S/4HANA Digital Access Considerations for Indirect Use Compliance

S/4HANA Digital Access (Indirect Use) Considerations: Ensuring Compliance Under the New Model

SAP’s new Digital Access model fundamentally changes how indirect use of SAP is licensed. Instead of licensing every user or device that indirectly accesses SAP, it licenses the business documents created by those interactions.

This shift promises clearer compliance for CIOs and CTOs migrating to S/4HANA, but it also introduces new cost considerations and risks if not managed properly.

In summary, understanding and negotiating SAP’s digital access terms is crucial to ensure compliance and avoid surprise costs during a migration to S/4HANA.

Indirect Access: The Hidden Licensing Risk

For years, indirect access (also known as indirect use) was a looming compliance gray area in SAP environments. Indirect access occurs when SAP is used via a third-party system or interface without a person directly logging into SAP.

For example, an e-commerce site that sends orders to SAP or a mobile app updating SAP inventory are indirect uses.

Traditionally, SAP required that any use of its software – direct or indirect – had to be covered by a Named User license. This meant even external users or systems should have a license, which was often overlooked.

High-profile legal disputes underscored the risk. In 2017, Diageo was ordered by a UK court to pay approximately £54 million because customers and sales representatives accessed SAP via a Salesforce front-end without holding proper SAP user licenses.

Around the same time, AB InBev faced a staggering $600 million license claim from SAP for widespread indirect use through integrated systems (settled out of court).

These cases sent shockwaves through the CIO community; indirect use was not just a minor issue but a potential multi-million-dollar exposure. They highlighted that under legacy contracts, even viewing or writing SAP data through non-SAP applications could count as “use” that requires licensing.

The fallout was a wake-up call: enterprises realized they might be out of compliance and at risk of audit penalties if they hadn’t licensed these indirect scenarios.

In response to customer backlash over the ambiguity and hefty audit findings, SAP introduced a new approach in 2018 to bring more clarity and fairness.

Read Contractual Differences Between RISE with SAP and BYOL Models.

SAP’s Digital Access Model Explained

Digital Access is SAP’s updated licensing model for indirect use, built around the number of documents created in the SAP system by external (non-SAP) systems.

Instead of tracking every possible user or device, SAP now tracks nine categories of digital documents that, when created indirectly, count toward your licensed consumption.

These nine core document types encompass common business objects in SAP, including Sales Orders, Purchase Orders, Invoices, Service and Maintenance records, Manufacturing orders, Quality Management records, Time records, Financial documents, and Inventory (material) documents.

Whenever an external application triggers the creation of one of these documents in SAP, it incurs a licensing obligation under the digital access model.

Importantly, SAP built in some rules to keep this fair and transparent:

• Read-only actions don’t count: If an external system is just querying or reading data from SAP (without creating a new record), it does not consume a digital document license. Simple data lookups via an API, for instance, are not charged under this model.
• One charge per business process: If one external event generates multiple SAP documents in a chain, you typically only pay for the first document. For example, if a third-party e-commerce order creates a Sales Order in SAP, which then automatically generates a Delivery and an Invoice, you would count one Sales Document (the originating order) for licensing. The subsequent delivery and invoice from that same process are not counted again as long as they result directly from the initial transaction.
• Weighting high-volume records: SAP recognized that some document types (like financial journal entries or material movements) occur in huge volumes. In the digital access model, certain documents have a lower weight or “multiplier.” For instance, a Financial Document or Material Document might count as only 0.2 of a document for licensing purposes. In practice, this means five financial postings equate to one billable document. This weighting helps prevent exorbitant costs for record-heavy processes.

Under digital access, organizations purchase a quantity of these documents (usually in blocks or tiers) to cover their indirect usage.

The model is often described as “outcome-based” licensing: you pay for the measurable business outcomes (the documents that get created), rather than trying to license every possible human or system that might interact with SAP.

It’s worth noting that direct SAP users are still licensed the old way (named user licenses). Digital access only covers indirect integration scenarios.

In an S/4HANA environment, you end up with a hybrid model: your employees and internal users use traditional user licenses, and your third-party interfaces and external users are covered by digital document licenses.

The goal is to provide a more transparent and auditable approach to managing the proliferation of integrations, APIs, and IoT devices in modern IT landscapes, without the compliance complexities of the traditional model.

