Key Takeaways

  • Building your own SAP effective licence position before SAP does is the single most powerful audit defence action available to enterprise buyers.
  • The process has five distinct phases: contract inventory, landscape scoping, user remediation, measurement execution, and counter-ELP documentation.
  • USMM and LAW are open tools — your own SAP team can run them at any time. You do not need SAP's permission to measure your own landscape.
  • Pre-measurement remediation — removing dormant users, fixing technical user flags, tightening role profiles — typically reduces user counts by 15–40%.
  • A well-prepared counter-ELP shifts the entire negotiation dynamic: you become the party with the data, not the party responding to SAP's claims.

The SAP effective licence position is the foundation of every audit conversation. When SAP delivers its initial ELP, most enterprise buyers find themselves responding to a document constructed entirely by the other side — using SAP's tools, SAP's methodology, and SAP's timing. The result is a structural disadvantage that shows up directly in settlement outcomes.

The alternative is to arrive at the ELP conversation with your own independently prepared position — a counter-ELP built on your own data, after your own remediation work, reflecting your own contractual analysis. This guide gives you the methodology to do exactly that.

For the complete context on what an ELP is and why it matters, start with our guide on the SAP ELP and compliance gap process. This article focuses specifically on the practical mechanics of building your independent position.

Why Building Your Own ELP Changes Everything

The conventional approach to SAP audits is reactive: wait for SAP's ELP, review it, challenge the most obvious errors, negotiate a discount. This approach consistently produces poor outcomes because you are fighting on SAP's terms, using SAP's data.

Enterprises that build their own ELP before SAP delivers its version experience materially different audit dynamics. SAP's auditors know within the first meeting whether they are facing a prepared counter-party. When you can present your own measurement data — with supporting documentation, methodology notes, and a clear challenge to each discrepancy — the negotiation starts from a very different place.

The Information Asymmetry Problem

SAP's audit teams spend their entire working lives analysing SAP licence positions. Most enterprise IT and procurement teams engage with the topic once every three to five years. Building your own ELP is how you close that expertise gap — not just for the current audit, but for every commercial conversation with SAP going forward.

Phase 1 — Contract Inventory and Entitlement Mapping

The contracted position in your ELP is only as accurate as your understanding of your own entitlements. Before touching a system, you need a complete map of what you are contractually entitled to use.

Gather Your Complete Contract History

Pull together every document in your SAP contract chain: the original Enterprise Licence Agreement (ELA) or Global Master SAP Agreement (GMSA); all Order Forms, Schedule Addenda, and SAP Product Schedules; any Value-Added Reseller (VAR) contract if licences were purchased through a partner; MVLS migration agreements if you have converted any products; and any supplemental agreements from SAP contract renewals or expansions.

The typical enterprise has accumulated SAP contracts over 10–20 years. Licences purchased at different points may carry different metric definitions, price protection clauses, and authorisation scopes. Understanding the layered nature of your entitlement is not just a legal exercise — it directly affects what appears in the "contracted position" column of your ELP.

Map Products to Current SAP Metrics

SAP's product portfolio and licensing metrics have evolved substantially over time. Products contracted under legacy names may map to different current product names, and the measurement unit may have changed. Key historical mapping issues include: named user type renames between ECC and S/4HANA licensing frameworks; product conversions driven by SAP's strategic moves (e.g., Business Suite to S/4HANA conversions); and database licensing changes when customers migrated from third-party databases to SAP HANA.

Document Your Price Protection Rights

Many enterprise contracts contain Price Protection clauses that allow additional licences to be purchased at original contract price. These are time-limited but frequently extend for multi-year periods. Document the exact Price Protection period for each product category — this affects both the compliance gap valuation and your leverage in settlement negotiations. Our SAP audit defence team regularly identifies Price Protection rights that clients were unaware of.

Phase 2 — Landscape Scoping and System Classification

The scope of systems included in your ELP measurement is one of the most consequential decisions in the process. Including systems that should not be in scope inflates your user count; excluding production systems you should include creates a later dispute. Getting the scope right is essential before any measurement runs.

