Consolidating SAP Licenses Across Multiple Systems Globally

Consolidating SAP Licenses Across Multiple Systems Globally

Introduction

Global enterprises often run multiple SAP systems (e.g., regional SAP ECC instances, S/4HANA deployments, and separate modules like SAP BW or CRM). Managing licenses in such fragmented landscapes is challenging.

License duplication – where the same individual or usage is counted multiple times – can lead to unnecessary costs and compliance risks. IT decision-makers and licensing professionals need a clear strategy to consolidate SAP licenses across these systems to ensure compliance and optimize costs.

This article provides an expert overview of common pitfalls in multi-system SAP licensing and offers guidance on rationalizing and consolidating licenses globally.

SAP Licensing Basics: Types of Licenses

Understanding SAP’s license models is the first step in tackling consolidation. SAP licenses generally fall into three categories:

• Named User Licenses: Assigned to individuals (by name). Each user needs an appropriate license type (e.g., Professional, Limited, Employee) based on their role and activities. Example: A finance manager might require a Professional User license, whereas a clerk might use an Employee User license. Importantly, one named user license covers a person’s access across all SAP systems they use – you should not purchase separate user licenses for the same individual on different systems​. In other words, “each SAP user requires a single named user license regardless of how many SAP systems they are using.” The challenge is identifying those duplicate user accounts to avoid double-counting. We discuss this in depth below.
• Engine/Package Licenses: These cover SAP software components or modules licensed by metrics other than named users. Examples include database size, number of orders, CPU cores, or other usage-based metrics. For instance, SAP Business Warehouse or SAP CRM might have engine metrics (like data volume or number of records) in addition to requiring named users. Engine licenses are often tied to specific SAP modules (packages) and must be monitored per system. Running the same engine in multiple instances can lead to each instance being licensed separately if contracts are not unified.
• Indirect Access Licenses: These address scenarios where third-party applications or interfaces access SAP data without a human directly logging into SAP. SAP terms this “Digital Access” in S/4HANA. Under traditional rules, if an external system creates or reads SAP records, those actions still require licensing. For example, if a CRM system or e-commerce platform updates SAP ECC in the background, the interacting parties must be licensed via named users or SAP’s digital access documents​. SAP’s policy is that any individual or system using SAP functionality – even via an external interface – needs a license (either a named user or an appropriate indirect use license). Indirect usage is a common blind spot and can result in license compliance issues if not accounted for. (Notorious cases like the “Diageo” lawsuit illustrated the penalties for unlicensed indirect use.)

Why these types matter for consolidation: In a global multi-system SAP environment, you must holistically account for all three license types. A single person might consume a named user license and indirectly trigger engine metrics (e.g., creating a sales order that counts toward an engine license). Consolidation means ensuring each person or metric is counted once at the appropriate level rather than redundantly across systems.

Multi-System SAP Landscapes and Duplication Challenges

A typical large organization’s SAP environment includes multiple instances – for example, separate productive systems for ERP (SAP ECC or S/4HANA), CRM, BW, SRM, etc., possibly across regions.

Key challenges in such landscapes include:

