Case Study: SAP Audit Defense for a Leading UK Engineering Firm
Challenge
A major engineering firm in the UK, employing over 50,000 professionals across its global projects, was faced with an SAP audit that identified potential non-compliance issues. The audit highlighted discrepancies in indirect access claims, license misalignment, and unmonitored user growth. SAP’s initial assessment indicated a financial exposure of £12 million. The company’s complex IT ecosystem, involving ERP systems integrated with third-party tools and field devices, added further layers of complexity. The firm engaged Redress Compliance to:
- Validate SAP’s claims and identify inaccuracies in the audit report.
- Optimize existing license usage and identify cost-saving opportunities.
- Negotiate with SAP to resolve the audit amicably and minimize financial exposure.
- Strengthen internal processes to avoid future compliance risks.
The Process
- Audit Review and Analysis: • Conducted an in-depth analysis of SAP’s audit findings and identified several overstated claims regarding indirect access and user licensing. • Mapped actual system usage against entitlements to establish a clear baseline. • Evaluated historical contracts to identify favorable clauses SAP had overlooked in their assessment.
- Usage Validation and Optimization: • Validated indirect access scenarios, demonstrating where SAP’s assumptions did not reflect actual usage. • Reallocated licenses across departments to address underutilized entitlements. • Identified legacy systems that could be decommissioned, reducing unnecessary license consumption.
- Negotiation with SAP: • Presented SAP with a corrected compliance report backed by data-driven evidence of usage patterns and contractual entitlements. • Highlighted the company’s proactive steps to maintain compliance and optimize licensing. • Secured a reduced financial settlement while negotiating terms for future flexibility in licensing.
- Implementation of Governance Framework: • Designed and implemented a governance framework to monitor SAP usage in real time. • Delivered targeted training for IT and procurement teams to enhance their understanding of SAP’s licensing policies. • Established an internal audit schedule to regularly review compliance and mitigate risks of future audits.
Results
- Financial Outcome: • Reduced financial exposure from £12 million to £800,000, representing a 93% reduction. • Negotiated a cost-neutral resolution that included additional licenses aligned with future growth.
- Operational Improvements: • Reallocated licenses across divisions, optimizing utilization and avoiding unnecessary purchases. • Decommissioned redundant systems, resulting in ongoing cost savings.
- Strategic Outcomes: • Enhanced governance processes to monitor and manage SAP licensing. • Improved compliance transparency, reducing the risk of future non-compliance penalties. • Strengthened the relationship with SAP, ensuring collaborative engagement moving forward.
Quote from the CIO:
“Redress Compliance transformed a daunting audit process into an opportunity for operational improvement. Their expertise saved us millions and provided us with a roadmap for future compliance and cost management. They were an invaluable partner throughout the journey.”
Key Results:
- Initial Financial Exposure: £12 million.
- Final Settlement: £800,000 (93% reduction).
- Compliance Enhanced: Real-time monitoring and governance framework implemented.
- Operational Efficiency: Streamlined licensing portfolio and reduced unnecessary costs.
This case demonstrates Redress Compliance’s ability to deliver tailored solutions for engineering firms, ensuring compliance, cost savings, and robust licensing management during SAP audits.
