SAP License Audit – SAP Audit Defense Strategies 2025

An SAP license audit is:

• Compliance Check: A process to ensure customers use SAP software according to the terms and conditions of their licensing agreement.
• Regularly Scheduled: Typically conducted annually to assess and verify the usage of SAP licenses.
• Measurement Tools: Involves using SAP’s measurement tools to track and report software usage.
• Audit Types: Includes Basic and Enhanced audits, each with varying degrees of scrutiny and complexity.

SAP License Audit

Proper preparation and knowledge can help you navigate the audit smoothly and avoid potential compliance issues and financial penalties.

Here’s what you need to know about SAP license audits and key aspects that will help you stay prepared.

1. Purpose of an SAP License Audit

• Purpose: The primary goal of an SAP license audit is to ensure that your organization uses the SAP software according to the terms of your license agreement. This includes verifying that you have the correct licenses for all users and are using the software within the scope of your contractual entitlements.
  • Example: If your company has purchased licenses for 500 users, but the audit reveals that 600 employees are using the software, you may be required to purchase additional licenses to cover the discrepancy.

2. Key Phases of an SAP License Audit

• Notification Phase:
  • The audit process begins with a notification from SAP, usually via email. This notification will outline the scope of the audit, the timeline, and what is expected from your organization.
  • Example: A company may receive a notification stating that an audit will cover all SAP systems, focusing on Named User licenses and third-party applications’ indirect use of SAP data.
• Data Collection:
  • Your organization will be required to collect and submit data related to SAP software usage. This typically includes user counts, system metrics, and usage reports from SAP tools like the License Administration Workbench (LAW).
  • Example: A company might use LAW to generate a report showing the number of users assigned to each license type and how often they access the system.
• Verification and Analysis:
  • SAP will analyze the submitted data to ensure it aligns with your license agreements. This includes checking for overuse, under-licensing, or improper license assignments.
  • Example: During the analysis, SAP might discover that several employees classified under a more expensive “Professional User” license should be categorized under a less expensive “Employee User” license.
• Reporting and Follow-Up:
  • After reviewing the data, SAP will provide a report detailing any compliance issues. Your organization may be required to rectify these issues, which could involve purchasing additional licenses or adjusting existing ones.
  • Example: If the audit finds that your company has been under-licensed for SAP HANA, you may need additional licenses to remain compliant.

3. Common Issues Identified During SAP License Audits

• Misallocation of User Licenses:
  • A frequent issue is the improper allocation of user licenses, such as assigning a costly “Professional User” license when a more affordable “Named User” license would suffice.
  • Example: An organization might assign “Professional User” licenses to users who only need basic access, resulting in unnecessary costs.
• Indirect Access:
  • Indirect access occurs when third-party applications access SAP data. Depending on your SAP agreement, each instance of indirect access may require additional licensing.
  • Example: A logistics system that accesses SAP inventory data without proper licensing could result in significant compliance issues.
• Inaccurate User Counts:
  • Miscounting users, including inactive or obsolete accounts, can lead to incorrect licensing figures. It is crucial to regularly update user lists and deactivate unused accounts.
  • Example: A company might be paying for licenses tied to user accounts that belong to former employees or inactive users, unnecessarily inflating costs.

4. Best Practices for Navigating an SAP License Audit

• Maintain Accurate Records:
  • Review and update your SAP user list regularly to ensure accuracy. Deactivate obsolete accounts and verify that each user is correctly classified under the appropriate license type.
  • Example: A quarterly review of SAP user accounts can help identify and deactivate accounts that are no longer in use, preventing unnecessary licensing costs.
• Understand Your License Agreement:
  • Review your SAP license agreement thoroughly to understand what is covered and what is not. This knowledge will help you avoid surprises during the audit.
  • Example: Knowing that your license agreement requires additional fees for indirect access could prompt you to monitor third-party applications more closely and ensure they are properly licensed.
• Engage with Independent Licensing Experts:
  • Consider conducting a pre-audit assessment with independent SAP licensing experts. These experts can help you identify potential compliance issues before the official audit and provide guidance on corrective actions.
  • Example: An independent audit might reveal that your company has been underutilizing a set of licenses, allowing you to reassign them more effectively across your organization.

Top 5 SAP License Audit Triggers

SAP license audits are a routine part of managing SAP software, but certain organizational actions or changes can increase the likelihood of triggering an audit.

Understanding these SAP audit triggers can help you prepare and ensure compliance before initiating an audit.

