Reducing costs in SAP licensing

9 August, 2022
SAP Licensing

Understanding, optimicing and reducing costs in SAP licensing.

This article aims to discuss the SAP licensing process, and the optimization of resources and costs.

SAP licensing is based on auditing, which can be of two types:

Self-declaration or self-audit: we run the license measurement programmes ourselves and send the results to SAP.
Direct audit: SAP assigns an auditor to analyze the systems and calculate the actual usage.

In both cases, the result is compared with what appears in the contract signed with SAP, and if there are any imbalances, a phase of discussions is started with SAP to analyse these imbalances, and reach an agreement on how to deal with them (for instance, paying extra for over-usage).

Financial betting: not with licenses

From our experience, it is striking that a large part of SAP customers approach the licence audit with the uncertainty of a bet, rather than as a controlled process:

Will we have enough licenses?
How many Professional or Functional will I have to pay extra? Or will I have some left over this time?
How do I know if I have the engines correctly licensed? PO? BPC? HANA? BTP? Digital Access?
Are we covered with the current contract?

Understanding in order to decide (and doing your homework)

The first step when having to make a decision is to get all the information you need to be able to make it. Otherwise, it is not a decision but a bet, as we said above. And bets are risky.

SAP licensing is complex, but we should not settle for the fact that every audit process is a dark and unpredictable tunnel. As with other types of external audits, it makes sense to carry out an internal pre-audit ourselves and with enough time, in order to detect errors, correct deficiencies, and optimise results before the actual audit. By doing so, we walk along a familiar and predictable path and we make an audit of SAP licences much easier, not to mention the opportunities to optimise the use of the licences provided for in the contract.

If after all, our own audit shows a lower usage of users, engines or indirect access than we have in the contract, the situation is perfect because we can face the SAP audit with peace of mind.

f, on the other hand, we find a higher than expected usage of any of the contract items, we have time to check if there are possible corrections to be made and reduce the usage and bring it in line with the SAP contract. In any case, it is always necessary to arrive at the official SAP licence audit with your homework done.

Types of licence

SAP, due to its huge variety of products, also has very different ways of measuring the licensing of each one of them. These are the main ones:

Number of active users (entitled to execute transactions, whether they use them or not)
Users effectively performing certain activities (for example, modern BPC licensing)
Use of engines by hardware size, such as memory in HANA or the number of cores in PO.
Use of engines by number of objects processed, generated, archived, queried, and so on.
Indirect access (Digital Access), based on external users accessing the system, and the type and number of documents they generate.
Others specific to each customer, such as annual profits or other public financial data.

So what next? Well, it is a matter of measuring ourselves what we are consuming, and compare it to what we have in the contract. It is not easy, but it is worth it.

Performing our own measurement

The initial measurement tool is provided by SAP, with its well-known USMM and SLAW2 transactions. From here, the measurements from the traditional SAP systems are consolidated and stored waiting for us to send them to SAP.

On the other hand, we need to know what is not automatically measurable for the engines, such as BPC licensing, indirect access, the use of certain SAP Cloud, and so on. With enough experience, this information can be obtained in a procedural and formal way.

But, how can I know if I am actually consuming what I declare?

As mentioned above, SAP user licences are based on the assignment of certain roles to users, i.e. the authorisations they have.

For instance, most of the FI, SD or HR functions belong to the Professional licence. Parts of MM, PP, QM or PS qualify as “Limited Professional” or “Functional”. The “Employee” or “Productivity” licences cover more basic functions.

There can be a big difference between the functions we grant a user and the functions they actually perform, and this is where optimisation comes in.

A suitable tool, such as euKaria, developed by Novis Euforia, is needed to compare these four dimensions of user licences:

Licences in the contract
Assigned licences
Licences measurable by SAP
Optimised licences based on usage

These dimensions can be represented in colour on a radar chart with the different licence types:

For those users for whom we detect differences, particularly between the “SAP audit” and “actual usage” dimensions, a plan can be made to change the licences assigned in order to optimise their usage, use the types where we have too many licences, and reduce those where we have too few.

For example, in the case of euKaria, lists are generated for each user indicating which is the real type of licence they should have, compared to the one they have and the one that would be detected the SAP audit.

What’s more, thanks to the tool, we can obtain the optimised licence calculation for all measurable systems, so that we get a global and compact view of the licence usage of our organisation, and even better, have a list of specific actions to adapt each user to the optimised licence type:

Lastly, the only thing left to do is to apply the changes proposed by the tool so that the licence assigned and the authorisation granted are harmonised, and so you can face the SAP audit with peace of mind.