SAP Fieldglass Licensing & Workforce Management: Optimize External Workforce Costs

SAP Fieldglass Licensing & Workforce Management

Introduction – Why SAP Fieldglass Licensing Matters for Workforce Cost Control

SAP Fieldglass is SAP’s vendor management system (VMS) for managing external workforces – including contingent labor, contractors, gig workers, and services delivered under statements of work (SOWs).

Companies use Fieldglass to gain visibility and control over these non-payroll workers. However, without careful oversight, Fieldglass licensing can become a significant HR procurement expense. Its fees are tied to usage (such as the number of contractors or total spend processed), so costs can escalate quickly if your external workforce program grows or if licensing terms aren’t optimized.

Moreover, SAP actively monitors Fieldglass usage data, so exceeding your licensed limits can trigger costly true-ups or compliance issues mid-term.

In short, understanding Fieldglass’s pricing model and actively managing your usage is crucial for controlling contingent workforce costs and avoiding unexpected expenses.

This article breaks down Fieldglass’s pricing models, key cost drivers, and strategies to optimize licensing.

We take a buyer-first perspective, wary of SAP’s fee structures and upsell tactics – and focus on how you can negotiate better terms, manage supplier fees, and ultimately keep your external workforce spend in check.

Informed decisions on Fieldglass licensing can significantly improve how you manage your external workforce and keep contingent labor costs optimized. Read our overview, SAP Fieldglass Licensing for Global Enterprises.

SAP Fieldglass Licensing Models Explained

Fieldglass uses usage-based licensing rather than traditional per-user licenses. The two most common models are active worker-based licensing and spend-based licensing, and some contracts mix both.

Here’s an overview:

• Active Worker Model: You pay an annual subscription based on the number of external workers (contractors, temp staff, etc.) active in the system. This is usually sold in tiered bands (e.g., up to 500 workers, 501–1000, etc.). If you exceed your contracted band, you must true-up to a higher tier (often immediately once you cross the limit). This model works well if your contractor headcount is steady and you can forecast peaks accurately.
• Spend-Throughput Model: You pay based on the volume of spend or transactions flowing through Fieldglass. For example, a subscription might cover up to $X million in contingent labor spend per year (or charge roughly 1% of that spend). If you run more spend through the platform than agreed, fees increase, or you move to a higher spend slab. This model suits organizations with fluctuating headcount but relatively predictable total spend, or those that heavily utilize Fieldglass for SOW-based services.
• Other Variations: Some contracts include extra metrics, like fees for a certain number of admin users or per transaction. These are less common. Generally, internal managers and approvers can use Fieldglass without individual license fees, and SAP does not charge suppliers to use the system. Make sure your contract clearly defines any non-standard charges if they apply.

To compare the main models at a glance:

Fieldglass Cost Drivers You Need to Watch

Even with the right licensing model, your Fieldglass bill can grow depending on usage patterns.

Watch these cost drivers:

• Active Worker Count: Every additional contractor managed in Fieldglass pushes you closer to the next tier. Seasonal hiring spikes or large projects can temporarily boost your active count and trigger overage fees if not anticipated. Keep an eye on peak usage versus your contract limit and negotiate some headroom for spikes.
• Modules and SOW Spend: Each Fieldglass module has its own cost metric. The Contingent Workforce module is tied to worker count, while the SOW (Services Procurement) module might be tied to total project spend. Using more modules or managing high-value SOW projects can increase fees. Ensure your subscription covers the modules and volume you actually use.
• Integrations and Add-Ons: Connecting Fieldglass to other systems (such as ERP and HR) may require additional SAP integration tools or API usage, which incur their own costs (for example, SAP Integration Suite licensing). Fieldglass itself won’t charge extra for integrations, but the middleware or API consumption might. Account for integration-related costs in your budget so you’re not caught off guard.
• Supplier Funding and Adoption: SAP doesn’t charge suppliers to access Fieldglass, but if you choose a supplier-funded model (passing a small fee to vendors to fund the system), it can impact supplier behavior. A high supplier fee might lead vendors to increase rates or resist using the platform. Conversely, a purely buyer-funded model (you absorb Fieldglass costs) encourages full supplier participation. If you do add a supplier fee, keep it modest and transparent so vendors stay engaged. High supplier adoption ensures more spend is captured in Fieldglass, improving program visibility and value.

Negotiation Strategies to Optimize Fieldglass Licensing

When negotiating a Fieldglass contract or renewal, use your leverage to get better terms and prevent overspending. Remember, SAP’s initial offer isn’t set in stone – you can push for more favorable terms.