Traditional vs. Digital Licensing: Key Differences

How does the new document-based model compare to the traditional user-based approach?

The table below summarizes the key differences between licensing indirect use via Named Users versus Digital Access:

Pros and Cons: Both models have pros and cons depending on the scenario:

• Indirect (Named User) Model – Pros: Simple conceptually (just count users). Suppose indirect usage is minimal or involves a limited, known group of external users. In that case, it can be cost-effective – for example, buying 2–3 user licenses might cover a small B2B integration at a low cost. Additionally, there is no incremental cost if those few users generate a large number of transactions, as long as they have a user license, all their activity is covered.
• Indirect (Named User) Model – Cons: Very hard to manage at scale. In modern environments, you may have thousands of end customers or IoT devices interacting with SAP, making it impossible to license each as a user. Huge compliance uncertainty: Many companies only discovered their indirect use exposure during an audit. The old contracts were vague, and interpretations could be retroactive, leading to surprise penalties.
• Digital Access (Document) Model – Pros: Ties cost directly to actual business activity in SAP. It’s transparent and auditable – you can run reports to count documents. It covers any number of users or devices creating those documents, which is great for high-volume digital scenarios (e.g., e-commerce orders, API integrations) – you don’t have to worry about how many people or apps are behind the scenes. This model helps avoid the nightmare of an audit finding “ghost” users; you’ve proactively licensed the transactions you know about.
• Digital Access (Document) Model – Cons: Requires careful governance and forecasting. If your digital initiatives take off and document counts spike, costs can rise unexpectedly. The definition of what constitutes a document can be challenging in edge cases (e.g., determining how to count batch jobs or handling document reversals). In hybrid landscapes, you might be juggling both user and document licenses, which adds complexity. Additionally, initial costs may seem high if you have to purchase a large block of documents upfront – companies need to ensure they negotiate a favorable deal (ideally with some buffer for future growth).

In practice, many enterprises will employ a hybrid strategy: continuing with named user licensing for internal staff and perhaps low-volume partners, while adopting digital access for high-volume integrations and customer-facing processes.

SAP allows mixing models, and finding the right balance can optimize cost. The key is to analyze your usage patterns and identify areas of risk.

Cost Implications and Pricing Considerations

Licensing by digital documents shifts the cost model from a user count to a transaction count.

This has several important implications for CIOs and CTOs budgeting for S/4HANA:

