SAP Licensing and Modifications – What is Allowed?

What is a SAP Logistics User License?

• A Named User License for logistics-related tasks.
• Covers transportation management, warehousing, and track and trace.
• Includes additional rights under the SAP Employee User License.
• Grants access to logistics execution and yard logistics functionalities.
• Excludes access to SAP BusinessObjects Portfolio (SBOP).

SAP Licensing and Modifications

Organizations must navigate SAP licensing and modifications to ensure compliance and optimize their SAP software investments. Understanding the distinction between Add-Ons and Modifications, along with the associated responsibilities and risks, is critical for maintaining system integrity and adhering to SAP’s terms and conditions.

This article deeply explores these concepts, focusing on permissible actions and potential challenges under SAP licensing agreements.

Key Definitions in SAP Licensing

Add-On

• An Add-On refers to any development introducing new and independent functionality to the SAP system.
• Key Features:
  • Do not modify the delivered source code or metadata.
  • Utilizes APIs (Application Programming Interfaces) provided by SAP.
• Example: A third-party application integrated with SAP using APIs to extend functionality, such as a custom reporting tool.

Modification

• A Modification involves changes to the delivered source code or metadata of the SAP software.
• Key Features:
  • Enhances, customizes, or modifies existing functionality rather than adding independent capabilities.
  • Customization or parameterization of SAP software, as allowed under the contract, is not considered a Modification.
• Example: Altering SAP’s payroll processing logic to meet specific organizational needs.

Permissible Actions Under SAP Licensing

SAP licensing agreements define the scope of permissible actions related to Modifications and Add-Ons. Customers must adhere to these rules to remain compliant:

Allowed Activities

1. Using APIs and Tools:
   • Customers may develop or use modifications or add-ons by using APIs and tools included in the contractual SAP Software or obtained directly from SAP.
   • Example: Leveraging SAP’s integration APIs to build an Add-On for advanced supply chain analytics.
2. Making Modifications:
   • Permitted only for contractual SAP Software delivered by SAP in source code.
   • Example: Adjusting SAP ERP source code to align with local tax regulations.

Restricted Activities

• Modifications or Add-Ons developed by SAP or its affiliates on behalf of an End User are subject to separate agreements and do not fall under general licensing provisions.
• Example: An SAP-created custom module remains under SAP’s proprietary control.

Responsibilities and Risks Associated with Modifications and Add-Ons

While SAP allows certain customizations, organizations must understand the associated risks and responsibilities:

1. Responsibility for Deficiencies

• End-User Accountability:
  • Customers are responsible for deficiencies in the SAP software’s performance, security, or communication caused by Modifications or Add-Ons.
  • Example: A poorly implemented Add-On that causes integration failures between SAP modules.

2. Compatibility Risks

• SAP Software Updates:
  • SAP may update its software or APIs without guaranteeing compatibility with existing Modifications or Add-Ons.
  • Example: An updated API renders a custom Add-On that is incompatible with the latest SAP software version.

3. Support Limitations

• Impact on SAP Support Services:
  • SAP is not obligated to provide support services or remedies for issues caused by Modifications or Add-Ons.
  • Example: SAP is declining to address a performance issue linked to a custom add-on.

4. Future-Proofing Challenges

Example: A modification to the finance module that becomes incompatible after a mandatory SAP patch update.

Version Conflicts:

Minor Modifications or Add-Ons may lead to significant system deficiencies in later software versions.

FAQ: SAP Licensing and Modification

What is an Add-On in SAP licensing?
An Add-On adds independent functionality to SAP systems using approved APIs and development tools.

How do Modifications differ from Add-Ons?
Modifications change the delivered SAP source code, while Add-Ons use APIs to create independent functionality.

What is parameterization in SAP?
Parameterization customizes SAP features without altering its source code, unlike Modifications.

Can Add-Ons impact system performance?
Yes, poorly implemented Add-Ons can cause performance issues or system deficiencies.

Is SAP responsible for Add-On-induced issues?
No, SAP is not liable for performance issues caused by Add-Ons or Modifications.

What happens if SAP updates break Modifications?
SAP is not obligated to ensure compatibility of Modifications with future updates.

How can businesses minimize risks with Add-Ons?
Use certified SAP development tools and conduct thorough testing before deployment.

Do Modifications void SAP support agreements?
SAP may limit support for systems affected by unapproved Modifications.

What tools can help manage Add-Ons?
SAP provides APIs and certified development tools to ensure compliance and performance.

Why is documentation important for Modifications?
Detailed records help troubleshoot issues and assess compatibility during updates.

How do I test Modifications safely?
Use a sandbox environment to validate changes before applying them to production systems.

What is SAP’s stance on custom development?
SAP allows custom development but requires adherence to licensing terms and approved tools.

Can certified partners assist with Add-Ons?
Yes, certified SAP partners provide expertise for creating and implementing compliant Add-Ons.

How can updates affect Add-Ons?
SAP updates may change APIs or software, rendering Add-Ons incompatible without adjustments.

What is the best practice for handling Modifications?
Minimize Modifications, leverage parameterization, and regularly test for compatibility with SAP updates.