• Duplicate Named Users Across Systems: The same human user often has separate accounts in different SAP systems (e.g., an employee might have one login for ECC and another for BW or a regional ECC system). If these accounts are not recognized as one person, the user could be licensed twice for the same role​. For example, a sales manager might appear as a user in SAP CRM and SAP ECC; without consolidation, they might be counted as two licenses (one in each system) instead of one license covering both. This duplicate licensing is a common inefficiency in global SAP environments.
• Multiple SAP Contracts or Siloed License Pools: Some organizations operate with decentralized SAP contracts – for instance, each regional division purchased SAP licenses independently. This can lead to overlapping entitlements and inconsistent license types. One division might classify a user as a Professional, while another gives the same person a Limited license, causing mismatches in compliance reporting. If contracts are not aligned to allow sharing or reallocation, companies end up with redundant licenses in different regions​.
• Lack of Visibility and Central Management: With several SAP instances, getting a unified view of license usage isn’t easy. Admins in one system might not know that a user exists (and is already licensed) in another system. A ServiceNow SAP licensing survey noted that limited visibility across SAP environments makes license management “guesswork” and increases the risk of compliance issues​. In short, without central oversight, some users or engines will be over-counted while others might be overlooked.
• Inconsistent User IDs and Data: SAP’s license audit tools rely on user data (username, email, and personnel number) to identify duplicates. If global user records aren’t consistent, the same individual can be hard to match. Common scenarios include different usernames on each system (jdoe vs. john.doe), changed emails after a merger, or missing identifiers. In one real example, an SAP audit found “Chris Hughes” had accounts chughes on one system and chris.hughes On another, they were initially treated as two users until the data was cleaned. Inconsistencies like this cause the consolidation process to miss duplicates, leading to double licensing.
• Cross-Module Usage: In SAP, a single-user license can cover access to multiple modules (as long as the person is licensed at the highest level of use). However, if SAP modules (ERP, BW, CRM, etc.) run on different servers without unified user management, there’s a risk of counting module access separately. For example, an HR employee using SAP HCM (in ECC) and SAP BW for reporting might be allocated two licenses if the systems aren’t reconciled. Similarly, engine metrics (like SAP ERP operational metrics and a separate CRM engine) might overlap or double-count if the same business data is processed in two places. These overlaps require careful analysis to avoid paying twice for the same scope of usage.
• Mergers & Acquisitions (M&A) and Organizational Changes: Corporate changes often introduce licensing overlaps. When companies merge or acquire another running SAP for a transitional period, they might maintain multiple SAP systems with duplicate users and contracts​. Without consolidation, an acquired business’s users may all be “re-licensed” under the parent’s SAP agreement, even if they already had licenses, effectively double-paying. One industry guide notes that after M&A, “overlapping and redundant licenses” are common and must be addressed to avoid inefficiencies​.

SAP Contracts and License Measurement for Multiple Instances

SAP’s standard contracts and tools do anticipate multi-system use, but it requires customer diligence to avoid duplication:

• Named User License Rights: Under SAP’s licensing principles, a Named User license is assigned to one individual and entitles them to access any SAP software covered by the license type. Suppose a person is licensed as (for example) a Professional User. In that case, they can use SAP ECC, S/4HANA, BW, CRM, etc., as needed, without needing separate licenses for each system, as long as those systems are under the same corporate agreement. Affiliates (subsidiaries) are typically covered so that a global enterprise can have one contract for all users across all divisions​. However, SAP contracts also stipulate that each unique individual must have a license, and you cannot share one license among multiple people. The onus is on the customer to track that a user’s single license is not inadvertently counted multiple times.
• SAP System Measurements (USMM) and LAW: SAP provides built-in tools to help consolidate license data:
  • USMM (User Measurement) is run on each SAP system to count users by license type and to gather engine usage metrics. By default, USMM results are system-specific and will count every user in that system, even if the same person appears in another system.
  • LAW (License Administration Workbench) is the central tool for combining these measurements. LAW allows you to consolidate user data from multiple systems into one unified report, automatically recognizing duplicate users across systems​. For example, if “User X” exists in an ECC system and a CRM system, LAW can identify it as the same person (based on matching criteria) and count them once at the highest license type they have. This prevents the scenario where user X is counted twice (e.g., as a Professional in one system and a Limited Professional in another). SAP’s LAW tool was specifically introduced to solve the problem of “one individual being licensed twice” in multi-system environments.
• How LAW Works: LAW requires choosing matching criteria (such as user ID, email, first/last name, personnel number, etc.) to determine if accounts in different systems belong to the same person. Once the criteria are set and data from all systems is imported, LAW will group and combine users accordingly. It applies SAP’s consolidation rules – for instance, if the same user has a Professional and a Limited Professional license in two systems, the Limited license is absorbed into the higher Professional license count​. The output is a combined license audit report that forms the basis for compliance checks or contract negotiations with SAP.
• Challenges with LAW and Contracts: Simply having LAW exist doesn’t solve everything. Many customers struggle with LAW due to:
  • Data inconsistencies: If the chosen identifier (say, email) isn’t uniformly maintained across all systems, LAW might fail to match some duplicates​. Companies with disparate IT policies or after acquisitions often face this issue​.Technical issues: LAW can be finicky – errors in data files or version mismatches can lead to incomplete consolidations​. Organizations have found that ignoring LAW errors can result in under-reporting or over-reporting licenses, so each exception needs resolution (often requiring SAP support). Manual effort: Despite automation, knowledgeable staff are required to execute LAW properly and interpret results. Even with LAW, a company might report unnecessary duplicate licenses if not done correctly.
  SAP contracts usually expect the customer to present consolidated LAW results during an audit. If a company does not consolidate and, for example, reports separate user counts per system, SAP’s auditors will likely consolidate them anyway, but any inconsistency could raise red flags. It’s in the customer’s interest to proactively run LAW and review the data. SAP’s documentation confirms that LAW “supports you in the SAP license audit process for complex system landscapes” by simplifying the consolidation of users in multiple systems​.
• Affiliate and Regional Contracts: Check how your SAP contract handles affiliate companies and multiple installations in a global setup. Ideally, a single master agreement covers all systems worldwide, treating all users as one pool. If historically, there are separate contracts per region, consider negotiating a contract consolidation or at least co-terming to facilitate moving licenses between entities. SAP may transfer named user licenses between affiliates if all are under the same corporate umbrella (especially if defined in the contract). Without such provisions, you could have the absurd situation of one region being over-licensed (unused surplus). At the same time, another is under-licensed but cannot share those licenses – a costly inefficiency. Ensuring contract language allows usage across affiliates (and, if possible, outlines processes for mergers or divestitures) is key to avoiding duplicate licensing when organizational changes occur​.

