Challenges and risks of software audits

Challenges and risks of software audits

Software audits have always been causing asset managers real headaches. Especially companies that do not fully understand which software they have installed and how it is used by their employees are exposing themselves to considerable non-compliance claims.

Interestingly, according to Gartner, many organizations are not only unaware of the likely outcomes of an audit, but they also find it difficult to assess whether they are likely to be audited at all. This lack of awareness is the single most dangerous door opener for all financial risks caused by software audits. Therefore, in the first place it should be a company’s number one priority to assess the chances of being audited.

Additionally, in its research Gartner identified three more challenges user companies are facing:

  1. Companies are struggling to ensure an effective execution of the audit.
  2. Companies often fail to take the necessary measures to complete the audit and avoid future compliance violations.
  3. When negotiating new contracts, companies need to minimize audit risks.


Potential weak spots of your software licensing

Whether or not your company will be audited, it should always be your major concern to prevent any compliance infringements in the first place. If you are able to ensure a compliant software usage at any time, there is no reason to fear a software audit at all. However, to avoid any usage you have not agreed upon with your software vendor, you have to investigate the following possible weak spots:

  • Are you using the software as intended?
    Different usage might not be included in your contract.
  • Are you aware of the current product use rights?
    Software vendors change their terms and conditions and usage rights over time.
  • Do you know the definition of every license type?
    The vendor might have a different approach.
  • Did you upgrade your software?
    Upgrades enable new features and extend the way you may use a software. Find out whether this usage is still covered by your existing contract.
  • Do you run virtual sessions on other machines?
    Then you could possibly process data from the software without actually possessing access to the software.
  • Are you purchasing your software licenses from an independent software and technology vendor (ISV)?
    Software vendors prefer you to buy licenses from them or their partners.
  • Do you have a process for licensing, meaning the distribution and management of your software licenses? Having a clear and clean process in place saves you time for preparing an audit and considerably lowers your financial risks.


Consider an audit an opportunity for optimization

Being one step ahead of your auditor is the single best preparation for any audit. However, this often involves a lot of manpower and time. This is where a SAM solution comes in really handy. A license management tool gives you all the information needed about your license inventory and current usage. Thereby it allows you to constantly minimize your compliance risks. Knowing your licensing situation and having accurate data about your usage and demand is giving you a far better negotiation position in the audit. By constantly optimizing your usage and license distribution you will not only avoid additional charges from your vendor, but most probably prevent an audit at all.

So after all, no matter how threatening software audits may appear, they are always an opportunity for companies to:

optimize their software license distribution.
discover non-compliance and take measures to prevent copyright infringement prosecution.
ensure their own legal and ethical guidelines.


Source: Gartner, Address These Software Audit Challenges to Minimize Risk and Cost to the Business,, 12.04.2017



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