Here are the top five triggers that can prompt an SAP license audit:

1. Significant Changes in System Usage

• Trigger: A noticeable increase or decrease in system usage can raise red flags for SAP and prompt an audit. This might include a rapid expansion in the number of users, the addition of new modules, or increased data volumes.
  • Example: If a company expands its operations and quickly adds hundreds of new users to its SAP system, SAP might initiate an audit to ensure the additional usage is properly licensed.
• Why It Matters: SAP monitors system usage to ensure that all active components and users are appropriately licensed. A sudden change in usage could indicate a potential mismatch between licenses held and actual usage, leading SAP to verify compliance through an audit.

2. Contract Renewals or Amendments

• Trigger: When a company is about to renew or amend its SAP license agreement, this often triggers an audit. SAP may use the audit to verify that the company has complied with its existing licensing terms before extending or altering the contract.
  • Example: A company negotiating the renewal of its SAP license agreement might face an audit to confirm that all current usage aligns with the existing contract terms, ensuring that any new contract accurately reflects its needs.

3. Implementation of New SAP Modules or Products

• Trigger: Implementing new SAP modules or products often prompts an audit to ensure these additions are correctly licensed. SAP may audit the system to verify that all components, including the new additions, comply with licensing requirements.
  • Example: If a company adds the SAP HANA module to its existing SAP environment, an audit may be triggered to verify that the new and existing modules are appropriately licensed.

4. Mergers, Acquisitions, or Divestitures

• Trigger: Corporate events like mergers, acquisitions, or divestitures can significantly alter how SAP software is used. These changes often trigger an audit as SAP seeks to understand the new organizational structure and how it impacts software usage.
  • Example: If a company acquires another business that uses SAP, an audit might be initiated to reconcile the licenses and ensure that the combined usage complies with SAP’s terms.

5. Indirect Access Concerns

• Trigger: Indirect access occurs when third-party applications or non-SAP systems interact with SAP software. Concerns about potential indirect access violations often trigger an audit to assess whether additional licenses are needed for these interactions.
  • Example: A company using a third-party CRM system that accesses SAP data might trigger an audit if SAP suspects that the indirect usage is not properly licensed.

SAP Basic Audit vs SAP Enhanced Audits

Understanding the differences between basic and enhanced SAP audits is crucial for preparing effectively and ensuring compliance.

Here’s a breakdown of what each type entails:

Basic Audit:

• Scope:
  • It focuses primarily on products that can be measured using standard SAP license audit tools, such as License Administration Workbench (LAW) and License Management by License Indicator (LMBI).
• Customer’s Role:
  • Involves self-reporting technical data easily extractable from systems, such as the number of cores.
  • Also requires self-reporting of business metrics relevant to specific product usage.
• SAP’s Guidance:
  • SAP provides detailed manuals that guide customers in extracting and reporting the necessary information.

Enhanced Audit:

• Deep Dive:
  • Goes beyond simple quantification of license usage to thoroughly examine how SAP products are utilized within the organization.
• License Assignment Scrutiny:
  • Involves a detailed evaluation of how Named User licenses are assigned and whether they are used correctly.
• Additional Data Sources:
  • SAP may access extra data sources to ensure accurate user licensing. While this is more common in Enhanced audits, it can also occur in Basic audits.
• Extended Scope:
  • May include:
    • Role Analysis: Reviewing Named User assignments.
    • Indirect Use Assessment: Evaluating how SAP data is accessed through third-party systems.
    • Functional Review: Particularly of the HANA Runtime Edition database.
    • Onsite Visits: Auditors may visit the organization to conduct interviews and gather additional insights.
• Discretionary Scope:
  • While SAP considers all product areas, it can limit the scope of the audit. In some cases, customers may be able to negotiate these limits.

By clearly distinguishing between these two types of audits, organizations can better prepare for the specific requirements and challenges each one presents.

SAP License Audit Process

The SAP license audit process is a comprehensive and structured procedure that involves several critical stages. Each stage requires careful attention to detail to ensure compliance and avoid potential penalties.

Notification of Audit

The SAP license audit typically begins with an email notification from SAP outlining the audit’s scope, the participants involved, and the expected timeline.

This notification sets the stage for the audit process, ensuring the organization is aware of the impending review of its SAP usage. In the case of an enhanced audit, this initial communication often includes an invitation for a face-to-face meeting or a conference call, providing an opportunity for more direct engagement and clarification of the audit’s objectives.

Remote Audits

In a remote audit, SAP may request the auditor’s login details and a list of specific authorizations needed to access the relevant SAP systems.

The remote nature of these audits requires the organization to ensure that all necessary permissions are granted securely and promptly.

