Gartner research studies show an increase in software audits for companies of all sizes and industries. Both the execution, as well as the results of a software audit typically generates additional unexpected costs for you as an end user. At the same time, the opposite is applicable for the software publisher – an audit usually means generating more revenue.
The 4 major publishers that perform regular audits are IBM, Oracle, SAP and Microsoft. These are conducted based on the terms and conditions of your license agreements and more specific the audit rights of the software publisher.
Although nowadays software audits have become a common practice, they’re still a source of concern for many companies. It is very common that end user organizations, especially those that use software from multiple publishers, are audited on a yearly basis; for example, one year by Oracle and the other year by IBM. But what may trigger an audit? There are many situations, like the termination of support, changes in the IT infrastructure, changes in the number of employees, mergers and acquisitions, expired agreement, audit teams from different publishers talking to each other and so on. To see the entire list of situations, you can read our article “What may trigger a software audit?”
Now that you know there is a high possibility that you will be audited (again) in the next 12 months, let’s talk about the costs of a software audit and what it means for your company. The costs of an audit can vary heavily and typically depend on the size of your organization, the software publisher performing the audit, the scope of the audit and your current license compliance position. In order to understand the costs of an audit, you should distinguish between:
- Costs you need to pay as a result of a non-compliance finding (direct costs)
- Costs you need to pay as a result of the audit, independent of the outcome (indirect costs)