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What are some SAP license optimization best practices?

Optimizing SAP licenses is critical in today's insecure business landscape. Here are some best practices organizations can follow to lower costs and get the most from their investment.

James Kofalt
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Published: 30 Oct 2020

SAP licensing can be difficult to understand and manage. Organizations that allocate license privileges too generously will end up paying for excess usage they don't need. On the other hand, those who fail to limit user activity within the constraints of existing licenses risk serious financial and legal consequences.

To maximize the value from SAP systems, organizations should follow these best practices for SAP license optimization.

Keep track of named user licenses

There are a myriad of different user types within SAP, each of which grants rights to a different set of activities within the system. There is a sizable price difference between a professional user -- with virtually unlimited rights -- and a basic employee self service (ESS) user license. By monitoring the activities that each employee performs and then matching those activities to the appropriate user license type, SAP customers can ensure that they remain in compliance, without overpaying for unused access.

Get a handle on indirect access licenses

An indirect access license is necessary whenever a custom or third-party application is programmatically accessing SAP. For example, if organizations integrate Salesforce.com CRM with SAP, an indirect access license is required. A custom application designed to automate processes or integrate external data also requires this type of license. In many organizations, integrations may exist without the knowledge of the system administrator. However, if this situation is discovered during the license audit, it could trigger financial penalties and even legal action. Organizations should have a proactive system in place for discovering potential indirect access situations and bringing their licensing into compliance.

Understand engines

Engines, also known as "packages", are additional SAP products that organizations must purchase separately from named user licenses. Vendors typically price engines based on a distinct metric, such as the number of employees in an organization or the number of invoices processed. For SAP products in this category, it's important to be aware of potential pitfalls in advance. For example, when SAP audits for license compliance of the HANA database, they look at peak usage for a trailing 12 month period. Organizations that exceed that license threshold even once during that time may be subjected to corrective action from SAP.

Any organization running SAP's flagship ERP software should dedicate time and attention to license compliance. Many organizations find that they can avoid additional license costs by proactively managing user activity. Other organizations may discover potential pitfalls and can address licensing gaps before the gaps turn into much bigger problems.

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