Case study
The challenge
A firm that plays a central role in operations of the global telecommunications infrastructure and provides solutions to private, government, and non-governmental organizations uses Oracle as a key part of its operations.
The firm’s CFO realized that the company did not have a fully documented understanding of its total liability with respect to Oracle licensing. The company needed this documentation to ensure there were no unrecorded liabilities and so the company did not violate the terms of other licenses granted to them.
The organization’s Oracle landscape had developed over several decades. It used Oracle databases and middleware as a foundation for dozens of targeted solutions for the communications industry. The environment had evolved during the tenure of multiple IT executives, and the CFO was concerned because the Oracle licensing policies were inconsistent.
There was a great deal of variance in the kinds of license agreements in place. Oracle license agreements are rarely simple, and even standard agreements require a detailed analysis to assess their real world implications. The CFO needed a complete understanding of the firm’s Oracle footprint.
The solution for helping the CFO
The CFO engaged Palisade Compliance to help him fully understand the firm’s Oracle licensing landscape and uncover any additional liabilities. This was crucial so that the CFO could make accurate and defensible financial disclosures externally and internally to the audit committee of the board of directors.
The CFO – like all executives of private or public companies or businesses run under public security regulations – must attest to the financial condition of the company, and is responsible for the accuracy of the information presented to the board. The CFO also felt that it would be possible to do a better job of understanding Oracle license liability and associated risks if he conducted a detailed examination of all of the company’s Oracle licenses. He wanted to know how each license had been created, what the license entitlement was, and how compliant the firm was with its licensing entitlement requirements. This analysis would provide transparency into any liability for usage outside of the entitlement and show whether some contracts might require an expansion of their Oracle licenses.
In addition, the CFO had to assess whether there were any areas where Oracle licenses could be retired and replaced by other technology. With a clear picture of the firm’s entire relationship with Oracle, the CFO would be able to offer the board greater granularity and present a full picture of the risk related to Oracle licensing — especially the risk the company would face in an Oracle audit. Achieving this level of understanding would enable the company to better defend itself and establish a powerful negotiation position if an audit occurred.
Given the complexity of the IT landscape, the CFO realized that his organization did not have the expertise and resources to conduct a detailed self-audit of the firm’s Oracle licensing liabilities. He chose to work with Palisade Compliance because of our strong background in Oracle licensing. He also liked the fact that our primary focus is Oracle and that we are entirely independent. We are not involved in reseller relationships or other pro-marketing relationships with Oracle.
We assessed each domain where Oracle products were used, analyzing the compliance position for the entitlements. We also examined the adequacy of the licenses with respect to the current operational load, and advised the company about areas where it was safely in compliance, where it was far from using its entire entitlement, and where it would soon need to expand its entitlement. We identified problem areas and described a plan for remediating them, or recommended a negotiating strategy to put the company on the path to compliance. This allowed the CFO to accurately summarize the current state of the firm’s Oracle licensing and the risks it faced.
“With Palisade Compliance’s help, we really got a handle on our spend and total exposure. We appreciate their depth of knowledge in a myriad of aspects from contract reviews to pricing analysis to IT deployment optimization.”
~ CFO, global telecoms company
The outcome
IT landscapes continue to evolve over time. To maintain awareness of the company’s Oracle licensing and avoid risks in the future, the creation of new Oracle licenses and renewals of older ones required careful, consistent scrutiny. The company adopted policies for creating and managing Oracle licenses. In addition, we were engaged to periodically revisit and reexamine the licenses, as well as provide advice during Oracle negotiations.
The CFO gained knowledge and certainty about his Oracle position. His company was not audited, but he also knew that if it ever were, his partnership with us would ensure he had representation and expert advice to navigate that process. He was able to present his firm’s audit committee with a complete accounting of the Oracle landscape and know that he was not exposing the business to unnecessary risk. Most importantly, because of the plan the company adopted, their Oracle strategy wasn’t a one-time effort, but rather a continuous process built for today and the future.
The company found such benefits in working with us that it has continued to do so any time the issue of Oracle certification has arisen. Knowledge is always power with Oracle, and with us, the company is assured that it has all the technical information needed to make informed choices.
Are you involved in technology or finance management of a business that might be exposed to risk from its Oracle licenses and contracts?