Strategies to optimize your SAP licenses

We often hear from our customers that implementation and continuous care of their SAP environment is a complex process that requires experienced and dedicated IT personnel.  On top of that, organizations also need to monitor their SAP software license usage to avoid massive true-up fees resulting from audits or non-compliance. Most of the time, software license management is just another task for IT that is often overlooked. We believe that with the right expertise and tools, organizations should be able to maximize the ROI on their SAP application investment while keeping a close eye on their license consumption. Read more if you want to learn how you can optimize your SAP license usage, reducing costs with minimal effort and time to savings.

Be mindful of the most common challenges

It’s not a shocker that SAP conducts regular audits of its customers to help protect their IP and generate incremental revenue. The audit clause in SAP agreements and the company’s complex license structure make it very convenient for SAP to audit their customers more often than not. Some of the common challenges we’ve seen our customers struggle with over the years include:

  • Lack of SAP licensing knowledge
  • Misinterpreted SAP agreements
  • Custom licensing rules and unclear metrics
  • Overdeployed and unused software
  • Unknown indirect access due to 3rd party applications
  • Miscommunication between SAP sales and customers

The list may seem overwhelming to most companies. While we do recommend leveraging 3rd party support or licensing experts, there are leading practice procedures you can follow to determine if you are compliant with your SAP software usage.

Perform regular internal audits to stay compliant

  1. Identify all SAP agreements and create your license baseline

If you want to stay on top of your SAP licensing, the first step is to assess your SAP contracts. Before understanding SAP usage, you need to know what licenses you own. While this may sound like a quick and easy job, it’s often not the case. Many organizations lack internal procedures and don’t properly keep track of their vendor agreements, licenses owned, metric definitions, and key terms and conditions. Before anything else, identify and review your contracts, create an inventory of all purchased licenses, and outline the most important clauses on software use.

  1. Measure license consumption regularly

Named Users If you are a long-time SAP customer, you can relate that one of the most labor-intensive efforts of SAP license management is named user classification. For every user created in the system, you are required to assign one of the named user licenses that you own. It can be a Professional license, which is SAP’s most expensive production license or just an Employee or Self-Service license – created for individuals that require limited access to the SAP systems; however, in any organization, there can be fluctuation of personnel, especially in larger companies. Their continuous activity is connected to the roles and access type assigned in the SAP systems. An SAP Administrator is required to constantly evaluate user roles and re-classify users based on their current function and jobs performed in SAP. Often, there are issues with individuals leaving the company, whereby their accounts remain active or don’t get disabled. Without proper governance and regular clean-up of your SAP systems, these users end up consuming licenses that organizations should no longer pay for or support.

Running user reports on a regular basis and keeping the list of active users updated can save a lot of time, and also, avoid possible non-compliance during an audit. Be mindful that it’s not an easy process at first, but once you deep dive into the license rules and consumption, you can start building your own software asset management processes for SAP.

Engines SAP Engines should also not be overlooked as licensing can be challenging to measure and expensive to true-up. These are optional applications that customers can purchase in addition to the named user licenses. The main risk around engine consumption is that there is no use limitation so can you easily over-deploy them. Another key consideration is that engines are licensed on metrics that have unique definitions. Always make sure you clearly understand your metrics so you can measure the engines against the right consumption.

Indirect Access Indirect access has been a major customer concern and problem area in recent years. With the inherent complexities of IT environments nowadays, SAP investigates 3rd party application interaction with SAP’s own systems. Identifying indirect access is not a straightforward process as SAP Admins need to engage IT solution architects. Discussions regarding application interfaces and users are required, and architecture diagrams are often built to have a better understanding of which applications are connected to SAP and what data is being transferred between the different systems. Although identifying indirect access risks can be an extensive process, it can save you a lot of costs and help you negotiate sufficient licensing with SAP.

  1. Optimizing your SAP licenses consumption and develop proactive SAP license governance

Once you have identified your license entitlements and software deployments, the next step is to reconcile these figures. The reconciliation will provide an overview of your compliance position: you can identify licenses that are no longer or have never been used, as well as licenses for which consumption is higher than what you own. Based on this summary alone, you can cut costs by reducing future support for any unused licenses or reallocating them to new users. Also, you can proactively reach out to SAP to purchase additional licenses to cover any shortfalls, avoiding back support or penalties if identified during an audit. ­­­

Simplify your SAP licensing with the right technology

Now that you have an understanding of SAP licensing complexities, you will need to continue to perform regular mock audits to stay on top of your SAP licensing game. Try to avoid tackling the process manually, as you’ll be left with a point-in-time assessment, and maintaining your SAP license position will consume valuable IT and application resources. Powered by Xpandion (an SAP-certified tool), Connor delivers a complete solution for proactive license management, compliance risk mitigation, and cost optimization for SAP software. We provide automated usage reports and continuous managed care services to lower spend and minimize licensing risks through a highly effective and easy to deploy program.

Get the expert support needed to tackle SAP License Management

With Connor’s expertise + Xpandion’s technology, companies have real-time access to their SAP usage and can proactively identify license risk areas to save costs or eliminate non-compliance. Program benefits include:

  • Baseline license purchases and fully understand their contracts
  • Quickly re-classify user licenses based on actual usage and behavior
  • Optimize SAP licensing for both user and engine consumption, and reduce support fees
  • Receive alerts on suspicious data consumption to monitor indirect SAP access
  • Leverage automation to control the allocation of SAP licenses in real-time
  • Be more strategic with procuring SAP software and negotiating contracts
  • Stay safe during an SAP audit

Contact us to learn more

If you want to rapidly and accurately evaluate your SAP license position, but require expert support and guidance to help save valuable time and money, reach out to us at info@connor-consulting.com today. We can offer a tailored solution to meet your specific SAP licensing needs.