How to prepare for an Oracle audit

When an Oracle audit is looming, procurement and IT leaders face significant challenges.

Oracle’s aggressive sales tactics, complex licensing models, and a history of audits that often result in large penalties make it crucial for organizations to approach these situations strategically. However, it’s not all bad news. With the right preparation, you can reduce your risks and minimize costs during an Oracle audit.

Here are five essential tips to help you navigate the process and emerge with the best possible outcome:

1. Review your Oracle contracts & agreements 

Oracle contracts are notorious for their complexity and often contain hidden clauses that could cost you significantly during an audit. If you are facing an Oracle audit, it's crucial to go back and carefully examine the terms of your agreements.

• Focus on audit clauses: Ensure you fully understand the terms surrounding Oracle’s audit rights and obligations. Many Oracle agreements include clauses that give them the right to audit you at any time. Understanding these can help you prepare.
• Beware of the legal entities: Contract between Oracle and their customers are governed by the named legal entities within the agreements. Ensure you understand how those legal boundaries impact your business and its relationship with Oracle.

Consider working with legal and procurement teams to fully understand the nuances of your agreements and identify any room for negotiation.

2. Conduct a Thorough License Compliance Review

Before the auditors come knocking, take the time to perform a comprehensive internal audit of your Oracle licenses. This involves reviewing your existing contracts, assessing how Oracle software is being used across your organization, and identifying any gaps or discrepancies in your deployment.

• Check for unlicensed use: Identify instances where Oracle products may be used beyond the scope of your license.
• Review license types and metrics: Understand the specific terms tied to each license, such as Named User Plus (NUP) or Processor licenses, to avoid over-reporting or underreporting.

This proactive step not only ensures you understand where your organization stands but also provides insight into areas where you can make adjustments or negotiate more favourable terms if discrepancies are found.

3. Optimize Your Oracle Environment

Oracle audits can uncover costly misalignments between your actual usage and your license entitlements. One way to mitigate this risk is by optimizing your Oracle environment before the audit process begins.

• Review your virtualized environments: Ensure you understand Oracle’s partitions policy and rules pertaining to virtualized environments. Getting this wrong can lead to expensive audit settlements.
• Right-size your environment: Consider removing underused or redundant Oracle installations. You may find that some products or features are no longer necessary and can be decommissioned or swapped for more cost-effective alternatives.

By optimizing your Oracle infrastructure, you not only reduce your risk of being caught under-licensed but also position your organization for potential savings on future licensing.

4. Prepare Your Data for the Audit

Oracle audits typically require submitting data about your environment, including how many users are accessing the software, how many processors are being used, and how your installations are configured. Preparation is key to reducing the risk of inaccuracies that could lead to penalties.

• Use inventory & ITAM tools: Identify which tools within your business can provide the relevant data to complete the audit and ensure the teams who own those tools within the business understand your requirements.
• Centralize and organize usage data: Ensure that all relevant data is easily accessible, such as software inventory, usage logs, and system configurations.

A well-organized, accurate submission will show that you are actively managing your Oracle environment and help avoid penalties for discrepancies.

5. Seek Expert Help and Leverage Third-Party Support

Oracle audits are notorious for being complex and managing them without expert guidance can be daunting. That's why engaging with a third-party consultancy - like Livingstone - that specializes in Oracle licensing and audits is often the best course of action. We can provide invaluable assistance in reducing risks and navigating the negotiation process.

• Hire an Oracle licensing consultant: Livingstone understands the intricacies of Oracle’s licensing policies and can help you identify potential overcharges or areas of non-compliance that you might have missed.
• Negotiate with Oracle on your behalf: With years of experience, consultants can also support you in negotiations, potentially securing discounts or revised terms for your Oracle licenses.

Third-party support can be especially beneficial when it comes to defending against excessive claims or ensuring that your organization is only paying for what it needs.

In Conclusion

Facing an Oracle audit can be a nerve-wracking experience, but with the right approach, procurement and IT leaders can reduce both the risks and costs associated with it. By conducting a thorough review of your licenses, optimizing your environment, understanding your contracts, preparing your data, and seeking expert help, you can navigate the audit process with confidence. By proactively addressing these key areas, your organization can avoid costly penalties and negotiate better terms moving forward.

If you’re unsure where to start, talk to Livingstone. We are ITAM specialist with a team of Oracle experts to guide you through the complexities and secure the best possible outcome.

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