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Monitor & Stay in Control of SAP License Types

Monitor & Gain Control of SAP Licenses Prior to a Move to S/4 HANA

  • 26 November 2020
  • Tony Wise
  • 5.55 minutes to read

There are many different reasons organizations may be accelerating their progress towards converting to SAP S/4HANA, the most recent iteration in SAP ERP releases. 

When it was recently announced that SAP will extend general maintenance for Business Suite 7 until the end of 2027 (rather than discontinuing it in 2025 as originally advertised), organizations gained some extra time to better understand how they can utilize the full potential of S/4HANA and how they can smoothly orchestrate their transition. SAP S/4HANA is not an unappealing prospect from a management perspective: It offers CIOs a chance to resolve long-standing issues by removing obsolete processes, contracts and technologies. Simultaneously, it allows organizations to remove up unused licenses and become more productive than ever before. 

Of course, transitioning to S/4HANA is no small feat. If organizations want to get the most out of their investment, , businesses must take stock of existing SAP licenses to determine what is already owned,  what, exactly they are being used for, and how they map to the new S/4HANA landscape.

Many customers over spend on licenses due to the lack of knowledge and visibility of the current use inside their estate. Unfortunately, identifying and optimizing license requirements is difficult. Complex configurations and contractual terms tend to result in lost dollars in the form of maintenance and in unnecessary license fees. So, how can you regain visibility and control? How should businesses proceed in order to maximize time to value? 

Regaining Control Over Your SAP Licenses

Today’s software licensing structures are elaborate and complicated further due to the rapid change and increasing complexity surrounding the technical and business environment as a whole. 

Organizations must not only track on-premises assets, but virtualization, hosting, outsourcing, on-demand, and new cloud product development, as well. All of these significantly increase the degree of difficulty in tracking software entitlements and deployment. Yet, when SAP license management fails, businesses face costs that are becoming increasingly tough to justify or afford. 

Successful SAP license management involves detailed and often time-consuming self-evaluation at the outset. There are a number of different ways to do this – however, it’s always a good idea to start by performing a holistic evaluation of your purchased entitlements, your agreements made with SAP, your utilization and deployment numbers, and your business requirements.

Are your existing licensing contracts readily available? Have you performed any historical analyses of SAP deployments and licenses in order to optimize spending? If so, dig back into these records. 

Try to determine not only the number and types of SAP licenses currently deployed across your company, but the number of active SAP users, number of potential surplus licenses that may need to be redeployed, and whether or not evaluations have been performed from both a compliance and an optimization perspective. 

If you are unable to access all of this information or if any of it is unclear, it may be time to invest more time and resources into license management processes. Regaining control is entirely feasible – and now, with SoftwareONE and Snow Software, it’s even easier than you may have imagined.

Monitoring Your Environment is Imperative

SAP environment systems are unlike many other IT systems: They’re not only layered and complex, but they’re also mission critical to your organization’s day-to-day processes. Any downtime can be extremely costly, having both short- and long-term repercussions. This is why big-picture SAP license management and ongoing monitoring should be considered equally important in terms of prioritization. 

Either an excess or shortfall of licenses can bring about a chain of disruptions that ultimately harm your organization’s profitability. It’s far simpler to avoid this fate by implementing a software asset management solution – ideally, one that automates and streamlines the SAP license analysis and evaluation process. SoftwareONE, in partnership with Snow Software, is able to provide organizations with this type of custom SAP SAM solution. 

Knowing where you stand in terms of user licensing requirements allows you to move towards S/4HANA migration with greater confidence. By automating software asset monitoring, taking stock of unused licenses and shelfware, and continually right-sizing asset value, you’ll know exactly how much leverage you have during negotiations with SAP. And, as we all know, S/4HANA isn’t cheap: Every piece of information you can outline favorably, and in detail, has the potential to save significant dollars. 

Taking a Step-by-Step Approach

It’s best to take things step-by-step when revamping your SAP license management protocol. We’ve broken down the process into three steps, outlined below, and are prepared to assist you through each one with maturity level analyses of existing processes, suggestions for improvement, and up-to-date research to help you measure your current deployments and optimize license requirements. 

  1. Deployment and Usage: During this phase, we’ll tackle contract analysis (including both inventory and compliance), tool-based usage and needs analysis, backed up by SoftwareONE’s years of experience with SAP licensing. This will help us understand what you’re currently using and what you’ll need for the S/4HANA conversion. 
  2. Reconciliation: The clean-up process involves a few calculations. You’ll understand your initial software asset value, the potential value of freeing up inactive or duplicated user licenses, and the financial benefit of right-sizing users based on actual (rather than estimated) usage.
  3. Remediation and Optimization: During this phase we’ll help you introduce an authorization concept that accounts for license metrics and adjusts authorizations to usage, streamlining visibility across the organization. SoftwareONE will also provide customized licensing advice in order to resolve or reduce any identified license compliance issues, and optimize the value obtained from existing investments.

SAP’s view on your current license environment could very well be different from what’s outlined in your contracts – but they still rely on their own data for billing. With our help, you’ll easily be able to locate inconsistencies and licensing gaps that are draining your organization’s monetary resources. This means money back in your pocket, as well as a clearer, more thorough understanding of your SAP environment overall.  

How SoftwareONE & Snow Software 360 Can Help

Your organization will need to know critical details about your current SAP systems prior to an S/4HANA migration. You may have already been doing this to a certain degree: SAP requires that customers perform a system measurement once per year in order to compare actual usage against the entitlements outlined in the contract. Results of these measurements must then be consolidated via the SAP license administration workbench (LAW) tool.

However, even though the annual process is quite tedious, it certainly does not cover your entire SAP estate. Businesses must identify exactly who is using which SAP system, how they’re using it, and which new S/4HANA licenses must be purchased to keep up with previous usage and future demand. And it’s not just the users. There are multiple SAP engines / packages with various metrics, and of course the vexing question of “Indirect Access” that also need to be taken into account. Then come questions around cost, potential shelfware credits, and ideal contractual outcomes. 

SoftwareONE and Snow Software together have launched a solution to ease the gathering of this information. With Snow and SoftwareONE’s 360° SAP Evaluation, you’ll obtain a clear picture of your current SAP license landscape, including analysis of license inventory, a requirements analysis, and a complete usage analysis. Once you have the results, you can initiate the process to understand your unique SAP S/4HANA product list, respective costs, maintenance requirements and contractual terms – and enter into an SAP S/4 HANA conversion negotiation equipped with all the tools you need for success.  

Then, you need to prepare yourself for the second step, your move to S/4HANA and “how” you are planning do that. This is not a straightforward process, but in addition to our licensing and usage analysis offerings, SoftwareONE has dedicated services to help you with making the technical and contractual moves to S/4HANA. We can help you renegotiate your SAP contracts, and provide implementation services, specifically in the cloud.

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Tony Wise

SAP Licensing Advisory Services

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