• Block/Tier Pricing: SAP sells digital access in packages – commonly in blocks of, say, 1,000 documents (per year). There is a tiered pricing structure: the more documents you license, the lower the cost per document. For example, a small volume (1,000 documents) might have a high unit price, but if you commit to 100,000 documents, the effective rate per document drops with volume discounts. (SAP doesn’t publicly publish a price list, as these rates are often negotiated case-by-case. For illustration, one might assume an initial list price like $1,000 per 1,000 documents – $1 per document – but large enterprises often negotiate much lower, perhaps only a few cents per document at high volumes after discounts.)
• Forecasting is Critical: Under the document model, you need to estimate the number of SAP business documents your integrations will create. If you under-estimate and exceed your purchased blocks, you’ll have to procure additional licenses (a “true-up”), potentially at a higher marginal cost or face compliance issues. If you wildly over-estimate and over-buy, you’ve spent your budget unnecessarily. Therefore, accurate data and effective forecasting are crucial. SAP provides a Digital Access Evaluation Service (DAES) – a free tool/script that can scan your systems to count historical document creation by external systems. Using such tools before finalizing your S/4HANA licensing is a best practice to get data-driven estimates.
• Examples – Low vs High Volume: Consider two scenarios:
  • Low Volume: A third-party system (such as a dealer portal) typically has only 2 or 3 external users submitting data to SAP. Under the old model, you might simply purchase three named-user licenses (approximately $3,000 each, totaling around $9,000) and be fully compliant, allowing those users to create an unlimited number of transactions. Under the digital model, if those users generate only, say, 500 documents a year, you might be able to buy a small block (1,000 documents), but the minimum purchase might cost more than three user licenses. In this scenario, adhering to the traditional approach may be more cost-effective.
  • High Volume: An e-commerce website may generate 50,000 sales orders in SAP per year, resulting from millions of customer interactions. Licensing that via named users is untenable (you can’t buy a license for every customer), and even if you tried a technical user workaround, SAP would count that as indirect access. Digital Access shines here – you might negotiate 50,000 or 100,000 documents annually for a fixed fee (for example, $X00,000 for 100,000 documents). That way, no matter how many individual shoppers or devices are behind those transactions, you’re covered as long as the volume is within that range. Many customers in high-volume environments found that the document model ends up far more cost-effective and predictable than running the risk of an audit under the user model.
• Digital Access Adoption Program (DAAP): SAP launched the DAAP to encourage customers to switch to the digital model. This program (which ran for several years and officially ended in 2021) offered steep incentives, often a 90% discount on the cost of digital access licenses or the ability to trade in existing unused user licenses for credit. Essentially, SAP would calculate the “equivalent value” of your historical indirect usage and let you convert at a fraction of the cost. Many companies took advantage of DAAP to make the transition financially palatable. Even though the formal program has sunset, in practice, SAP still often negotiates custom deals for customers migrating to S/4HANA. It’s not uncommon to get a significant discount or credit on digital access if you raise the issue during your S/4 contract negotiations. Tip: Engage SAP early on; let them know you’re evaluating the digital model, and you might find them surprisingly flexible in getting a deal done (they’d rather lock you into S/4HANA than have an indirect use dispute derail the deal).
• Build in Buffers and Caps: When negotiating digital access licenses, savvy companies include provisions to manage cost uncertainty. For example, you might negotiate a buffer of, say, 10% extra documents at no charge, to cover unexpected growth. Or set predetermined pricing for additional tiers – e.g., if you exceed 100k documents, the next 20k are priced at the same per-unit rate (or at a discount) to avoid a punitive jump. Some contracts include audit protections or freeze the metric definition to avoid surprises. The key is to avoid an outcome where a surge in business (and documents) unexpectedly blows your budget. Ensure your agreement has the flexibility to accommodate growth without incurring excessive costs.

In summary, the digital access model can be cost-neutral or even cost-positive if handled correctly. Many customers have reported that after switching, they gained peace of mind and often did not end up paying more than before.

However, if handled poorly (without analysis or negotiation), it could also lead to higher costs. Thus, treat indirect access licensing as a critical component of your S/4HANA migration business case, not an afterthought.

Ensuring Compliance in Your S/4HANA Migration

Migrating to S/4HANA (whether on-premise or via RISE in the cloud) is an opportunity to reset and clarify your licensing. CIOs and CTOs should incorporate digital access compliance into their migration plans from the outset.

Key considerations include:

• Audit Your Indirect Usage Ahead of Time: Don’t wait for SAP to notify you about an issue. Conduct an internal review of all the third-party systems that interface with your current SAP ECC system. Identify the transactions they trigger and the users who utilize them. This baseline will reveal where you have indirect usage exposure. Many organizations are surprised by the numerous touchpoints that exist (e.g., various web portals, supplier integrations, custom mobile apps, etc.). Get a handle on it now so you can make informed decisions.
• Use SAP’s Measurement Tools (Safely): SAP offers the Digital Access Evaluation Service and related tools to help measure document counts. You can run these in a “report only” mode to get a sense of your document volumes. It’s often wise to involve your SAP account team and be transparent that you’re evaluating licensing options – this can set a collaborative tone. However, be cautious about how data is shared; ensure you control the narrative (you may not want to automatically send results to SAP without context). Consider using third-party license management tools as well to cross-check usage. The goal is to have reliable data on indirect use to guide your license purchases.
• Decide on a Licensing Model (or Mix) and Get it in Writing: Based on the data and cost analysis, determine whether to adopt digital access, maintain named user licensing for specific uses, or opt for a hybrid approach. If you remain on the old model, consider negotiating an amendment or clarification in your S/4HANA contract that explicitly defines what constitutes acceptable indirect use to prevent future disputes. If you adopt the new model, negotiate the number of documents and price as discussed, and ensure your contract documents reflect this, along with any applicable buffer or discount. In a RISE with SAP contract (subscription model), digital access may be included by default; however, check the fine print to determine how many documents are covered and the charges for overages. Adjust those terms if needed before signing.
• Implement Governance and Monitoring: After migrating, compliance is an ongoing process. Implement monitoring to track digital document creation within your SAP system. SAP is introducing more real-time dashboards (especially in cloud environments) to help monitor usage. Leverage these, or have your Basis/IT team run quarterly reports. Set internal thresholds to alert if you’re consuming licenses at a rate faster than anticipated. On the other hand, if you’ve transitioned to digital access, ensure that any new integration project is designed with licensing in mind – for example, avoid generating unnecessary SAP transactions if they are not needed. Simple governance (like an architecture review for new interfaces) can prevent inadvertent overages.
• Training and Awareness: Educate your IT architects, developers, and even business process owners about the licensing implications of integrations. Under the named user model, users should be aware that connecting a new system to SAP may require additional user licenses and budget approval. Under the digital model, they need to understand that creating SAP documents incurs a cost, not to discourage innovation, but to architect efficiently (for instance, by combining calls or avoiding the creation of redundant documents). A little awareness goes a long way in preventing compliance issues.
• Regular True-ups and Re-evaluations: Treat your SAP license strategy as a living document. Each year (or with each new project), reevaluate whether your chosen model still makes sense. Perhaps you begin with digital access but find that your volumes remain low – you could negotiate a reduction at renewal or consider whether named users would be sufficient. Or vice versa: you initially focus on named users, but as you roll out more digital channels, it may reach a tipping point where switching to digital access becomes more cost-effective. Keep an eye on SAP’s licensing updates too – SAP may adjust the program or offer new options (for example, future bundling of digital access in certain enterprise agreements). You want to be ready to pivot if needed, rather than being locked in a suboptimal model.

