SAP License Optimization: Untangle truth from trickiness
Life with SAP is challenging, so it’s important to know what’s possible in the relationship. With tangled license types and tricky license metrics, you must find your true SAP usage to get truly great savings.
You need to answer questions such as:
- Can you use a less expensive license type than Professional User?
- How do you ensure compliance with SAP’s required LAW measurement?
- How can indirect usage be monitored and correctly licensed?
Software asset management answers these burning questions and prepares you for an SAP license audit. The more you know about your SAP licenses, the more you get from your relationship with SAP.
Once you build an SAP system into your company, it is very difficult to remove the system from business processes and the IT landscape. The effort, costs, and risks involved are huge. Your company is now dependent on SAP both operationally and financially.
SAP knows you are vulnerable. They also know that sales increases are achieved quite effectively through their current customer base. These tactics include audit penalties for incorrect usage of licenses and charging you high maintenance costs.
The annual SAP audit – and the negotiations afterwards – can feel more like an annual ordeal. But SAP often uses audits to sell its solutions to existing customers, which makes it negotiable. When you understand your SAP licensing situation, you're strengthening your negotiating position.
You must use SAP's audit measurement tools, but effective SAP license management begins before the data submission. An analysis of your contracts reveals your obligations and entitlements. A clear breakdown of your SAP environment will uncover compliance risks, which could be avoided before the audit's deadline. Most SAP environments are also filled with cost-savings opportunities – over-licensing, redundant named users, underused engines. Many SAP customers have used savings from optimized licenses to cover unexpected costs from an audit.
Do the deep detective work for optimizing your licenses and constant compliance with
SAP’s LAW tool.
Don’t rely on Excel. You need a specialist to interpret the rules and results, and specialized tools to show the more in-depth information.
How do you beat this new licensing model?
Reduce your scope of authorization to reduce your SAP licensing costs.
Almost every company has some form of data exchange between SAP and third-party applications – called “indirect access”– for which SAP requires an additional license. It’s a big pain point. Most companies don’t know how to measure their indirect access. The interfaces were set up to simplify and accelerate former manual processes, but often the licensing consequences were not considered at all. Yet the risks involved can amount to millions in costs.
To address the issue and offer transparency, SAP has introduced new document licenses for instances of indirect access. SAP offers customers to keep their current method of either ignoring the topic and hope for the best, self-analyzing all data exchanges and evaluating them based on the old usage model, or move to new contracts with document licensing. It’s important to first understand the extent of indirect access in your SAP systems. This transparency gives you a clear picture of your current costs and helps forecast your costs for the document licenses. Knowing this allows you to make an informed decision that suits your company's needs.
Migrating to S/4HANA will be SAP customers’ biggest challenge in the coming years. It can’t be ignored because the current NetWeaver platform will no longer be supported by 2025.
SAP is eager for customers to migrate, so they allow customers to either migrate gradually, product by product, or get a completely new contract without reviewing their previous licenses.
Jumping into a new S/4HANA contract makes your migration easier – you’d buy what you want now for S/4HANA and credit the cost against your previous licensing costs. But you could miss out on savings potential by entering blindly if your previous licenses weren’t optimized.
With a SAM technology, you get a clear picture of your current licensing, so you know what you need in the S/4HANA universe and gain transparency before you enter your contract negotiations.
Currently SAP accepts license measurements based on your software usage. But they are moving to requiring you to submit measurements based on authorization.
This is like having a driver’s license that is tied to your car. With usage-based licensing, whether you drive a 2017 Mercedes or an ‘87 Corolla, you pay the same amount for that license. But it is different for authorization-based licensing. What you pay is based on what cars you can drive in, not on what car you actually do drive.
The challenge is to reduce your users’ authorization scope. You need to analyze the broad scope of authorizations and compare what you are actually using against what you are allowed to use. Make a list of unused authorizations, then reduce how much access each user has. Now there are fewer ways for SAP to charge.
Best practices go beyond clicking buttons. You need the right technology to manage details that slip without automation. And you want a real person to “push the right buttons” in your License Management strategy. With Aspera, you get a company with almost two decades of experience of managing SAP licenses and making tools for that.