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Tips to Prepare for Software Licensing Audit

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Tips to Prepare for Software Licensing Audit

December 12, 2016

  By Susan J. Campbell, TMCnet Contributing Editor

The end of the year marks a time for reflection, a look to the opportunities in the new year and celebration for the wins of the year. It’s also a time where you might get a notification from the software publisher that it’s time for an audit – the word that no one really wants to hear. But for those in software licensing who need to monetize their intellectual property, it’s an important step.

Software licensing solutions provider, Flexera Software recently published a blog on the topic, highlighting what companies need to understand about license entitlements in order to prepare for the software audit. The ultimate goal is to determine how much is being used against how much is supposed to be used. In this piece, the focus was on how much software is the company allowed to use.

In the age of technology, it seems a little silly that you even need to go through the steps. Don’t developers and publishers put the information they need into the software, preventing overuse or unauthorized usage? The reality, however, is that human error exists and all parties involved could have inaccurate data on license entitlements, including resellers. Therefore, it’s important to collect and review all necessary data sets related to software licensing.

Flexera Software suggests that once you collect all of your data, examine the different sets through the visualization of overlapping circles as in a Venn diagram. The ultimate goal should be the convergence of all circles into a single circle to get the true and accurate license entitlement position. First, examine the vendor identified license entitlements to the publisher knows what you are entitled to use. Get a full set of entitlement data and this makes up your first circle.

The second set of records, and therefore your second circle, is your reseller data. Make sure you can map between what the reseller claims you have purchase and the entitlement records provided by the vendor. If a gap is identified, it’s time to do some digging to determine the cause. Are there inconsistencies with the way your organization name is listed in vendor records? Even a typo or a spelling error can cause problems. Once you’ve collected all of this information, you have a second and separate circle of data.

Your third circle and data set is an examination of organizational changes. If you spun off a separate company that you know has entitlements to specific software, yet your name is still associated in publisher and reseller records, you need to record that information here. Chances are the head of the spun off company is also preparing for an audit and they need proof that they have the right entitlements to use what they are using.

Once you have these data sets completed, you’re in a much better state to be able to go into the audit and better understand where you’re lining up with entitlements and where you’re not. Once complete, consider a software licensing solution that can help you keep these data sets straight and better prepare you for your next time down audit road.

Edited by Maurice Nagle

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