SAP audits: Is it really impossible to accurately determine your financial exposure?

SAP licensing

Recent legal action by SAP has shone a spotlight on SAP licensing, with many companies understandably confused or concerned about the implications. Dan Kirtley discusses how your organisation can be prepared for an audit.

SAP licensing is complicated. License entitlements can be open to interpretation and contract amendments can mean that financial liability for one customer may be very different in comparison to another, even if their usage and requirements are identical. It often depends on what deal was struck at the time of purchase.

Traditionally SAP licensing reviews and system measurements have focused on direct usage of an organisation’s SAP environment. Direct usage on an individual level describes one user accessing SAP data directly through the SAP interface. The transactions which they perform determine what license type (or types) the user should be assigned. This in turn determines the associated cost for that user to perform their required tasks within the SAP system.

Even correctly managing licensing of direct users is more complicated than it might first appear. An organisation with 10,000 users of its SAP environment could have many groups of users who transact in very different ways. The users may change jobs and so need to use the SAP environment differently from one year to the next. Other users leave the organisation and of course it’s no longer necessary to have a license assigned to them.

If your organisation doesn’t keep on top of this and effectively manage licenses, you’ll almost definitely be paying over the odds for your licenses or you will be hit with a big fee following system measurement (LAW) submission or a more comprehensive SAP audit.

The risk becomes even greater when you consider indirect usage. That’s because you may face licensing liability for a far greater number of users compared to those who you know directly access the SAP system. That 10,000 user license requirement could two, three, even four times more if a third-party application accesses your SAP data.

One thing is clear. The better prepared your organisation is, the better you understand overall usage of your SAP environment from every user and the better you can map this to existing entitlements, the stronger you will be when it comes to an audit or a negotiation. To do this effectively, you need a system that can automatically consolidate all of the necessary data and automate the required tasks.

Reserve your seat for Snow Software’s SAP Audit and Licensing workshop in Singapore to be held on 31 August 2017. If you are interested to learn how to mitigate non-compliance and uncover optimisation opportunities for your existing SAP systems, then this event is for you.

This article is sponsored by Snow Software.

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