This setup allows the audit to proceed without an on-site visit while providing the auditor the access needed to conduct a thorough review.

Collection of Data

One of the first steps in the audit process is activating standard license audit tools provided by SAP within the requested systems.

These tools collect data on SAP usage, forming the audit’s basis. Additionally, customers must self-declare their usage of products that SAP tools cannot technically measure.

This self-declaration is typically a formal document that must be provided to the SAP auditors. It ensures that all aspects of SAP usage are accounted for.

Onsite Visit in Enhanced Audit

An onsite visit may be required for enhanced audits, although this is not always necessary. The purpose of the onsite visit is to gain a deeper understanding of how the organization utilizes SAP software.

This may involve interviewing key personnel to understand indirect use processes, evaluating SAP HANA’s functionality, and investigating how Named User licenses are allocated within the organization.

These additional steps help ensure the audit captures a complete picture of SAP usage.

Submission of Information

Once all the necessary information has been collected, it is submitted to SAP for review. This is a critical stage in the audit process, as any discrepancies or missing data can lead to follow-up inquiries from SAP, particularly in enhanced audits.

These follow-up questions aim to clarify any uncertainties and ensure the audit report accurately reflects the organization’s SAP usage.

Negotiation Phase

After SAP has reviewed the submitted data, the organization will receive an audit report detailing the findings. It is crucial to thoroughly review this report and understand how SAP derived each license usage figure.

This understanding is essential for the negotiation phase, where discussions may occur regarding the need for additional licenses to cover any identified shortfalls. Enhanced audits often uncover higher levels of non-compliance, leading to more complex negotiations.

Finally, it is important to note that the SAP Sales team manages the resolution of compliance findings, not the Global License Audit and Compliance (GLAC) team that conducted the audit.

This separation ensures that the audit remains objective while the sales team handles the commercial aspects of any compliance issues.

Who Conducts SAP License Audits?

Understanding the orchestration of SAP license audits is crucial for businesses engaged with SAP products.

The audit process is a meticulously coordinated effort involving specialized professionals.

Licensed Auditors and Compliance Managers

• International Team of Auditors: SAP license audits are conducted by licensed auditors based in various global locations, including Ireland, China, and India. These auditors are responsible for executing the fundamental audit process.
• License Compliance Manager’s Role: A dedicated license compliance manager works closely with these auditors and ensures that the audit activities adhere to SAP’s established procedures and guidelines.

Selection of Customers for Audits

• Strategic Selection Process: Not all SAP customers are subject to annual audits. The selection is a strategic decision made collaboratively by license compliance managers, auditors, and SAP’s audit business team experts.
• Criteria for Selection: Large enterprises, recent purchasers of new SAP products, or customers labeled as ‘high risk’ from previous audits are typically more likely to be selected for an audit.
• Initial and Subsequent Audits: Unless otherwise specified, new SAP customers generally face their first license audit within two years of signing the contract. Subsequent audits aim to be annual, contingent on SAP’s resources and planning.

Initiating the Audit Process: The Measurement Request Email

The SAP license audit process begins with a critical step: the Measurement Request Email.

This email serves as the formal initiation of the audit, sent by the licensed auditor to the individual responsible for managing audit-related activities within the customer’s organization.

Understanding the details and implications of this email is essential for preparing effectively for the audit process.

Key Elements of the Measurement Request Email

• Scope of the Audit:
  • The email outlines the scope of the audit, specifying what will be measured and how it will be conducted. This typically includes using tools like User and System Measurement Management (USMM) and License Administration Workbench (LAW).
  • Example: If your organization runs multiple SAP systems, the scope might include measuring all production, development, and test environments to ensure every aspect of your SAP usage is accounted for.
  • System/Installation Landscape: The email will detail the systems included in the audit, ensuring that all relevant installations are measured. Verifying that the listed systems accurately reflect your current SAP environment is crucial.
  • Measurement Plan: The email provides a plan for taking the measurements, including what specific data will be collected and how it will be used to evaluate your compliance with SAP licensing requirements.
  • Self-Declaration Products: Some products may require manual usage declaration because they cannot be automatically measured. The email will specify which products must be self-declared, requiring you to manually gather and report this data.
• Relevant Engine Notes:
  • The email includes a document or link to SAP Notes, which are technical documents that explain how to implement or correct certain aspects of SAP systems related to the audit. Reviewing and applying these notes is crucial to ensuring your systems are configured correctly before the audit.
  • Example: If your company uses the SAP HANA database, the email might include specific SAP Notes that guide measuring and accurately reporting HANA usage. Implementing these notes correctly can prevent potential discrepancies during the audit.
• SAP Portal Links:
  • The email will provide links to the SAP Service Portal, where you can find detailed information about the measurement tools (USMM, LAW) and other resources necessary for completing the audit.
  • Example: Accessing the portal might give you step-by-step guides on running the USMM tool to gather user data or using LAW to consolidate license usage across multiple systems. This information is critical for ensuring the data you submit is accurate and complete.
• Submission Deadlines:
  • The email will set a deadline for submitting the measurement data. This deadline is usually four weeks for direct customers (large, medium, and small). For indirect customers, the timeline may be extended to 12 weeks, allowing more time to gather and submit the necessary information.
  • Example: If your organization is a large direct customer, you might have four weeks to complete and submit all necessary measurements. It’s important to plan accordingly, ensuring your IT team has enough time to run the necessary tools and compile the data without rushing.

