Top 3 Triggers for IBM Software License Audits

A solid understanding of what flags an IBM software license audit can help you prepare for the inevitable.

IBM software license audits are at an all-time high. And, as anyone who has ensured them can attest, they are disruptive, grueling, and costly. But with a better understanding of the scenarios that can trigger them, you’ll be better equipped to navigate any scenario IBM might throw your way.

Here are three common situations that can flag your organization for an IBM software license audit.

Substantial business or IT growth

Whether it be a change in IT infrastructure or an expansion in the overall size of your workforce, development brings with it the expectation from IBM that you will be purchasing more licenses for existing or new products, according to License Hawk. Organizational improvements require significant changes in license agreements, which can result in compliance risks.

License metrics can be tricky, and it’s important to be vigilant of what parameters your software licenses contain. As you evaluate your entire IT estate, it’s vital to have a thorough understanding of the number of users, what their positions are, and what they will require.

“It’s challenging. If you have an organization of 100,000 people scattered across 1020 different locations around the world, all of those users need to know what’s in the contract,” says Michael Swanson, founder and CEO of Information Systems Asset Management (ISAM). “All of a sudden, users could be doing things they don’t even know they’re not allowed to do.”

Change in your IBM product usage

Any alterations to your plans that include an IBM product can increase your audit risk, including canceling a project or trying to renegotiate your enterprise license agreement (ELA).

“Whenever you don’t want to increase your spend with a vendor, that will increase the potential for an audit,” Swanson says. “Whenever a rep is pressured to meet a quota and increase their revenue with you every year, that will increase your chance of an audit.”

ELAs have many moving parts. They require planning for a myriad of scenarios, including capacity, software/hardware upgrades, and additions/retirement. Or there might be products included in the ELA that are trial or limited licenses. With so much to consider, it’s easy to see how compliance gaps can occur. These gaps would most likely be closed if you choose to sign up for a new ELA, but if there is no renewal, an audit might be coming your way.

Organizational improvements require significant changes in license agreements, which can result in compliance risks.

Logging a support request for an unexpected IBM product

Nothing raises the IBM software license audit flag more than opening a support ticket and finding out there is no record of you purchasing that particular solution. Due to the ever-changing nature of the business, it’s essential to ensure you have the most recent, up-to-date information about your IT estate available to avoid costly errors like this one. Not keeping meticulous records can cause discrepancies, and discrepancies can lead to noncompliance.

It helps to evaluate your own estate. Start by asking yourself the following questions:

  • Do you know what you have and where you are using it?
  • What is the full technology history?
  • Who are the users?
  • What is the contract history?

What can you do about IBM license audits?

If you want to avoid IBM software license audits, it’s important to create an IT coalition— including procurement, tech, finance, legal, and asset management — to ensure the entire team is on the same page. Having multiple teams’ input reduces the risk of customer confusion, which megavendors thrive on, according to Swanson.

“[Vendors] change the licensing rules to create noncompliance. You bundle the products, create new releases, new products, and bundle it in a way that you charge more because you’ve confused the customer,” he says.

Another way to combat IBM software audits is to engage the services of a third-party software maintenance (TPSM) provider. Some TPSM companies like Origina offer audit protection and risk mitigation services from experienced licensing specialists who analyze a customer’s software license inventory and offer insights into the tactics used during a software license audit to help avoid paying steep fines for breaching an IBM license and entitlement usage contract.

Remember, the question isn’t whether you will undergo an IBM software license audit, but when? Knowing what can trigger the audit process is the first step in your company’s audit risk mitigation process.


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