Understand the Risks Associated With a Software Audit

Understand the Risks Associated With a Software Audit

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Research Publication Date: 10 September 2003 ID Number: LE-21-0036 Understand the Risks Associated With a Software Audit Linda R. Cohen A software audit can have a major impact on your organization. Know whether your software licenses are in compliance, or face fines and productivity losses. © 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. ANALYSIS Many enterprises are not aware of the impact that a software vendor audit can have on their organization — financially and in terms of time consumed. Because enterprises do not condone software installations unless they are properly licensed, most enterprises believe that they do not need to be concerned about the results of software audits. However, an enterprise may be out of compliance ...

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Research
Publication Date: 10 September 2003
ID Number: LE-21-0036
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form
without prior written permission is forbidden. The information contained herein has been obtained from sources believed to
be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although
Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal
advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors,
omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein
are subject to change without notice.
Understand the Risks Associated With a Software Audit
Linda R. Cohen
A software audit can have a major impact on your organization. Know whether your
software licenses are in compliance, or face fines and productivity losses.
Publication Date: 10 September 2003/ID Number: LE-21-0036
Page 2 of 3
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
ANALYSIS
Many enterprises are not aware of the impact that a software vendor audit can have on their
organization — financially and in terms of time consumed. Because enterprises do not condone
software installations unless they are properly licensed, most enterprises believe that they do not
need to be concerned about the results of software audits. However, an enterprise may be out of
compliance with its license agreement for many reasons, and it may not even be aware of it.
The number of software vendor audits is increasing. Enterprises need to develop audit principles
and processes to ensure that they stay in compliance with their license agreements, and that they
know their audit responsibilities and rights. Audits are not pleasant. Normal work is disrupted as
purchasing records, license agreements and other documentation are researched. Because
many contracts are vague in their usage rights and subject to reinterpretation, there can be
significant management time involved in discussing and resolving issues related to these rights.
As far as the audit results are concerned, at best, an enterprise is within compliance and only
time is involved. At worse, the audit will prove that the enterprise is out of compliance and, with
negotiation leverage at its lowest, the costs can be significant.
Software compliance is often not a priority in an enterprise until there is a perceived risk of an
audit. To determine if an enterprise has the staff and processes in place to maintain accurate
license compliance, consider these questions:
How long has it been since a meeting was held on contract compliance and asset
management?
Does the CIO know who is responsible for IT asset management?
Are personnel trained in software license negotiation managing the technology
contracts?
Is there centralized technology procurement within the enterprise?
How long has it been since a desktop audit was performed?
Are asset management projects funded?
Does the enterprise have written procedures on software procurement processes?
Does the enterprise have written policies on software licenses that are not legally
procured?
If the answer to any of these questions is "no," the enterprise has a high risk of noncompliance.
The following research focuses on software audits from a contract viewpoint and the areas of risk
to enterprises.
Featured Research
"Clearly Define Software License Usage Rights" — Don't overlook software license usage rights
in software licensing negotiations.
By Jane Disbrow
"Ensure Software License Compliance Prior to an Audit" — Use this checklist to ensure software
license compliance.
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"Surviving a Software Vendor Audit" — Develop audit principles and processes internally to
ensure that these audits are managed effectively.
By Jane Disbrow
Publication Date: 10 September 2003/ID Number: LE-21-0036
Page 3 of 3
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
"Don't Be Surprised by Software Vendor Audits" — Expect increased audits by software vendors
and include audit protections in your software licensing agreements.
By Jane Disbrow
Linda Cohen
Managing Vice President
ITSPmember@gartner.com
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