Rationalizing Users Across SAP ECC and S/4HANA

Many enterprises are transitioning from SAP ECC (the legacy ERP) to SAP S/4HANA. During this period, both systems might run in parallel, increasing the risk of duplicate licensing if not managed:

• Consistent License Classification: ECC and S/4HANA have similarly named user categories (Professional, Worker/Employee, etc.), though names may differ slightly. Ensure the same individual is assigned the equivalent license type in ECC and S/4HANA. If a user is a Professional in ECC, they should also be treated as a Professional (or S/4HANA Enterprise user) in the S/4 system. Discrepancies can complicate consolidation – SAP will generally count the user at the higher license level, but you want to avoid any ambiguity that could cause SAP to question your classification. SAP provides conversion guides and documents for mapping old license types to new S/4HANA license roles.
• Retire Redundant Accounts: Migration projects are a prime time to clean up. If users have accounts on both ECC and S/4 during rollout, decide when the ECC account can be removed or set to inactive. Every inactive account that remains active in system measurements could count as a license. Identifying users who have fully moved to S/4HANA and deactivating them in ECC (or vice versa) will prevent double-counting in an audit. Many organizations perform a pre-migration license audit to reconcile the user list – this was recommended as “Step 0 – get your SAP ECC licenses in order before S/4HANA”​.
• Leverage SAP Conversion Programs: SAP has programs for converting existing ECC licenses to S/4HANA licenses when you migrate (often called contract conversion or license exchange programs). A global enterprise should consolidate its user count before conversion to avoid converting more licenses than needed. For example, if 1000 ECC named users and 1200 S/4HANA named users are counted separately, but actually only 1300 unique people total, converting them separately would overshoot. Instead, consolidate and convert, so you may only need 1300 S/4 licenses instead of 2200. SAP’s conversion ratio and credit mechanisms will assume you’ve accounted for duplicates. Failing to do so could leave you with excess post-migration entitlements (and cost).
• Digital Access (Indirect Use in S/4HANA): S/4HANA introduced a new metric for indirect access (documents). Ensure that you also consolidate how you handle indirect usage as you consolidate licenses. Indirect document counts should ideally be measured once globally (via SAP’s Digital Access Estimation tool) rather than per system. If both ECC and S/4 generate sales orders from external systems, try to get a combined count to license digital access centrally. SAP’s digital access adoption program sometimes offers incentives if you can show an enterprise-wide approach to indirect usage licensing.

In summary, the principles of consolidation apply equally to ECC and S/4HANA – treat them as part of one landscape when counting users.

Don’t let the coexistence of old and new ERP lead to double-licensing the same people. Rationalize and map users across systems and use SAP’s tools to combine usage data.

