Every week we share our expert TIP with you.
#13: Save costs on SAP licensing by using validated information
Many useful articles have been written about how to save costs on SAP licensing. But how to make a quick start and realise important quick wins? This article will help you to make a quick start with saving costs on SAP Licensing by tracing and validating different kinds of necessary information. We already have them summarised for you:
1. Understand what has been purchased and which rights and restrictions apply to the purchased SAP licenses
This means creating insight in all applicable contracts and usage rights. Each order form and any other official document needs to be investigated and stored into your administration. Besides the official documents, any other agreement that has been made between your organisation and SAP, even verbally may also apply. When starting to list all entitlements for SAP software you may notice that gaps occur; order forms or other official documentation are missing and therefore will not lead to an accurate and complete overview of your entitlements and use rights. Preventing gaps and establishing an accurate and complete overview based on validated information is highly recommended and will lead to better decision making for the near and far future.
Software metrics, their definitions and the product scope of use (which components are included in the license) enable you to determine which product you are allowed to use and how to count usage. One of the key elements is to understand upfront (before purchase) what the exact measurement method is. Ask yourself the following questions:
- Does SAP offer a measurement tool (e.g.: LAW, LMBI) and will you be able to track software usage through this SAP solution?
- Do you need to buy an ITAM tool to determine usage?
- Is manual labour necessary to determine usage?
- You don’t need to measure usage because the software has a technical restriction?
Installing and using software might seem easy, but getting the means from SAP or any other software publisher to manage software licenses and measure usage might not be that easy. Get a clear view on your rights and restrictions before negotiating and buying the software.
2. Knowing who is using SAP software and how
For all SAP licenses it is important to know if usage restrictions apply to existing entities, locations, employees or even non-employees. Licenses are often purchased without checking with the colleagues who will actually use or manage the SAP software. If those people are not involved, how will they gain awareness on how to use the software and which boundaries apply?
If the software is not technically restricted in usage, which is often the case, people will likely over-use SAP software by clicking on features that are actually not included within the license. A non-compliant situation can easily occur. Since software publishers tend to offer the whole package, they basically leave it up to organisations themselves to decide which features they activate.
One example is "Indirect use”, which has been made possible by SAP on a technical level. Non-SAP systems can be connected with SAP systems, but validation of the consequences for your SAP licenses is necessary before starting to connect these non-SAP systems. Determine which non-SAP systems can be connected to an SAP system and which kind of transactions users are allowed to conduct through a non-SAP system? Are these kinds of transactions covered by an SAP engine license? If so, which metric applies (user, transaction, CPU)? Check if the users who are connecting to the SAP system already have an SAP Named User license assigned to them. All users accessing an SAP system need at least an SAP Named User license but that just might not be sufficient. Also, pay attention to licensing indirect use when you move to S4HANA for your organisation. Whatever situation may apply, any information you retrieve from SAP on these matters is relevant and should be documented to avoid any discussions later on.
3. Establish if and how SAP licenses are being managed currently
We often see organisations managing licenses in a way that does not exactly match the metrics and measurement methods stated within the contract. A simple example is that some companies just count the number of users they provide an account with, while metrics of the purchased software state “Company Employee” and therefore easily lead to higher consumption numbers. Understanding the contract and how usage is being measured is very important. However, managing the available licenses accordingly is equally or even more important. Otherwise, the software might not be as beneficial as you think it is.