Every software installed in an organization comes with a license prescribing what they can or cannot do with the purchased software. It is important for every organization to understand the terms of the software agreement fully, in order to make sure it steers clear of getting into any sort of legal malpractices.
A Gartner report reveals figures that indicate an increased number of license audits that are being conducted by leading software vendors. The figures are up from 61% to 65% since 2011. Software audits are on an upswing and the chances of going a whole year without receiving at least one such audit request by the software vendor are only 35%.
How much does unused software cost?
Software audits safeguard the interest of both, the vendors as well as the users.Software companies are protected against piracy, exploitation of single-user software, infringement of copyrights, etc. Besides, users get piracy-free systems and they also know the status of utilized or unutilized software.
Even though organizations may have licensed the software correctly, What organizations they have also paid for and installed software that is unused What organizations fail to realize is that the unused software can cost their business millions. This report from Aberdeen Essentials reveals that of all the software deployed in an enterprise, 28% goes unused or barely used. This amounts to a loss of nearly $224 per PC.
1e, a leading technology company, conducted a research in the year 2014,t o see how efficiently software estates, software licensing procedures, and audit requests are being managed by the organizations, among 2000 U.S. and 1000 U.K. decision makers, with over 500 employees. The report called, ‘The Hidden Cost of Unused Software’ provides insights on how businesses can regulate and optimize their approach towards software asset management.
What is the need to conduct software audits?
A software audit can be both internal and external. Internal software audits are executed by either an in-house team or a team of consultants, whereas, external software audits are carried out by external parties.Internal audit reports are used by an organization to check what software are installed across the organization and how the deployed software are utilised across the network. This gives an organization a chance to reassign the unused software, adjust its usage, and manage any internal shortcomings.
On the other hand, software vendors conduct audits to ensure that the organization’s system is free from under-licensed or pirated software products. If any under-licensed or pirated products are found, the vendor may demand to resolve the matter immediately, which may result in serious consequences or an unexpected expenditure for the organization.
There are mainly two kinds of software audits:
Software Assessment Management (SAM)
SAM is also known as ‘self-audit’. It is a kind of software audit that ensures that clients adhere to its compliance. It is a set of IT practices that involve managing and optimizing the purchase, installation, utilization, maintenance, and disposal of the software being used within a workplace.
Legal Contract & Compliance (LLC)
A LLC is issued to an organization when the organization refuses to conduct SAM. LLC is a non-voluntary audit. The Business Software Alliance (BSA) conducts all LLC audits.
How to prepare yourself for a sound software audit?
Work with automated software asset management tools:
Various tools are available in the market that can help an organization identify the software applications that are under-utilized or unused. Within an organization, transparency of software consumption is essential. Software asset management tools help you maintain records of your software and the software inventory, leading to a smoother software audit process. An automated system will eliminate the chances of human-made errors and is time-efficient.
1. Take a Proactive stance:
A LLC notice is sent to the organization before conducting a LLC Audit by the authorities. Organizations must not wait for the BSA to send a LLC notice; they must address the issue beforehand. Do not simply accept the audit terms, process, and results. If an organization realizes that they haven’t complied with the regulations, they must approach the vendors and make settlements.
2. Conduct a time-to-time in-house audit:
An important point that an organization needs to keep in mind is to conduct timely in-house software audits. Self-audits must be conducted at least twice a year, perhaps even more frequently if the software system is complex or large. This will help an organization from being fined or penalized.
3. Communicate with your vendor:
Organizations must inform their software providers that they take software audits seriously, and have incorporated rigid measures in order to adhere to the software compliance agreement as much as possible. This will not only build trust and goodwill but also deter the vendors from auditing your organization.
Needless to say, using software is integral to conduct any kind of business. Software asset management has now become a core business function. Software audits certify that the software applications installed are not only genuine but are also being used optimally. It increases the longevity of the software and also helps in cost-optimization. Software is the need of every business, and a software audit is the need of every software system.