So You Received a Software Audit Letter – 8 Steps You Need to Take Right Now

June 16, 2016
Editorial Staff


Editorial Staff

Given how software usage can often unintentionally sprawl in a large organization, pubilshers feel compelled to perform the occasional audit to recover potentially lost revenue. With complex IT environments and intricate license metrics, the risk of mis-licensing and subsequently failing an audit grows every day. Receiving an audit notice can be challenging, but there are several proactive steps organizations can take to reduce their effort during the audit and also ensure that they minimize their exposure.

1. Cooperate with the publisher

As much as you want to turn away and hope the publisher forgets all about you, the trouble will only multiply through inaction. Since audits frequently reveal revenue gaps, they are important for the publishers to address, so you can expect that they will certainly follow through.

It is important to review the audit timelines and communicate your plan to the publisher promptly. A strong understanding of your own environment and the license compliance process puts you in control rather than being on the receiving end.

2. Build a team to delegate tasks

Identify the relevant stake holders in IT, Procurement, and Compliance and conduct an internal meeting to build your strategy. A disconnect between these teams leads to a long and tedious audit process that drains your time and resources.

3. Review the audit clause of an agreement

Most license agreements have an audit clause which specifically mentions the terms of the audit as well your rights and obligations. It is important to understand these terms so that you can effectively communicate with the auditor and ensure that your rights are protected. It ensures you provide the right level of information to the auditor that is tailored to the usage questions they raise.

4. Agree on the scope

The scope of an audit is generally proposed by the publisher or their auditor in their initial communication. However, the scope may not align with the terms of the license agreement and may be over and above what has been agreed to. Organizations should therefore review their agreements and ensure that the proposed scope is mutually agreed.

5. Understand your entitlements

Software licensing terms are complicated. It can be challenging to understand what constitutes a proof of license. Review your entitlements and gather all relevant documents supporting the ownership of the license.

6. Review deployments

If available, review your deployment data to understand what products have been installed and used. If deployment data is not readily available, conduct a network inventory using a quality discovery tool as soon as you receive the initial audit letter. This will allow your IT team to review your deployments and make some quick amends to minimize your exposure.

7. Identify resources

Identify a single point of contact to ensure there is no miscommunication. Organizations should also nominate experienced IT resources to work with the auditors during the data collection phase. This will allow the audit to be completed efficiently while minimizing business disruption.

8. Find an independent advisor

A software license audit entails a host of activities that require extensive understanding of inventory tools as well as license entitlements. Many organizations do not have dedicated SAM teams and find the whole exercise extremely challenging. In such cases, it is extremely important to partner with a reputed license expert to ensure that the audit is balanced.

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