If a software audit was to come to your organization today, do you know what they would find? Or does the idea of a surprise audit fill you with dread and a general wave of anxiety over the unknown? Running an internal software audit can help ease that anxiety and give you peace of mind.
The majority of organizations do not have any sort of software asset management solution in place and, as a result, a software audit for them would only be a matter of damage control to stop the bleeding wherever possible.
Needless to say, this is not an ideal situation to be in. Especially in these hard times, the old solution of throwing money at a software audit until it goes away is a luxury few organizations can afford.
At MetrixData 360, we have seen companies struggle to get their software environments in order at the last minute. But it is possible to get out ahead of the game.
How do you maintain a clean software environment that is compliant and under control all year round and not just when the software auditors darken your door? Self-assessments and internal software audits are an excellent step to helping you get your software environment in order.
Why You Should Perform an Internal Software Audit
Internal audits may come across as though they are nitpicking and critiquing the work of the IT and procurement departments. While it’s natural to become defensive when an audit team takes a critical look at past behavior, an internal audit isn’t meant to be adversarial. In fact, the purpose of an internal audit or self-assessment is to safeguard the company, not pick it apart.
The actual reasons for performing these software audits can be broken down into two parts:
Action: Merely reporting issues will get you nowhere. Being able to tell there is a fire (smoke, alarms, the heat on your face) is only the first step in putting out the fire. You still have to figure out what comes next. Internal auditors need to be able to provide you with actionable solutions to the issues in your software environment.
When Should You Perform an Internal Software Audit?
Timing is everything in the business world. When would be the perfect time to kick off an internal audit? If you are experiencing any of the following situations, then performing an internalized software audit is an excellent idea.
- Feeling the Threat of a Software Audit
While software audits are sometimes distributed at random, and every customer should anticipate a software audit of some kind from each of their vendors at least once a year, there can be a certain rhythm to them that we have noticed at MetrixData 360.
Some common factors that can catch the software vendor’s attention and may lead you to receive an audit sometime in the future are as follows:
- The vendor has seen a dip in their sales and they’ll soon become resourceful in making up that revenue
- You’ve cut back spending with the software vendor
- You’ve let it slip to a vendor’s sales rep that you are working on some new projects that will require more licenses, but that project is unexpectedly postponed and the licenses are never purchased. The vendor’s sales team waits impatiently, and nothing happens, not being told about the project being cancelled. They will think that new projects are underway involving their software that they are not part of.
- You’ve recently gone through a merger and acquisition (see the next paragraph for more details)
Performing a self-assessment is the best way to prepare for a software audit if you feel like one is coming. Times being what they are, software audits are expected to only increase as software vendors are desperate to make up for their lost revenue, so if you aren’t in a software audit, you have a good chance of being in one soon.
- Going Through a Merger and Acquistion
The reason why this point gets its own section is because there are many reasons why it is a good idea to perform a self-assessment when your organization is going through a M&A and it’s not just because an M&A is the number one way to incite an audit (which it is!). Examining your own resources and the resources of the other company will give you better insight into what you are signing up for. You want to assume that the other organization is perfectly compliant and has their software licensing environment in order. However, we have often seen many organizations halt their M&A because they realize at the last second that the other organization has massive compliance issues that they will have to bear as well.
Their compliance issues become your compliance issues after the M&A is completed. Performing an internal self-assessment will not only give you the ability to check for compliance issues before the move, but it will also allow you to cross-compare which assets you can keep, which assets you can dispose of, and which assets won’t be able to move. It’s common after an M&A to have multiple pieces of software that serve the same function, and this duplication will only serve as a waste of money in your new software environment. This is the perfect opportunity to do a little spring cleaning and cut back any wastage.
It is also important to note that not every license can be transferred during an M&A, many organizations simply assume this without checking their licenses to determine if it is actually possible and they run the risk of being non-compliant. The last thing you want to do is be caught with compliance issues immediately after your M&A, it’s what the software vendors will be expecting and they will be knocking on your door with a software audit notice within 12 months of your finished M&A. You need to be ready for when that happens.
- A Contract Renewal or True-Up Is Upon You
Contract renewals or true-ups are your opportunity as a customer to alter your current agreements to better suit your business needs. But you won’t be able to make informed purchasing decisions if you don’t have the data to back it up.
A self-assessment can tell you which licenses you need more of, which you can cut back on and the numbers for each. Simply buying based on what you’ve purchased in the past or making a rough estimation will not allow you to purchase in the most cost-effective manner, and you’re bound to lose money either by purchasing too many licenses or too few, leaving you exposed to compliance issues.
The software vendors and their sales reps do not have your business’s interests in mind when they make recommendations to you. The sales rep’s goal is to increase your spending with them and to get you to buy from them exclusively. Ensuring that you are using what you buy and making sure that you get the most value out of the product is not on their agenda, so you shouldn’t rely on their advice alone.
Having your own data to back up your purchasing decisions will put you back in the driver’s seat during your next software contract negotiation.
Related: Getting Ready for a Contract Renewal or Contract Negotiation? Make sure you are ready by checking out our article: Getting Ready for a Microsoft True-Up
- Are You Going through a Cloud Migration?
These days, it seems like everyone in the modern business world is either already in the Cloud or heading there. Transitioning to the Cloud can be an expensive endeavor, riddled with hidden fees and unexpected costs related to rampant spending and uncensored processes. When you move to the Cloud, it is important to prioritize and only take what can and should go with you. Unneeded licenses that are just acting as a leech to your budget and untransferable licenses that will only represent a compliance gap later should be left behind.
How to Perform a Software Audit Self-Assessment
Knowing that you need a software self-assessment is one thing, but knowing how to do it is quite another. Here are just a few elements that involved in creating a software self-assessment that will give results:
- Proactive Approach
- Informal Audit Activities
- Free-flow of Information
- Have the Right Team
- Proactive Approach
It is easier to build something that is strong and stable in the first place than to go back later and fix it. Going back and reworking faulty systems is more likely to be met with resistance on the part of the IT team, who will have more work for them. Building controls upfront will help you to keep your software assets under control before they even grow into issues.
If you’d like to learn how you can create a proactive SAM approach, you can check out our article about growing in SAM Maturity.
- Informal Audit Activities
Internal audits can involve an extensive process of granular research that may be difficult to conduct on a regular basis. Allowing your team to perform informal, less rigorous research to simply scan an environment for red flags will greatly reduce the data you will have to sift through and will allow you to cover a lot more ground on a regular basis without losing steam.
Since you are not in an actual audit at the moment, there is only the need to keep a pulse on the health of your software environment, there’s no need to dig deep and cut into it just yet.
- Free-Flow of Information
In many organizations, there is a disconnect between the IT department and the procurement department; a communication breakdown between those who buy the software and those who use it. This is an inherent deterrent towards the goals of achieving a realized software asset management solution. Breaking down these walls by encouraging the free flow of information between departments is essential to ensuring a healthy software environment.
- Have the Right Team
Having a messy, unorganized and unmonitored software environment is a costly luxury and an unnecessary expense when compared to the savings that could be realized with a properly implemented software asset management solution. This is why performing internalized audits and self-assessments is a great way of realizing those risks before they grow into greater issues.
Who Should Act as Your Internal Software Audit Team?
When it comes to hiring a team, you can either create an internal SAM team or hire an external source.
At Metrixdata 360, we have helped many of our customers get their software licensing environment under control, cutting down your expenses to their smallest digit.
Our goal is to save you money and if you would like to learn more about the kind of services we offer, you can check out our self-assessment page.
