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8 most common SAP compliance issues and how to avoid them

August 29, 2017

 

Are you confident your organization is in full compliance on their SAP software? Surprisingly most organizations are typically unaware of the financial risks they might face during an audit.

 

The recent UK court ruling in favor of SAP UK, against Diageo Great Britain Ltd. is an important ruling for customers who use third party systems to access data generated by SAP systems. The ruling required Diageo to pay millions of dollars in additional license and support fees for indirect usage because they integrated their SAP systems with Salesforce software using SAP PI integrator software. This means any organization that has indirect usage of SAP software is exposed to substantial SAP penalties and ongoing maintenance charges.

 

This ruling demonstrates the importance of being fully informed on the possible financial risks your organization could be exposed to and the need to be proactive to avoid non-compliance upfront. Here are the 8 most common SAP compliance issues you need to know.

 

  1. Incorrect User Counts - The terms and conditions of SAP license agreements states that the “users” refer to individuals authorized to use the software, but it’s not uncommon for system users, generic users, or any other “user-names” within the SAP system to be counted as licensable users.
     

  2. Incorrect User Classifications - Many organizations choose to allocate the more costly “Professional User” licenses to employees when the less costly “Named User” license would be enough.
     

  3. Indirect Usage - Individuals who use third party systems to access data generated by SAP Systems are required to be licensed separately.
     

  4. Authorized vs Active Use - Many organizations that don’t perform periodic clean-up of their SAP systems often count “old” user names for individuals that have left the organization.
     

  5. License Requirements of Engines - Many SAP software programs are licensed on non-user metrics (e.g. Revenue, Turnover, Plants etc.).
     

  6. Different Licensing Terms for the same SAP program - Organizations often obtain licenses under different license metrics for the same type of SAP functionality.
     

  7. Implemented Customizations - Customizations and modifications result in customized transactions and reports which can lead to wrong “Named User” allocations by the organization.
     

  8. Shelve Ware - License and recurring maintenance fees are paid for software that is not in use.

 

What you can do to avoid costs and start saving money?

 

Accurate insight into your license entitlements and license usage is critical to identifying possible risks and cost saving opportunities.

 

  • License Entitlements - Gather and review all your SAP paperwork, this includes your license agreements, your ordering documents, your amendments, support agreements etc. Perform a detailed contract analysis and create an overview of all active and inactive licenses, included products/components, the restricted usage rights included in these licenses, and the applicable license metric definitions.
     

  • License Usage - Evaluate the real deployment and usage of your SAP software programs. Perform a normal “measurement” of your SAP system, such as an internal inventory which will require you to evaluate your systems and interface environment in detail. This will determine if any “usage” qualifies or could be interpreted by SAP as indirect usage.

 

You’ve identified non-compliance issues, what’s next?

 

Start investigating solutions that will come together in an action plan that includes a well-documented position, target outcomes and a negotiation strategy that reflect both the level and quantification of the risk identified.

 

Be proactive and approach SAP instead of waiting until SAP catches you during an audit. Keep in mind that although SAP doesn’t advertise the possibility of creating special user types, with the right documented approach you can negotiate the appropriate terms that work for your specific situation resulting in a better fit solution for your organization.

 

These 8 SAP compliance issues will continue be a problem for organizations into the future—especially because they give SAP commercial leverage to move you to their cloud solution. Don’t wait until your caught during an audit, be proactive and identify and address any issues right away.

 

The recent UK court ruling has already seen a change in the way SAP starts and performs audits. Be prepared. Having the right information can help you make smarter decisions about your SAP licensing.

 

 

 

This article was written in collaboration with licensing experts at The Software Consulting Group (SCG) and b.lay. 

 

To discover how SCG can help your organization avoid SAP compliance issues, contact Richard Liotta at 1-416-795-3667 or email him at: richard.liotta@softwarecq.com

 

 

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