How Redress Compliance helped a leading UK pharmaceutical company achieve a 95% reduction in IBM non-compliance fees — from £5 million to just £250,000 — through expert audit report analysis, sub-capacity licensing corrections, strategic negotiation, and long-term compliance optimisation.
| Client Overview | |
|---|---|
| Industry | Pharmaceutical / Life Sciences |
| Location | United Kingdom |
| IT Environment | Highly regulated — spanning R&D, manufacturing, and distribution across on-premises servers, private cloud, and hybrid setups |
| Issue | IBM audit with claims exceeding £5 million in non-compliance fees, citing sub-capacity licensing violations, virtualisation policy breaches, and multi-product deployment issues |
| Services Provided | Audit Report Analysis, Internal Software Usage Audit, Strategic IBM Engagement & Negotiation, Licence Optimisation & Future-Proofing |
| Outcome | £5M claim reduced to £250K (95% reduction). Centralised licence management implemented. Zero operational disruptions. Enhanced internal audit processes established. |
A leading pharmaceutical company in the UK faced an IBM audit with claims exceeding £5 million in non-compliance fees. The company's highly regulated IT environment — spanning R&D, manufacturing, and distribution — made managing software licences complex across multiple platforms and deployment models.
IBM's audit findings highlighted alleged non-compliance related to sub-capacity licensing, virtualisation policies, and the use of multiple IBM products across on-premises servers, private cloud environments, and hybrid setups.
The company's internal IT and procurement teams lacked the expertise to interpret and challenge IBM's audit findings effectively. IBM audit claims in regulated industries like pharmaceuticals are particularly high-stakes — the company couldn't risk operational disruptions to critical R&D, manufacturing, and distribution systems while defending against the audit. Without independent expertise, they faced the prospect of accepting IBM's inflated claim or entering negotiations without understanding which findings were valid and which were based on errors in IBM's calculations.
Redress Compliance was engaged to manage the complete audit defence — from initial analysis through to final settlement and long-term compliance planning. The engagement followed a structured four-phase approach:
Sub-capacity licensing and PVU calculations in virtualised environments are among the most frequent sources of errors in IBM audit reports. IBM's audit methodology often defaults to full physical capacity when ILMT (IBM Licence Metric Tool) data is incomplete or misconfigured — dramatically inflating the apparent non-compliance. By independently verifying actual usage against ILMT data, deployment records, and contractual entitlements, Redress Compliance regularly identifies significant overestimations that can reduce audit claims by 80–95%.
The £5 million IBM audit claim was reduced to just £250,000 — a 95% reduction. The settlement covered only the cost of additional licences required for future compliance.
No retroactive fees or punitive charges. The final settlement addressed only genuinely required forward-looking licence additions.
IT operations remained fully uninterrupted throughout the entire audit and negotiation process — ensuring continued focus on critical pharmaceutical research and production.
Centralised licensing management, enhanced internal audit processes, and IBM licensing training for IT and procurement teams implemented for long-term protection.
"IBM's audit felt insurmountable until Redress Compliance stepped in. Their expertise saved us millions and ensured our licensing practices are rock-solid moving forward. They turned a crisis into an opportunity to improve."
| Metric | Detail |
|---|---|
| Initial IBM Audit Claim | £5,000,000 |
| Final Settlement | £250,000 (95% reduction) |
| Total Savings | £4,750,000 |
| Compliance Improvements | Centralised licensing management and enhanced internal audit processes implemented |
| Business Continuity | Zero operational disruptions during negotiations and remediation |
| Future Protection | IBM licensing training delivered to IT and procurement teams; licence tracking tools deployed |
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Fredrik Filipsson is the co-founder of Redress Compliance, a leading independent advisory firm specialising in Oracle, Microsoft, SAP, IBM, and Salesforce licensing. With over 20 years of experience in software licensing and contract negotiations, Fredrik has helped hundreds of organisations — including numerous Fortune 500 companies — optimise costs, avoid compliance risks, and secure favourable terms. Fredrik built his expertise over two decades working directly for IBM, SAP, and Oracle.