Case Study: IBM Audit Defense for a Leading Japanese Automotive Company
Challenge
One of the world’s largest automotive manufacturers, based in Japan, was subjected to an IBM software audit, with non-compliance claims totaling ¥1.8 billion. The company’s extensive IT infrastructure supported manufacturing, R&D, supply chain management, and global distribution operations. IBM’s audit findings cited sub-capacity licensing violations, misconfigurations in virtualized environments, and entitlement mismatches across their global operations. The company’s decentralized IT and rapid adoption of hybrid cloud technologies created a complex licensing landscape. To protect its financial position and ensure uninterrupted operations, the automotive giant engaged in Redress Compliance.
The Process
- Audit Report Review: • Redress Compliance conducted a comprehensive analysis of IBM’s audit findings, identifying multiple errors in calculations and entitlement mappings. • Reviewed historical agreements, including terms for sub-capacity licensing and PVU metrics, to establish a compliance baseline.
- Data Collection and Validation: • Collaborated with IT teams across the company’s global facilities to collect accurate usage data from on-premise servers, virtual environments, and cloud platforms. • Verified sub-capacity usage calculations, uncovering misapplied metrics and overestimations by IBM’s audit team. • Identified underutilized licenses and opportunities for reallocation to close compliance gaps.
- Negotiation with IBM: • Engaged with IBM’s audit team to dispute inflated claims, presenting detailed evidence and corrected data. • Highlighted the company’s long-standing investment in IBM technologies and their proactive compliance efforts. • Leveraged Redress Compliance’s expertise to secure significant concessions, reducing financial exposure.
- Compliance Optimization and Future Strategy: • Reallocated unused licenses to address immediate compliance issues without additional purchases. • Implemented a global license management strategy, including real-time tracking tools and automated compliance checks. • Provided IT and procurement teams training on IBM licensing policies to enhance governance practices.
Outcome
Redress Compliance reduced the company’s financial liability by 95%, bringing the ¥1.8 billion claim down to ¥90 million. The settlement covered the cost of additional licenses required for new deployments, with no penalties or retroactive fees imposed. The company’s operations continued seamlessly without disrupting production or global supply chain activities. Enhanced compliance processes were implemented, significantly reducing the risk of future audit challenges.
Quote from the IT Director:
“Facing a claim of this magnitude was daunting, but Redress Compliance turned it around. Their expertise saved us billions and ensured our global operations remained unaffected. They resolved the immediate issue and gave us the tools to manage licensing more effectively going forward.”
Key Results:
- Initial Audit Claim: ¥1.8 billion.
- Final Settlement: ¥90 million (95% reduction).
- Compliance Improvements: Centralized global license management and real-time monitoring systems.
- Business Continuity: Ensured uninterrupted operations during the audit process.
This case underscores Redress Compliance’s ability to deliver exceptional outcomes for global enterprises. It addresses the complexities of IBM licensing in high-stakes scenarios.
