Software audits on the rise as times get tough

6 Nov 2008

Businesses have been warned that the current credit crunch will lead to an increase in the number of software audits being performed on organisations as software vendors look to safeguard revenue streams

IT consulting and services company Version 1 has warned that the incidence of Software Audits in the Irish marketplace has increased, and believe that this is only the beginning as the economy begins to head into a more difficult phase.

International trends would suggest that Ireland is only following suit with the rest of the global software industry.

As the credit crunch begins to bite, and new projects are cancelled or put on hold, software vendors are looking for ways to protect their revenue streams.

Companies need to be more proactive at managing their usage of software packages provided by large software vendors, said Derek Alexander, software asset management consultant at Version 1.

“Many IT managers are unaware of what exactly is in use in their organisations, and also how it is in use. It is an increasingly daunting task just keeping up with the changes to software licensing terms and conditions, and it can be difficult to know where you stand – you can be confused into submission during the audit process.”

Taking action to understand your software licensing position before the inevitable audit letter arrives could save you tens of thousands of euro in unplanned spending and decreased productivity, Alexander advised.

It can also help to ensure that you don’t buy licences that you don’t actually need, make you are aware of the value of your investment in software licensing, and may also uncover opportunities to save money on annual support costs.”

Alexander went on to say that when the licence compliance teams from software vendors come calling, they tend to give little notice and can take an inflexible line on any additional licensing that is required.

“Neither are they obliged to show you the most cost-effective way to become compliant.” Impartial advice on your options at this stage can be invaluable.

Once a company understands its current usage and addresses any issues that have been uncovered, then it can begin to actively manage its software assets, either in-house or by outsourcing it as part of a managed service.

Organisations can expect to realise savings of up to 30pc a year on software licensing, according to Alexander.

“Numerous reports and analysis have shown that an effective Software Asset Management (SAM) program will allow you to budget more effectively and prepare you for vendor audits, mitigating legal and financial risks. It can also help you reduce internal support costs,”  he added.

In a number of instances, businesses in various sectors have achieved significant savings by learning to manage their software assets. These include a retail firm which made a €40,000 saving, a media company that saved €250,000, an insurance firm saved €220,000, a financial services company saved €200,000 and a public sector organisation saved €120,000.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years