Case study
The challenge
The business model of a large manufacturer of electromechanical devices includes an aggressive acquisition strategy of several businesses a year.
The business operates across a broad range of industries, producing devices for everyone from aerospace to energy spaces. These acquisitions present a unique problem when it comes to managing Oracle licenses. The central operating company had been audited by Oracle in the past and was aware of their auditing practices.
While the company tries its best to understand these relationships prior to the acquisitions, there are instances where surprises occur. Thus, the company is juggling multiple engagements with Oracle at any given time.
Part of the reason the company has been successful is that they allow the acquired businesses to continue to use their existing ERP systems. This eased the ability of those companies to track and produce profits and improve operations. But it also means that the central company has to oversee a complex web of ERP and technology systems across its range of acquisitions.
Overall, the company had done a solid job of managing its Oracle licenses, but the issue of licenses with its acquisitions became a particular problem after it took over a business that had a great deal of Oracle middleware in its data centers. During the due diligence leading up to the acquisition, it became clear that the acquired company did not realize they were actually being audited for the second time by Oracle. The firm thus had to quickly figure out how to handle this audit once the acquisition went through. They turned to Palisade Compliance for help.
With the assistance of Palisade Compliance, the manufacturing firm swiftly brought together all correspondence and documentation related to Oracle’s investigation of the acquired company.
The solution
The company chose Palisade Compliance based on our reputation, and recommendations from numerous partners and customers who had undergone Oracle audits as well. While the company had navigated their own Oracle audit years before without outside assistance, they recalled the experience and the tremendous legal and internal staff resources that were required to reach a positive solution. At this stage, the heads of the business decided that they simply didn’t have the bandwidth to go through the process without outside aid again.
Joining up with us didn’t come a moment too soon, as they soon discovered the acquired business had already provided information to Oracle and Oracle was pushing for more. They quickly needed to take control of the situation and not cede leverage to Oracle. With our assistance, the manufacturing firm swiftly brought together all correspondence and documentation related to Oracle’s investigation of the acquired company’s use of virtualization software.
We also helped to slow the audit process down. Instead of answering every question Oracle asked as quickly as possible, the manufacturer carefully responded to only the questions it legally had to answer and curtailed the flow of information from the acquired business to Oracle. After reviewing all available information and the inventory of the new business, we asked intelligent questions about the company’s Oracle configurations and devised a strategy for responding effectively. Working together, they were able to determine the worst case scenario and then channeled all communications with Oracle through one central team, which was bolstered by having us help to craft email responses to Oracle.
The outcome
The result of this concerted effort was successful. The company gained leverage and better control of their negotiations with Oracle. While the company did have to settle, the settlement was significantly less than the estimated worst case. This was achieved by properly orchestrating responses and data flow, pushing back on erroneous and unfounded claims, and timing the settlement to coincide with Oracle’s fiscal year end.