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With the right expertise and tools, we believe that organizations can maximize the ROI on their SAP application investment while keeping a close eye on their license consumption. In this article, we have compiled some helpful tips for optimizing your SAP license usage to reduce costs and your SAP TCO.
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. Yet, software license management is just another task for IT often overlooked.
With the right expertise and tools, we believe that organizations can maximize the ROI on their SAP application investment while keeping a close eye on their license consumption. In this article, we have compiled some helpful tips for optimizing your SAP license usage to reduce costs and your SAP TCO.
It’s no surprise that SAP conducts regular audits of its customers to help protect their intellectual property (IP) and generate incremental revenue. No different than other IT suppliers, SAP has included an audit clause in its license agreements, which gives them the right to conduct a software review of its customers to ensure compliance with the terms and conditions of contracts.
Some of the common challenges or pitfalls that we’ve seen companies face when undergoing an SAP audit include the following:
o Lack of SAP licensing knowledge
o Misinterpreted SAP agreements
o Custom licensing rules and unclear metrics
o Over Deployed and unused software
o Unknown indirect access due to 3rd party applications
o Miscommunication between SAP sales and customers
At first look, the above list of challenges is daunting. And while enlisting a third party to help navigate your SAP licensing would be most effective, it is possible to manage your environment independently. To do so, there are several best practices you can employ to determine if your SAP software usage is compliant with your SAP entitlements:
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 to track their vendor agreements, licenses owned, metric definitions, as well as key terms and conditions. Therefore, when reviewing your licenses, identify and review your contracts, create an inventory of all purchased licenses and take note of the most critical clauses on software use, such as license grants and restrictions.
· Named Users: You must assign a named user license for every user created in the system. 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 requiring limited access to the SAP systems. Their continuous activity is connected to the roles and access type assigned in the SAP systems.
An SAP administrator must constantly evaluate user roles and re-classify users based on their current functions 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.
· Run Regular User Reports: Running user reports regularly and keeping the list of active users updated can save a lot of time and avoid possible non-compliance during an audit or true-up. 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 repeatable 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 and thus can be easily over-deployed. Another key consideration is that engines are licensed on metrics with unique definitions. Make sure you clearly understand your metrics to measure the engines against the right consumption. To validate licensing definitions for engine-based products, we advise logging into the SAP customer portal.
· Indirect Access: In recent years, indirect access has been a major customer concern and problem area, leading to significant non-compliance. 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 on understanding which applications are connected to SAP and what data is transferred between the different systems. Although identifying indirect access risks can be an extensive process, it can save you a lot of fees and help you negotiate sufficient licensing with SAP.
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 official audit.
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 licenses. 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 resources.
Powered by Appsian’s License Auditor (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 continuously managed care services to improve ROI and minimize licensing risks through a highly effective and easy to deploy program.
With Connor's expertise and Appsian's technology, companies have real-time access to their SAP usage and proactively identify license risk areas to save costs or eliminate non-compliance.
Program benefits include:
o Baseline license purchases and fully understand their contracts
o Quickly re-classify user licenses based on actual usage and behavior
o Optimize SAP licensing for both user and engine consumption and reduce support fees
o Receive alerts on suspicious data consumption to monitor indirect SAP access
o Leverage automation to control the allocation of SAP licenses in real-time
o Be more strategic with procuring SAP software and negotiating contracts
o Stay safe during an SAP audit
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 slc@connor-consulting.com today. We can offer a tailored solution to meet your specific SAP licensing needs.
