Best Practices Software Licensing Audits: Better Be Prepared!

Time and again, reports of businesses incurring considerable additional claims resulting from software license audits are circulated. How can you guard against this happening?

The best strategy to weather such an audit is to prepare for it by compiling a consistent documentation of all licenses at hand—but not after the letter announcing the audit has actually made its way into the inbox. That would only leave 30 days to act …

A watertight preparation will help you act with confidence and avoid being subject to unpleasant results and consequences or having to fear subsequent claims of any substantial size. This means that organisations are well advised to be completely aware of which software they are using and how far this usage is in accordance with the relevant software vendors' terms of use—well in advance of an upcoming audit. And what is just as important: The internal responsibility for preparing for an audit should never lie with one person alone.

The following three-step plan will help businesses prepare properly for a software license audit:

1. Define an audit response procedure.

Determine who within the organisation is entitled to respond to the letter announcing an upcoming audit and then communicate an impending audit to all concerned in order to secure any support needed.

2. Form a qualified team     

Form a ready-for-action audit team comprising the head of technology, the license project manager, the software application manager plus one representative each from the legal and purchasing departments.

3. Use a professional software asset management (SAM) tool for quality assurance.

A tool of this kind will compile the license data needed for an audit easily, rapidly, and consistently and create the corresponding compliance report.

There is a caveat, however: If you use a SAM tool to take stock of your software assets, only the active devices on the network will be scanned. By no means should systems that happen to be offline during the scan procedure be missed out when preparing a software license balance comparing installed program instances with purchased or otherwise obtained licenses. That may lead to awkward questions.

A complete documentation of all license acquisitions complete with pertaining service agreements should also always be kept at hand for an audit. As far as pre-owned software is concerned, businesses need to produce complete documentation for those licenses as well including confirmations of deletion by previous owners.