Measurement Request Email

The Measurement Request Email is not just a formality but the roadmap for the entire audit process.

Misunderstanding or overlooking key elements in this email can lead to serious compliance issues, potential fines, or the need to purchase additional licenses after the audit.

• Proactive Planning: By thoroughly understanding the scope, deadlines, and resources provided in the email, your organization can proactively plan the audit process. This might involve scheduling time with your IT team to run measurement tools, reviewing system configurations, or consulting with independent licensing experts to ensure that all aspects of the audit are covered.
• Avoiding Pitfalls: Many companies run into trouble during SAP audits due to miscommunication or failure to follow the guidance provided in the Measurement Request Email. For example, if the SAP Notes provided are not applied correctly, it could result in incorrect measurements, leading to discrepancies that could be costly to resolve.
• Preparation for Negotiations: Understanding the measurement data and the audit scope prepares you for potential negotiations after releasing the audit report. If you know that certain aspects of your usage will likely be flagged, you can begin preparing your case, gathering evidence, or making adjustments before the final submission.

In Summary, the Measurement Request Email is a critical document in the SAP audit process. It provides the blueprint for what will be audited, how the measurements will be taken, and the submission deadlines.

By fully understanding and acting on the information in this email, your organization can navigate the audit process more effectively, minimize compliance risks, and avoid unnecessary costs.

Proper preparation and a detailed review of the Measurement Request Email are the first steps toward a successful SAP license audit.

SAP License Audit Tools

SAP license audits involve specialized tools to help SAP and its customers accurately measure and manage software usage.

These tools are essential for ensuring compliance with licensing agreements, identifying potential issues, and preparing for audits.

Here’s an overview of the key SAP license audit tools, their functions, and how they can be used effectively.

1. License Administration Workbench (LAW)

• Purpose: The License Administration Workbench (LAW) is a central tool for consolidating and analyzing license-relevant data from multiple SAP systems. It helps organizations manage their license usage across complex SAP landscapes.
• How It Works:
  • LAW collects user data from various systems and aggregates it into a comprehensive report. This allows organizations to identify duplicate users, consolidate license types, and ensure they are not over-licensed.
  • Example: A multinational company with several SAP instances in different countries might use LAW to gather user data from each instance, ensuring that all employees are correctly licensed without redundancy.
• Key Features:
  • User Consolidation: LAW can identify and merge duplicate user accounts, ensuring that each individual is only counted once, even if they have access to multiple systems.
  • Centralized Reporting: LAW simplifies the audit process by centralizing data collection, making generating accurate reports for SAP audits easier.

2. User and System Measurement Management (USMM)

• Purpose: The User and System Measurement Management (USMM) tool measures license-relevant data within individual SAP systems. It helps determine the number of users, their roles, and the extent of their system usage.
• How It Works:
  • USMM collects detailed information about user activity within a specific SAP system, including user types, roles, and transaction histories. This data is critical for understanding how licenses are being utilized.
  • Example: A company might use USMM to track the number of “Professional Users” and “Employee Users” active in its SAP ERP system, ensuring the correct number of licenses are purchased.
• Key Features:
  • User Classification: USMM helps classify users based on their activities, ensuring they are assigned the appropriate license type.
  • Detailed Reporting: The tool provides detailed reports on system usage, helping organizations identify discrepancies or potential compliance issues before an audit.

