Receiving an audit notice usually causes a significant headache. From this time on, the user will be constrained by time and limited by opportunities, but this typically 30-45 day period is just about getting ready for the auditor’s visit. IPR-Insights also provides support in this as well as in the negotiations with the auditor: our experts help our clients become aware of their real licensing status and reduce the auditor’s information advantage to sit in for the meetings as an equal party.
- For those who have not yet started software asset management or are in the early stages of the SAM process, there are many questions and tasks to be solved. What workload and duration to expect? Which products will be tested at all? How accurately do we know or guess what we are using? Do we have an overview of each installation? Do these software products belong to one or more areas? Who operates them? Do we know what licenses can cover what we use? What do we have a license for? To what extent can the incompliance move, if any? How should I prepare for the audit?
- Those who are already advanced in software asset management are interested in the finer details of licensing and auditing. What has been the change since the last review? Are there any licensing traps that are unknown? Will there be any unplanned costs at all? What interpretation disputes can we expect? Should we advance planned infrastructure upgrades or other investments? How much will the data supply cost? How can we prepare for and provide data in the least disruptive way in our day-to-day operations, and should we tune in to the schedule? The more mature SAM practice is also beneficial in terms of numerical audit results, and serving information needs is less disruptive to normal operations and therefore less costly.
It is the client’s obligation under the license agreement to cooperate with the auditor, and this can only be limited in extreme cases. This may be the case if the investigating vendor is interested in non-relevant areas other than his own software or if the examination interferes with normal day-to-day operations.
The audit exploration phase provides a picture of where, how much, and what features of the vendor’s products are being used, which ones are within the scope of the audit, and how well they fit into the intended use. The more structured the organization, the more organizational and infrastructure pockets, nooks and crannies may occur where something unexpected can be found, and these details are of great interest to auditors.
The role of the evaluation phase is to determine which licenses are best covered by the identified use and to compare them with the license inventory. However, optimized licensing will only be sought by the user and/or independent consulting partner, not by the auditor as the cost is borne by the end-user.
having discovered the expected incompliance, the financial preparation phase follows, which determines what level (eg regional, global) decision or support is needed for the solution. Addressing outstanding incompliance may involve postponing or canceling planned improvements.
In preparation for the negotiation phase with the auditor, it is important to clarify (or even quantify) what we want to achieve and what we are willing to let go. We also need to know what the opposite party is aiming for and what they are expected to respond to each of our steps.
The definitions of some license agreements are imprecise in their practical use, and the vendors tend to interpret the points at issue to their advantage. Clients, as equal parties, have the opportunity to interpret factually unclear concepts in contradiction with the vendor’s idea, as the difference in list price can be huge. The value of actual use must be paid for, but nothing that goes beyond that, or that cannot be deduced from the contract or is not based on facts.
Vendors have different attitudes in dealing with incompliance. Some allow you to purchase licenses during the audit, while others, especially ones applying external audit firms, freeze the status at the start of the audit, both on the license and on the usage side.
The software auditor (vendor or agent) is trying to make statements that cost money to the client. He is not an independent expert – he is interested in finding incompliance. In addition, some vendors stipulate that if the difference between contracted and actual use is greater than 5 percent, the auditor’s fee is also paid by the audited company, and that is also a significant expense.
It is important that the auditor does not have unlimited time to investigate: first, with less work, he focuses on promising points, the “low-hanging fruits”. It is worth to prepare for each vendor-typical trap situation with the help of an independent SAM consultant.