Avoiding risk from software non-compliance

Over 60 percent of IT managers perceive a business risk to the organization they work for because of unmanageable IT estates, according to research undertaken by IDC and commissioned by the Software Industry Research Board (SIRB). The SIRB was founded by FAST IiS; its membership consists of some of the largest and most influential organizations in the software industry today.

The findings of the survey are included in the white paper, ‘Avoiding the Dangers of a Poorly Managed Software Estate: Spotting the Signs of Risk’ which identifies four main areas of software compliance risk to an organization - legal, commercial, operational and reputational. These four areas encompass:

* Commercial risk: the over-purchasing of software assets subsequently not used by the organization; buying outside volume licence agreements, under-licensing which can lead to costly reconciliations.

* Legal risk: the risk of legal action to defend against use of unlicensed, unauthorised or pirate software.

* Operational risk: the possibility of disrupted service because of system failure due to a virus. This is especially common in the case of counterfeit software.

* Reputational risk: the impact of unfavourable publicity through lack of legitimate licensing, which could result in poor customer perception and even a drop in share price.

Fred Broussard, senior analyst IDC, commented: “Over the course of our research we have identified the areas of risk that IT management and general management associate with software licensing and software asset management (SAM). This has highlighted a difference in perception in key areas, driving a disconnection between IT and procurement that results in the ineffective management of software licenses within corporate UK. This white paper, clearly illustrates that effective SAM can address each of the four main risks in turn, while delivering cost savings within a compliant framework.”

Key findings of the survey include:

* Procurement is responsible for buying software in 70.4 percent of organizations, the board accounts for 15.4 percent, line of business managers 14.5 percent and the IT department itself 13 percent.

* And yet when it comes to who is responsible for SAM it is the IT director at 47 percent, then the CTO at 16 percent, line of business managers also at 16 percent, procurement at 10 percent and CIO at 9 percent.

* The picture becomes even more blurred when it comes to who owns software licence management with 31 percent of organizations claiming it resides with the IT department, 21 percent with finance and 47 percent with procurement.

* Only 48 percent of general management staff in larger organizations believed that compliance was a risk to their business, compared to 60 percent of their IT colleagues.

* 38 percent admitted that they had only a basic understanding of their software licenses.

http://www.fastiis.org/about_us/SIRB/

•Date: 29th Sept 2009• Region: UK/World •Type: Article •Topic: Operational risk
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