Not Sure How to Prepare for a Software Audit?

Software costs for most companies are already sky-high, leaving the Finance team frustrated and IT departments stuck trying to stretch their budgets to near impossible lengths. Asking your team to prepare for a software audit may seem like trying to bleed a stone, but being unprepared will be far more costly. Audits are an unpleasant inevitability for businesses – it’s not a question of if but when.  At Metrixdata360, it’s our goal to save you money, so here are some ways to limit the financial damage of a software audit and bring your compliance gap down to what you actually owe.

1. Prepare to Prepare for a Software Audit

Is there such a thing as too much preparation? Maybe… but not when it comes to your software licensing! If your software vendors have their way, audits would happen fast. Vendors know that tight, audit turn-around timelines will leave you scrambling to gather all the data you need to prove your compliance; and if your data has gaps or grey areas, the auditors can make worst-case scenario assumptions to inflate your possible compliance gap.

According to Glasshouse Systems’ article How to Save Time and Money with Software Audit Defense, one of the best ways to save valuable time is understanding your licensing position and having the data organized and easy to prove long before you receive your audit notice. Remember, there is nothing motivating the auditors to do an effective job capturing your license position; any mistakes they make will be your pain and potential penalty to deal with. Having your own license position and your data at the ready should your company be called to the front for an audit, will not only improve your chances that your compliance gap will be lower, but it will also decrease the likelihood of being audited again in the near future. While some software vendors perform random audits regularly, auditors will also target clients that they believe have overly complex environments without the means to monitor them. Demonstrating a lack of preparedness during a software audit is like being that one antelope in the herd with a limp in their run; don’t assume the lions won’t notice. For further information about how best to prepare for a software audit, please visit our Software Audit Preparation article.

2. Common IT Failure – Have Proof of Ownership Ready

According to Scott IP Technology Attorneys’ article Common Mistakes in Software Audits, one common mistake that companies fall prey to during a software audit is providing improper documentation that fails to accurately prove ownership for software licenses. As soon as an audit notice is received, some companies try to buy more licenses in order to mitigate compliance risk due to a potential shortfall in licenses for their workforce/environment. However, this route is a waste of time and money, since trade associations and publishers will only accept dated proof of purchase with the entire name of the company on the document. Companies should seek consultation before they try to purchase licenses during an audit in order to understand the potential consequences and benefits of this action.

3. Get a Proper SAM Tool

Having a proper SAM tool will be extremely valuable for budgeting your software. An effective SAM tool can not only highlight where the shortfalls in your license spending exist but also where you are overspending on licenses (something that tends to get glossed over by the software auditors). A SAM tool can also provide the accuracy of data to show you where your licenses are being used and where licensing could be re-bundled to save you money. Make sure that your SAM tool can accommodate multiple licensing metrics and can account for any programs you’ve moved to the Cloud. That way you will have a firm grasp of your licensing position before you are thrust into an audit.

SAM tools are also very useful in the event of a software audit. During an audit, the software vendor will hire a third-party auditor that will come to the table with their own SAM tools that they want to use to measure your data. Whatever you do, don’t let them! Having a different SAM tool come into your environment is a quick way to have your compliance gap inflated. The auditor’s SAM tool will have its own way to measure licenses with the possibility of accidentally applying duplicates and marking your test and development servers as full production (plenty of SAM tools do this by mistake, so make sure that you’re aware of this when buying your own SAM tool). Having your own reputable SAM tool to gather data is the best way to counter the auditor’s offer of using theirs. For more information on SAM tools, please visit our SAM as a Service article.

4. Monitor Your Usage – Even in the Cloud, and Do it Constantly

Software Asset Management really shouldn’t be a thing you only do once a year or when the auditors are walking through your front door. It needs to occur on a regular basis – ideally, it should happen at the very least once a month, if not daily. That way you will know immediately if anything is amiss and your team can save time and money proactively fixing it instead of reactively paying penalties following a software audit. Now that many companies have moved (or are in the planning-to-move process) to the Cloud, one trend we are noticing is that by NOT regularly monitoring access and usage to the company’s Cloud environment certainly results in the spikes in a company’s spending.

With the ability for anyone in IT to spin up as many instances in the Cloud as they want, you run the risk of having projects left open and running long after the project’s completion, resulting in a continuous and unnecessary drain on your IT budget and expense to your company. You will also want to make sure that you have the right to move your licenses to the Cloud in the first place, as often licenses will be non-transferable. The Cloud has its own license metric that will usually leave a few of your servers exposed and unlicensed. For more information on proper Cloud Migration, please visit our article Heading to the Cloud? 5 Problems You’ll Need to Address.

5. Hire the Right Software Asset Management (SAM) People for the Job

Hiring the right people will get you the results you need. It’s a great idea to have an audit defense team ready and they should include members of your procurement and IT departments. Leading the project should be an audit-experienced attorney who knows how much and how little to say to the vendor and their auditors. In our many years of software licensing consulting, we have had many clients ask us whether it is better to hire a SAM consultant or to do it themselves. We’d recommend hiring a consultant because they offer you years of expertise instantly and they can streamline the auditing process to save your company precious time and resources. For a more in-depth look at hiring a SAM professional as opposed to doing it yourself, check out our article Hire a Software Asset Management Expert or Do it Yourself? The Pros and Cons of Each.

Invest in Being Prepared for a Software Audit and Save Money

Software Audits don’t have to be a complete drain on your resources, time and budgets. Following these tips and ensuring that you’re ready long before the audit arrives, can save your business time, stress and money. When you prepare for a software audit, you are investing in your IT department. 

If you’d like more tips on how to be prepared for an audit, please check out our Learning Center for more information.

About MetrixData 360

MetrixData 360MetrixData360 translates software licensing agreements into clear understandings and drives significant cost savings in audits and negotiations.