Remember, compliance is not just about avoiding audits – it’s also about cost optimization. A well-managed digital access approach can turn what was once a major unknown risk into just another planned software expense, aligned to business growth.

Recommendations

• Proactively Assess Indirect Use: Before migrating, conduct a thorough audit of all third-party integrations and their interactions with SAP. Know your exposure before SAP does.
• Leverage Evaluation Tools: Use SAP’s Digital Access Evaluation or similar tools to measure document volumes. Get data to size your license needs, but use these tools on your terms to maintain control of the process.
• Analyze Cost Scenarios: Compare the projected costs of staying on named-user licensing versus adopting digital access. Include “what-if” scenarios (e.g., transaction volumes doubling) to see which model is more cost-effective and less risky in the long run.
• Engage SAP and Experts Early: Discuss indirect usage with SAP during your S/4HANA planning. Signal that you want to address it constructively. Also, consider consulting independent SAP licensing experts or user groups for a second opinion on SAP’s proposals.
• Negotiate Favorable Terms: If you opt for digital access, negotiate aggressively to secure favorable terms. Aim for DAAP-level discounts or credits for any unused licenses you surrender. Include extra capacity for growth and clearly define the terms for handling overages (e.g., pre-agreed pricing for additional documents). If sticking with the old model, negotiate contract clauses that clearly define what is permitted indirect use, to avoid future “surprise” interpretations.
• Implement Monitoring Post-Migration: Set up a governance process to track indirect usage on an ongoing basis. For digital access, regularly monitor document consumption versus entitlements. For named user models, keep track of new interfaces and ensure that any necessary user licenses are accounted for in your license count.
• Educate Your Team: Make licensing awareness part of your project culture. Ensure that anyone designing or connecting systems to SAP understands the basic licensing impacts. This avoids unintentional non-compliance and encourages designs that minimize the creation of extraneous SAP documents.
• Plan for Growth and Changes: Revisit your licensing model choice periodically. As your business evolves (through new channels, acquisitions, etc.) or as SAP’s policies change, be prepared to adjust your approach. It’s better to re-align proactively than to be caught off-guard by an audit or an unforeseen spike in digital activity.

FAQ

Q1: Do we need to adopt the Digital Access model when migrating to S/4HANA, or can we continue with the existing licensing?
A1: You are not forced to adopt the digital access model, but SAP strongly encourages it for S/4HANA. Customers can technically retain the traditional named-user licensing for indirect access if they simply carry over their existing contract. However, most new S/4HANA contracts (and especially RISE subscriptions) will include the digital access terms by default. It’s often in your interest to address this during migration, either by negotiating a comfortable digital access package or explicitly clarifying that your existing model will continue. Ignoring it isn’t wise; make an active decision on which model to use.