Consider these tactics:

• Leverage Volume Discounts: If you anticipate significant usage, push for volume-based pricing. Your cost per contractor or per dollar of spend should decrease at higher usage levels. Committing to larger tiers or multi-year deals can justify a better rate. Use your projected volume as a bargaining chip.
• Define “Active Worker” Clearly: Negotiate a precise definition of what counts as an active worker. Ideally, you use an average over time or exclude short-term contractors from the count. This prevents being penalized for normal churn (replacing one contractor with another) or brief overlaps. Clear contract language here helps avoid ambiguities that could lead to unexpected charges.
• Build in Seasonal Flexibility: If your contractor count fluctuates seasonally or for big projects, address it in the contract. For instance, negotiate a clause allowing a temporary 10–20% headcount overflow during peak periods without extra fees, or agree to measure usage by annual average instead of strict peak. That way, a short-term spike won’t automatically trigger a higher tier.
• Consider Supplier-Paid Options (Cautiously): In some programs, you can recoup Fieldglass costs by charging suppliers a small percentage fee on their invoices. If you pursue this, negotiate the fee level (e.g., 1-2%) and terms upfront with your MSP or vendors. Be cautious: while this reduces your direct spend, suppliers will bake that fee into their rates. Ensure any supplier fee is reasonable and communicated so it doesn’t undermine vendor cooperation or inflate costs.
• Bundle with Other SAP Deals: Try negotiating Fieldglass as part of a larger SAP package if possible. If you’re also renewing or purchasing SAP Ariba, SuccessFactors, or other SAP solutions, mention that Fieldglass is part of the overall deal. Bundling can improve your leverage – SAP may offer better discounts or add-ons to secure a bigger sale. Just make sure any Fieldglass “bundle discount” truly yields a better price than if you negotiated it standalone.

Best Practices for Contingent Workforce Licensing & Cost Optimization

Managing Fieldglass well on an ongoing basis helps avoid excess costs and compliance issues.

Keep these best practices in mind:

• Off-Board Contractors Promptly: Remove contractor profiles from Fieldglass as soon as their assignments end. Inactive accounts will still count toward your license if left in the system. Keeping the roster clean ensures you’re only paying for active workers.
• Channel Spend Wisely: Not every external engagement needs to go through Fieldglass. If your fees are spend-based, you might handle very low-value or one-off contractor engagements outside the platform to avoid incurring fees on trivial spend. Use Fieldglass where it provides oversight and value, but be strategic to avoid paying extra for minimal benefit.
• Maximize Supplier Adoption: Train and require your staffing vendors to use Fieldglass for all relevant activities (submitting candidates, timesheets, etc.). Full adoption provides you with complete visibility and enhanced data for effective performance management. If you impose a supplier fee, keep it small and highlight the platform’s benefits (faster hiring, transparency) so suppliers see it as a cost of doing business with you. High compliance drives ROI on the system.
• Audit Usage Before Renewal: Ahead of each renewal, pull reports on your Fieldglass usage (peak contractor count, total spend managed). Compare these to your licensed entitlements. If you’ve consistently used far less than you’re paying for, push to downsize your subscription or get a better rate. If you’re near the limits, use your data to negotiate any needed increase on favorable terms (e.g., volume discounts or a larger tier at a reasonable price). Don’t go into renewal discussions blind – leverage your usage data to right-size your contract and avoid overpaying.

FAQ – SAP Fieldglass Licensing & Supplier Fees

Q1: Is Fieldglass licensed per internal user or per external worker?
A1: Fieldglass isn’t licensed per internal employee. Its pricing is based on external workforce metrics – for example, the number of contractors in the system or total contingent spend – rather than individual user licenses.

Q2: Do suppliers have to pay to use the client’s Fieldglass system?
A2: No. SAP does not charge suppliers to use Fieldglass; your subscription already covers their access. Some companies add a small vendor fee (~1-2%) to recoup costs, but that’s optional and not mandated by SAP.

Q3: Can we negotiate who pays the Fieldglass fees – us or our suppliers?
A3: Yes. You can pay Fieldglass fees yourself or have suppliers contribute via a small percentage (supplier-funded model). This cost-sharing setup is negotiable and should be defined in your vendor or MSP agreements.

Q4: What if we have seasonal peaks in contractors – will we get charged extra?
A4: It can, unless you’ve built in flexibility. Fieldglass counts peak concurrent contractors, so a surge can exceed your tier and incur fees. Negotiate a seasonal buffer or use average counts so short spikes don’t trigger charges.

Q5: Does a Fieldglass contingent workforce license cover SOW services as well?
A5: No. Each Fieldglass module is licensed separately. A contingent workforce license (contractor count) doesn’t cover the SOW module (which is spend or project-based). If you use both modules, you must license each one’s usage.

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