Engines are often some of the most expensive SAP components — maintaining compliance is critical to avoid a costly true-up. Effective management of these specialised licences ensures you get the most value from SAP while keeping audit risk under control.
What Are SAP Engine / Package Licences?
Beyond standard user licences, SAP software includes many add-on products or modules, often called engines or packages. Unlike named user licences (which are per individual), engines are licensed by a measurable unit — essentially a usage metric. Compliance means your actual usage of that metric stays at or below what you've licensed.
| Engine / Package | Licence Metric | Example |
|---|---|---|
| SAP HANA Database | Memory size (GB) | 256 GB of HANA memory licensed |
| SAP Payroll | Number of employees processed | Licensed for 5,000 payroll employees |
| SAP Warehouse Management | Warehouses managed / transaction throughput | Licensed for 8 warehouses |
| Industry Solutions (IS-Retail, IS-Utilities) | Revenue, customers, or business metrics | Licensed for $500M annual revenue band |
| SAP Procurement (SRM) | Number of documents or spend value | Licensed for 100,000 purchase orders/year |
Tracking and Measuring Your Usage
Measuring engine metrics can be challenging — it's not always as straightforward as counting users. Best practices for tracking include:
Leverage SAP Tools
Some engines have specific SAP transactions or reports to measure usage. For instance, SAP provides measurement programmes for certain modules during system measurement (LAW/SLAW processes). For HANA, check the HANA studio or cockpit to see memory usage. For employee counts (HR/Payroll engines), pull a report of active employee records or payroll runs. Identify the tool or method for each metric you have.
Assign Metric Owners
For each metric, assign a responsible owner in the organisation. HR should own tracking of employee counts for HR-related licences, the IT infrastructure team for database size metrics, finance for revenue-related metrics. These owners should know the licensing limits and report current usage periodically — decentralising monitoring to subject matter experts who understand the data.
Regular Internal Checks
Include engine metrics in quarterly or biannual internal licence audits. Don't skip them because SAP's user measurement tools sometimes focus only on user licences. Manually collect the data if needed — ask HR for employee counts vs. licence cap, or run transaction counts if you have "number of orders" licensed. Keeping a simple spreadsheet of "licensed metric vs. actual usage" updated quarterly gives great visibility.
Plan for Growth
If your business metric is growing (often a good thing for the business), anticipate the licensing impact. If you project adding 200 employees next year and you're near your Payroll user limit, budget for more licences or discuss alternatives with SAP ahead of time. Growth can trigger non-compliance if not planned for.
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SAP Licence Optimisation →Common Metrics and Potential Pitfalls
Applies to modules like SAP HR/PY (Payroll), SuccessFactors Employee Central, and other HR engines.
Pitfall: Companies may forget to include contractors or part-time workers if the metric counts them, or they may not realise that every unique employee with a record counts — even if inactive in the system (depending on the contract).
Best Practice: Clarify whether the metric is "maximum active employees processed per year" or "current employees." Always keep HR data tidy — remove truly terminated employees from counts if allowed. Conduct periodic true-downs by archiving old records if your contract permits.
HANA licences often cap the database's memory across instances.
Pitfall: Systems tend to grow — new modules, more data, etc., can cause memory usage to exceed what's licensed. HANA will technically still run, but you'll be out of compliance.
Best Practice: Monitor HANA memory usage closely. If you're at 90% of licensed capacity (e.g., 230 GB used out of 256 GB licensed), that's a red flag — talk to SAP about additional licence or archive data to lower usage. Also ensure you're compliant with the licence type (runtime is cheaper but only for SAP apps usage, not custom dev).
Some engines count the number of documents (orders, invoices) or throughput (e.g., SAP PI messages per CPU).
Pitfall: Usage spikes can occur (end-of-quarter transaction surges), pushing you over the licensed amount unexpectedly.
Best Practice: Set internal alerts or thresholds. Track monthly so as not to exceed annual limits. If you see a risk of exceeding, negotiate a one-time extension or purchase additional volume from SAP proactively rather than after the fact.
Some industry solutions are licensed based on company revenue or specific sales volume.
Pitfall: If your company grows revenue beyond the licensed band, you may owe more. These are tricky because they're somewhat external to the system.
Best Practice: Know the revenue bands in your contract. Work with finance to be aware of growth relative to those bands. If revenue exceeds the next tier, check if that breaches a requirement for a licence uplift. Inform SAP if you move into a higher bracket.
Optimising and Staying Compliant
Licence Recycling (Engines)
Similar to user licence recycling, see if any metric usage can be reduced. If you have an engine for a module you're not fully utilising, can you retire some processes? If a part of your business that drove a metric is divested, ensure you adjust the licence — you might reduce maintenance or negotiate a lower metric band at renewal.
