Case Study: SAP Audit Defense for a Major US Food Manufacturer
Challenge
A leading US-based food manufacturer with over 75,000 employees and a global distribution network was subjected to an SAP compliance audit. The company’s ERP system was central to managing its supply chain, production, and financial operations. SAP’s audit findings alleged significant non-compliance due to indirect access, unlicensed users, and outdated licensing agreements. The initial financial exposure was estimated at $15 million. The company engaged Redress Compliance to:
- Validate and challenge SAP’s audit findings.
- Optimize its SAP license portfolio to align with actual usage.
- Negotiate a fair resolution and minimize financial impact.
- Establish governance mechanisms to prevent future compliance risks.
The Process
- Audit Analysis and Validation: • Reviewed SAP’s audit report in detail, identifying inaccuracies in calculating indirect access and user licenses. • Conducted a comprehensive usage assessment to map system activities against contractual entitlements. • Cross-referenced audit findings with historical agreements, uncovering misinterpretations in SAP’s claims.
- Optimization of Licensing Usage: • Reallocated licenses across operational units to address underutilization and ensure compliance. • Identified and retired outdated licenses tied to legacy systems no longer used. • Introduced role-based access controls to optimize user licensing, particularly for seasonal and part-time staff.
- Negotiation Strategy and Resolution: • Prepared a data-backed compliance report, highlighting errors and discrepancies in SAP’s audit findings. • Engaged SAP in negotiations to recalibrate the financial exposure, emphasizing the company’s proactive compliance measures. • Secured a revised settlement with additional licensing value and strategic terms for future scalability.
- Governance Implementation: • Designed and implemented a real-time monitoring system to track SAP license usage and ensure ongoing compliance. • Delivered training workshops for IT and procurement teams to improve understanding of SAP’s licensing models and requirements. • Established a periodic internal audit process to review license usage and prevent future disputes.
Results
- Financial Outcome: • Reduced financial exposure from $15 million to $1.2 million, achieving a 92% reduction. • Negotiated a resolution that provided the company with future-proof licensing terms.
- Operational Improvements: • Optimized license allocation across departments, reducing inefficiencies and eliminating redundant costs. • Retired unused systems, freeing up resources for new initiatives.
- Strategic Outcomes: • Established a proactive compliance framework, ensuring transparency and control over SAP usage. • Strengthened SAP vendor relationships through collaborative negotiation and resolution. • Positioned the company for seamless scalability in its ERP strategy as it expanded operations.
Quote from the CFO:
“Redress Compliance’s support during our SAP audit was critical in mitigating financial risks and strengthening our compliance processes. Their expertise not only saved us millions but also ensured our licensing strategy aligned with our growth plans. We are now better prepared for the future.”
Key Results:
- Initial Financial Exposure: $15 million.
- Final Settlement: $1.2 million (92% reduction).
- Compliance Enhanced: Real-time monitoring and proactive governance implemented.
- Operational Efficiency: Streamlined licensing portfolio and reduced waste.
This case demonstrates Redress Compliance’s ability to deliver tailored solutions for large manufacturers, ensuring cost efficiency, compliance, and strategic alignment during SAP audits.
