Blog

By: Steffani Lomax

We have talked about preparing for software audits and how to manage the audit process. To summarize the discussion on audits, let’s explore how companies can set themselves up to potentially prevent an audit.

Certain conditions almost always lead to an audit that runs smoothly and results in virtually no negative impact – or can even prevent a software audit. The company that is obviously well-organized, with processes and/or systems in place to manage and control its software assets, ensures the greatest opportunity for a successful, painless audit. An organization that has previously experienced a bad audit and learned from the experience typically does a better job managing a subsequent audit. It often takes a painful experience to force a transformation.

Organizations are becoming increasingly aware of the need to establish a robust Software Asset Management (SAM) program to manage and track their software licenses. While some organizations have adopted practices utilizing people, process and technology to build a solid internal SAM program, others are still floundering, waiting for an issue to develop before implementing significant changes to better manage their assets. Companies that have taken the proactive approach to SAM have placed themselves in a position to prevent future audits because auditors become less interested if your organization appears to have its act together. Here is the recipe for success:

1. Manage and control all software assets. Establish a formal, repeatable process for managing the life cycle of a software asset, from requisition to retirement. Implement processes for real-time collection of transactional data, asset tracking and compliance.

2. Negotiate audit provisions into contract terms and conditions. Include audit terms and conditions that limit exposure by pre-defining audit methodology and limiting both the frequency and the scope of potential audits.

3. Establish an internal process for managing audits. Assign roles, responsibilities and a process for managing audits from the time the audit letter is received to eventual settlement.

4. Incorporate licensing expertise. Knowledge of licensing complexities and nuances is key, particularly for strategic software publishers where the organization is exposed to the most risk. Maintain a constant vigil to keep abreast of changes to licensing metrics mandated by vendors.

5. Appear confident and in control. Giving the appearance of having complete control and confidence in managing software assets can also deter a vendor from pursuing an audit or an auditor from continuing his or her efforts. The auditor is tasked with finding revenue and will not waste time where it appears there is no significant opportunity.

6. Be proactive. Engage a third party expert annually to optimize your software licenses. A software asset management expert can verify compliance by conducting or validating an internal audit and can also ensure that your licenses are optimized.

Following these guidelines will result in the prevention of some audits. If auditors believe your organization is in control of its software assets and is in compliance, they will move on to knock on another door where they hope they’ll find a better revenue opportunity.