Data Management
Good data hygiene helps with metrics like database size or number of data objects. Archiving old transactions, purging obsolete records, and housekeeping can keep usage within limits. For example, if an engine counts active products in a catalogue and you discontinue some products, remove them from the system if they count towards your licence.
Negotiation of Buffers
SAP might allow 10% overuse on an engine metric without immediate breach, to be trued up at renewal. Or they might structure a licence as tiered (you pay more when you cross a tier). Try to include such flexibility in contracts — e.g., licence 1,000 employees but allow a temporary spike to 1,100 with notice. Not always granted, but worth discussing if your usage fluctuates.
Combine with Audits
As part of audit prep, treat engine usage like any other item to have evidence ready. Showing auditors that you regularly measure and have documentation (screenshots of usage reports, etc.) creates confidence. If you exceeded and already bought extra licences before the audit, have that paperwork ready.
Third-Party Alternatives
In some situations, extremely expensive engines might have third-party alternatives or might be candidates for moving to a different platform. If a particular engine's metric is hard to control and costs millions, consider whether a non-SAP solution could replace that functionality more cheaply. This is strategic, but sometimes negotiating with SAP is easier if they know you have alternatives.
Preparing for Audits Involving Engines
When SAP audits you, they will ask for the usage of your engines and packages. Be ready by:
Documenting Metric Definitions
Have a clear document for each engine metric in plain language — "We are licensed for X (metric) and currently using Y." Also note how you measured Y. If SAP's audit scripts measure differently, you want to reconcile quickly. For example, SAP might run its measurement for an engine — compare it to your internal count to ensure alignment.
Avoiding Last-Minute Scramble
If you know an audit is coming (or annually, regardless), do a special check on all engines. If any metric is over the limit, address it immediately — either reduce usage or reach out to SAP to procure additional capacity. Buying voluntarily is far better than being caught. SAP may be more amenable to reasonable pricing if you come forward versus during an audit when you have little leverage.
Using the LAW Report Wisely
The Licence Administration Workbench (LAW) combines systems for user counting, but for engines, LAW will sometimes include data or list engines in scope. Make sure all your engines in use are known to SAP — proactively declare them in the audit submission with current usage stats. Full transparency demonstrates control and honesty, possibly avoiding punitive penalties.
Recommendations
Maintain a Metrics Inventory
List all your SAP engine/package licences along with their metrics (e.g., "SAP CRM Marketing — licensed for 2 million business partner records") and the current usage of that metric. Update this inventory regularly.
Assign Ownership
Designate specific owners in business or IT for each metric who will track usage (HR for employee counts, DBA for HANA memory, etc.). This ensures accountability and regular monitoring.
Quarterly Metric Audits
Don't wait for SAP's audit — check your engine usage at least quarterly. Use system reports or manual methods to get the numbers and compare against entitlements for early warning of any issue.
Set Alert Thresholds
Define internal thresholds for each metric (e.g., 85% of licensed capacity). If usage exceeds that, trigger an internal alert or review. It's a sign to either optimise or start the process of acquiring more licences before going over 100%.
Clarify Contract Terms
Ensure you understand exactly how each engine's usage is defined in your contract. Some metrics have nuances (peak vs. average, specific exclusions, etc.). If anything is unclear, get clarification from SAP in writing — it will help avoid disputes later.
Optimise Before Buying More
If you're nearing a limit, see if there are optimisation steps to slow growth. Clean up data, archive, and restrict unnecessary usage. Only invest in more licences when you truly need to — and when you do, negotiate for volume discounts.
Keep Evidence of Compliance
Save reports or screenshots that show usage levels at key points (year-end, audit time). This creates an evidence trail that you were compliant. In case of any disagreement with SAP's measurements, you have your records to discuss.
Engage SAP Early if Overuse Looms
Don't hide an overuse — engage SAP proactively. Sometimes SAP may provide a short-term licence to cover overage until a formal purchase is made, or they may guide you on measuring correctly. Early engagement can lead to better commercial terms than dealing with it under audit pressure.
Review Engine Use vs. Need
Periodically review if you still need all the engine licences you own. If a module isn't delivering value or usage has dropped, consider consolidating or terminating maintenance for that component to save costs and complexity.
Stay Educated on SAP Changes
SAP introduces new metrics and changes old ones (especially with S/4HANA, where some engines became part of the base while others changed metrics). Stay updated through SAP notes, user groups, or licensing webinars so you can manage engines with current knowledge.
FAQ
🎯 Expert Insight: Independent SAP Engine Licence Advisory
Engine and package licences are among the most technically complex and financially significant components of any SAP estate. The combination of obscure metrics, inconsistent measurement tools, and SAP's evolving licence models under S/4HANA creates substantial compliance risk. An independent advisory engagement brings deep knowledge of SAP's metric definitions, current audit practices, and proven strategies for optimising engine costs — often uncovering savings and compliance gaps that internal teams miss.
📚 Related Reading
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