In the last couple of weeks, the Business Software Alliance (BSA) has announced two financial settlements reach with organisations accused of using unlicensed software.

In October 2010, the BSA reached a £10,000 settlement with Glasgow-based Barrhead Travel Services, which was said to have been using illegal copies of Adobe software. The fine included the cost of legal fees as well as the price to purchase legitimate licenses for the software in use.

This week, the BSA announced an £11,500 settlement with a Yorkshire-based plastic component manufacturing company, Pas-tech Thermoforming Ltd. The company was accused by the BSA of using unlicensed copies of Microsoft Office on its computers.

With the BSA actively courting whistle-blowers through its rewards scheme, and more software vendors engaging directly in audit activities, the chances of facing at least one software audit in a 12 months period are now estimated to be around 60 percent (up from around 53 percent last year). In other words, you are more likely than not to face at least one audit in the coming year.

With an audit almost certain, the critical question is whether you can afford to wait for an audit request before getting your software licenses in order, or whether it's more cost-effective to do this in advance. Well, perhaps not surprisingly, I'd argue strongly that it's the latter. Gartner cited last year the example of a customer that was unprepared for a software audit. In total, the cost of the engagement ended up coming in around $500,000 – far higher, the analysts claimed, than would have been the case if the organisation was prepared in advance.

But why is that? In one sense, it's simple. Doing an audit in your own time, under no pressure from a vendor or watchdog allows you to fit it in around other activities, minimising the impact on IT team, end users etc. Waiting for an audit often means dropping everything and focusing solely on the audit for a period of weeks or months – potentially causing major disruption to the business. Likewise, managing the software through your own initiative allows you to spot potential issues (whether through over or under-licensing, for example) and fix them in the most cost-effective means. It's a different story when lawyers are involved and a watchdog is breathing down your neck!

The two most recent BSA examples are just the tip of the iceberg. For as long as UK organisations continue to under-manage their software estates and licenses effectively, UK plc will remain a rich hunting ground for those resolved to identify and punish license management failures. So the message to all should be clear – act now; it really is the sensible and cost-effective option.