Best Practices for License Consolidation in SAP Landscapes

To effectively consolidate and optimize SAP licenses across multiple systems, consider the following best practices:

• Implement Centralized User Management: Use SAP tools like Central User Administration (CUA) or Identity Management to maintain a single source of truth for user IDs across systems. Centralized user provisioning ensures that, for example, Jane Doe has the same username and details in every SAP system she accesses. This greatly aids in LAW consolidation and avoids duplicates by design. Even if full technical centralization isn’t feasible, establish a governance process to create new users with consistent IDs and attributes in all systems.
• Regularly Run License Audits Internally: Don’t wait for SAP’s official audit. Schedule internal measurements (USMM) on all systems and consolidate with LAW at least annually (if not quarterly). Internal audits will highlight duplicate users and unused accounts so you can address them proactively​. For example, if LAW shows 50 users appearing in both ERP and BW systems, review those and decide if each is one individual (merging their records if needed) or if any accounts can be retired. Regular monitoring allows you to fix issues before SAP’s auditors come in​.
• Identify and Eliminate Duplicate Users: Use the LAW tool’s output or third-party software to pinpoint suspected duplicates. Criteria such as an identical email or personnel number can flag the same person. As noted by license experts, if a user has different usernames in different systems, SAP’s audit might miss the consolidation, so do this yourself. Correct duplicates by aligning the usernames or using LAW’s “grouping” functionality to manually merge accounts that automation didn’t catch. The goal is to represent each real person once in the final count. This may involve working with HR to get a common personnel ID or updating user master records to fill in missing fields (like email) across all systems​. Some companies even create a “license ID” mapping table to link accounts from various systems to a single individual.
• Clean Up Inactive and Unneeded Users: In every system, retire users without access. This includes former employees, duplicates, and service accounts that aren’t necessary. Inactive SAP user accounts can be retired to free up licenses​. Many organizations find that 10-30% of accounts in a given system are inactive or stale. Removing them ensures they don’t consume licenses in any consolidation. Remember that under SAP’s named user definition, every account counts unless deleted or technically retired. So, a global cleanup can directly reduce your license count, especially across multiple systems where each might have its own set of outdated accounts.
• Optimize License Types Assigned: Align the license type with actual usage for each user and do this across all systems. Suppose a user is a “Professional” in one system but is only used for display in another. In that case, you might be able to downgrade that second account’s classification, but since SAP will count the highest level per user, you might as well assign the correct (highest needed) type globally. Conversely, some users might have been over-classified in one system. Analyze usage logs or use SAP’s License Management Workbench (if available) or third-party tools to suggest the optimal license type per user​. For instance, if someone never executes advanced transactions, they might only need a Limited license instead of a Professional. The consolidation process should incorporate these optimizations so you’re not consolidating an inefficient allocation. It’s best to harmonize license types before an audit – SAP expects that a user with access to multiple systems has a license adequate for their use.
• Monitor Indirect Usage and Engines: Indirect use can easily be overlooked. Deploy tools or processes to track interfaces and background users that connect non-SAP systems to SAP. This might involve reviewing RFC users and interface logs or using specialized indirect access monitoring tools. By identifying indirect scenarios (e.g., an e-commerce site creating sales orders in SAP), you can include their impact in your license plan – whether assigning a named user license to cover it or accounting for it under a digital access document license. Similarly, track engine metric usage across all systems. If two systems contribute to the same licensed metric (e.g., total SAP BW data volume across an Asia BW and Europe BW), see if the metric is licensed per installation or globally. It might be possible to negotiate an enterprise metric (covering both systems with one license pool) rather than separate smaller licenses that waste buffer capacity.
• Use Dedicated License Management Tools: Apart from SAP’s LAW, consider using third-party SAP license management solutions (e.g., Flexera’s SAP module, Snow Software, VOQUZ samQ, ServiceNow SAM for SAP). These tools can automate user consolidation, identify duplicates/inactive users, and simulate audits continuously. They often provide more user-friendly analysis, such as compliance dashboards and optimization suggestions. For example, a license management tool can apply a “Duplicate User Rule” to automatically combine users across systems based on multiple criteria and flag any that need human review. They can also track license consumption trends, helping you rebalance license allotments between systems or departments before purchasing more. While these tools have a cost, large global SAP customers often find the investment pays off by reducing audit exposure and license spending.
• Coordinate License Administration Globally: Establish a global SAP licensing governance team or process. This team should have representation from each region or system but work with a unified view. They can maintain a consolidated license inventory – essentially a database of all SAP users (with mappings to accounts on various systems) and all license metrics. Regular meetings can review changes: e.g. if a new project in Asia needs 100 new users, the team checks if there are unused licenses in Europe that can be reallocated instead of buying net-new. A centralized approach also ensures that if one region offboards a bunch of users, those licenses can be freed for use elsewhere. This kind of global coordination prevents the left hand and right hand from buying licenses for the same user or capacity. It also ensures consistent interpretation of SAP’s rules across the company (so one business unit isn’t violating compliance unknowingly).
• Plan for Organizational Changes: If you anticipate acquisitions, divestitures, or large expansions, include license consolidation in your integration plans. When integrating a newly acquired company’s SAP environment, perform a LAW consolidation as soon as possible – identify overlaps in named users and see if you can terminate redundant licenses or contracts. SAP’s policies may not allow simply transferring licenses from one entity to another without consent​. Still, if you negotiate early, you might avoid “re-buying” licenses you essentially already have via the acquired entity. For divestitures, carve out the exact number of licenses that move to the spun-off entity and document any transfers to avoid later disputes​. Many large enterprises negotiate special clauses for these scenarios (like carve-out rights or temporary usage agreements)​ – these clauses can facilitate cleaner license consolidation or separation when needed. In short, manage SAP licenses as a strategic asset during organizational change, not just an afterthought.

