Case Study: IBM Audit Defense for a Major US Government Entity in New York
Challenge
A major government entity based in New York, responsible for critical public services and infrastructure, faced an IBM audit with claims exceeding $35 million in non-compliance fees. The entity’s IT infrastructure supported essential functions such as public safety, healthcare systems, and citizen services, making uninterrupted operations paramount. IBM’s audit findings highlighted discrepancies in sub-capacity licensing, entitlement mismatches, and deployment overages in virtualized environments. Given the entity’s budgetary constraints and the high stakes of ensuring public service continuity, it engaged Redress Compliance to resolve the audit and mitigate financial risks.
The Process
- Audit Review and Analysis: • Redress Compliance meticulously reviewed IBM’s audit findings, identifying errors in licensing calculations and entitlement usage. • Examined historical agreements and deployment data to establish a clear compliance baseline.
- Data Collection and Validation: • Collaborated with the entity’s IT and operations teams to gather accurate data from servers, virtualized environments, and cloud platforms. • Validated sub-capacity usage metrics, uncovering significant overestimations in IBM’s claims. • Identified underutilized licenses and misconfigured setups that could be optimized to address compliance gaps.
- Strategic Negotiations with IBM: • Presented a corrected compliance report to IBM, backed by validated data and a clear interpretation of licensing policies. • Highlighted the entity’s proactive measures to maintain compliance and its critical role in delivering essential public services. • Secured significant concessions from IBM, reducing the financial liability and avoiding penalties.
- Optimization and Compliance Management: • Reallocated unused licenses within the organization to address immediate compliance gaps without additional purchases. • Designed a compliance framework incorporating automated monitoring tools and periodic internal audits to ensure future adherence to licensing terms. • Delivered training sessions for IT and procurement teams to enhance understanding of IBM’s licensing requirements and governance practices.
Outcome
Redress Compliance reduced the entity’s financial liability by 96%, bringing the $35 million claim down to $1.4 million. The settlement covered the cost of additional licenses required for future scalability, with no penalties or retroactive fees imposed. The government entity maintained uninterrupted operations throughout the audit process, ensuring that public services remained unaffected. Enhanced compliance processes were implemented, minimizing the risk of future audit challenges.
Quote from the CIO:
“Redress Compliance’s expertise was instrumental in navigating this complex audit. They saved us millions and ensured we could continue delivering critical services to the public without disruption. Their partnership was invaluable.”
Key Results:
- Initial Audit Claim: $35 million.
- Final Settlement: $1.4 million (96% reduction).
- Compliance Enhancements: Centralized license management and real-time monitoring tools.
- Operational Continuity: Ensured uninterrupted public services during the audit process.
This case highlights Redress Compliance’s ability to deliver outstanding outcomes for government entities, protecting financial resources and ensuring operational stability during IBM audits.
