5 reasons you’re likely to get audited
There’s no way around it – your organization will face a software audit at some point. A few years ago, Gartner found that 65 percent of organizations were audited by at least one publisher in the previous year, and there’s no reason to believe that figure has decreased.
Organizations, especially enterprises, deal with thousands of licenses from dozens of publishers, with millions of dollars in fines, fees, and penalties at stake if an audit finds an organization under-licensed.
The changing complexity of licensing is one reason why organizations have difficulty staying on track with their software asset management (SAM). For many organizations, poor planning, lack of knowledge, and a reactive mindset compounds the frustration.
Here are five tell-tale signs that your SAM program is falling short and is vulnerable to an audit — and how to fix it.
1. Your SAM program is reactive and not proactive. When an audit letter arrives, you don’t want IT scrambling to prepare. By being reactive, they put the organization at risk of penalties and fines, as well as potential huge, unplanned budgetary issues. Though publishers promise to not interrupt your employees’ normal workflow, an audit is bound to cause some disruption. Also consider that multiple publishers could audit your organization in one calendar year, which could result in multiple shutdowns and even more unanticipated costs.
SAM must be a continuous process, and self-audits must become part of your IT routine. Planning ahead will pay dividends in time and money if you do get audited; it’s the difference between an audit that takes a few weeks to one that could take months or even a year to complete to the publisher’s satisfaction.
2. You’re unsure what your license agreement says. Do you know what exactly your licensing agreement entitles you to? Publishers often reference that original agreement during an audit, and it’s hard for the organization to argue the terms of that contract.
For that reason, organizations must negotiate and fully understand their licensing allotment, as ignorance of it can cost millions of dollars. If your lawyers didn’t see your previous licensing agreement, share it with them this time around, or hire a law firm that specializes in the publisher contract you are dealing with.
3. You don’t plan ahead for organizational shifts. Did your organization recently acquire a competitor? Were business units reorganized? Was a hiring push just announced?
Too often, license purchasing and review remains the same even as organizations change. When management announces a business transformation, IT should update purchasing policies and procedures, and do an internal audit. By being agile and flexible, IT can prevent the company from becoming over licensed through ghost assets or unused licenses. This flexibility ties back to the idea that being proactive can make the auditing process easier.
4. Your licenses and agreements are poorly organized. Poor and haphazard organization results in a misunderstanding of license allotments. At one organization we worked with, IT kept track of each business unit’s allotment in a spreadsheet, which tended to be outdated and therefore inaccurate. This meant spreadsheets couldn’t be reconciled with the purchase agreement when the audit began; poor organization resulted in the company paying fines and penalties. So again, be proactive in setting up asset management policies and rules that govern license allotments and purchases, which will help IT track software licenses.
5. You struggle with changing licensing rules. Publishers amend and update licensing terms often, and these updates are easy to miss and can be very difficult to understand. The reality is keeping track of each licensing change from every publisher is an incredibly difficult job, and IT often cannot handle these changes while maintaining and improving the internal network. Even an FTE would have trouble with all of the changes, so it often pays to enlist outside help from a SAM service provider to better understand the current rules from each publisher.
The licensing guides are here to help
If software licensing is a complex maze that’s constantly being reshaped, then SAM is the compass that guides you through. One way to navigate the challenges is partnering with a SAM expert that can help you sort through your license allotments and agreements.
These experts can help you understand your original agreements and how licensing has changed since you signed the contract. Plus, a third-party review can present an organization with its license allotment versus its entitlements, and then help reconcile the difference.
Working with a licensing expert proves that an organization is adopting a proactive SAM program. Publishers often negotiate with proactive organizations and their partners to arrive at the best deal for both sides, thus avoiding lawsuits and additional costs. So working with a SAM expert helps get licensing on track while fending off audits — and fines or lawsuits — from the biggest software publishers in the industry.
Contact your SHI account executive or email SAMservices@SHI.com to learn more about SHI’s SAM services and licensing help.