Considerations for Global Deployments and Regional Instances

Global organizations often have SAP landscapes split by region or function. Here are extra considerations in such cases:

• Regional License Carve-Outs: Sometimes, due to legal or operational reasons, certain countries run on their own SAP instance with a subset of licenses. It’s crucial to understand if those licenses are part of a global agreement or truly standalone. If standalone, you may have contractual limits on transferring licenses across borders. Be mindful of language in contracts about usage “within the country” or restrictions on data residency that might indirectly affect license allocation. Work with SAP to allow some flexibility for global use of licenses, especially if you operate a follow-the-sun support model (e.g., an APAC support team using a European SAP system during their daytime).
• Local Compliance and Regulations: Some regions might have specific regulations (for example, Russia and China have particular rules for software licensing or encryption). Ensure that consolidating your licenses globally doesn’t conflict with any local requirement to have a separate license entity. Generally, SAP licenses are global, but if you have to show proof to local auditors or authorities, maintain clear documentation of how global licenses cover regional systems.
• Network and Performance Isolation vs License Sharing: Often, regional SAP systems exist for performance reasons (data closer to users) or to segregate data. While the systems are separate, license management can still be centralized. You might use LAW with “system group” features to consolidate by region first, then globally. Recognize that even if systems don’t directly connect, from a licensing perspective, all authorized users across them need to be accounted for. A global license team can create sub-reports per region to ensure each region is optimized internally, then merge those for an overall view.
• Volume Discounts and Global Agreements: Consolidating licenses can improve your purchasing position. Instead of each region buying 500 licenses at a higher per-unit cost, a global purchase of 2000 licenses might qualify for volume discount tiers. SAP licensing is often negotiable, and a unified global license agreement can yield better discounts or more favorable terms (like extra test system rights, etc.). Conversely, if licenses remain fragmented, you miss out on economies of scale. Use the data from consolidation efforts to approach SAP for an enterprise agreement – showing that you have five systems with X total users can justify a global deal that reduces the total cost compared to maintaining separate, smaller contracts.
• Managing Global License Pools: Decide whether licenses are allocated from a global pool or budgeted to regions. A best practice is to have a global license pool from which regions draw, with a tracking mechanism. This avoids each region over-provisioning “just in case.” Instead, the surplus in one area can offset needs in another. It requires internal governance to ensure no region exceeds its share without approval, but it reduces the total licenses needed. Some companies implement an internal “license marketplace.” If one business unit no longer needs 50 licenses, those go back to the pool, and another unit can take them rather than buy new ones, all documented through internal processes.

Global deployment doesn’t change the fundamental goals: avoid duplicate licensing, maintain compliance, and minimize waste. It adds a layer of complexity in coordination and contract handling, which can be managed with clear policies and executive support.