3. SAP NetWeaver Administrator (NWA) License Management

• Purpose: SAP NetWeaver Administrator (NWA) includes features for managing and monitoring SAP license usage, particularly in environments where SAP NetWeaver is in use. It is useful for monitoring engine metrics and non-user-based licensing.
• How It Works:
  • NWA provides tools to monitor the usage of various engines and components within the SAP NetWeaver platform. It tracks metrics such as database size, transactions processed, and the usage of specific applications.
  • Example: If a company uses the SAP NetWeaver Portal, NWA can monitor the number of transactions processed to ensure that the licensing complies with SAP’s terms.
• Key Features:
  • Engine Monitoring: NWA tracks usage metrics for engines and applications, ensuring compliance with non-user-based licensing models.
  • Alerts and Notifications: The tool can generate alerts when usage approaches licensing limits, allowing organizations to avoid non-compliance proactively.

Common SAP License Compliance Issues

Navigating SAP license compliance can be challenging, and mistakes can lead to significant financial and operational consequences.

Misallocation of User Classifications

• Issue: A common error is assigning higher-cost “Professional User” licenses when more affordable “Named User” licenses would be sufficient.
  • Example: An administrative assistant who only needs basic access is assigned a “Professional User” license instead of a “Named User” license, leading to unnecessary costs.
• Impact: This misallocation results in overspending on SAP licenses, which could be avoided with proper classification.
  • Insight: Independent licensing experts can help regularly assess user roles and responsibilities, ensuring that licenses are allocated correctly and cost-effectively.

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Indirect Access Licensing

• Requirement: Users accessing SAP data through third-party systems must have appropriate licenses, even if they don’t interact with SAP directly.
  • Example: A logistics team using a third-party system to access SAP data for shipping purposes might require additional licenses to stay compliant.
• Challenge: Ensuring compliance in complex IT environments where multiple systems interact with SAP can be difficult.
  • Insight: Independent licensing experts can help design and implement a monitoring strategy to track indirect access, ensuring all users are appropriately licensed and avoiding costly non-compliance.

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Inaccurate User Counting

• Misinterpretation: The term “users” in SAP agreements typically refers to individuals authorized to use the software, but many organizations mistakenly count system users, generic accounts, or inactive users.
  • Example: Including system admin and automated user accounts in the license count inflates the licenses needed.
• Result: This results in overestimating required licenses, leading to unnecessary expenses.
  • Insight: Regular audits conducted by independent licensing experts can help differentiate between actual users and non-licensable accounts, ensuring accurate user counts.

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Active vs. Authorized Usage

• Scenario: Organizations that don’t routinely update their SAP systems may count inactive or obsolete user accounts, leading to inflated license requirements.
  • Example: A company that hasn’t updated its user list in years may still pay for licenses for employees who no longer work there.
• Advice: Regular system maintenance and clean-ups are essential to avoid paying for unnecessary licenses.
  • Insight: Independent licensing experts can help establish processes for regularly reviewing and deactivating obsolete accounts, keeping license usage accurate and cost-effective.

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Engine License Requirements

• Non-User Metric Licensing: Some SAP licenses are based on metrics like transaction volume, revenue, or data size rather than the number of users.
  • Example: A company using SAP for financial transactions might require licenses based on the number of transactions processed rather than user count.
• Implication: Misunderstanding these metrics can lead to non-compliance and unexpected costs.
  • Insight: Independent licensing experts can clarify these complex licensing metrics and ensure that your organization meets all requirements without overspending.

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Varied Licensing Terms for Identical SAP Programs

• Observation: Organizations may inadvertently license the same SAP functionality under different metrics or terms across various departments, leading to inconsistencies.
  • Example: One department licenses SAP for database size, while another licenses it based on user count, creating potential compliance risks.
• Precaution: A comprehensive review of all licensing terms across the organization is necessary to ensure consistency and correctness.
  • Insight: Independent licensing experts can help align licensing strategies across departments, ensuring that the terms are consistent and compliant, thereby reducing risks.

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Custom Implementations

Insight: Independent licensing experts can provide tailored advice on appropriately licensing custom implementations, avoiding compliance issues, and optimizing licensing costs.

Consequence of Customization: Developing custom transactions or reports within SAP can lead to misallocation of licenses, as these custom elements might not fit neatly into standard licensing categories.

Example: A custom-built report used by multiple employees might require a different licensing approach than standard SAP transactions.

Solution: Regular audits and reviews of custom implementations can help ensure all custom developments are correctly licensed.

FAQs on SAP License Audits

What is an SAP license audit?

An SAP license audit reviews a company’s SAP usage and licensing to ensure compliance with contractual agreements.

What is the role of SAP auditors before the submission deadline?

SAP auditors are responsible for repeatedly contacting end users to verify the measurement status and remind them of the submission deadline.

How can measurements be sent to SAP?

Measurements can be sent directly from the tools to SAP or as email attachments formatted according to SAP requirements.