Define Your Production Landscape

Your SAP contract should specify the production systems covered by your licence agreement. Typically this includes your production ECC/S/4HANA instance and formally licensed add-on products (CRM, BW, SRM, etc.). Explicitly excluded should be: development systems; quality/test systems; training systems; sandbox environments; and non-contractual shadow IT SAP instances.

Document each system in your landscape with: system ID (SID); system type (production/dev/QA/training); SAP release version; and inclusion/exclusion rationale based on your contract. This landscape inventory becomes a key exhibit in your counter-ELP documentation.

Verify Multi-Tenant and Cloud System Scope

For RISE with SAP customers or those with SAP Cloud ERP, the system boundary definitions are different. Cloud system user metrics are typically managed through the SAP Cloud Identity Access Governance tool or directly in the cloud admin portal. Verify that cloud system users are not being double-counted in the ELP alongside on-premise named users from the same user population.

Development System Inclusion Risk

We have reviewed multiple ELP documents where SAP's auditors included development system users without clearly flagging the inclusion. Because development systems frequently contain large populations of technical users and developers with extensive authorisation profiles, their inadvertent inclusion can add tens of thousands of Professional User equivalent licences to the measured position. Audit your landscape scope document before you agree to anything.

Phase 3 — User Remediation Sprint

This is where the most significant licence count reductions happen. Pre-measurement remediation involves systematically cleaning your user master data to reflect the legitimate, current state of your licensed user population — before USMM runs and before SAP's auditors see the numbers.

Dormant Account Identification and Removal

Run a report (transaction SM04 or SE16 on USR02 table) to identify users who have not logged in for 90 days or more. Cross-reference against HR termination records to identify leavers. Accounts should be either: locked (which excludes them from USMM counting); assigned an expiry date in the validity period field; or deleted if no longer needed for audit trail purposes.

In a typical enterprise that has not performed a recent user audit, 10–25% of active accounts belong to people who have left the organisation or moved to different roles. This is pure measurement inflation — and it is entirely correctable before USMM runs.

Technical User Type Correction

In SAP's SU01 user administration transaction, each user has a User Type field that determines how USMM classifies them. The relevant types are: A (Dialog/Named User — counted in ELP); B (System User — not counted as named user); C (Communications User — not counted); S (Service User — not counted); L (Reference User — not counted). Technical users — RFC batch users, background job service accounts, EDI interface accounts — that are incorrectly set as type A will be counted as named users in USMM. Correcting their type to B, C, or S removes them from the user count entirely.

Identifying technical users requires coordination between your SAP Basis team and application owners. A user named "BATCHJOB_01" or "RFC_EXT_CONN" is obviously technical. More ambiguous cases — service accounts created for operational users — require review against the actual account purpose.

Role Profile Rationalisation

USMM classifies users based on the transaction codes their role profiles grant access to, mapped against SAP's licence type determination rules (LTDR). A user with even a single transaction code in their profile that maps to a Professional User threshold will be classified at that level. Role profile rationalisation — removing unnecessary transaction authorisations — is the most technically intensive remediation activity but also one of the most impactful for USMM outcomes.

Priority targets for role review: composite roles with broadly-scoped S_TCODE authorisation objects; user groups with unusually high USMM-classified licence types relative to their business function; and users whose actual transaction usage data (SM20 security audit log or ST05 workload) shows much narrower activity than their roles permit.

Remediation Return on Investment

For a mid-size enterprise with 8,000 active SAP users, a thorough pre-measurement remediation exercise typically reduces the measured user count by 1,200–2,400 users, with significant upgrade from Professional to Limited Professional or lower classifications. At current SAP list prices, this represents €3–9 million in compliance gap reduction before any formal negotiation begins.

Phase 4 — Running Your Own Measurement

Once remediation is complete, execute USMM and LAW to generate your own measurement data. This is a legitimate, routine SAP housekeeping activity — your Basis team should be doing it regularly regardless of any audit context.

