Why You Shouldn’t Overlook Conducting Timely Audits on Your Customers

As technology continues to improve, the environment in which customers establish their digital architecture continues to evolve. With this change in architecture comes a change in the way companies handle the licensing of their software. If you wait too long to perform an audit, more advancements will lead to greater shifts in the digital environment, thus performing audits with extensive gaps in between makes them more difficult to manage. In addition to new software purchases, companies will have changes in personnel that lead to lost points of contact, adding to a list of growing environment changes that will overall affect the audit process. As the gap between performing audits increases, the time and cost to complete an audit will also increase.

 

I trust my customers, why would I need to audit them more frequently?

While having licensees who intentionally avoid paying the proper amounts under their license agreement is certainly a reason for conducting regular audits, it is also true that a large portion of audit findings come from unintentional errors made by the licensee during reporting, or even differences in understanding of the contractual clause. Licensing can be complex. As your customers expand their organizations, sometimes across multiple locations, the contract agreement, licensing, and usage of their software products may not be the first thing that comes to their mind. Therefore, by not performing regular audits on your customers, you are missing out on a lot of opportunities to catch missed areas of non-compliance.

  

A Compliance Program Becomes a Self-Sustaining Practice

In both the short- and long-term perspective, a license compliance program should be not only be self-sustaining, but should also bring significant value to the licensor’s organization. One myth that exists around compliance audits are that they often become a long and expensive process. However, this does not have to be the case. Top licensors utilize a wide range of tools to assist in the identification of missed licensing revenue. These tools include data analytics from internal and external datapoints, remote audits, educational reviews, limited scope audits, and full scope audits. By balancing these tools, a licensor can establish a successful license compliance program that successfully captures areas of non-compliance among its customer base. Lastly, by conducting regular audits, a licensor may discover trends in high risk areas. This will further allow the licensor to easily target specific areas of risk with each customer being audited.

 

Understanding Customer Needs Increases Sales

Through fully capturing areas of non-compliance, you will be able to capitalize on the sales opportunities to clear up the conflicts. Through conducting a regular audit process, you will be more connected with your customers as you better understand their business and their environment. As you do so, you may be able to identify additional needs in the customers environment and recommend additional products to help customers improve their business practices.

 

How Often Should I be Auditing my Customers?

While many major companies are auditing their customers every 2-3 years, we understand that every customer environment and level of risk varies. An experienced audit practice will be able to analyze your licensing environment and licensee base and provide you with effective recommendations tailored to you and your customers. As you work with Connor Consulting, we will assist you in establishing a compliance program that will match the needs of your company.

 

How can Connor help?

Connor Consulting is a leading independent audit firm that specializes in contract compliance. Connor Consulting has managed hundreds of Software License Compliance audits and have helped numerous companies collect lost revenue and improve their control environment and licensee-based relationships. Connor has global teams with an average experience of 10+ years that specialize in Software License Compliance, IP royalty audits, third party review, and software asset management. Contact us today to explore the benefits of a contract compliance program for your organization: +1 (415) 578 5002 or fill out an inquiry at http://www.connor-consulting.com/work