What happens if measurement errors are identified?

If errors are found, the SAP auditor will email the customer to request corrections. The deadline for updating the measurement is typically extended by a week.

Who evaluates the measurement results?

The auditors are responsible for evaluating the measurement results, which involve various technical verifications and analyses.

What is the role of the SAP license compliance managers?

They work closely with the auditors to compare the measured figures with the contractual license entitlement.

What is a Closure Notification Email?

This communication is sent to the customer after the measurements have been evaluated. It confirms the completion of the audit and indicates whether any compliance gaps have been identified.

What is an Enhanced Audit?

An Enhanced Audit is a more thorough audit led by licensed compliance managers, compliance team executives, and SAS experts. It includes additional measurements and a unique indirect access usage measurement.

How are indirect access usage levels researched during an Enhanced Audit?

When SAP auditors arrive on site, they will investigate the levels of indirect access usage by checking interactions between SAP and non-SAP systems, the direction of data flow, and how data is transferred.

Are customers required to participate in SAP annual license audits?

Customers must participate in annual license audits, during which SAP audit tools review license usage.

What is the role of the SAP License Audit Workbench (LAW)?

LAW measures SAP-named users based on how customers have classified them. However, it cannot determine how users should have been licensed.

What happens if users are classified incorrectly?

If users are incorrectly classified, customers may buy the wrong licenses, leading to significant over-licensing.

What is the impact of not expiring unused user accounts?

If unused user accounts are not properly locked and expired, they can still be active for licensing purposes and will be counted by LAW, potentially leading to over-licensing.

What is a Self-declaration audit?

A self-declaration audit involves the customer self-declaring software use based on their configurations. Technically, it’s not a full SAP license audit.

Are all SAP products in-scope for an annual SAP License Audit?

No, only certain SAP products are in scope. The SAP License Audit Workbench only measures ABAP systems, not JAVA-based ones.

If I don’t hear back from SAP following my annual license audit, does that mean I am compliant?

Not necessarily. SAP may be unable to review every annual license audit submission in detail. Issues can be missed or not raised with the customer at the time.

Are SAP License Audit Workbench measurements always accurate?

No, these measurements are known to have issues with accurately measuring SAP products, especially due to the constant changing of SAP license metrics.

Is the SAP License Audit Workbench a Software Asset Management (SAM) tool?

No, the SAP License Audit Workbench is primarily a data collection tool for SAP. It doesn’t provide visibility on usage, licensing costs, or functionality to actively manage licenses and configurations.

Does the SAP License Audit Workbench help identify indirect access within my landscape?

At least License Audit Workbench 2.0 does this by examining transactional load via technical user accounts to interface third-party systems with SAP.

What is the purpose of the USMM TCode?

USMM TCode is designed to count active dialog users with customer-assigned license types from a valid price list.

What happens if a user is assigned a blank license type?

If a user is assigned a blank license type, the USMM TCode assigns them an expensive professional license.

Does the USMM TCode collect license usage data from all systems?

No, it only collects data from ABAP systems, excluding the Java stack.

What kind of license usage data does the USMM TCode collect?

USMM TCode collects license usage data such as Named Users, Indirect Usage data, Managed Engines usage, peak concurrent Logon sessions, and Professional Users.

Has the introduction of SAP S4 Hana changed license definitions?

Yes, with the introduction of SAP S4 Hana, license definitions have changed significantly from legacy ECC to S4 Hana license, including the Hana Database License.

Building an SAP Audit Defense Strategy

Preparing for an SAP license audit requires a well-planned defense strategy to ensure compliance, minimize risks, and avoid unexpected costs.

An effective audit defense strategy helps you respond to the audit and positions your organization to manage SAP licenses more efficiently in the long term.

Here’s how to build a robust SAP audit defense strategy:

1. Understand Your SAP Licensing Agreement

• Comprehensive Review: Start by thoroughly reviewing your SAP licensing agreements. Understand the licenses your organization holds, the specific terms and conditions, and any unique clauses that may apply to your situation.
  • Example: If your agreement includes indirect access clauses, ensure you fully understand how third-party systems accessing SAP data are licensed. Misunderstandings could lead to significant compliance issues during an audit.
• Document Interpretation: Work with independent licensing experts to interpret complex licensing terms. These experts can help you identify potential risk areas and ensure that your understanding of the agreement aligns with SAP’s interpretation.
  • Example: An independent expert might identify that certain users classified under “Professional User” licenses could be reclassified under a less expensive license type, reducing costs without breaching compliance.

