Organizations across the world spend millions on their SAP^® systems, typically increasing their license expenditure every year. The processes and solutions to control and limit this upward curve represent huge cost saving opportunities. Industry Analysts state that enterprises who mature their SAM processes and use tools to focus on license optimization typically report up to 30% in spending reductions within one year. They also enable the SAP team to spend less time on license administration and turn their focus to mission-critical tasks.

SAP licensing is complex and although the data required to understand it is available natively, consolidating the data is laborious, time-consuming and error-prone. This guide provides eight key initiatives to drive significant savings on SAP software by using Technology Intelligence. Many cost saving benefits can be accomplished by gathering a holistic view of the SAP environment, including optimizing licenses, managing indirect/digital access, removing inactive or duplicate users and building up a complete picture of usage.

When you know exactly what you’re using, and how this matches to your current entitlements, you can enter contract negotiations with SAP from a position of strength and be prepared when SAP comes to audit.

1. Named user licenses

SAP has many different license types with a huge range of associated costs. These license types determine what transactions the user is permitted to perform in the environment. SAP puts the onus on its customers to assign the appropriate named user license type to each user account, but if no user license type is assigned in a production environment, SAP will assume a Professional User type (the most expensive) is required. Without the right data upfront, the only way to do this is to generalize and attempt a best fit. The work that individuals perform can change year-on-year. This means that a license type which once fit well beforehand is no longer compliant.

Common pitfalls

Organizations typically end up overspending because they do one or all of the following:

• Purchase unnecessarily expensive named user license types to ensure coverage of users’ requirements, but in the process, also cover them for use of transactions that they do not need.
• Purchase licenses to cover indirect access without considering the best license method or checking whether users already have a valid direct user license.
• Keep user-license assignments static until the next SAP-mandated system measurement, and then pay the fees and associated maintenance costs that SAP requests for any shortfall.

How Snow Software can help

Snow Optimizer for SAP^® Software measures transaction activity for every user, aggregated across all systems over time to get an accurate view of real usage. This empowers the SAP team to custom fit the appropriate license type for each user. Assigning the “ideal” license for each user ensures the most efficient use of the enterprise investment to minimize incremental purchasing.

It also means that new users can be assigned better-fit licenses from the start. SAP team should continuously evaluate individual needs and assign the most cost effective, compliant license type for each user.

2. Inactive users

The number of users requiring access to the SAP environment can fluctuate considerably over time.

For example, contractors implementing a new SAP system only require a license to access the system for the time that they are working within the organization. Other instances where licenses become redundant are when users leave the organization or when users no longer need the same access to SAP after a change in their position.

Although these examples may seem obvious, it is a laborious, manual process to identify and deactivate these users, especially when the SAP user population is large and highly distributed over multiple systems.

How Snow Software can help

Snow Optimizer for SAP Software monitors usage of all SAP systems across the SAP environment to identify inactive users. We usually find a significant percentage of users have been inactive for more than 90 days (or whatever date is deemed appropriate), and these licenses can be returned to a pool (re-harvested) for reassignment as and when required.

Snow Optimizer for SAP Software can also plug directly into HR and Active Directory information to deactivate users who have been flagged as having left the organization. Licenses can either be manually freed up and reassigned or done so automatically to reach a continuously optimized environment.

3. Duplicate users

An organization’s SAP environment typically comprises many systems and the administrator of one system (or group of systems) may be different from another. This environment evolves over time as new systems are added. Users must be licensed to access these systems and so they are often provided with a new account. This can lead to a double counting, or duplication, of users where the username may differ slightly to the username they have for other systems, for example John Smith and JSmith.

The result is that an individual consumes two or more named user licenses when they only need one. If this is not effectively managed, it can be very costly for the organization. These duplicate accounts cannot be easily identified using the embedded tools and although it is possible to do this manually by cross-checking all systems in the environment, that process is prone to error and extremely time-consuming and resource-hungry.

How Snow Software can help

Snow Optimizer for SAP Software identifies potential duplicate users by analyzing user master records, such as email addresses, first names and last names and can identify similar or duplicate records. Consolidating and removing inactive or duplicate users empowers administrators to revoke licenses that are incorrectly assigned. The licenses are released back to the license pool so that they are free to be reallocated.

