Establishing an Internal SAP License Compliance Program
Introduction – Why You Need a Compliance Program
SAP license audits can strike with little warning, and reacting after the fact often means scrambling to true-up licenses and pay unplanned fees.
Instead of playing defense, many enterprises implement internal SAP license compliance programs to stay audit-ready.
A dedicated compliance program helps you find and fix issues on your own timeline – avoiding surprise audit bills and keeping your license spend optimized year-round.
By monitoring usage regularly and correcting any drift, you close compliance gaps long before SAP’s auditors come knocking.
In short, ongoing license management is far cheaper and safer than last-minute firefighting during an audit. Read our SAP License Audits & Compliance Guide.
Beyond avoiding penalties, a proactive program yields cleaner license data and less shelfware (unused licenses), which in turn strengthens your negotiating leverage during contract renewals.
Forming the Governance Team
A successful program starts with people – form a cross-functional SAP license governance team with clear ownership and accountability.
Key stakeholders typically include:
- IT Asset Management / SAP Basis – Runs license measurement tools and maintains user access. This team provides data on usage and ensures each user has the correct license type.
- Procurement / Finance – Owns the contracts and budget. They track license entitlements vs. use, manage purchases/renewals, and make sure you’re not paying for shelfware or buying unnecessary licenses.
- Compliance/Legal – Interprets SAP’s licensing terms and ensures internal policies meet contractual obligations. They advise on gray areas (like indirect usage) and help mitigate compliance risks.
- HR (Human Resources) – Feeds the team with timely info on new hires, role changes, and leavers. This ensures licenses are assigned or reclaimed promptly as staff join, move, or exit.
Define each member’s responsibilities clearly – a RACI matrix (Responsible, Accountable, Consulted, Informed) can help. Regular cross-functional meetings (e.g. quarterly) keep everyone aligned. This governance structure provides checks and balances so no aspect of licensing falls through the cracks. Instead of a last-minute scramble during audits, you have a steady, ongoing process managed by the right experts.
Read our SAP License Audit FAQ: 15 Common Questions Answered for SAP Customers.
Toolset and Data
- SAP’s Native Tools: Use SAP’s built-in measurement tools early and often. Run USMM (User Measurement) in each system to gather user counts and license types. Use LAW/SLAW2 (License Administration Workbench) to consolidate multiple systems’ data and avoid double-counting users across systems. And if you use SAP BusinessObjects, run the LMBI tool for BI platform license measurements. These tools aren’t just for official audits – schedule them regularly as part of internal monitoring.
- Specialized SAM Tools: Consider dedicated software asset management solutions for SAP. Third-party solutions can automate usage analysis and provide dashboards for license consumption. Such tools help spot mismatches (e.g. a user’s activity exceeding their license level or an interface generating documents that count toward digital access). While not mandatory, these tools can make ongoing compliance tracking more efficient and insightful.
For more insights, SAP License Compliance: Best Practices for SAP Engines and Package Licenses
Core Processes for Ongoing Compliance
With team and tools in place, establish key processes that keep SAP license usage in continuous check:
- Regular License Reconciliation – Run internal license measurements on a fixed schedule (e.g., quarterly). Compare current usage to your entitlements and address any discrepancies. Frequent self-checks mean no surprises when SAP’s official audit comes around.
- Joiner–Mover–Leaver Management – Tie license updates into HR events. For each new hire, assign the appropriate SAP license (or reallocate an existing one) from day one. When employees change roles, they adjust their license type up or down to match their new needs. When someone leaves, immediately remove or lock their SAP account and recoup that license for reuse. This lifecycle approach prevents the accumulation of unused accounts and ensures that everyone is right-licensed according to their current role.
- New Integrations & Projects – Vet any new system integration or major SAP project for licensing impact before it goes live. This includes monitoring third-party interfaces that create SAP transactions (indirect access) and assessing license requirements when rolling out new modules or experiencing significant user increases. Evaluating these changes in advance helps you avoid compliance surprises and budget for any required licenses in advance.
Policy & Training
Non-technical measures are equally important:
- Establish a License Policy – Create an internal SAP license management policy that outlines how licenses are assigned and governed. It should define which job roles correspond to each license type, outline rules for any service accounts or third-party access, and establish procedures for approving new interfaces that may introduce license impact. A formal policy makes expectations clear and provides a reference when questions arise.
- Train Stakeholders – Educate IT and business stakeholders about SAP licensing basics and your internal processes. Train SAP administrators and support teams on compliance procedures (like proper user classification and not using shared accounts). Also, brief business unit leaders and project managers on recognizing license implications early – for instance, knowing that connecting a new application to SAP or adding dozens of users has licensing consequences. Regular awareness sessions ensure people will flag potential issues and involve the license team before problems occur.
Audit Simulation & Self-Checks
Don’t wait for SAP to tell you about a compliance issue.
Conduct your own mock audits periodically to stay audit-ready. At least once a year, perform an internal audit simulation that mirrors SAP’s audit process.
