Case Study: IBM Audit Defense for a Large US Media Company
Challenge
A large media corporation headquartered in New York was subject to an IBM software audit, with initial claims amounting to $15 million. The company’s diverse IT ecosystem supported critical functions like content creation, broadcasting, and streaming services. IBM’s audit findings cited non-compliance issues in virtualization environments and sub-capacity licensing for high-demand servers. Due to the complexity of their operations and the rapid scaling of digital platforms, the company struggled with centralized license management. Facing steep financial penalties, the media giant sought the expertise of Redress Compliance to navigate the audit and minimize its financial exposure.
The Process
- Initial Analysis: • Redress Compliance thoroughly reviewed the audit report provided by IBM, identifying discrepancies in the licensing claims. • Analyzed the company’s software entitlements, agreements, and deployment data to determine accurate compliance levels.
- Data Gathering and Validation: • Partnered with the company’s IT teams to collect detailed data from on-premise servers, virtualized environments, and cloud platforms. • Verified sub-capacity usage metrics, focusing on correctly applying IBM’s licensing rules. • Identified unused and misallocated licenses, which were key to offsetting the audit findings.
- Negotiation with IBM: • Presented IBM with a detailed compliance report, highlighting errors in their initial findings. • Engaged IBM’s audit team in strategic negotiations, leveraging Redress Compliance’s deep expertise in licensing policies to advocate for fair and accurate resolution. • Focused on the company’s historical good-faith efforts to comply with IBM’s complex licensing requirements.
- Optimization and Future Planning: • Implemented a license reallocation strategy to close compliance gaps without incurring significant costs. • Provided a tailored roadmap for ongoing compliance, including recommendations for software asset management tools. • Conducted training sessions for IT and procurement teams to strengthen their understanding of IBM licensing terms and governance.
Outcome
Redress Compliance’s intervention dramatically reduced the company’s financial exposure by 98%. The initial $15 million claim was reduced to $300,000, covering only the cost of additional licenses required for new deployments. The media company avoided operational disruptions, maintaining uninterrupted service delivery for its audience. Additionally, it implemented robust processes to manage licensing compliance proactively.
Quote from the CFO:
“IBM’s audit initially seemed like an insurmountable challenge, but Redress Compliance’s expertise turned it into a manageable situation. Their guidance not only saved us millions but also gave us the tools to stay ahead of compliance issues in the future.”
Key Results:
- Initial Audit Claim: $15 million.
- Final Settlement: $300,000 (98% reduction).
- Compliance Enhancements: Centralized licensing management and improved monitoring systems.
- Business Continuity: Avoided disruptions in broadcasting and streaming operations during the audit process.
This case underscores Redress Compliance’s ability to deliver outstanding outcomes for large, complex organizations, safeguarding their finances and operational stability.
