Explore the Secrets of SAP Software Contracts to Optimize Spend and Reduce Compliance Risk

• SAP has strict audit practices, which, in combination with 50+ types of user classifications and manual accounting for some licenses, make maintaining compliance difficult.
• Mapping and matching SAP products to the environment can be highly complex, leading to overspending and an inability to reduce spend later.
• Beware of indirect access to SAP applications from third-party applications (e.g. Salesforce).
• Products that have been acquired by SAP may have altered licensing terms that are innocuously referred to in support renewal documents.

Our Advice

Critical Insight

• Focus on needs first. Conduct a thorough requirements assessment and document the results. Well-documented license needs will be your core asset in navigating SAP licensing and negotiating your agreement.
• Examine indirect access possibilities. Understanding how in-house or third-party applications may be accessing the SAP software is critical.
• Know what’s in the contract. Each customer agreement is different and there may be terms that are beneficial. Older agreements may provide both benefits and challenges when evaluating your SAP license position.

Impact and Result

• Conduct an analysis to remove inactive and duplicate users as multiple logins may exist and could end up costing the organization license fees when audited.
• Adopt a cyclical approach to reviewing your SAP licensing and create a reference document to track your software needs, planned licensing, and purchase negotiation points.
• Learn the “SAP way” of conducting business, which includes a best-in-class sales structure, unique contracts and license use policies, and a hyper-aggressive compliance function. Conducting business with SAP is not typical compared to other vendors, and you will need different tools to emerge successfully from a commercial transaction.
• Manage SAP support and maintenance spend and policies. Once an agreement has been signed, it can be very difficult to decrease spend, as SAP will reprice products if support is dropped.