Case Study: IBM Audit Defense for a UK Pharmaceutical Company
Challenge
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 licenses complex. IBM’s audit findings highlighted alleged non-compliance related to sub-capacity licensing, virtualization policies, and the use of multiple IBM products. The company’s internal IT and procurement teams lacked the expertise to interpret and challenge IBM’s findings effectively, prompting them to engage Redress Compliance for support.
The Process
- Audit Report Analysis: • Redress Compliance began by scrutinizing IBM’s audit report to identify errors in their calculations and assumptions. • Reviewed the company’s existing contracts, entitlements, and deployment records to establish a baseline for compliance.
- Internal Software Usage Audit: • Conducted a thorough review of software deployments across on-premise servers, private cloud environments, and hybrid setups. • Verified usage data, focusing on high-risk areas like sub-capacity licensing and processor value unit (PVU) calculations. • Identified discrepancies between IBM’s findings and the company’s software usage.
- Strategic Engagement with IBM: • Engaged with IBM’s audit team to challenge their findings, presenting corrected data and highlighting compliance measures already in place. • Leveraged Redress Compliance’s understanding of IBM’s licensing policies to negotiate favorable dispute resolution terms. • Highlighted the pharmaceutical company’s critical role in the healthcare sector to gain goodwill in the negotiation process.
- Optimization and Future Proofing: • Reallocated unused licenses and optimized deployments to align with licensing entitlements. • Provided a tailored compliance management plan, including regular internal audits and license tracking tools. • Delivered training sessions on IBM licensing requirements for the company’s IT and procurement teams.
Outcome
Redress Compliance’s intervention reduced the audit’s financial impact by 95%. The pharmaceutical company’s £5 million liability was reduced to just £250,000, covering only the cost of additional licenses required for future compliance. The company’s IT operations remained uninterrupted, ensuring a continued focus on critical pharmaceutical research and production activities.
Quote from the CFO:
“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.”
Key Results:
- Initial Audit Claim: £5 million.
- Final Settlement: £250,000 (95% reduction).
- Compliance Improvements: Centralized licensing management and enhanced internal audit processes.
- Business Continuity: Avoided operational disruptions during negotiations and remediation efforts.
This case highlights Redress Compliance’s ability to deliver exceptional results under pressure. It protects businesses from the overwhelming financial and operational challenges of IBM audits.
