Fortune 500 Insurance Group Defends $9.8M SAP Indirect Access Claim Through Custom Usage Mapping
Industry: Insurance Location: Illinois Employees: 42,000
Challenge
A Fortune 500 insurance group in Illinois faced a dire SAP licensing challenge: an audit uncovered alleged indirect access violations, with SAP claiming the company owed $9.8 million in unlicensed usage fees.
Much of the activity came from third-party systems, such as customer portals and partner applications, integrating with the insurer’s SAP ECC environment.
These integrations meant hundreds of users and automated processes accessed SAP data without individual licenses, triggering SAP’s indirect access rules.
The staggering $9.8 million claim threatened to upend IT budgets and derail ongoing digital initiatives.
“When that $9.8 million invoice hit our desk, it felt like a bolt from the blue,” recalls the CIO of the insurance group. “We had confidence in our systems, but SAP saw things differently. We knew we needed expert help to challenge this before it halted our transformation projects.”
The organization engaged Redress Compliance to mount a defense. Their goals were clear: prove the claim was overstated, avoid an exorbitant true-up cost, and strengthen license management to prevent future surprises.
The situation was urgent and complex, indirect SAP usage is hard to untangle, and SAP’s audit team pressed for a quick resolution.
Solution
Redress Compliance deployed a specialist team to perform a custom usage mapping across all the insurer’s SAP systems and connected applications.
This meant diving deep into log files, user accounts, and interface records to pinpoint exactly how SAP data was accessed and by whom.
The team’s approach combined technical analysis with licensing expertise:
- Usage Audit & Analysis: Redress mapped every third-party integration and external user interaction with the SAP ECC system. They distinguished read-only data queries from transactions that created SAP documents, uncovering that many external accesses were informational look-ups not requiring full user licenses.
- User License Mapping: The team reviewed tens of thousands of SAP user accounts and matched each to the correct license type based on actual job roles and activities. By implementing a custom user license mapping, the company could reclassify or retire hundreds of dormant or misassigned accounts. This optimized the license portfolio and eliminated much of the “shelfware” that SAP had counted toward the claim.
- Indirect Access Risk Evaluation: Redressed and evaluated SAP’s newer Digital Access (document-based) licensing model as an alternative solution. They ran SAP’s Digital Access estimation tools to count documents (orders, invoices, etc.) generated by third-party systems. This data provided a credible counterpoint to SAP’s assumptions. It showed that the insurer’s actual digital document count—and thus true indirect usage cost—was a fraction of what the $9.8 million claim suggested.
Armed with hard data, Redress Compliance led negotiations with SAP’s audit and sales teams. They presented a detailed, evidence-based report that challenged the audit findings point by point. Discrepancies were highlighted, some third-party interactions were read-only or already covered under existing licenses, and many named users flagged by SAP were no longer active employees.
“Our detailed mapping proved that SAP’s claim was vastly inflated,” explains a Redress Compliance licensing specialist. “By showing SAP exactly who was using the system and how, we flipped the narrative. It wasn’t about avoiding fees; it was about paying for the right licenses, nothing more.”
Redress also helped the insurer craft a forward-looking compliance plan as part of the settlement.
This included transitioning certain interfaces to SAP’s digital access license for a fixed fee and obtaining formal approval for a hybrid landscape where some legacy systems would continue to feed SAP data. Crucially, SAP agreed to a tailored resolution instead of the one-size-fits-all penalty.
Results
After several discussions, the Fortune 500 insurer defended against the $9.8 million claim. The outcome was a dramatic reduction of the financial exposure and a stronger licensing position for the future:
- Claim Resolution: SAP’s demand for $9.8 million was reduced by roughly 90%. Ultimately, the company only agreed to a small license expansion (under $1 million), avoiding over $8 million in fees.
- Indirect Access Clarity: Through the custom usage mapping, all indirect usage was either licensed appropriately or covered via SAP’s digital access options. The looming indirect access issue was fully resolved without stalling the business.
- Optimized License Landscape: The user license cleanup reclaimed thousands of unused or misallocated licenses. The insurer reallocated licenses to better fit actual needs, preventing overspending on unnecessary user licenses and establishing a role-based licensing model.
- Governance and Future Transformation: The engagement established robust governance. The company implemented continuous license monitoring tools and internal audit practices to catch indirect usage early. With compliance under control, the insurer can pursue its transformation goals, such as a planned SAP S/4HANA migration, without fearing surprise license costs.
“Redress didn’t just save us money, they set us up for the future,” says the CFO. “We went from a potential $9.8 million hit to a manageable solution. Now our SAP environment is clean, compliant, and ready to support innovation instead of holding it back.”
Results Summary: The Fortune 500 insurance group averted a multi-million dollar liability through data-driven defense and negotiation. The custom license mapping exercise provided transparency, leading to a ~90% reduction of the claimed fees.
In addition, the company optimized its SAP license allocation and established stronger compliance controls. This foundation resolved the immediate audit crisis and enabled the insurer to continue its digital transformation confidently and cost-effectively.