2. Conduct Regular Internal Audits

• Proactive Auditing: Conduct regular internal audits to monitor your SAP usage before an official SAP audit is announced. This includes running tools like the User and System Measurement Management (USMM) and License Administration Workbench (LAW) to gather accurate data.
  • Example: An internal audit might reveal several former employees still have active SAP accounts. Deactivating these accounts reduces the licenses needed and prevents potential compliance issues.
• Usage Tracking: Monitor all SAP system usage, including user activity, license allocation, and system access patterns. Regularly updating this information helps you stay compliant and quickly address any discrepancies.
  • Example: If your internal audit reveals that a department uses SAP more intensively than initially anticipated, you can adjust its license allocation accordingly, ensuring compliance before the official audit.

3. Optimize License Management

• Right-Sizing Licenses: Evaluate your current license allocation to ensure that each user has the appropriate type of license based on their actual usage. This process, known as license right-sizing, helps to avoid overpaying for licenses and reduces the risk of under-licensing.
  • Example: If many employees use SAP only for basic tasks like viewing reports, they may not require full “Professional User” licenses. Reallocating these users to less expensive “Employee User” licenses could lead to significant cost savings.
• License Reallocation: Regularly review and reallocate licenses as roles and responsibilities change within your organization. This dynamic license management approach ensures you always comply with your licensing agreement.
  • Example: After a reorganization, a team that previously required “Developer” licenses may no longer need them. Reallocating those licenses to another team that needs them more can optimize your license usage and prevent unnecessary purchases.

4. Maintain Accurate Documentation

• Record-Keeping: Maintain detailed records of all SAP-related activities, including user access logs, system configurations, and any changes in license allocations. This documentation will be invaluable during an audit and will provide evidence of your compliance efforts.
  • Example: If SAP auditors question the classification of certain users, you can refer to your records to demonstrate that the licenses were assigned according to the agreed terms.
• Audit Trail: Ensure that all changes to SAP licenses and configurations are well-documented, creating an audit trail that can be reviewed during the audit. This transparency can help resolve any disputes quickly.
  • Example: If you reclassified a group of users from “Professional User” to “Employee User,” documenting the rationale and process for this decision can help defend your actions during the audit.

5. Engage with Independent Licensing Experts

• Pre-Audit Consultation: Engage independent SAP licensing experts to conduct a pre-audit review. These experts can help you identify and correct potential compliance issues before the official audit begins, reducing the risk of penalties.
  • Example: An independent expert might discover that your organization has been overlicensed in certain areas. Adjusting your license usage can reduce costs and strengthen your case during the audit.
• Audit Defense Support: If the audit identifies compliance issues, these experts can assist in negotiating with SAP and ensure that any additional licenses or fees are fair and justified.
  • Example: If SAP auditors claim that your organization owes additional fees for indirect access, an independent expert can present evidence of actual usage and compliance to help negotiate a more favorable outcome.

6. Prepare for Potential Negotiations

• Audit Findings Review: After receiving the audit report, carefully review the findings. Understand how SAP arrived at its conclusions and be prepared to question any discrepancies or unclear areas.
  • Example: If the audit report indicates you need to purchase additional licenses, verify that the calculations are accurate. If there are any discrepancies, be ready to provide evidence from your records to challenge the findings.
• Negotiation Strategy: Develop a strategy to minimize additional costs while ensuring ongoing compliance. Be prepared to discuss alternative solutions, such as reallocating existing licenses or implementing new processes to manage usage more effectively.
  • Example: If SAP proposes that you purchase additional licenses, you might negotiate for a grace period to reallocate existing licenses instead, potentially saving your organization significant costs.

In Summary, Building a robust SAP audit defense strategy involves understanding your licensing agreements, conducting regular internal audits, optimizing license management, maintaining accurate documentation, and engaging with independent experts.

By taking these proactive steps, your organization can effectively prepare for an SAP audit, ensuring compliance and minimizing financial risks.

A well-prepared defense strategy helps you navigate the audit process and strengthens your SAP license management practices.

Negotiating SAP License Audit Settlements

The SAP audit negotiation phase becomes crucial when an SAP license audit reveals compliance issues. Handling this process can significantly impact your organization’s financial and operational future.

Understanding what to look for, the tactics to employ, and the mistakes to avoid can help you navigate this complex negotiation effectively.

