Case Study: IBM Audit Defense for a Large US Retailer
Challenge
A leading US retailer with a nationwide presence faced an IBM software audit claiming $20 million in non-compliance fees. The retailer’s IT infrastructure spanned hundreds of locations, including regional data centers and cloud platforms supporting e-commerce, inventory management, and point-of-sale systems. IBM’s findings alleged violations related to sub-capacity licensing, misconfigured virtual environments, and outdated entitlements. The retailer’s decentralized IT management and rapid scaling of digital operations complicated the licensing landscape. To mitigate the financial and operational risks, the retailer engaged Redress Compliance for expert audit defense.
The Process
- Audit Report Review: • Redress Compliance conducted an in-depth analysis of IBM’s audit report, uncovering significant errors in license usage calculations. • Reviewed the retailer’s historical agreements, entitlements, and deployment data to establish accurate compliance baselines.
- Data Collection and Analysis: • Partnered with the retailer’s IT and operations teams to gather data from servers, virtual machines, and cloud instances. • Validated sub-capacity metrics, identifying miscalculations in processor value unit (PVU) usage across virtualized systems. • Identified unused licenses and opportunities for optimization to close compliance gaps.
- Engagement with IBM: • Presented IBM with a comprehensive compliance report backed by accurate data and licensing interpretations. • Negotiated directly with IBM’s audit team, challenging inflated claims and securing concessions based on the retailer’s proactive compliance efforts. • Highlighted the retailer’s unique operational needs, ensuring critical systems remained functional throughout the audit.
- Optimization and Compliance Planning: • Reallocated existing licenses to address compliance gaps without additional purchases. • Designed a governance framework for real-time license tracking and management to prevent future issues. • Delivered training sessions for the retailer’s IT and procurement teams to strengthen their understanding of IBM’s licensing policies.
Outcome
Redress Compliance’s efforts reduced the retailer’s financial liability by 97%. The initial $20 million claim was negotiated down to $600,000, covering only the additional licenses necessary for future scalability. The retailer avoided disruptions to its IT operations, maintaining seamless customer service delivery. Additionally, it implemented improved compliance management processes, significantly reducing the risk of future audits.
Quote from the CIO:
“Redress Compliance’s expertise was pivotal in resolving the IBM audit. They saved us millions and equipped us with the tools to stay compliant as we grow. Their guidance turned a potential crisis into a manageable opportunity.”
Key Results:
- Initial Audit Claim: $20 million.
- Final Settlement: $600,000 (97% reduction).
- Compliance Improvements: Implemented centralized license management and robust monitoring tools.
- Business Continuity: Ensured uninterrupted IT operations during the audit resolution process.
This case highlights Redress Compliance’s ability to protect high-stakes operations in the retail industry, delivering exceptional financial and operational outcomes in IBM audit defenses.
