Software License Scanning vs. Manual License Review: The True Cost of Compliance

Every organization using open-source software faces the same question: How do we ensure license compliance without slowing development?

The traditional answer has required engineering, legal, compliance or other teams to conduct manual license review before dependencies are approved. It’s a tedious, slow process that doesn’t scale and leaves open the possibility of human error.

Alternatively, automated license scanning offers comprehensive visibility, policy-based enforcement and compliance assurance that executes at the speed of development.

What else differs? Let’s take a look.

Manual License Review: The Traditional Approach

How It Works

Manual license review typically follows this workflow:

1. Developer wants to add a new dependency
2. Request goes to security, legal or a review committee
3. Someone manually checks the license (often searching online or reading documentation)
4. License implications are evaluated against company policy
5. Approval or rejection is communicated to the developer
6. Developer proceeds or finds an alternative

For existing codebases, this might mean periodic audits where teams manually inventory dependencies and check licenses, often using spreadsheets to track findings.

The Advantages

• Nuanced judgment: Humans can interpret complex licensing scenarios that might confuse automated tools. They can evaluate dual licensing options, understand license compatibility in specific contexts and make judgment calls on edge cases.
• Legal review integration: Manual processes naturally involve legal teams, ensuring license decisions align with broader legal strategy and risk tolerance.
• One-time approval: Once a dependency is approved, that decision is documented and can apply across projects, at least until the dependency changes versions or licenses.
  

The Limitations

• Scale is the enemy: In a codebase with hundreds or thousands of dependencies, manual review is untenable. Most organizations end up reviewing only new dependencies, leaving existing ones without validation.
• Speed kills innovation: Developer waits for approval can range from hours to weeks, depending on team availability. This creates friction that slows development velocity and frustrates engineering teams.
• Coverage gaps: Manual review typically only catches what's explicitly flagged for review. Transitive dependencies (dependencies of dependencies) often go unchecked. License changes in new versions of existing packages get missed. The actual state of licenses in production is often unknown.
• Inconsistent application: Different reviewers might make different decisions on similar licenses. Policy drift over time means earlier approvals might not align with current risk tolerance. There's no systematic enforcement once code is approved and merged.
• Resource intensive: Manual license review requires dedicated time from security, legal or compliance teams. The cost compounds as the organization scales and dependency usage grows.
• Post-hoc discovery: Most manual processes discover license issues after the dependency is already in use, sometimes even in production. Remediation at that point is expensive and risky.
  

Automated License Scanning: The Modern Alternative

How It Works

Automated license scanning integrates directly into the development workflow:

1. Developer adds a dependency to their project
2. SCA scanner automatically detects the dependency and its license(s)
3. License is classified based on predefined properties (copyleft type, commercial use restrictions, etc.)
4. Policy engine evaluates the license against organizational rules
5. Developer receives immediate feedback in their PR or IDE
6. Code is blocked or flagged based on policy configuration
7. Exceptions are handled through defined workflows

This happens continuously, for every dependency, in every repository, across every team.

The Advantages

• Complete coverage: Every dependency is scanned, including transitive dependencies multiple layers deep. Nothing falls through the cracks.
• Real-time feedback: Developers learn about license issues immediately, in their development environment, before code is committed. This is when remediation is cheapest and least disruptive.
• Consistent enforcement: Policies apply uniformly across all teams and repositories. There's no variation based on who's doing the review or what day of the week it is.
• Version tracking: License changes between package versions are detected automatically. If a dependency switches from MIT to GPL in a new version, you know immediately.
• Scales infinitely: Whether you have 10 dependencies or 10,000, the scanning process is the same. More repositories and teams don't require proportionally more resources.
• Audit trail: Every license detection, policy evaluation, and exception is logged. Compliance reporting becomes straightforward rather than a manual data collection exercise.
• Integration with development tools: License scanning fits into existing workflows—PR checks, CI/CD pipelines, IDE integrations—rather than requiring separate processes.

The Limitations

• Edge case handling: While automated tools handle most scenarios well, complex licensing situations (unusual dual licensing, custom license terms, ambiguous SPDX identifiers) may require human review.
• Policy configuration required: Automated scanning is only as good as the policies you define. Organizations need to invest upfront time in understanding their risk tolerance and configuring appropriate rules.
• False positives possible: License metadata in package registries isn't always accurate. Some packages may have incorrect license declarations or missing license information, requiring manual verification.
• No legal interpretation: Automated tools classify licenses based on properties and risk levels, but they can't provide legal advice on specific use cases or compliance obligations in specific jurisdictions.

The Comparison: Where Each Approach Wins

Manual Review Wins When:

• You have very few dependencies: If your entire application uses 5-10 carefully selected libraries that rarely change, manual review is perfectly viable.
• Dependencies are static: If you're maintaining legacy systems where dependencies change rarely or never, periodic manual audits might suffice.

Automated Scanning Wins When:

• You have modern development practices: Frequent releases, many dependencies, multiple teams, rapid iteration – these all favor automation.
• Speed matters: Developer productivity and short feedback loops are priorities that manual review can't support at scale.
• You want comprehensive coverage: If your goal is 100% visibility into all licenses in use, including transitive dependencies, only automation delivers.
• Compliance is ongoing, not periodic: Continuous compliance requires continuous monitoring, which manual processes can't sustain.
• Resources are limited: Automated scanning provides better coverage with less human effort, making it ideal when security and legal teams are stretched thin.

The Bottom Line

Manual license review and automated scanning aren't mutually exclusive, but for any organization with more than a handful of dependencies, automation is essential for effective compliance.

Manual review doesn't scale. It creates bottlenecks, provides incomplete coverage, and consumes resources that could be better spent on higher-value activities. It works when dependency count is low and change is slow – conditions that rarely exist in modern software development.

Automated license scanning delivers what manual review can't: comprehensive coverage, real-time enforcement, consistent policy application, and compliance at the speed of development. The upfront investment in tooling and configuration pays off through better coverage, lower operational costs, and reduced compliance risk.

The question isn't whether to use automated scanning. It's whether your organization can afford not to.