Background
A large US-based insurance provider, servicing millions of policyholders, relied heavily on SAP for its core operations. With thousands of employees accessing SAP systems, the company’s licensing footprint was substantial. An unexpected SAP license audit put the organization under scrutiny, threatening hefty penalties.
Challenges
The audit quickly identified alleged licensing shortfalls – including misclassified users and potential indirect usage – resulting in a daunting $4.2 million compliance claim. The insurer faced the challenge of disproving or mitigating the audit findings to avoid an unbudgeted multi-million-dollar fee. They needed to ensure compliance without purchasing excessive new licenses, all while maintaining uninterrupted business operations.
Solution (How SAP Licensing Experts Helped)
- Expert Audit Defense Team: The insurance provider engaged SAP Licensing Experts, a team of independent SAP licensing advisors, to lead the audit defense. The experts began with a comprehensive internal license audit, reviewing every named user and engine license against actual usage.
- Usage Analysis & Remediation: The team identified numerous inactive accounts and users assigned to unnecessarily expensive license types. They guided the reclassification of users to appropriate license categories (e.g., switching some users from Professional to Employee licenses based on role).
- Indirect Usage Mapping: Given SAP’s focus on indirect access, the advisors mapped out all third-party systems (such as web portals and interfaces) interacting with SAP. This analysis helped demonstrate that many indirect transactions were already covered under existing licenses or were non-chargeable by SAP’s definitions.
- Negotiation with SAP: Armed with hard data, the SAP Licensing Experts crafted a detailed compliance report rebutting the audit findings. They entered negotiations with SAP’s audit team, providing evidence of corrected classifications and highlighting contractual rights. The experts’ deep knowledge of SAP’s contracts and audit processes enabled them to challenge unwarranted charges effectively.
- Strategic License Adjustments: In parallel, the company purchased a small number of needed licenses to cover genuine gaps, but on favorable terms arranged by the negotiators, avoiding any “panic buy” at list price.
Outcome and Savings
After a rigorous defense, the $4.2M audit claim was completely overturned. The insurer ended up paying $0 in audit penalties, owing only the cost of a few adjusted licenses, which amounted to a negligible sum. In fact, through reclassification and elimination of unused licenses, the company realized an ongoing saving on annual maintenance costs. The successful defense not only saved the company millions but also improved its SAP license compliance posture. Moving forward, the insurer established regular internal license audits to prevent compliance issues before they arise.
“SAP Licensing Experts turned a potentially devastating audit into a non-event. We avoided a multi-million dollar fee and even uncovered areas to optimize our license spend going forward,” — CFO, US Insurance Provider