What to Look For During Negotiation

1. Accurate Understanding of Audit Findings:
   • Verify Audit Results: Before entering negotiations, thoroughly understand the audit findings. Cross-check SAP’s calculations with your internal data to identify any discrepancies.
   • Example: If SAP’s audit report claims you are under-licensed by 200 users, but your internal audit shows only 150 unaccounted for, you must clarify this difference before negotiating any settlement.
2. Clarity on Licensing Requirements:
   • Understand License Types: Ensure you understand the different SAP license types involved, such as “Professional User” or “Employee User,” and how they apply to your organization’s usage.
   • Example: If SAP suggests purchasing additional “Professional User” licenses, but many users only require “Employee User” access, negotiate to adjust the licensing mix accordingly.
3. Potential for License Optimization:
   • Explore Reclassification: Look for opportunities to reclassify or reallocate existing licenses rather than purchasing new ones. This can often lead to significant cost savings.
   • Example: Reclassifying some “Professional Users” to “Employee Users” based on usage might reduce the additional licenses you need to buy.
4. Opportunities for Bundling or Discounting:
   • Negotiate for Discounts: If you must purchase additional licenses, negotiate for volume discounts, bundling opportunities, or extended payment terms.
   • Example: If SAP requires you to purchase many new licenses, negotiate for a bundled discount or an extended payment plan to ease the financial impact.
5. Review of Indirect Access Charges:
   • Clarify Indirect Access: Indirect access charges can be a significant cost in SAP audits. Ensure you fully understand how SAP has calculated these charges and explore ways to minimize them.
   • Example: If SAP has imposed indirect access charges for a third-party CRM system, discuss whether the usage justifies the charges or if a more cost-effective licensing solution is available.

Tactics for Successful Negotiation

1. Engage Independent Licensing Experts:
   • Leverage Expertise: Hire independent SAP licensing experts to interpret the audit results, identify potential errors, and develop negotiation strategies.
   • Example: An expert might uncover that SAP overestimated the number of users requiring a particular license type, giving you leverage to negotiate a lower settlement.
2. Prepare a Strong Business Case:
   • Document Your Position: Prepare a comprehensive business case detailing your usage, the steps you’ve taken to ensure compliance, and any discrepancies in the audit.
   • Example: Presenting a well-documented case showing that SAP’s user count includes inactive accounts or duplicates can strengthen your negotiation position.
3. Explore Alternative Solutions:
   • Consider All Options: Be open to alternative solutions, such as adjusting how certain users access SAP systems or implementing new processes to reduce indirect access risks.
   • Example: Instead of agreeing to purchase additional licenses, propose implementing a different access method to reduce indirect access fees.
4. Keep the Long-Term Relationship in Mind:
   • Maintain Good Relations: While negotiating firmly is essential, keep the long-term relationship with SAP in mind. Aim for a resolution that is fair and sustainable for both parties.
   • Example: Propose a phased implementation of license adjustments or a long-term plan to ensure compliance, which could be more acceptable to both parties than a large, immediate purchase.
5. Be Ready to Walk Away:
   • Know Your Limits: If SAP’s proposed terms are unreasonable, be prepared to leave the negotiation. Sometimes, the threat of not reaching an agreement can lead SAP to offer more favorable terms.
   • Example: Indicating that your organization might seek alternative software solutions if a fair agreement isn’t reached can be a powerful negotiating tool.

Common Mistakes to Avoid

1. Rushing the Negotiation:
   • Take Your Time: Don’t rush the negotiation process. Carefully review all audit findings and proposed settlements before agreeing to anything.
   • Example: Agreeing to SAP’s initial proposal without fully understanding the implications could lead to unnecessary costs or unfavorable terms.
2. Overlooking the Fine Print:
   • Read the Details: Consider the fine print in any settlement agreement. Look for clauses that might impose additional costs or obligations in the future.
   • Example: A clause requiring you to purchase additional licenses under specific conditions might seem minor now but could lead to significant expenses later.
3. Failing to Document the Process:
   • Keep Records: Document all communications and decisions made during the negotiation process. This documentation is essential if disputes arise later.
   • Example: Keeping a detailed log of emails, meeting notes, and agreed terms can protect your organization if SAP later disputes aspects of the settlement.
4. Ignoring Future Implications:
   • Think Long-Term: Consider how the settlement will impact your organization. Ensure that any agreements made now will not lead to compliance issues later.
   • Example: Agreeing to a license purchase that only meets short-term needs might leave your organization vulnerable to future audits and additional costs.
5. Underestimating SAP’s Position:
   • Respect Their Leverage: Recognize that SAP has extensive experience in these negotiations and will likely have a strong initial position. Be prepared to counter this with well-researched arguments.
   • Example: Assuming that SAP will agree to significant discounts without a solid business case could lead to unsuccessful negotiations.

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