From $483K to zero: Southern States Co-Op turns to SHI for audit support

SHI guided Southern States Co-Op through a daunting licensing audit maze.

Challenge:

Southern States, a farmer-owned agricultural supply cooperative with multiple locations across the Mid-Atlantic region, faced a daunting challenge when they received an audit notice from Microsoft. The notice claimed that they owed $483,000 for violating their licensing agreement. Microsoft licensing is complex and changes often, and every agreement contains an audit clause that allows Microsoft to inspect a customer's compliance. Some factors that can trigger an audit are having a large number of employees and users, undergoing mergers and acquisitions, or operating in multiple business locations. Southern States had all these factors, making them a likely audit target. To make matters worse, the person in charge of Microsoft licensing at Southern States had recently left the company, leaving a knowledge gap. Suzanne Fielden, Manager for IS Application Development Services at Southern States, inherited the responsibility and had to deal with an imposing task.

Solution:

Suzanne reached out to SHI for help. Danielle Kraft, a senior manager with SHI’s ITAM services, stepped in to help Suzanne tackle the audit. Danielle set two goals: To get Southern States through the current audit and to provide education and guidance to help the company avoid future audits. Danielle helped Southern States respond to Microsoft, asking them to delay the audit for several months. This gave Southern States time to uncover risks and figure out a plan of action. “Danielle got us focused on the audit areas with the biggest risk,” Suzanne says. “It was a close collaboration, asking good questions. Danielle guided us, showing us what we needed, what we didn’t.”

During their review, Danielle and the team determined a preliminary risk of $416,000. They also worked with Southern States to help streamline their licensing, removing items the company didn’t use.

Danielle and the ITAM team “drove the project and carried the heavy load,” Suzanne says. “She met with us at least weekly and was instrumental in guiding us through the talks with Microsoft and KPMG. She advised us not to say too much, to give them what they asked, but also push back at times.”

Outcome:

It was through the ongoing discussions and pushback that Microsoft and KPMG were brought down to $26,000. Finally, during a call at the start of 2023, the ITAM team requested several more concessions, which Microsoft accepted.

The result: The total amount was reduced to zero.

Southern States has emerged from the audit with “a better understanding of licensing, so we won’t put ourselves in jeopardy again,” Suzanne says. “We can make better decisions going forward.”

While their work with SHI has helped to expedite the learning curve, Suzanne is the first to admit they “will never be Microsoft experts. We’ll always rely on partners like SHI to make smart licensing decisions.”

And if they face another audit, Southern States knows where to turn. “It eased our minds having [SHI] guide us through that process, for sure,” Suzanne says. “Danielle saved us from ourselves, and SHI was there at the right time.”

Suzanne’s advice to companies facing a similar audit is to reach out to a third-party vendor like SHI. “Few businesses can get through a Microsoft audit on their own.”

“It could’ve been a horrible experience, but SHI put all our fears at rest, with added guidance and expertise,” Suzanne says. “We loved working with Danielle — she made the prospect of an audit far more palatable.”