Corporate UK Facing Compliance Time Bomb

You would have thought any competent IT department would know the risk to their business from pirated software. Apparently, 60% of UK companies don’t, and a staggering 43% do not perceive a risk from a lack of compliance. At least that’s the result of research commissioned by the Software Industry Research Board (SIRB), which was conducted by IDC in 2008 across 601 IT executives and buyers of software in the UK and is representative of the UK business market by size of company and investment in software.

It’s evident IT managers aren’t pulling their weight and have got their heads in the sand when it comes to adopting an effective software asset management policy. If the survey is to be believed, then over half of UK businesses do not perceive a risk from misuse of software or counterfeit supply, and just under half do not believe they face a threat from the lack of compliance as they claim to have a Software Asset Management (SAM) policy. This is shocking!

The research also identified that 75% of companies have in place a SAM policy and yet 38% admitted that they had only a basic understanding of their software licenses. This lack of transparency can leave businesses open to the threat of the legal and financial consequences of under and over licensing. This is clearly not a good situation to be in under any circumstances, but especially not in the tough economic climate we are currently experiencing. The same research also found that a tad of half of those same companies had been subject to a software publisher audit within the last 12 months. This is a trend that is expected to continue, making it a very real risk for businesses.

Ever heard of The Federation Against Software Theft and Investors in Software (now merged as FAST IiS)? FAST is known for acting on behalf of software vendors, launching actions against software pirates, educating businesses and lobbying on behalf of the industry. Ever heard of The Business Software Alliance? Did you know that the BSA could fine your company heavily for using pirated software? Well, it can.

If you’re not keen on researching, let me sum up what you need to know: Software piracy is the unauthorised copying or distribution of copyrighted software. This can be done by copying, downloading, sharing, selling, or installing multiple copies onto personal or work computers. What a lot of people don’t realise or don’t think about is that when you purchase software, you are actually purchasing a license to use it, not the actual software. It is that license that tells you how many times you can install the software, so it’s important to read it. If you make more copies of the software than the license permits, you are pirating.

It’s not all bad news. Thankfully, the majority of UK businesses recognised that poor management of software can expose them to risks that can compromise the business such as viruses, corruption of data, Trojan horses, external hacking, and employee sabotage, any of which can carry enormous consequential impact. Dire news for IT managers is that the majority of employees believe it’s your job to manage this software nightmare and not the responsibility of a Board Director or CIO.

The point of this whole blog post is to stress to business leaders that you cannot afford to be complacent about the subject of compliance and risk to your businesses because you need to validate that you are able to demonstrate good governance and transparency in terms of compliance. Critical weaknesses can leave your organisation with material risk - and put bluntly that means a risk to the bottom line! You need to better manage software assets to reduce over spending, track software assets so you don’t leave your company open to attack through viruses and the like, and avoid legal risk and damage to reputation from using unlicensed or pirated software. Having a software strategy doesn’t seem such a chore now does it?