Compliance has been an ongoing discourse in the banking sector (and, the financial services industry, in general) since the Sarbanes-Oxley Act of 2002. Both a mantra and curse, financial institutions continue to struggle to maintain best practices across all sectors. But few companies understand that SOX is not just about reporting financials correctly, it's also about attesting that your enterprise is in compliance with copyright, trademark and other intellectual property rights.

How hard could it be to remain compliant? System migrations, M&A activities, buyouts-all of these events can cause non-compliance.

For example, with Bank of America's takeover of Countrywide, migrating systems and increased workforce as a result of the merger will need to be closely monitored to be sure standard licensing agreements are maintained.

With investment in IT remaining a priority, most CIOs and CEOs are less focused on maintaining software assets after the initial negotiation than they should be. Unfortunately, this results in millions of dollars in settlements when software vendors move forward with enterprise software audits. In addition, groups such as the Business Software Alliance are cracking down on corporate software piracy, with many lawsuits resulting in payments between $11 million and $13 million in fines.

Banks and financial services firms rely on enterprise software from Oracle, SAP and Microsoft to streamline business processes and provide greater value to customers. Software asset management is the key to decreasing risk and maximizing the value of software investments.

According to a recent Forrester report-Trends 2008: Applications Licensing and Pricing-CIOs are sick of software pricing schemes and the complexity of enterprise software licensing. Maintenance costs are going up to nearly 30 percent of license costs. To add to a CIO's frustration, enterprise software vendors change their software licensing rules often. Microsoft's downloadable price book is 100 pages long-and that's just what you have to start reading to even begin to understand licensing rights. There are a number of proactive practices that can help audit-proof an organization.

Aligning corporate objectives with IT is imperative to staying ahead in the licensing game. Increased licensing and maintenance fees due to poor planning can eat into an IT budget. Plan ahead as much as possible to anticipate these changes, and beware of changes over time as well. Globalization and consolidation have altered the structures of many companies. Review software licenses to make sure they sync up with your company's profile and business model.

Some of the most common mistakes that cause overspending on licensing can be avoided by planning your software needs. Over- and under-licensing is common when organizations make quick decisions to meet an immediate need, or mistakenly think that buying in "bulk" is the cheapest way to go. It's important to keep in mind which types of software are needed and who will be using them. Organizations often end up with the proper licensing but have unused software.

The most common mistake is also the most overlooked-the ever-changing licensing rules. Licensing rules can be compared to the stock market: always changing and requiring professionals to speak another language in order to understand the ins and outs. Remaining "in the know" with all the licensing rules and regulations is a difficult task, but a necessary one to keep the watchful eyes of software vendors on someone else.

With organizations like the BSA seeking huge settlements from businesses, the importance of knowing what you have and that everything is up to date is a small step that could save millions-not to mention the hassle of having to deal with a lawsuit and audit of your software assets. Some steps to take include creating a repository of information on software assets through the use of a discovery tool; maintaining proof of ownership and copies of license agreements; making sure all affiliates and divisions are compliant; and automating asset management. Special circumstances often require attention, including tracking the mobile workforce, being cognizant of software modifications that may require new licensing agreements, and including non-production and temporary servers that may also have licensing requirements.

According to a February 2008 report from Gartner, "During the next few years, small-to-midsize businesses need to devote more time to planning and preparing for software purchases because this will be a challenging period for software licensing. During periods of uncertainty, it's harder to negotiate lasting contractual protections." Aside from having a lawyer review software vendor agreements, it is critical to have a specialist in licensing "best practices" review it.

Know ahead of time that software vendors will typically push a discounted rate for support services and licensing (as much as 20 percent across the board). Don't be sold too quickly on the discount when it may not be what is really needed, and could end up costing more down the road.

Several factors, including increased vendor comfort with the concept of auditing customers, indicate that the number of software audits will rise, according to Gartner. When disputes arise, penalties can vary depending on a number of factors including: how cooperative the organization is, the number of instances of piracy, the degree of non-compliance and what programs and policies the company has in place to avoid illegal use of software.

Fees can include civil charges with penalties of up to $150,000 per instance of infringed title and even federal charges resulting in jail time. The organization must then purchase all products out of compliance and pay for legal fees and any third party used to verify illegal software removal.

Scott Rosenberg is CEO and founder of Miro Consulting, Inc. (c) 2008 Bank Technology News and SourceMedia, Inc. All Rights Reserved.

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