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oracle audit letterIt appears that Oracle has recently sent out a large number of audit letters to their clients. Why do I think this is happening? It’s simple: over the last weeks our phones are ringing off the hook! Companies are reaching out to us for assistance in how to reply to Oracle and handle this audit. Plus, it’s the start of a new Oracle quarter and they are filling the pipeline for their fourth quarter (May 2015) dash to the finish line.

So here are my top five recommendations on how to respond to an Oracle audit letter:

1. Take it Seriously
When you get that audit letter from Oracle it probably won’t have the word “audit” on it. Rather, it will say that you’ve been selected for a “license review.” It almost sounds like you won a prize!! Congratulations, you’ve been selected to participate in a license review!! Yeah. Oracle tries to make the audit letter as nonthreatening and innocuous a possible. Rest assured, it is a real license audit with real dollars, time, and effort at stake. You need to take it seriously.

2. Don’t Ignore It
Oracle is not going away. They have hundreds of people completely focused on targeting their customers for audits and then executing on those audits. It’s an audit machine. If your LMS auditor goes on vacation, or leaves, someone else will pick up your audit. They will track your company down and escalate all the way to C-level executives. When you ignore Oracle they assume you are hiding something. Well, that’s what I would assume if I were auditing a business and they were ignoring me. Remember that Oracle has a contractual right to audit you, and you have an obligation to be in compliance. Ignoring this problem will not make it better.

3. Don’t Rush to Respond
Just because you are not ignoring it doesn’t mean you need to rush into it either. When you get that audit letter the Oracle LMS auditor wants to set up a meeting right away. They usually give you 3 days and then they start calling and/or emailing trying to get you to commit to running their scripts, filling out their spreadsheets and providing more and more data so they can build a noncompliance case against you. Just like Oracle has a contractual right to audit, you probably have a contractual time frame in which to respond. Take all the time you have. If it’s 10 days, take 10 days. If it’s 30 days, take 30 days. If it’s 60 days, then take that. So, reply to Oracle that you have the letter (so they know you are not ignoring them) and set a meeting date for as far out as contractually allowed. Why do we take all the time allowed?

4. Create a Plan
Oracle license audits are serious business with millions of dollars at stake. You have to have a plan on how you are going to mitigate these risks, optimize your licenses, and ultimately come out ahead in this audit. Rest assured, Oracle has a plan. Your LMS auditor has analyzed your purchase history, talked to your sales reps (those nice guys selling you all those amazing products) and done some pretty sophisticated analysis to pick you out for an audit. You need the same type of thought and effort into this audit. In fact, I think you need to be more prepared than Oracle. How will you respond? What information will you give Oracle? Who gets to decide the process? When are you done? Is Oracle doing it right? (yes, Oracle LMS makes mistakes!!), etc. There are so many areas where companies have leverage in the Oracle LMS audit process but they don’t even know it.

5. Stick to the Plan
Remember when I said Oracle is not going away? Well, that is true for when you execute on your plan as well. Oracle will try to wear you down. They will bring in new analysts, management, escalation points, etc. All talking to the same person in your company. We’ve seen far too many people give Oracle money “just to make them go away.” The process doesn’t have to be long, but the most successful outcome just might take some time. Make sure you have your CIO on board with your plan. Oracle will call him/her. Everyone in your company must be rowing in the same direction throughout the entire audit.

BONUS TIP – Call Palisade Compliance
Okay, you got me. This last point is a unabashed corporate plug. On a serious note, we’ve saved companies millions of dollars by guiding them through the Oracle audit process using our proven Palisade Compliance audit response methodology. We have a system and a process that just works. I spent 16 years at Oracle and headed up Oracle’s contract, business practices, and LMS teams. I’ve now spent the last 3 years helping businesses successfully navigate those areas.

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