I hope you’re all sitting down. I’m going to unleash a huge bombshell…
SAP licensing is complex!
Ok, so chances are, you already know this. Everybody in the SAP eco-system knows this. SAP themselves know it and have produced this pdf that explains some of the complexities. I’ve got recent experience of a customer going through an SAP audit, the results were not what either party expected, to put it mildly.
What you might not know, is what you can do about it. Let’s look at this, starting with why SAP compliance can be so tricky. We’ll then look at the potential impact to your business, ‘SAP License Optimization‘ or ‘SAP License Management‘, and what steps you can take to mitigate the risks.
The Underlying Issues
- It starts with your SAP contract. It’s all negotiated thoroughly, reviewed diligently and signed based firmly on what you expect you’ll be doing. Then after an 18-month implementation project, turns out you use SAP differently. Does anyone in the project team feed this back to procurement or legal? I’m guessing not, and your contract stays the same.
- As well as your usage of SAP, there’s also potentially indirect license usage with your B2B partners. Maybe a logistics provider? They need indirect access to parts of the system you might not have factored in.
- Do you have a B2C portal? I’ve seen systems where a customer action calls a specific transaction, beyond the scope of the SAP contract. The global population is rather large number of potentially HUGE ‘users’. Especially if none of them actually buy anything.
- As if this wasn’t enough, your procurement manager leaves for pastures new. You know the one, who knows the ins and outs of your SAP contract.
- As your SAP implementation has completed, your SAP PM has moved on. They were overkill for BAU and they needed a new challenge. Was SAP licensing discussed during the handover?
First and foremost, it could cost you a lot of money. SAP could be entitled to literally millions of Euros, Dollars, Sterling, whatever you deal in. Significant time and effort is also likely, from a whole range of your most valuable and stretched resources. Other impacts include reputation, relationships with SAP, disruption to service and disgruntled employees. But let’s look at how to avoid all this.
As you can probably appreciate, you’re not alone. There are many companies out there who provide help in this area. ‘SAP License Optimization‘, ‘SAP License Management‘ or samQ. From my experience, they’re very good at what they do, a great eye for detail and a real appreciation for the SAP market. However, they do speak a somewhat ‘nuanced’ language which can be difficult for the layman (me!) to understand.
5 step process
|Inspect available licenses||Systems Integrator/Implementation Partners Internal Legal|
|Different parties within your own organization will likely have different views|| Meet with your teams, bring the contracts for review. Ask all parties to share their version of the truth. Also, get input on what licenses you need from project/IT teams.|
|What is SAP’s view?||Project/IT team|
|What licenses SAP are charging you for? There may be a discrepancy on their side||Look at your billing documents. Ask your SAP Account Exec for clarification|
|Analyze your actual SAP license usage||Project/IT team||There may be things in here that neither you nor SAP factored in. You’re looking for incorrect installs, transactions nobody has mentioned, alternative/redundant processes. Locked, deleted and expired users might also be causing issues.||Get your basis team to run monitoring transactions. LAW (License Admin Workbench), STAD (Business Transaction Analysis), AL08 and SM04 (active users), and ST03 (workload) are good places to start – but they will know this area better than me.|
|Implement Corrective Measures||Systems Integrator /Implementation Partners|
|This is your chance to put things right. Streamline where appropriate and communicate with SAP from a position of knowledge/strength.|| Potential measures include:|
|Monitor and Manage||Internal Legal|
|Well… you don’t want to have to go through all this again, right?||Regular checkpoints with all teams involved. Update on usage, discuss any upcoming development and consequences|
SAP Licensing can get out of control before you’ve ever gone live. Without corrective action this could lead to bills in the millions and other big issues. You’re not alone though, there are many customers in this situation. There are also people out there to help – just search for SAP License Management or Optimization and you’ll find them. If you want to make a start on your own, following the 5 steps above you will help you regain control.