Risks of Over-Licensing and Under-Licensing

Failing to consolidate and manage SAP licenses properly carries significant risks:

• Over-Licensing (Excess Capacity): This happens when an organization has purchased more licenses than it needs. In a multi-system context, over-licensing often results from duplicate accounts (counting one person twice) or not reusing licenses efficiently across regions. The immediate impact is wasted budget – money spent on licenses that aren’t truly required. Over-licensing can also breed complacency; if managers see unused licenses, they may be less vigilant about cleaning up usage. Ultimately, those dollars could have been invested elsewhere. Studies estimate that many SAP customers have shelfware (unused licenses) because of poor tracking. For example, if each of the four regional systems has 10% spare users licensed that could have been shared, that might total hundreds of unnecessary licenses globally. Eliminating duplicates and unused accounts directly translates to cost savings​. Remember that while SAP typically doesn’t refund unused licenses, maintaining a lean license count can give you leverage during contract renewal (you won’t be paying maintenance on licenses you don’t need).
• Under-Licensing (Non-Compliance): The opposite scenario is even more dangerous. Under-licensing means actual usage exceeds what is licensed. In a multi-system environment, this can occur if no single team has the full picture – each system admin might think they are compliant, but in the aggregate, you might be over the entitlement. SAP regularly conducts license audits, and if they find you’re using more licenses than purchased (e.g., total consolidated named users exceed your contract, or engine metrics are over the licensed amount), they will issue a bill for the shortfall. This usually comes at list price and may include back maintenance fees and penalties. Under-licensing can lead to steep “true-up” costs and fines after an audit​. For instance, one division might have allowed a bunch of contractors to access SAP without proper licenses, pushing the count over your license count by 50 when consolidated. SAP could charge those 50 at a high cost and even penalize them if they view it as a breach. Indirect access is a particular under-licensing risk: if unnoticed, things like an automated interface can generate thousands of document accesses that were never licensed, and SAP might levy charges for a new engine (Digital Access) to cover it retroactively. Non-compliance findings can strain your relationship with SAP and reduce your negotiation leverage.
• Audit and Legal Penalties: In severe cases, under-licensing can lead to fees and legal action or mandated removal of access. SAP’s contracts typically give them the right to audit and even terminate licenses for breach. While termination is rare, an audit dispute’s legal fees and management distraction are significant. Moreover, if your company is publicly traded or in a regulated industry, compliance lapses in software licensing could have to be reported or could violate internal controls (e.g., Sarbanes-Oxley considerations for asset management).
• Operational Impact: Both over- and under-licensing have operational implications. Over-licensing may seem safe, but if you’re significantly over, you might miss opportunities to invest in other needed software or upgrades (opportunity cost). If discovered internally, under-licensing might force emergency measures like removing users or cutting off integrations to stay compliant, which could disrupt business. Neither is ideal; the sweet spot is accurate licensing aligned to actual usage.

In summary, efficient license consolidation and management is not just an administrative task—it protects the organization from financial waste and compliance crises. Next, we present concrete recommendations to address these challenges.

Recommendations

1. Establish a Central License Management Function:

Create a dedicated team or designate a license owner who oversees SAP licensing across all systems globally. This team should maintain a consolidated view of all SAP users and license allocations.

They will coordinate data collection from all SAP instances and act as the single point of contact for any licensing issues. Central oversight brings visibility that individual system owners might lack.

2. Perform Regular Consolidated Audits:

Use SAP’s License Administration Workbench (LAW) or equivalent tools at least annually (preferably more often) to consolidate system user counts​. Investigate any discrepancies or duplicate user findings and adjust accordingly.

Regular internal audits will catch duplicate accounts and misclassified users early, allowing you to correct them before an official SAP audit​. Treat the LAW report as your baseline truth for license usage.

3. Unify and Cleanse User Data:

Standardize user identifiers across SAP systems to facilitate consolidation. For example, ensure each user’s email or employee ID is recorded uniformly in all systems, as these can serve as unique keys for LAW​.

Clean the data by removing blanks or inconsistencies (e.g., one system has a middle name, another doesn’t). If necessary, run a user data cleansing project: identify variations of the same name or ID and correct them.

This may involve cooperation between IT and HR. The cleaner your user master data, the more accurate and easier the license consolidation.

4. Retire or Merge Duplicate Accounts:

Actively eliminate duplicate user accounts. When LAW or other analysis reveals that two or more accounts belong to one individual, decide on a primary account and discontinue the others (or mark them as “multiplicity” in LAW if needed).

Update SAP user classifications so that secondary accounts are set to a special license type that doesn’t count (SAP used to have a “multi-client” user classification for this purpose, though now LAW handles it automatically).