Q2: How can I estimate the number of digital access documents my company will generate?
A2: Start by analyzing current usage. SAP provides a Digital Access Evaluation Service report (for ECC and S/4HANA systems) that counts the number of each of the nine document types created by external interfaces. Run this tool in your system to get a baseline. Additionally, review each integration (e.g., your web store, CRM, and supply chain systems) and estimate the number of SAP transactions it triggers in a given year. Combining these methods will give you a ballpark. Many companies also conduct a one-time indirect use assessment with the help of SAP or a third-party licensing specialist to ensure no scenario is missed. The outcome of this assessment drives how many document licenses you should purchase.

Q3: Will the digital access model increase our SAP licensing costs?
A3: It depends on your usage profile and how well you negotiate. For some, digital access reduces cost risk because it prevents the possibility of a massive audit penalty. Companies with high volumes of indirect transactions often find the new model cost-efficient after volume discounts. Others with minimal indirect use may find the old model more cost-effective. SAP’s incentive programs (like the 90% discount via DAAP) were designed to make switching cost-neutral in many cases. The best approach is to model the costs: calculate what you’re paying (or would pay) for indirect use under the named user model versus the document model. Include potential audit fines as a “cost” of staying with the old model. In many cases, after analysis, companies conclude that while list prices for digital access were initially high, the negotiated price and predictability make it worthwhile. Always negotiate for credits and discounts – treat it as a deal, not a list price purchase.

Q4: What happens if we exceed our licensed document volume under digital access?
A4: If you go beyond the number of documents you licensed (e.g., you bought 100k documents/year but ended up creating 120k), you will need to procure additional licenses to cover the excess. Typically, this would be addressed at your next true-up or renewal, and you’d purchase additional blocks to cover the overage (potentially paying back-dated fees for the excess if it was significant). To avoid nasty surprises, it’s wise to negotiate terms upfront – for example, an agreed-upon price for extra documents or an automatic upgrade to the next tier at a predetermined rate. Also, monitor your usage throughout the year. If you notice trends indicating an overage, you can approach SAP early to discuss a mid-term adjustment. In the worst case, if unmanaged, it is similar to an audit finding – you’d be out of compliance, and SAP could bill the list price for the overage, so proactive management is key.

Q5: How can we reduce the cost of digital access licenses or optimize this aspect of our SAP contract?
A5: There are several strategies:

• Leverage Trade-Ins: If you have a lot of spare named-user licenses (perhaps from legacy bundles) that you won’t need after moving to S/4HANA, ask SAP to convert those into a credit toward digital access. Under past programs, SAP gave generous conversions.
• Timing and Bundling: Align your digital access purchase with a larger S/4HANA deal or renewal when you have more negotiation leverage. SAP may offer additional documents or discounts to secure a large contract or a RISE subscription.
• Start with a Conservative Scope: You may negotiate digital access for specific document types or a subset of systems initially, if feasible. (SAP’s standard model covers all nine types, but some customers focus on the types they use heavily.) In some cases, SAP has been open to partial licensing approaches or phasing in volumes over time.
• Optimize Your Processes: After migration, you can often configure SAP or your middleware to prevent unnecessary document creation. For example, if an external system were generating multiple interim records that aren’t needed, eliminating those would reduce your document count. This is more of an architecture tweak, but it can have licensing implications.
• Shop Around Internally: Make sure you’re not double-counting users and documents. Suppose some indirect scenarios involve known users (such as a partner portal with a fixed user list). In that case, it may be more cost-effective to cover those via named user licenses and exclude them from document counts. Use the flexibility to mix models – you don’t have to put everything under digital access if it doesn’t make sense.
• Contract Clauses: Negotiate caps or clauses that protect you from extreme scenarios. For instance, a clause that says if a single external system goes haywire and creates millions of documents by error, SAP will work with you in good faith rather than immediately charging for all of them. It’s not always granted, but asking for such customer-friendly terms can sometimes lead to at least a discussion of safeguards.

