Case Study: IBM ELA Review for a Leading Financial Bank in New England
Challenge
A prominent financial bank based in New England engaged Redress Compliance to conduct a comprehensive review of its IBM Enterprise License Agreement (ELA). The bank relied heavily on IBM’s technologies to support critical operations, including transaction systems, customer relationship management, and compliance platforms. With an upcoming ELA renewal, the bank sought to:
- Ensure compliance with existing IBM licensing terms.
- Optimize license usage to eliminate unnecessary costs.
- Define the scope of the new ELA to include only essential products.
- Negotiate favorable terms for the new agreement while maintaining flexibility for future scalability.
Given the bank’s regulatory obligations and the financial stakes, it required expert guidance to navigate the complexities of IBM’s licensing policies and align its IT strategy with business objectives.
The Process
- Comprehensive Licensing Review: • Analyzed the bank’s current IBM agreements and entitlement records to identify compliance gaps. • Evaluated deployments across on-premise servers, virtual environments, and cloud platforms to ensure accurate entitlement mapping. • Validated usage data to uncover areas of overprovisioning and misaligned entitlements.
- Optimization and Cost Savings: • Identified underutilized licenses and redundant IBM solutions, creating opportunities for significant cost reductions. • Reallocated existing licenses to match actual usage, eliminating unnecessary purchases. • Recommended decommissioning outdated products to streamline the bank’s software portfolio.
- Defining ELA Scope: • Collaborated with bank leadership to identify mission-critical IBM products and services for inclusion in the new ELA. • Excluded non-essential solutions, reducing overall costs and complexity. • Provided a roadmap to address future licensing needs, ensuring scalability and alignment with the bank’s IT strategy.
- Negotiation Support: • Leveraged findings from the review and optimization process to negotiate more favorable terms with IBM. • Secured cost predictability and flexibility in the new ELA, accommodating the bank’s growth and regulatory requirements. • Ensured the inclusion of terms that minimized financial risks while maximizing operational benefits.
Results
- Compliance Achieved: • Addressed all identified compliance gaps, mitigating the risk of audit penalties.
- Cost Savings: • Annual savings from eliminating unused licenses: $4.5 million. • Additional savings from retiring redundant solutions: $1.2 million. • Total savings achieved: $5.7 million annually.
- ELA Renewal Outcomes: • Reduced the total cost of the new ELA by 28% compared to the previous agreement. • Negotiated scalable terms to support future business growth. • Streamlined the licensing portfolio, focusing on essential solutions and reducing overhead.
Quote from the CIO:
“Redress Compliance’s IBM ELA review was a transformative experience. Their insights helped us ensure compliance, optimize our licensing, and secure a cost-effective agreement. Their support has positioned us to navigate the future with confidence.”
Key Results:
- Initial Exposure: Mitigated compliance risks.
- Savings Achieved: $5.7 million annually.
- Operational Efficiency: Optimized IBM licensing portfolio and governance.
- Strategic Alignment: Tailored ELA to meet business and regulatory needs.
This case demonstrates Redress Compliance’s ability to deliver exceptional financial and strategic value to financial institutions, ensuring compliance, cost optimization, and favorable ELA negotiations.
