Software License and Contract Transformation to S/4HANA Support: Roadmap Overview
SAP ECC support ends in 2027. It pushes SAP user organizations to transform their existing SAP landscape to the HANA platform. License and contract transformation are no exception either. In order to make the most benefit out of the momentum, you need to plan and execute this transformation in an organized manner. We have prepared and tested a methodology that works and as a result can propose you an approach to consider for this exercise.
Besides the pain of this transformation, it is a hot momentum for a gain to you! It provides you the unique opportunity to completely re-design your license portfolio, custom tailor all elements to your actual needs and strategies, save considerable cost and gain advantages of beneficial terms and conditions and also leave behind everything you actually do not need!
SAP License Portfolio Optimization
Quick Assessment of Optimization Potential
With a few days exercise you get a high-level overview on the optimization possibilities of your current SAP user license portfolio with gap-analysis and financial calculations. All results are based on your own real SAP usage data.
When transforming your license portfolio to any of the HANA options (Cloud, On-prem, RISE) the point is to transform the optimal and not the current portfolio. By doing so, you HANA licenses will really reflect your needs in terms of types and amount. It also saves you more compared to the vendor’s proposal. The result is the lowest cost optimal HANA license portfolio.
Optimization of Your Full SAP License Landscape
The biggest saving potential lies in the assignment of the lowest cost yet compliant user license type to each and every SAP user at your organization. By analyzing the actual transactions run by each user and aligning them to the lowest ranked SAP license type, you will create the lowest cost license portfolio that fits your actual business needs as opposed to the current, historically grown license portfolio and assignment. As a result, you will have a re-designed license portfolio in terms of types and amounts and the gap between the current and optimal portfolio.
Car-parts manufacturer’s license portfolio
Risk Assessment & Mitigation
Probably the biggest threat to SAP user organizations is the outcome based licensing of indirect access. SAP announced the Digital Access license concept in 2018 by defining that any use of SAP’s software processing capability by an external entity is licensable. It means that you need to consider all your interfaces, RPAs, IoTs or any 3rd party application interacting with SAP ERP system and count and classify the documents created in SAP by these external entities.
We can assist you in analysing all your interfaces, measure the exact number of documents, classify them in terms of type and amount and provide you with a financial calculation on the necessary license coverage. The analysis focuses on the mitigation possibilities by sorting out non-relevant items, secondary documents and provide data-based detailed arguments on them to protect your point. As a result, you will have a firm, data-based view on your outcome based license requirement with facts and figures, licensing options and advise on the negotiation strategy with SAP to achieve the highest discount and the lowest license requirement.
When switching to S/4HANA from your current ECC system, covering Digital Access licensing is inevitable. SAP considers it as part of the S/4HANA contract.
Modelling & Refining
You as an SAP user have many options to choose between when it comes to S/4HANA transformation. All options have different licensing consequences, one being more favourable, the other less depending on your strategy and unique operation and landscape. Before making a decision, it is highly recommended to evaluate these options and create license models, both product, number and financial wise to see which provides the most advantage to your company. Such modelling has many aspects like user profiles, license use rights, conversion metrics, infrastructure aspects, etc. that have to be included in the models. Of course, the optimal and not the existing portfolio should be the basis of all your models. By doing so, you will have a clear view on the possibilities and consequences and can make a data driven decision.
S/4HANA Perpetual vs. RISE with SAP
Existing Options for you
Once you have made your decision, your next step is to lay down your future co-operation with SAP in the form of an agreement. It is a momentum for you to re-define your operational relationship with SAP and take advantage of a new agreement.
Our approach is not to wait for SAP to provide their standard contract but rather to prepare you draft agreement yourself. We can provide assistance for you in creating your BoM, elaborating on your unique terms and conditions, defining the requested use rights to your future license category, and developing arguments to protect your interests at the negotiation table. We also assist you in going through the proceeding SAP license audit to prove your points and defend your requests.
Audit & Negotiation Support
Before migration to any S/4HANA options, SAP tends to run a serious audit to establish your up-to date license position, inclusive of Digital Access. When running an internal preparation for the hot audit, we can assist you in clarifying SAP’s request, conducting an internal dry audit – simulating USMM and Passport (Digital Access) results, re-arranging your license assignment, evaluate SAP’s audit results, develop arguments for certain license usage and advice on decision making at turning points.
When it comes to sitting down at the table to negotiate your future contract, we can stand by you, help understand, evaluate and argue SAP’s statements and requests, analyse SAP’s offerings and prepare to achieve the maximum possible benefits with expertise and legal advisory.
Authorization and Role Transformation to SAP HANA
S/4HANA compatibility quick check
S/4HANA Quick Check shows necessary adjustments and provides recommendations for action. The S/4HANA Quick Check tells you which changes in your authorization concept are necessary to make it compatible with S/4HANA. We also provide you with an effort estimation as well as concrete recommendations for action with appropriate measures for the optimal migration of your authorization concept to S/4HANA.
The S/4HANA Quick Check provides you with an overview of the status quo of your authorization concept and the expected expenses within the scope of the S/4HANA migration. To do this, we evaluate your SAP authorization concept and carry out analysis. This allows us to identify which transactions in your roles are dropped, forwarded or replaced by SAP Fiori apps. The result of the analysis is a report that lists exactly which changes need to be made to your authorization concept to make it compatible with S/4HANA. You will receive concrete recommendations for implementing your SAP authorization concept. We also show you whether a revision of your existing authorization concept is useful or whether a complete redesign would make more sense.
A chaos of roles and users has developed in your SAP system, and it’s getting worse. Parent roles and reference users are copied wildly, new departments or locations are added on a monthly basis, and employee authorization requests are constantly extended – this enables misuse of your SAP system.
Our calculations reveal removable user-role, role-role, and role-authorization assignments. In a presentation, we will show you samples of the results, as well as the entire optimization potential that has become visible through the Role Reducing Quick Check. In order to give you a comprehensive overview of unused SAP roles, we check your SAP authorization concept thoroughly. You will then receive from us all recommendations for action to rid your SAP system of unnecessary roles and to protect your system from misuse in the future.
Authorization Concept Partial or Full Re-design
Once you see the better way to handle authorization related tasks, we can assist you in the execution of either brown-field or green-field approach in order to make your authorization and role concept compliant and compatible to S/4HANA.
Governance Policy for SAP SLM
A Governance Policy for SAP Software License Management is important to the enterprise because it provides a framework for managing software licenses in a consistent and controlled manner. The policy can help to ensure that software licenses are used in a way that complies with legal and contractual obligations, and that the enterprise gets the most value from its investment in software licenses. The policy can also help to ensure that software license management is aligned with other enterprise governance processes.
By implementing a governance policy on the SAP environment, you will be able to control consumption ep. on the required balance and avoid unexpected license costs. Such costs may come from the internal developments of automation processes of many kinds. Without the involvement of license management costs may rise to the sky. SAP considers certain EDIs and RPA (Robotic Process Automation) solutions as license relevant for Digital Access furthermore. Other internal software purchases or developments may have the same results. The following cases may be part of the governance policy.
Any development or change initiated either by IT or Business that have direct or indirect effect on SAP licenses fall within the scope of the present paper.
- New SAP license purchase
- Third party software purchase affecting SAP license portfolio
- Implementation of EDI based data connection to SAP ERP system
- Implementation of RPA based internal subprocesses
We can assist you creating and implementing a governance policy for SAP to keep control on unexpected licensing consequences.