Allocating correct SAP license types saved many millions
The Company is a world-leading chemicals and biotechnology business, quoted on a European stock exchange. It has major facilities in the US, China, Brazil as well as Europe, and currently employs around 14,000 people.
In 2011, the Company acquired a large business with 3,000 licensed users of SAP. An attempt was made “in-house” to assign specific roles to the new users and assess the distribution of SAP license types accordingly, but after two years, the Company realized this was unworkable. It needed a third-party solution to quickly and accurately identify license types, and in 2014, it selected and implemented Snow Optimizer for SAP® software.
With some consulting from Snow in the initial phase, the implementation process was speedy. The Company began to see actionable data within two weeks. As the Company had suspected, the data from Snow revealed it had been over-licensing with SAP on a massive scale as many users had been assigned a license type that was too sophisticated – and too expensive – for their role. The alignment of user roles with the correct SAP license saved the Company tens of millions of dollars.
- Tens of millions of dollars saved on SAP licenses and support fees
- Rapid implementation
- Quick and easy reconciliation ensures ongoing cost avoidance
The Company’s SAM Administrator gives Snow 10/10 for value for money and customer service. When asked how likely he would be to recommend Snow Optimizer for SAP Software, he replied: “Also 10/10. Given the enormous savings, all companies should do this. I don’t think there’s anything else in the market at present that works like this.”
The Company is a world-leading chemicals and biotechnology business with manufacturing and R&D facilities in the US, China, Brazil and all over Europe, where it is headquartered. The Company is quoted on a European stock exchange. It has been expanding steadily since the millennium, both organically and through acquisitions, which has greatly upped the ante for its Software Asset Management team, and for its SAP systems in particular.
Prior to 2011, when the Company made a major acquisition that added 3,000 employees to the payroll, its SAP estate had been managed by the same single administrator for almost two decades.
Once a year, working with just the three basic SAP license types of Professional, Limited Professional and Employee – and without anything like complete insight into these licenses – the administrator had tried valiantly to cut back on spend based on which users were inactive (or seemed to be inactive).
There was no way of telling if a particular license type reflected the needs of a particular user or role. The addition of 3,000 SAP licenses, and a new contract with SAP to reflect the changed circumstances, forced the Company to confront this much more difficult question.
The New York office of the Company embarked on a project that set out to create 10 roles within SAP and distribute the correct SAP license types within the system based on these roles. But this seemingly simply idea ran aground on the many complexities of the SAP licensing structure, and the Company decided it needed a dedicated third-party solution.
It considered Flexera, but this software could not (and cannot) be installed and managed inside an organization’s SAP native environment – a deal breaker for the Company. Therefore, the Company settled on Snow Optimizer for SAP Software. The solution was implemented in 2014.
The process of selection, negotiation and results took just three months. The Company’s SAP Administrator comments: “Implementation in-house was very quick: less than two weeks, and that includes the training. I was really impressed how easy it was to get going.”
The early results confirmed what the Company had suspected all along: it was overpaying vastly for its SAP licences. The New York project had to tried to put the cart before the horse and define roles within SAP while lacking insight into actual usage – but it is usage that determines the role!
“We use Snow to analyze what each user has been doing,” explains the Company’s SAP Administrator. “For instance, we can see easily and quickly that someone is only using between 10 and 20 transaction codes a year – in other words, he doesn’t need a Professional license.”
“Tens of millions of dollars saved on SAP licenses and support fees”
The Company’s SAP Administrator
The Company is running on a project with data from Snow Optimizer for SAP software to rebuild its roles within the SAP system. “SAP says you can have a shop-floor user, you can have procurement user, you can have manager self-service, but without insight into actual usage you can’t tell which is which.”
A significant number of the 3,000 new employees work on the shop floor or in warehouses, and data from Snow Optimizer for SAP Software showed that their use of the SAP system was limited, and that their license could be downgraded from Professional to Employee without affecting their productivity.
The SAP Administrator is unable to put a number on the savings and cost avoidance achieved with the Snow solution. However, when you consider that the cost of an SAP license for a Professional user is between €3,000 and €4,000 plus the 20% annual support fees, he believes that across the 3,000 new licenses alone, the savings must run into “tens of millions” of US dollars.
Savings are ongoing. The SAP Administrator often optimizes his SAP estate. “If you don’t run [Snow] for months you’re looking at 4,000 to 5,000 changes. So I do this very regularly.” While Snow Optimizer for SAP Software allows you to automate when to schedule this process, the Administrator prefers to do it manually. “It takes just 20 minutes,” he says, “and you can see what you’re achieving.” His latest in-house “measurement” allowed him to cull or re-assign 143 licenses.
KEEPING SAP ON BOARD
SAP is regarded as the Mount Everest of Software Asset Management. The Company’s SAP Administrator had already seen the effectiveness of the Snow Platform at first hand, having been involved in the implementation of Snow’s Microsoft License Management. All the same, he was surprised by how quickly Snow Optimizer for SAP Software got on top of his problems.
Within weeks he had data that SAP was happy with. “In the beginning, we weren’t sure if SAP would accept the data but it turned out there was no problem at all. I think we’ve had three measurements already – everything was fine. There was no discussion.”
With Snow Optimizer for SAP Software, the Company has been able to show a level of maturity that makes future audits less likely, with SAP ever more inclined to accept the Company’s findings. “It is a virtuous circle,” the SAP Administrator concludes.