4. Indirect/digital access

Indirect Access is, in simple terms, where a SAP system is accessed or queried through a third-party application. The way in which that application interacts with the SAP system and underlying data can have a significant impact on licensing requirements and financial exposure at the point of audit. If SAP data is being accessed through third-party software, organizations must ensure they have valid licensing in place to do so. Organizations may choose to purchase sufficient named user licenses of the right type to cover all such access or they can pay for indirect access based on the number of digital documents created.

Since SAP announced the Digital Access model in 2018, SAP has been encouraging customers to switch to it from the legacy user based licensing, and offering attractive incentives to do so. Being prepared with factual data is key to minimizing financial risk and overspend. Organizations should build up an architectural diagram of Indirect Access across the SAP environment to establish how many user licenses would be required for indirect access from third-party systems and compare this to the number of digital documents they expect to create, via interfaces to their SAP data.

How Snow Software can help

Through one single console, Snow Optimizer for SAP Software shows external access via various protocols, including HTTP and RFC throughout the entire SAP landscape. Snow Optimizer for SAP Software also reconciles third-party users against named users within the SAP system, to prevent paying for unnecessary indirect access user licenses.

Snow Optimizer for SAP Software can show how many digital documents have been created in the digital core and by whom, enabling organizations to predict the number of document licenses required under the digital access licensing model. In addition, it builds on the SAP Passport tool to bring in actual digital document creation and consolidates it. This allows organizations to choose the best licensing model for their needs.

5. Digital access evaluation

Digital access measurement is a new form of SAP licensing where SAP charges customers for the number of documents getting created in SAP system, e.g. sales orders, purchase orders and other financial documents. Digital access measurement goes two ways, depending on the system version. If you have a legacy SAP version, it will utilize digital access estimation, while the latest version will help you in getting digital access measurement.

How Snow Software can help

The intelligence tool in Snow Optimizer for SAP Software can collect the digital access measurement from the entire SAP environment, including all users and systems, in a single window. This will enable the organization to have a better understanding of their digital document licensing.

6. Engines

When a SAP module is purchased, there are two-core licensing pillars, named user and functionality, for which an engine license is required when used in a production environment.

There are multiple types of metrics used for the engines, including for:

• Objects that exist within the application
• Activity types
• An application’s CPU consumption
• Memory usage

For example, the metric for SAP Payroll Processing is number of master records, while the metric for SAP e-Recruiting is number of candidates. If your organization wants to avoid hidden costs and pay only for what is really needed, you should have a process in place to measure metrics on a regular basis. This saves a significant amount of time and risk of error, which in turn enables avoidance of additional costs or penalties.

How Snow Software can help

Snow Optimizer for SAP Software enables the administrator to set measurements appropriate to each engine metric. Licensing rules in the solution define how these metrics are combined to determine a single license consumption figure for each SAP engine.

Snow Optimizer for SAP Software links individual engine results to the respective documentation in the SAP Support Portal, to ensure you have the latest information about the engine being measured and its metrics. Snow Optimizer for SAP Software then automatically gives warnings when a limit of contractual number of licenses, engines, memory usage or specific activity types is reached.

7. S/4HANA Trusted Authorization Review (STAR)

Transformation towards S/4HANA and SAP’s cloud offering means SAP customers are moving to a simplified license model, which is the flexible Full Use Equivalent (FUE) matrix in the cloud. SAP has introduced a new form of license measurement called authorization base. STAR enables you to get the authorization objects associated with license requirements and customers can work with SAP to get a new license view.

How Snow Software can help

Snow Optimizer for SAP Software can provide a comprehensive report of the authorization objects assigned in each role associated with the license required. This also provides an automatic option for changing the license across the SAP environment as per the STAR functionality. This helps customers avoid sharing authorization details with SAP.

8. Compliance report

A compliance report is a custom report to see the entitlements versus current utilization in licensing. SAP does not provide any sort of reporting matrix in terms of contract; hence customers do not have an option to see what they are entitled for and their current utilization.

How Snow Software can help

Snow Optimizer for SAP Software has the capability to track the updated product details and entitlements for what customers own. Along with license intelligence functionality, Snow Optimizer for SAP Software will help you get a comprehensive view of the entitlements versus current license utilization in the dashboard. The contract management functionality can also keep records of canceled contracts, as well as new contracts by product.