Case Study: IBM Audit Defense for a Multinational Company in the Middle East
Challenge
A leading multinational corporation across the Middle East faced an unexpected IBM software audit. The company’s complex IT infrastructure spans multiple countries and environments, including on-premise, cloud, and hybrid setups. IBM’s audit findings claimed non-compliance fees exceeding $12 million due to discrepancies in sub-capacity licensing and processor value unit (PVU) calculations. With limited in-house expertise in IBM licensing, the company turned to Redress Compliance for assistance navigating the audit process and mitigating financial risk.
The Process
- Comprehensive Audit Review: • Redress Compliance began by analyzing IBM’s audit report to identify inaccuracies and inconsistencies in the findings. • Conducted an internal audit of the company’s software usage, focusing on key areas such as virtualized environments, cloud deployments, and hardware configurations.
- Data Collection and Validation: • Collaborated with regional IT teams to gather accurate usage data from servers and software deployment tools. • Validated sub-capacity usage data and identified overestimated PVU consumption in IBM’s audit. • Ensured proper entitlement mapping to licenses, uncovering several unused or misallocated licenses.
- Negotiation Strategy: • Leveraged technical insights to counter IBM’s claims, presenting detailed evidence of compliant usage. • Demonstrated the company’s commitment to compliance through proactive remediation efforts. • Negotiated directly with IBM’s audit team to resolve disputes regarding sub-capacity licensing metrics and assumptions.
- Optimization and Remediation Plan: • Proposed a licensing optimization strategy to reallocate underutilized licenses and reduce future compliance risks. • Recommended specific governance practices to monitor and manage IBM software usage effectively.
Outcome
Redress Compliance’s expertise resulted in a dramatic reduction of the company’s financial exposure. The $12 million claim was reduced by 97%, with a final settlement of just $360,000, covering only the cost of additional licenses required to ensure compliance. Furthermore, the company implemented improved processes for managing software entitlements, significantly reducing the risk of future audits.
Quote from the CIO:
“The IBM audit was a wake-up call for us, but Redress Compliance’s guidance made all the difference. They turned a potentially catastrophic situation into a manageable outcome. Their deep understanding of IBM licensing rules saved us millions and strengthened our compliance processes.”
Key Results:
- Initial Audit Claim: $12 million.
- Final Settlement: $360,000 (97% reduction).
- Compliance Improvements: Established centralized software license management and governance policies.
- Future Risk Mitigation: Implemented monitoring tools for sub-capacity licensing and PVU tracking.
This case underscores Redress Compliance’s ability to navigate complex licensing environments and achieve outstanding outcomes for clients facing high-stakes IBM audits.
