Many organizations are surprised by the total cost of a vendor audit; this oversight can lead to substantial unbudgeted IT spend. SPVM and IT Asset Managers should understand the total risk audits pose, prioritize the vendors they spend the most with and those that are business-critical, and ensure they have the right processes in place to act when the audit lands.
We asked our experts for their top six vendor audit tips for before, during, and after an audit:
Six top tips for your next vendor audit
1. Develop a strategy
Build and implement a clear, repeatable process you can follow every time you receive an audit request. Involve support from other key stakeholders - Audits are not just an ITAM responsibility. These stakeholders could be IT buyers or line-of-business managers, who must understand the licensing implications of their purchasing decisions.
Likewise, the working group should include C-Level, procurement, finance, and legal personnel. Navigating an audit takes a team effort, and it is critical that all stakeholders understand the process and collectively know what is required and the desired outcome. Document the process for every audit undertaken and use this experience to continuously improve your strategy.
2. Deploy initial response tactics
Manage the response carefully to suit your organization. If the audit lands when your business has mission-critical or time-sensitive priorities that are using more than normal resources, ask the vendor to defer; the audit should fit your timeframe, not the vendor's.
3. Know your vendors
Many factors drive each vendor to audit, including both your business's actions and their commercial position.
It's important to know what makes the vendor ‘tick’. This insight will help you avoid activities that raise red flags. Where such activities are unavoidable, this lets you prepare the data and gather proof proactively.
Understanding a vendor's cloud motivation matters too; it is often used in non-compliance cases to win more business. Assess your cloud needs for each vendor, and don’t be lured into unfavorable contracts.
4. Control communication and data flows
This is important both before and during an audit.
Conversations with support desks can give a vendor information about your business that could trigger an audit, so manage these conversations carefully to prevent the wrong information from leaking.
Once engaged in an audit, ensure only the spokesperson communicates with the auditor, and keep control of the information and data provided. An overly helpful team member may provide more than what's requested and raise more questions than they answer.
5. Let the audit drive negotiations
The outcome of an audit can be substantially improved by using the findings to leverage negotiations for planned purchases or upcoming renewals.
Research and understand what motivates a software vendor from a product-specific and revenue target standpoint and align this to your requirements and strategies. Finding these synergies will help you to achieve the best commercial and contractual deals.
6. Seek expert advice
Engaging an expert who deals with audits for specific vendors every day can make the difference between a final bill of $50m and $2m.
Often, only someone who has seen the same situation with another customer can spot the slight nuances in a contract and know what action to take. This expertise can also help ensure your business is audit-ready.
For more information around audit readiness, responding to audits, negotiating the final bill, and building an audit process, check out our solution here.
If you're not quite ready to talk to us yet, you can download these audit resources for free:
