Case Study: IBM Audit Defense for an Australian Bank
Challenge
One of Australia’s largest banks faced an IBM software audit and claimed AUD 18 million in non-compliance fees. The bank’s IT environment included critical banking applications, customer relationship platforms, and secure cloud environments. IBM’s findings highlighted alleged violations related to sub-capacity licensing and misconfigured virtualized environments. The decentralized nature of the bank’s operations and a lack of visibility into software usage made reconciling compliance issues challenging. The bank engaged Redress Compliance for expert audit defense to mitigate the financial risk and ensure business continuity.
The Process
- Audit Analysis and Preparation: • Redress Compliance initiated a detailed review of IBM’s audit report, uncovering discrepancies in the licensing metrics and entitlement mapping. • Assessed historical agreements, entitlements, and usage data to identify compliance baselines.
- Data Collection and Validation: • Collaborated with the bank’s IT and operations teams to gather precise data from virtual servers, cloud platforms, and physical hardware. • Validated sub-capacity usage data, focusing on high-demand applications and virtualized workloads. • Identified instances of over-provisioned and underutilized licenses, creating opportunities for optimization.
- Strategic Negotiations with IBM: • Engaged directly with IBM’s audit team to dispute inflated claims, presenting corrected data and compliance justifications. • Highlighted the bank’s commitment to regulatory compliance and cybersecurity to strengthen its negotiation position. • Secured significant concessions from IBM by demonstrating proactive efforts to address licensing challenges.
- Optimization and Compliance Management: • Developed a license optimization strategy, reallocating underutilized licenses to address compliance gaps. • Designed a compliance framework to monitor and manage software usage in real time, preventing future discrepancies. • Provided training to IT and procurement teams on IBM’s licensing rules and best practices for license governance.
Outcome
Redress Compliance’s intervention reduced the bank’s financial liability by 97%, bringing the AUD 18 million claim down to AUD 540,000. The settlement covered the cost of additional licenses required for specific deployments with no penalties incurred. The bank’s operations continued without disruption, ensuring uninterrupted service delivery to its customers. Enhanced compliance processes were implemented, reducing the risk of future audits and enabling better control over license management.
Quote from the CIO:
“The IBM audit posed a significant risk to our operations and finances, but Redress Compliance’s expertise saved us millions. Their approach was efficient and left us better prepared to manage licensing in the future. They delivered exactly what we needed.”
Key Results:
- Initial Audit Claim: AUD 18 million.
- Final Settlement: AUD 540,000 (97% reduction).
- Compliance Improvements: Implemented centralized license management and real-time monitoring tools.
- Operational Continuity: Ensured no interruptions to critical banking services during the audit process.
This case demonstrates Redress Compliance’s ability to deliver exceptional results in highly regulated industries, safeguarding financial stability and operational efficiency in IBM audit defenses.
