February 26, 2025 (Wed) - 9AM UTC-6

Software Audits: A Persistent Multimillion-Dollar Concern

Software audits have cost over half of organizations across various industries millions of dollars due to non-compliance. This alarming concern highlights the imperative for businesses to look more deeply and reevaluate their software license management (SLM) practices and further strengthen their compliance.

Software Audit Fines by the Millions

Software vendors routinely audit their customers to verify compliance with licensing agreements. These audits are meant to confirm that software usage aligns with the licensed number of users, devices, and agreed terms. However, these audits frequently uncover non-compliance violations, leading to substantial fines for users.

According to a recent ITAM study, 55% of companies said they paid by their vendors half a million dollars or more over the past three years due to non-compliance. Nearly 24% shelled out $10 million or more to software audits within the same period.

In addition to significant financial losses from non-compliance fines, companies may incur indirect costs such as legal fees, and operational disruptions. Legal fees can quickly escalate as companies navigate complex compliance issues. Operational disruptions due to suspended software access can create bottlenecks, stall projects, and reduce productivity, which may lead to significant delays in project timelines.

Software vendors provide license utilization data. But it often falls short of reflecting true usage, compromising audit readiness efforts.

Engineering and Specialty Software: Not Exactly Audit-Friendly

In engineering and design-intensive industries such as construction, manufacturing, automotive, aerospace, oil and gas, energy, and military, leading solutions vendors like Autodesk, Siemens NX, Dassault Systèmes, Bluebeam, and Hexagon enforce strict adherence to license agreements. For organizations using these tools, maintaining compliance and audit readiness is imperative.

However, engineering and specialty solutions often have higher software audit risks due to the following factors:

Complex Licensing Agreements: Vendor contracts can be complex, with varied terms and conditions for different usage types. Navigating these agreements requires specialized expertise and tools that many organizations lack.

Rapid Technological Changes: Technological advancements continually reshape software licensing models. Organizations often struggle to update tech stacks due to high costs, time constraints, and leadership’s reluctance to adopt new technologies, complicating compliance efforts.

Decentralized Software Environments: In large companies, software management is often fragmented across departments or business units, leading to inconsistencies and compliance gaps.

Bad User Practices. Bad user habits such as license hogging, license camping, and failing to check licenses back into the pool can lead to discrepancies between reported usage and actual usage during an audit. Organizations may struggle to justify the reported usage figures to auditors, leading to potential fines and penalties.

True License Usage: Key To Software Audit-Readiness

License utilization data plays a crucial role in this process, helping companies understand how their software licenses are being used, identify potential compliance issues, and optimize license allocation to avoid both overuse and underuse.

Vendors typically provide basic metrics, such as the number of licenses issued and the duration of use. However, this information often lacks a comprehensive and accurate view of actual software usage. It generally includes only surface-level information, without detailing user behavior, peak usage times, or specific application interactions. Consequently, organizations may struggle to fully understand their software assets, leading to inefficiencies, unoptimized license allocations, and increased non-compliance risks.

Mitigate Software Audit Risks with Open iT

Open iT, a leading provider of software license management solutions for engineering and specialty applications, addresses audit risks by offering granular visibility into software asset utilization. This visibility allows for detailed metrics, robust license reporting, and actionable insights, significantly contributing to enhanced audit readiness.

Open iT mitigates software audit complexities and ensures compliance through several key strategies and best practices:

  • Comprehensive License Tracking: Detailed tracking across all devices and users, including concurrent, named-user, and node-locked licenses.
  • Real-Time Usage Monitoring: Continuous monitoring to detect anomalies and potential compliance issues as they arise.
  • Automated Reporting and Analytics: Robust tools generate detailed, customizable reports on license usage, compliance status, and potential risks.
  • License Reconciliation: Thorough comparison of actual software usage with purchased licenses to identify and address discrepancies early.
  • Compliance Alerts: Configurable alerts for potential non-compliance, allowing proactive corrective action.
  • Historical Data Analysis: Maintains historical records of software usage for long-term compliance and audit documentation.
  • Simulation of Licensing Scenarios: Allows simulation of different licensing scenarios to optimize license usage and ensure compliance.
  • Enhanced Vendor Negotiations: Detailed usage insights improve negotiation positions with vendors.
  • Chargeback and Showback Capabilities: Promotes accountability by assigning software costs to specific departments or projects. This transparency ensures that all parts of the organization are aware of their software usage and associated costs, further promoting compliance.
  • Integration with Existing Systems: Seamlessly integrates with existing IT and software management systems for a unified approach to software asset management.

Be Audit-Ready with Open IT

With 25 years of experience supporting industries with extensive engineering license portfolios—including construction, energy, manufacturing, aerospace, defense, and government agencies—Open iT excels in helping companies navigate the intricacies of software licensing and sidestep the pitfalls of non-compliance and software audits.

Contact Open iT today to learn how our comprehensive SAM solutions can help you achieve compliance, optimize your software usage, and protect your bottom line.

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