Executing USMM

USMM (transaction /nUSMM) is run in each production system individually. Key decisions at execution: the measurement date (use a representative date that avoids peak processing periods); the measurement type (full or delta); and whether to use the current classification rules or a custom variant. Export the results to a file for LAW consolidation and for your own documentation.

USMM produces an output report showing users by licence type. Review this output carefully before proceeding to LAW consolidation. Users appearing in unexpected high-cost categories warrant investigation — they may be candidates for further remediation or for a contractual challenge on the metric definition.

LAW Consolidation

The Licence Auditing Workbench (LAW) consolidates USMM data from multiple systems, applying cross-system rules to avoid double-counting. Run LAW across your defined production landscape — and only that landscape. The LAW output file (typically an .xml or .xls export) is the data set that feeds the ELP. Keep this file as a dated, version-controlled document: it is the evidential foundation of your counter-ELP.

Engine Metric Measurement

Named user counts are only part of the picture. For any metric-based licences in your contract (HANA database sizing, SCM order counts, BW data volumes), take your own measurements using SAP's standard metric measurement transactions or reports. Document the methodology, the measurement date, and the raw output. If your contract defines metric measurement methodology (e.g., average vs. peak, full backup included or excluded), apply that methodology precisely.

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Phase 5 — Documenting Your Counter-ELP

The final phase converts your measurement data into a formal counter-ELP document — a professional, evidenced presentation of your own licence position that you can present to SAP's audit team.

Structure Your Counter-ELP Document

A well-structured counter-ELP mirrors SAP's ELP format while documenting your methodology and the basis for any differences. Recommended sections include: executive summary; methodology statement; landscape scope definition; contracted position (citing specific contract clauses); measured position (with USMM/LAW data appendices); compliance gap analysis (where gaps exist); credits and over-licenced items (where surplus licences offset the gap); and challenge basis for each area where your figures differ from SAP's.

The Methodology Statement

Every measurement has methodological choices embedded in it. Document yours explicitly: measurement date; USMM variant used; LAW consolidation scope; user remediation activities completed before measurement and their rationale; engine metric measurement methodology and contract definition applied. This transparency serves two purposes: it makes your data credible, and it forces SAP's auditors to document their own methodology choices with equal precision — a discipline they rarely apply voluntarily.

Quantifying Discrepancies

Where your counter-ELP produces different figures from SAP's ELP, document the specific delta for each line item with a clear explanation. Category your discrepancies: remediation differences (users removed through legitimate pre-measurement activities); methodological differences (different measurement timing, landscape scope, or metric definition); contractual differences (disagreement on the contracted position); and errors in SAP's data (incorrect system data, wrong product mapping, missing credits).

The Power of a Written Counter-ELP

A formal written counter-ELP document, supported by raw measurement data and referenced against specific contract clauses, changes the negotiation completely. It signals to SAP's audit team that they are dealing with an informed counter-party who will not simply accept their figures. In our experience, SAP's initial settlement offer following presentation of a credible counter-ELP is typically 25–40% lower than their opening position in cases where no counter-ELP is presented.

Beyond the Audit: An Ongoing ELP Practice

The most effective SAP licence governance programmes treat the ELP not as an audit response tool but as a living document that is updated regularly — typically quarterly or at each major system change. An up-to-date ELP provides: early warning of compliance gaps before they accumulate to audit-triggering levels; accurate input into licence optimisation programmes; and a continuously current negotiating position for any commercial conversation with SAP.

Implementing a continuous ELP process requires three components: automated USMM scheduling (most SAP environments can run USMM automatically monthly); governance over user provisioning and deprovisioning workflows; and a contract management system that maintains a current view of your contracted entitlements. Our SAP licence compliance programme is designed around exactly this framework.

For the next step in your ELP journey — understanding exactly how to calculate the financial exposure from any gap you identify — see our guide on SAP compliance gap calculation. And for the strategic challenge process once you have your counter-ELP prepared, see Challenging SAP's ELP: Evidence-Based Approach.