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Software license compliance remains challenging in India: EY

Managed by its Forensic Technology & Discovery Services arm, this unique tool considerably reduces the manual time and effort required to manage SAP software licenses.

April 07, 2016 4:43 IST | India Infoline News Service
An increasing dependence on technology has led to the usage of software becoming mission critical for most organizations. But managing software licenses and governance can be quite complex as it includes license optimization, usage and can result in incorrect allocation or wastage. To address these challenges, EY Fraud Investigation & Dispute Services has launched an automated tool - EY SAPPHIRE, to help clients maintain compliance, control license costs and optimize their existing license landscape. Managed by its Forensic Technology & Discovery Services arm, this unique tool considerably reduces the manual time and effort required to manage SAP software licenses.
 
Paul Walker, Partner and Head (EMEIA), Forensic Technology & Services, EY states, “Today, businesses are operating amidst an enhanced risk landscape, and effective compliance is no longer just a “good-to-have” measure, but a norm. As the influx of technology has permeated through to every division within the company, it has become inherently impossible to track information without automation. This has prompted EY to devise comprehensive tools – such as EY SAPPHIRE, for businesses to effectively decipher loopholes and thereby enhance their levels of compliance around SAP licenses.
 
Amit Jaju, Executive Director, Forensic Technology & Discovery Services and Head (EMEIA) Software License Forensics, EY said, “Globally, there has been an increase in the number of software licensing related disputes over the last year. We have noticed that while companies followed standard license management practices and tools for specialised software such as an ERP system; they were caught unprepared during compliance audits. This led to disputes around the fine print in the license contract. This inspired us to develop a comprehensive and specialized software solution to help our clients manage SAP licensing in an automated manner. Feedback from our existing clients, from not just the CIOs but also the CFOs, has been positive.”
 
Part of Forensic Technology & Discovery Services, the Software License Forensics team has managed several SAP license compliance engagements for global companies across verticals such as telecommunications, fast moving consumer goods, manufacturing, utilities and software services. Based on this experience, EY SAPPHIRE enables organizations manage issues in a centralized and proactive manner to mitigate financial, legal and reputational risks. Typically, non-compliance with licensing rules and disputes between the IP owner and user, could potentially amount to millions of dollars. Some other challenges include,
 
Wastage: 33% of users have not utilized the roles allocated to them. This contributes to a considerable wastage in terms of license cost, especially if the user belongs to a higher category license.

Unclear or incorrect licenses: Contracts could lack clear definitions for the highest category of license types. This would further lead to companies allocating incorrect license types to users which could violate the license contract definitions.

Integration: It has been observed that almost all companies did not clearly understand the best method to integrate non-SAP applications with SAP from a licensing perspective
 
Equipped with a unique set of functionalities and dashboards to help businesses, the tangible benefits derived from EY SAPPHIRE can be summarized below:
  • License optimization reduces on-going costs and provides vital inputs for realistic budgeting
  • Compliance with contract minimizes risks arising out of audits
  • Controls the increase in license maintenance costs
  • Enables centralized management of licenses
  • Helps indirect access assessment and optimization
  • Deploys minimal use of existing resources 

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