Delivery organization manages, tracks and distributes software licenses. The objective of the process is to oversee license compliance, ensure optimum license usage, provide the customer with maximum access to software and better vendor management. This Paper outlines the best practices while managing Application Licenses and provides an insight to the various license types and a process to manage these licenses. It also outlines a phased implementation approach to be considered while implementing ALM Process.