What Is an SAP Licensing Consultant?
Introduction: An SAP licensing consultant is an expert advisor who helps companies manage and optimize their licensing for SAP software, a notoriously complex area. SAP’s licensing model includes named user licenses (each user is assigned a specific license type) and package/engine licenses (for SAP modules or functionalities measured by metrics like number of orders, revenue, etc.).
In addition, SAP introduced the concept of indirect access—using SAP data by non-SAP applications—which has been a source of costly compliance issues. Keeping licenses aligned with actual usage is challenging in large enterprises running SAP ERP, CRM, HANA, and other products.
An SAP licensing consultant’s role is to ensure the company complies with SAP’s rules while minimizing license costs by analyzing how SAP systems are used and aligning license entitlements accordingly.
Read more about Software licensing consultants.
Indirect Access and Other Licensing Challenges
One of the biggest SAP licensing risks today is indirect access. This occurs when a third-party system or interface (for example, a customer portal, middleware, or even Excel) accesses data in SAP. SAP requires that such usage be licensed via traditional named user licenses for those indirect users or via its newer Digital Access (document-based) license model.
Many customers have been caught off guard by this. They thought they were properly licensed, only to have SAP audit them and claim additional fees because a non-SAP e-commerce system was pulling information from SAP without a specific license.
SAP has pursued large penalties in such cases – in one famous instance, a customer faced a £54 million indirect access claim. This risk means companies must vigilantly track how SAP data is used beyond direct SAP logins.
Apart from indirect access, companies struggle with:
- User License Management: SAP offers various user types (e.g., Professional, Limited Professional, Employee, Employee Self-Service, Developer, etc.), each at different price points and permissions. Determining the correct license type for each employee is tricky, and roles change over time. Often, companies over-assign expensive licenses to users who don’t need them (wasting money) or have users do tasks beyond their license (creating compliance issues).
- Measuring Usage for Engines: SAP’s engine licenses (for products like ERP modules or databases) are based on metrics such as database size, number of documents, or annual sales. Tracking these metrics to ensure you stay within purchased limits is difficult. For example, as it grows, a company might unknowingly exceed a licensed limit (say, the number of employees in payroll). SAP’s own tools like LAW (License Administration Workbench) help collect usage data, but interpreting the results and optimizing license allocations requires expertise.
Read What Is a Salesforce Negotiation Consultant?.
How SAP Licensing Consultants Deliver Value
SAP licensing consultants assist clients in key ways to drive both compliance and cost efficiency:
- License Audits and ELP Analysis: The consultant will perform a thorough internal audit of the company’s SAP license usage. This involves running SAP’s measurement programs (LAW reports) to get user counts, package consumption, and indirect usage data. They then compare this with the licenses the company owns. The outcome is an Effective License Position (ELP) – a clear view of where the company is under-licensed (risk areas) or over-licensed (where there are more licenses than needed). The consultant then helps remediate findings by adjusting deployments or advising the purchase of additional licenses to cover shortfalls.
- Optimizing License Allocation: An SAP consultant looks for opportunities to reallocate and right-size licenses based on the audit findings. They might find that 500 “Professional User” licenses are assigned, but only 300 users truly need that level, while others could be downgraded to a cheaper category. By adjusting license types to match actual roles and usage, the consultant eliminates waste, for example, by removing obsolete user accounts so the company doesn’t have to pay maintenance on unused licenses.
- Indirect Usage Assessment and Remediation: Given the high stakes of indirect access, SAP consultants pay special attention to it. They work with IT to map out all the systems that interface with SAP. If indirect use is found, the consultant helps determine the most cost-effective way to license it, perhaps by leveraging SAP’s Digital Access licenses (which charge by document count for certain document types) or by ensuring that external users have the appropriate named user licenses. They can also recommend technical or process changes to reduce indirect usage. In effect, the consultant “simulates” an SAP indirect usage audit in advance and fixes any gaps proactively. This can prevent massive surprise bills.
- Audit Defense and Negotiation: If SAP sends an official audit notification (SAP audits large customers often on an annual or biannual basis), the licensing consultant manages the process. They help compile accurate data for SAP, ensuring the numbers aren’t over-reported. When SAP presents findings, the consultant can dispute any overestimated license shortfalls or indirect access counts, armed with data and knowledge of SAP’s policies. They also assist in negotiating a resolution if a compliance gap is confirmed, often reducing the fees SAP initially claims.
Read What Is a Broadcom Negotiation Consultant?.
Real Benefits for Companies
The primary benefit is compliance risk mitigation – the company can avoid being caught in a surprise audit with a massive fine. By plugging indirect access holes and fixing mislicensed users ahead of time, the consultant greatly reduces the chance of a multimillion-dollar compliance event.
Another major benefit is cost savings: license optimization and cleanup often yield significant savings on license fees and maintenance. For example, one firm saved $3M after an expert review. Many firms can defer or cancel planned license purchases once an expert reassigns what they already own.
Additionally, SAP licensing consultants bring specialized knowledge and efficiency. They can accomplish in weeks what might take an internal team months. This saves time and improves outcomes – for instance, ensuring the company chooses the optimal licensing approach (such as using SAP’s Digital Access for indirect use).
Finally, their guidance often leaves behind better internal practices – they may train the internal team or implement improved monitoring, so the organization is better positioned long after the engagement.
