The SAP software licensing model is considered to be amongst the most complex and costly to manage. While many software vendors typically calculate their license fees by counting the number of active and inactive users, or by considering the number of servers and CPUs, use of SAP Named user licenses is based on access rights.
Roles determine access rights and depending on what the user can do within SAP will determine the license required. Customers are required to allocate a license to a user in SAP, however, the license does not restrict their access rights. Often organizations can allocate incorrect licences, resulting in overspend if too high a license is allocated or unbudgeted expenditure in an audit situation.
Recognizing the changing commercial circumstances
The high-value and wide usage of SAP software means that without precise knowledge of how SAP systems are set up and configured, manual effort and time to manage the software can be huge. SAP is often not brought within enterprise Software Asset Management (SAM) and Software License Optimization (SLO) programs that are typically used for other vendors like Microsoft. This leaves organizations exposed to unnecessary, systematic and costly inefficiency with their SAP investment.
Against this technical background organizations using SAP need to recognize the changing commercial environment that now exists. The SAP market is now mature, this means that to maintain growth SAP, as a company, has to look for other ways to increase revenues, and like all of the major software vendors has focussed on compliance as a key revenue earner. It has been said that some 20% of SAP’s turnover now comes as a direct result of audit activity and the individual within SAP with the highest revenue generation target is actually an auditor.
Software Audits are on the increase
Gartner estimates that you now have a 65% chance of receiving one or more software audits a year. Not only can the outcome of these be costly in terms of true-ups and potential fines, the disruption they also cause to your day-to-day activities can be substantial.
Obviously, avoiding these costs is a paramount consideration but actually putting in place the necessary people, processes and technology to achieve this can appear daunting. However, the effort is worth it, as not only will it help alleviate the impact of an audit, it will provide the necessary information that will enable you to optimize your SAP software estate and deliver a very compelling ROI.
Potential benefits of SAM is high
For example, if you are paying $2,500 for a professional license, $1,000 for a limited professional license and $250 for a user license you could discover that by optimizing your licenses based on actual usage and role allocation that you can reclassify 500 professional license users to limited professional and 250 limited professional to user. This can potentially save you 500 X $1,500 + 250 X £750 = $937,500 on future license costs and $206,250 per annum on maintenance costs (presuming you pay maintenance at 22% a year).
If would any help with your SAP licensing, please get in touch.