Case Study: IBM Audit Defense for a US Medical Hospital
Challenge
A prominent medical hospital in the United States faced an IBM software audit with an initial claim of $7 million in non-compliance fees. The hospital’s IT infrastructure supported critical operations, including patient care systems, administrative tools, and medical research platforms. Due to its decentralized IT structure and reliance on virtualized environments, discrepancies arose in sub-capacity licensing compliance and processor value unit (PVU) calculations. With limited internal resources to manage the audit, the hospital engaged Redress Compliance to safeguard its financial and operational stability.
The Process
- Initial Assessment: • Redress Compliance began by thoroughly reviewing the IBM audit findings to identify inconsistencies and inaccuracies. • Analyzed the hospital’s licensing agreements, entitlements, and deployment data to clearly identify compliance gaps.
- Data Collection and Validation: • Worked closely with the hospital’s IT team to gather precise usage data across servers, virtual machines, and cloud platforms. • Verified sub-capacity usage metrics, identifying areas where IBM’s calculations were incorrect or inflated. • Mapped actual software usage to the entitlements to reveal over-provisioned and under-utilized licenses.
- Strategic Negotiation: • Engaged IBM’s audit team to dispute the initial findings, presenting accurate data and justifications for compliant usage. • Highlighted the hospital’s critical role in healthcare, emphasizing the need for uninterrupted access to IBM software to maintain patient care standards. • Secured concessions from IBM on disputed claims, leveraging Redress Compliance’s deep knowledge of IBM’s licensing policies.
- Optimization and Compliance Planning: • Identified and reallocated unused licenses to address compliance gaps without additional purchases. • Provided a customized compliance roadmap, including automated tracking tools to monitor future usage and avoid similar issues. • Delivered training for the hospital’s IT staff to strengthen their understanding of IBM’s licensing terms and requirements.
Outcome
Redress Compliance successfully reduced the hospital’s financial exposure by 100%. IBM accepted the hospital’s compliance report as accurate, reducing the initial $7 million claim to $0. This result preserved critical patient care and medical research funds while ensuring uninterrupted access to IBM’s software solutions. The hospital also implemented enhanced processes to prevent future compliance risks.
Quote from the CIO:
“The IBM audit posed a significant threat to our operations, but Redress Compliance delivered extraordinary results. Their expertise resolved the audit without penalties and empowered us with tools to manage compliance proactively. Their partnership was invaluable.”
Key Results:
- Initial Audit Claim: $7 million.
- Final Settlement: $0 (100% reduction).
- Compliance Improvements: Streamlined license tracking and improved usage monitoring.
- Operational Continuity: Ensured no disruptions to critical healthcare services during the audit process.
This case underscores Redress Compliance’s ability to protect organizations in highly sensitive industries, ensuring financial security and operational stability in the face of IBM audits.
