How we helped an international manufacturing company get in control of their ILMT and successfully settle an IBM audit

IBM audit

Successful IBM audit settlement

Company: International industrial and manufacturing company

Case: IBM audit

Cost avoidance327,000 euro

Many organizations that installed the IBM License Metric Tool (ILMT) want to license the sub-capacity of a server. In order to meet IBM’s contractual terms and conditions to be eligible for sub-capacity licensing, ILMT must be set up correctly and maintained continuously. In some scenarios due to replacements of or changes within the hardware infrastructure, it’s not always possible to meet all the requirements to be eligible for sub-capacity licensing.

The moment the audit letter arrives, it is usually too late to start configuring and maintaining your ILMT installation. In addition, end users that completely focus only on their ILMT environment, may often forget to have a clear look into all the other IBM programs which are not licensed on a PVU or RVU metric (e.g. user- based programs)

The above is exactly what happened at an industrial and manufacturing company we worked with. This customer was expecting to receive an audit letter from IBM. By acting promptly, they had time to determine before the actual audit took place what its actual compliance position was and what they could do to remediate any issues identified.

Our solution

We started with an internal audit to determine the licenses and actual deployment of all IBM products within the company. In collaboration with the organization’s IT staff, we gathered all the necessary information for IBM products: Processor Value Unit (PVU) and Authorized User licensed programs. The conclusion of this internal audit was that the company had a total financial exposure of 348.000 euros.

This financial exposure was caused by the following issues:

  • For their Authorized User based programs, it was clear that the users received access to some additional functionalities that they didn’t even need in their daily business operations, resulting in a situation that they would need to have Full Access licenses for which the company did not have sufficient entitlements.
  • For their PVU based programs, the company performed some migrations from old hardware to new hardware and did not install and configure ILMT in a complete and accurate manner.

Business impact and results

As a result of the internal audit, the customer had the opportunity to remediate and optimize the issues identified.

For the Authorized User based programs, the company was able to eliminate the initial non-compliance by configuring the proper access for each individual user. Moving forward, each user was only authorized to use the specific functionalities the company was licensed for.

For the PVU based programs, it was clear that the customer would need additional licenses. Not only because they were not able to comply with all the requirements to be eligible to license on the sub-capacity of the server but also because it needed more PVU licenses for a new project.

This new demand was combined in the commercial negotiations resulting in a settlement below 20K EUR; a significant difference compared to the initial financial exposure.

This example demonstrates that an audit letter does not necessarily mean the situation is hopeless. Those who immediately take action can significantly reduce the financial consequences or even prevent them altogether.

Another positive consequence of our intervention is that managing ILMT and properly setting up users’ access to different IBM programs now has also become a priority within the client organization. In the end, our services have not only shown that compliance risks can be minimized, but also that unnecessary spending is brought to light through proactive licensing management.

Although we knew the audit letter was on its way, we still wanted to get a clear understanding of our position. B-lay helped us not only with that, but also to successfully settle the IBM audit.