Software audits are unavoidable and hard to budget for. IT organizations have little to no say in their timing, and the ultimate cost of an audit is challenging to predict. But action can be taken to reduce the likelihood of audits and to minimize their impact.
Audits occur because a technology vendor wants to ensure that it is receiving all of the licensing compensation it is entitled to. The chances of getting audited are reduced if an insurer can avoid alerting the vendor that there may be some unlicensed usage.
Despite best efforts at avoiding an audit, once one has arrived, the goal is to limit its impact. Technology audits are difficult to manage as each vendor measures “usage” differently; they may also have multiple metrics for each product. A midsized IT organization may be dealing with over 100 different licensing metrics. Furthermore, certain usage metrics may be difficult to measure, and the software license monitoring solution provided by the vendor may be sensitive to improper installations.
A number of tactics can be taken to optimize audit outcomes. These include proactive management of the auditor, building a cross-functional team to understand entitlements and usage, scrutinizing audit results, and proposing win-win alternatives to the software vendor.
Technology vendors have every right to be compensated for the usage of their products. Given technology’s nature, product usage can proliferate within an organization without the knowledge of the vendor or the carrier’s IT or procurement organizations. Audits are a means to capture this information and charge the carrier appropriately.
But these audits are disruptive, and they consume time and money. Taking proactive action to minimize these events is appropriate. Insurer IT organizations who have scrutinized their auditors’ initial findings have been able to reduce the ultimate cost by as much as 90%. As they say, “Knowledge is power,” and this may be truer in technology licensing audits than anywhere else.
Further suggestions can be found in Novarica’s recent CIO Checklist, Software Licensing Audits.
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