Case Study: IBM Audit Defense for a Large Swedish Bank
Challenge
A leading Swedish bank known for its extensive retail and corporate banking services was subjected to an IBM audit, which claimed non-compliance fees of SEK 140 million. The bank’s IT infrastructure was vast, supporting mission-critical operations such as digital banking platforms, transaction systems, and customer databases. IBM’s audit findings alleged licensing violations in sub-capacity environments, misconfigured cloud systems, and entitlement mismatches. Given the highly regulated nature of the financial industry and the potential financial impact, the bank engaged Redress Compliance to address the audit and mitigate risks.
The Process
- Audit Assessment: • Redress Compliance initiated a detailed review of IBM’s audit report, identifying sub-capacity calculations and entitlement usage inaccuracies. • Analyzed historical agreements and software entitlements to establish an accurate compliance baseline.
- Data Validation and Collection: • Collaborated with the bank’s IT and compliance teams to gather precise data from on-premise servers, virtual machines, and cloud platforms. • Validated sub-capacity licensing metrics, uncovering overestimations in IBM’s audit claims. • Identified underutilized licenses and misaligned entitlements that could be optimized to address gaps.
- Strategic Negotiations: • Engaged directly with IBM’s audit team, presenting corrected data and evidence of compliance efforts. • Emphasized the bank’s commitment to regulatory and operational compliance, leveraging goodwill to negotiate favorable terms. • Secured significant concessions by challenging ambiguous interpretations of IBM’s licensing rules.
- Optimization and Governance: • Reallocated unused licenses to align with usage and close compliance gaps. • Designed a compliance management framework, incorporating real-time license tracking and automated monitoring tools. • Conducted IT and procurement team training to enhance understanding of IBM licensing policies.
Outcome
Redress Compliance’s efforts resulted in a 96% reduction in the bank’s financial exposure. The initial SEK 140 million claim was negotiated down to SEK 5.6 million, covering only the cost of additional licenses required for new deployments. No penalties or retroactive fees were imposed. The bank implemented enhanced compliance processes, ensuring audit readiness and reducing the risk of future claims. Throughout the process, the bank’s critical operations remained uninterrupted.
Quote from the CFO:
“IBM’s audit presented a significant financial and operational challenge, but Redress Compliance delivered exceptional results. Their expertise saved us millions and left us better equipped to manage compliance in the future. Their partnership was invaluable.”
Key Results:
- Initial Audit Claim: SEK 140 million.
- Final Settlement: SEK 5.6 million (96% reduction).
- Compliance Enhancements: Centralized license management and improved monitoring systems.
- Business Continuity: Ensured no interruptions to banking operations during the audit process.
This case highlights Redress Compliance’s ability to navigate the complexities of IBM licensing in the financial sector, delivering outstanding outcomes for highly regulated organizations.
