Effective Strategies for SAP Cost Avoidance and License Management

Overspending in an SAP environment poses a significant risk. This often results from poor user administration, inadequate monitoring, Indirect Access issues, and unchecked purchasing options. 

By preparing for any SAP audit scenario, you can avoid unexpected costs and maintain smooth operations. 

Whether you’re planning a software renewal, migrating to the cloud, assessing digital access, or looking to remediate risks, there are strategies you can implement to achieve substantial SAP cost avoidance. 

For instance, one Anglepoint client had struggled to manage its SAP estate at an enterprise level. Anglepoint completed an enterprise-wide entitlement position saving the client $11.4M. Read the case study here. 

Anglepoint’s experts highlight four key areas to help achieve SAP cost avoidance and maximize savings: 

SAP Audits

To ensure SAP cost avoidance during audits, manage user classification and system administration effectively. Proper classification and administration ensure compliance and minimize penalties. By preparing thoroughly for software audits, you can avoid unexpected costs and maintain smooth operations. 

Vulnerabilities

Recently, Anglepoint’s SAP experts have noticed an increase in what SAP refers to as Enhanced (or Premium) Audits. These audits require extensive internal analysis before data can be submitted to SAP. Specifically, they demand detailed user reports at a granular level demanding a thorough analysis and deep understanding of your SAP environment. This process can be challenging, as it often requires additional resources for this time and labor-intensive task.

Recommended Remediation:

User classification: Managing user classification properly is crucial, especially with SAP’s evolving licensing model. Regularly review roles and administration to prevent unexpected costs and compliance issues. This understanding of user access needs ensures business continuity and accurate determination of user numbers, which is vital to avoid costly mistakes.

Check out Anglepoint’s eBook SAP’s Hidden Treasures: 12 USMM Gems You’re Missing Out On, which outlines the potential that can be drawn from a well-configured USMM.

SAP Purchase Options

Planning

Start preparing for a software contract negotiation 3-9 months before purchasing additional required licenses, depending on your organization’s size and complexity. Understanding what you have purchased and what you need can only be assessed effectively with ample preparation time. Leaving this to the last minute may mean a negotiation for products and quantities you don’t need.

Once you understand exactly what you need you can explore the best way to purchase the products for SAP cost avoidance. Through a careful review of previously negotiated SAP products, pricing, and discounts, it may be advantageous to negotiate a bigger bundle of SAP products to get a better discount, which in turn can result in lowered overall cost and therefore lower applicable maintenance fees.

Organizational Goals

Define your organization’s goals and develop a 1-to-3-year plan. By incorporating future requirements into your negotiations, you can secure a better deal. Furthermore, accurate forecasting will be vital and precise IT Asset Management (ITAM) data will enable you to effectively assess and plan for future needs.

Negotiations

Knowing what discounts they typically offer puts you in a strong position to negotiate effectively. Additionally, benchmarking and understanding potential discounts the vendor can offer gives you even more leverage to strengthen your position in a negotiation. The support of an external SAP expert is invaluable in this process. With their extensive negotiation experience, they can use their knowledge to help you achieve the best possible discounts and terms for your organization.

SAP Digital Access

In April 2018, SAP introduced a new licensing model called “Digital Access.” This model was designed to help navigate and simplify Indirect Access licensing, potentially offering substantial savings. When initially purchasing Digital Access licenses, it is crucial to evaluate document usage carefully for effective SAP cost avoidance and to prevent over-licensing.

You must assess your indirect access counts before engaging directly with SAP.

Keep in mind that SAP’s method for estimating Digital Access documents is highly complex and requires an unbiased, well-trained expert to verify accuracy. If you haven’t already embarked on this journey, it is important that you seek independent expert advice.

S/4HANA and RISE with SAP

SAP’s S/4HANA, first released in 2015, introduced one of the most impactful changes to SAP’s Enterprise Resource Planning (ERP) products. The powerful platform was designed to take day-to-day enterprise processes to another level, offering real-time data processing, AI, and enhanced integration capabilities to improve organizational efficiency. Moreover, this transformation can be facilitated by leveraging RISE with SAP. This comprehensive offering provides the tools, services, and guidance needed to seamlessly transition to a modern ERP system.

The new SAP S4/HANA Cloud Public Edition 2024 introduces further innovations that can drive organizational success. These tools combined with other business intelligence take organizational success to another level.

It is important to understand that S/4HANA is not just a product upgrade. It is a complete SAP platform migration. This transition requires substantial investment, careful planning, and expert support to implement it successfully.

Your organization can potentially uncover SAP cost avoidance opportunities that can help fund this transformation. Careful planning and forecasting goals make this transition a strategic investment.

Anglepoint’s SAP team has over 50 years of combined experience. We have worked directly for SAP, audited with the Big Four, served as end-users, and provided SAP consultancy. Our team leverages this expertise to support our clients in every aspect of licensing, focusing on SAP rightsizing, mitigating risk, and optimizing SAP spend. To discuss your SAP challenges and strategies with no obligation, contact our experts.

 Check out Anglepoint’s eBook SAP’s Hidden Treasures: 12 USMM Gems You’re Missing Out On, which outlines the potential that can be drawn from and well-configured USMM.