Compile all relevant data and verify compliance in key areas:
- Users & Accounts – Verify all active user accounts are correctly licensed (no misclassified or idle users), and use LAW to ensure no individual is counted twice across systems.
- Engines & Packages – Check usage of any SAP engines or package licenses (metrics like number of employees, orders, etc.) and ensure actual consumption stays within your licensed limits.
- Indirect Usage – Review external interfaces to SAP and confirm their activity is properly licensed. Estimate documents or transactions coming from these sources and make sure you have sufficient named user or digital access licenses to cover them.
- Entitlements vs. Consumption – Compare your overall license consumption to what you’ve purchased. Note any overuse or underuse so you can address it proactively (e.g. true-up a shortfall or cancel maintenance on excess licenses).
If your self-audit finds any gaps, resolve them before SAP does. That might involve acquiring additional licenses in a planned manner or consolidating unused accounts to reduce the count.
The point is to catch and fix issues internally. Companies that rigorously self-check often find that when SAP’s official auditors arrive, there’s little or nothing to find – the audit becomes routine.
In some cases, demonstrating strong internal compliance even lowers your audit profile with SAP over time.
Executive Reporting & Governance
Keep your compliance initiative visible at the top. Provide periodic updates to executives (for example, a quarterly or semiannual report) on SAP license compliance.
This report should cover:
- Overall Compliance Status – A summary of your current compliance position (e.g,. all license counts within contractual limits, or any areas of concern).
- Usage & Cost Analysis – Highlights of license utilization vs. entitlements (to spot any shelfware or shortfalls) and any cost savings or optimization achieved by the program.
- Upcoming Risks/Events – Any pending changes, projects, or audit/renewal events that could impact licensing in the near future.
Regular executive reporting not only keeps leadership informed and engaged, but also reframes compliance as a value-add.
You show that governance efforts are controlling costs and preventing surprises.
This transparency helps secure ongoing support for compliance activities and readies the C-suite with facts for future negotiations with SAP.
Checklist: Compliance Program Essentials
Here’s a quick checklist of essential practices for a proactive SAP license compliance program:
- ✓ Quarterly internal license measurements
- ✓ Documented license assignment policy (clear rules for allocating user types)
- ✓ Joiner–Mover–Leaver process (update or recycle licenses with every staff change)
- ✓ Shelfware monitoring (regularly eliminate unused licenses to reduce waste)
- ✓ Indirect access oversight (track external system usage and ensure it’s licensed)
- ✓ Annual mock audits (self-audit to catch issues before SAP does)
- ✓ Executive reporting cadence (routine compliance updates to CIO/CFO)
- ✓ Cross-functional governance team (IT, procurement, etc., collaborating on licenses)
- ✓ Stakeholder training (ongoing education on SAP licensing for key teams)
Each of these elements reinforces the others. Together, they form a robust, preventative approach that keeps your SAP environment compliant and your spending under control.
Conclusion
The best way to handle an SAP audit is to never be caught off guard by one.
By establishing an internal program, you drastically reduce the chance of surprise findings or budget-busting true-ups.
Proactive compliance not only minimizes risk and optimizes usage but also improves your leverage in SAP negotiations. In short, you’ll be managing licenses on your terms instead of scrambling under SAP’s audit deadlines.
If your organization doesn’t yet have a formal SAP license compliance program, the time to start is now – before an audit letter arrives.
By implementing the measures above (from governance structure to regular self-auditing), you turn license management into a continuous business process.
This upfront effort pays off by keeping you in control and out of trouble with SAP.
FAQ
How often should we run internal SAP self-audits?
Perform a full internal license audit at least once per year. Ideally, supplement that with quarterly mini-audits or measurements to catch changes sooner. Regular monitoring prevents small compliance issues from snowballing into big problems.
Can internal compliance prevent SAP from auditing us?
Not really. SAP can audit any customer per the contract. Demonstrating a strong internal compliance program can reduce the frequency or severity of audits. If you have a clean track record of compliance, SAP may audit you less often. And even if an audit occurs, your proactive management means you’ll breeze through it with no surprises.
What tools are best for ongoing compliance?
SAP’s own tools are the foundation – USMM for usage data and LAW (or SLAW2) for consolidating multi-system results are essential. Many companies also deploy a third-party SAP license management solution for deeper analytics and automation. Using SAP’s built-in reports regularly, potentially augmented by an external tool, gives you comprehensive visibility and early warning of any compliance issues.
How do we train business teams on SAP licensing risks?
Integrate licensing awareness into your organization’s training and processes. For example, ensure project managers and solution architects know that any new system integration involving SAP requires a license impact check. Provide simple “dos and don’ts” guidelines to department heads – e.g., don’t create generic shared SAP accounts; do consult the license team before connecting a new app to SAP. Include a licensing overview in onboarding for IT staff and periodic briefings for business users. The goal is to create a culture where everyone identifies licensing risks and involves the compliance team early.
Read more about our SAP Audit Defense Service.