Q6: What are the consequences if we ignore indirect access compliance?
A6: Turning a blind eye to indirect access is very risky. SAP has become quite vigilant in auditing customers for indirect usage. If you ignore the issue and migrate to S/4HANA without addressing it, you may be subject to a compliance audit down the road. The result might be a hefty, unexpected bill, often running into millions of dollars for large enterprises, to cover unpaid licenses retroactively. Beyond financial penalties, such an audit dispute can strain your relationship with SAP and derail IT plans. Additionally, if you’re on a subscription model like RISE and exceed the included usage, you may

Q7: Can digital access licensing be negotiated as part of RISE with SAP?
A7: Yes. If you’re moving to SAP’s RISE (subscription cloud bundle), digital access is typically included in the subscription based on certain assumptions. However, you should discuss it during the negotiation. RISE contracts often come with a preset number of digital access documents (or an unlimited use clause for indirect access up to a threshold). If your usage is likely to be higher, you should negotiate this into the subscription. You can request custom tiers or additional document storage capacity as part of the RISE deal. Everything in RISE is negotiable, since it’s a bundled offering – you have room to tailor it. Ensure that the contract language is clear on how indirect use is measured in a cloud context and what happens if you integrate many non-SAP apps. It’s advisable to secure audit protections and the flexibility to increase document counts at a known rate in the future. Many companies have successfully become comfortable with indirect access terms included in their RISE agreements; it’s all about raising the topic and negotiating for what you need before signing.

Q8: What internal stakeholders should be involved in managing digital access compliance?
A8: Indirect usage spans both technology and business, so you should form a cross-functional team:

• IT Architecture/Integration teams: They know where and how systems connect to SAP. They can help identify indirect use points and design solutions to minimize the impact on licenses.
• SAP Basis/Administration: They can run the measurement tools, monitor usage, and implement any technical notes or tools SAP provides.
• Procurement/IT Sourcing: They handle the contract negotiation with SAP. They need the data from IT to negotiate effectively, and they should be involved in securing the right terms.
• Finance or IT Finance: They will want to understand the cost implications and ensure the budget is allocated. They can also validate the ROI of switching models by looking at scenario costs.
• Legal/Compliance: Particularly given the history of lawsuits, legal should vet the contract language for indirect access. They can also advise on the risks of current agreements and help craft protective clauses.
• Business Process Owners: In areas such as sales, logistics, or manufacturing, these owners should be aware that changes to processes (like how an order is entered) can affect document counts. They will also be the ones asking for new integrations or automation, so they need to loop in IT for licensing whenever they plan something that involves SAP.
  By involving all these stakeholders, you ensure that indirect access licensing isn’t an afterthought but an integrated part of your IT governance and financial planning.

Q9: Are there any alternatives to SAP’s Digital Access model from a contract standpoint?
A9: Aside from the two main approaches (traditional named users vs. digital documents), SAP occasionally offers custom licensing arrangements for specific situations. For example, some customers have negotiated flat-fee enterprise licenses that cover a specific scope of use (sometimes referred to as an Enterprise Agreement), which may include indirect usage implicitly. Others have developed specific third-party applications with special terms (for instance, an agreement that allows a particular CRM integration with a certain number of users without additional license fees). These are not standard and typically only on the table for very large customers or unique cases. Another “alternative” some customers choose is to use middleware or caching to reduce direct touches to SAP – but be warned, SAP’s contracts are written broadly, and trying to technically circumvent licensing usually doesn’t hold up if data ultimately hits SAP. The safest path is to either adhere to named user rules (and tighten compliance) or utilize the digital access model. Any creative alternatives must be explicitly agreed upon in writing with SAP.

Q10: What’s the single biggest thing to watch out for when managing digital access long-term?
A10: The biggest watch-out is changes in your environment or changes in SAP’s policies. Internally, if your business undergoes digital transformation (for example, launching a new direct-to-consumer channel that interfaces with SAP), your indirect usage can skyrocket. You need a process to catch that early and adjust your licenses accordingly. Externally, SAP’s rules or pricing can evolve; while the company has committed to the current model for now, they might refine definitions or introduce new document types in the future. Keep an eye on communications from SAP and engage in user groups where licensing is discussed. If SAP ever offers a new licensing model or updates the digital access terms, review them carefully – they might address some current pain points or, conversely, impose new ones. Staying informed and agile is key. In summary, treat digital access as an ongoing compliance and cost management task, not a one-time project.

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