The result should be that each person has one active account counted for licensing, no matter how many systems they access.

5. Optimize License Type Allocation:

Review the activities of each user across systems and ensure they have the lowest appropriate license type that covers all their usage. For instance, if a user is read-only in all systems, they might qualify as an ESS/Employee Self-Service user instead of a higher-cost Professional.

Conversely, if they perform one advanced task in any system, they need a higher license – assign it once and use that classification globally. Right-sizing license types can free up expensive licenses (which might cover two fewer users instead).

Use tools or SAP logs to identify when a user hasn’t executed any transactions requiring a high-level license. Optimize before purchasing more licenses – often, rebalancing what you have yields savings.

6. Leverage Professional License Management Tools:

Invest in SAP-specific license management solutions if your landscape is very complex. Tools from vendors like Flexera, Snow, ServiceNow, VOQUZ, etc., can automate continuous monitoring. They can detect duplicate and inactive users to optimize spend​, suggest license reclassifications, and track indirect usage patterns.

They often include simulation features to estimate the effect of adding or removing systems, which helps plan consolidation or expansion. While SAP’s LAW is powerful, third-party tools add reporting and analytics, making ongoing optimization easier.

These tools are used to generate audit-ready reports and to obtain factual data during negotiations with SAP​.

7. Monitor Indirect Access Closely:

Establish a process to review any new integrations or third-party applications that interface with SAP. Each such interface should be assessed for licensing impact. Maintain an inventory of interfaces (e.g., Salesforce to SAP ERP integration) and classify whether they are covered under named user licenses or need Digital Access licensing.

SAP offers a Digital Access Estimation Tool – run it periodically to gauge your document counts. Additionally, consider enabling SAP’s API user measurement tools or third-party indirect access trackers​ to log external usage. By monitoring this continuously, you can avoid unpleasant surprises where a background system quietly incurs a large license liability.

8. Educate Regional Teams and Enforce Policies:

Ensure all SAP administrators and stakeholders in each region understand the importance of avoiding duplicate licensing. Develop and distribute clear guidelines, such as “Before creating a new user, check if this person already exists in another SAP system.” Train them on the correct assignment of license types and the implications of indirect usage.

Sometimes, well-meaning project teams create service accounts or test users without considering licenses – a central policy should govern this (for instance, disallow generic accounts or require central approval for high-privilege users). Regular training and communication can foster a culture of compliance and cost-consciousness regarding SAP licenses.

9. Align Contracts with Consolidation Goals:

When negotiating with SAP (renewals, additional purchases, or migration to S/4HANA), use the insight from your consolidation efforts to your advantage. If possible, push for a single global contract or synchronized terms recognizing your consolidated user count. Ensure affiliate usage rights are in place so you don’t need to double-pay for the same user in different subsidiaries.

If you have proven you only need X unique users, resist sales pressure to buy more “just in case” for each system – demonstrate that you have a process to manage licenses dynamically.

Also, consider negotiating buffer clauses (e.g., allow 5% over-usage temporarily without penalty) if your consolidated count fluctuates seasonally. The more SAP sees that your licensing house is in order, the more likely they might offer flexible terms since you can verify exactly what you need.

10. Prepare for Audits and True-Ups Proactively:

Always assume an SAP audit could be around the corner. Keep documentation of your license entitlement (contracts, purchased license counts) and how you calculated current usage. If you identify a shortfall yourself, it may be better to address it with SAP proactively (before an official audit notice) – sometimes SAP will work with you on a resolution (like buying the needed licenses on negotiated terms rather than list price penalties).

On the flip side, if your consolidation shows you are over-licensed, consider pausing maintenance on unused licenses or negotiating give-backs at renewal (though SAP typically doesn’t allow dropping licenses mid-contract, you may offset them by purchasing something else).

The key is no surprises: a well-prepared, consolidated license position means an audit should ideally find no major issues, or at least nothing you weren’t already aware of. This level of control can save your organization from financial hits and last-minute scrambles.

By following these recommendations, organizations can significantly reduce the inefficiencies of duplicate SAP licensing and ensure compliant, cost-effective use of SAP software globally.

Consolidation is an ongoing effort, but with the right tools, data, and governance, it yields transparency and savings that far outweigh the effort.