How to Challenge SAP License Audit Results
- Review Audit Findings Thoroughly: Examine all claims for accuracy.
- Verify User and System Usage: Ensure your usage data matches SAP’s findings.
- Understand License Terms: Check if SAP misinterpreted your licensing agreement.
- Dispute Inaccuracies: Present evidence to counter false claims.
- Request Clarifications: Seek explanation on complex findings.
How to Challenge SAP License Audit Results
SAP license audits are critical to ensuring compliance with SAP’s licensing policies, but they can often result in significant disagreements between the company being audited and SAP.
In some cases, organizations may feel that the audit findings are inaccurate, overstated, or misinterpreted, and they may choose to challenge the results.
Understanding how to effectively challenge SAP license audit results can save organizations from unnecessary financial penalties and help protect the integrity of their business operations.
This article explores the strategic approach to challenging SAP license audit results, including understanding the audit landscape, identifying audit tool limitations, gathering evidence, and taking the necessary steps to dispute the findings.
Understanding the Audit Landscape
SAP license audits come in two main forms: Basic and Enhanced Audits.
Understanding the difference between these two types of audits is the first step in formulating a strategy to challenge the results.
- Basic Audits: Basic audits generally focus on the technical aspects of SAP systems. These audits are less comprehensive and typically cover only 60-70% of the licensed estate. The audit is primarily driven by standard SAP tools, such as the SAP License Audit Workbench (LAW), which automatically evaluates the system to assess compliance. The focus here is on measurable aspects like the number of users, installation of licensed products, and data stored within SAP systems.
- Enhanced Audits: Enhanced audits are far more comprehensive. They involve a more detailed examination of how SAP products are used and may include on-site visits by SAP auditors. SAP evaluates technical and functional aspects of product usage in these audits, such as how users access and interact with SAP data, applications, and other systems. Enhanced audits are designed to uncover deeper issues, including indirect access, which can sometimes lead to substantial discrepancies in how license entitlements are calculated.
Given the differences between these audit types, it’s crucial to understand the nature of the audit before taking any steps to challenge the findings. An enhanced audit, for example, is far more intrusive and thorough; thus, there may be more room for legitimate disputes than a basic audit.
Read how to prepare for SAP license audits.
Common Audit Tool Limitations
The SAP License Audit Workbench (LAW) is one of the primary tools used by SAP to conduct license audits.
While LAW is a powerful tool for assessing compliance, it has several limitations that organizations can leverage when challenging audit results.
These limitations fall into two main categories: technical constraints and measurement inconsistencies.
Technical Constraints
- Inaccurate User Classification: One of LAW’s main limitations is its inability to accurately classify users based on their roles or level of system interaction. LAW cannot determine how users should have been licensed, which may lead to inaccurate results. For example, it may incorrectly classify dormant users (users who have not logged in for an extended period) as active users, thereby inflating the apparent number of licenses in use. This can result in inflated costs and unnecessary licensing fees.
- Limited System Coverage: LAW is primarily designed to measure ABAP-based systems, which are core to SAP’s traditional architecture. However, it excludes Java-based and non-ABAP systems, which may also be part of your SAP landscape. If your organization uses systems that don’t fall under the ABAP category, LAW may fail to account for those systems, leading to potential underreporting of usage and licensing needs.
- Lack of Customization: SAP customers often implement custom configurations and bespoke solutions, which can complicate the audit process. LAW may not accurately reflect these customizations, which means that the audit findings could be skewed if special configurations are not properly accounted for. Custom solutions may be used in ways the standard SAP tools are not equipped to measure, making it difficult to determine compliance accurately.
Read about common SAP audit defense strategies.
Measurement Inconsistencies
SAP’s licensing metrics evolve, which presents organizations with an additional challenge during audits. Different customers may use the same SAP product under varying license terms and conditions, which can complicate measuring compliance.
LAW typically calculates usage using the most recent metric. However, this can create inconsistencies if the metrics have changed over time or if the organization’s specific terms differ from those of other companies.
For example, SAP’s licensing models have shifted from user-based metrics to more complex metrics like digital access or cloud consumption.
LAW may only reflect the most recent licensing model, potentially ignoring the terms of previous contracts. As a result, SAP could potentially claim non-compliance based on outdated or inaccurate measurements.
Strategic Approaches to Challenge Audit Findings
If you believe that SAP’s audit results are incorrect or overstated, it’s crucial to have a clear and systematic strategy to challenge those findings.
Here are the key steps to follow when disputing audit results:
1. Documentation and Evidence Gathering
Before disputing any audit findings, gathering as much documentation and evidence as possible to support your position is important. This documentation should include your licensing entitlements and a thorough analysis of your systems’ use.
- License Entitlement Records: Collect all relevant documents demonstrating your organization’s entitlement to SAP licenses. These documents may include:
- The Master License Agreement (MLA)
- Historical purchase records
- Amendments or special agreements with SAP
- Contracts outlining specific licensing terms or discounts
- Documentation of any exceptions or special terms for particular SAP products or modules.
This evidence will form the foundation for your challenge, helping to demonstrate that your organization has complied with its licensing agreements or that SAP’s calculations contain discrepancies.
- Usage Analysis: In addition to the documentation of entitlements, you should conduct your internal analysis of system usage. This analysis should focus on several key areas:
- Named User Classifications: Review user classifications to ensure users are assigned the correct license type based on their roles and system interactions.
- Inactive Users: Identify any dormant or inactive users who may have been incorrectly counted as active by the SAP audit tools.
- System Access Logs: Review system access logs to track how users interact with SAP products and data. This can provide insights into potential discrepancies in the audit findings, especially if indirect access is a factor.
2. Review License Models and Metrics
Given the potential for measurement inconsistencies, it’s important to carefully review the licensing metrics and models that apply to your organization.
Consider how your specific SAP products and systems were licensed at the time of purchase. SAP’s licensing models can change over time, so it’s crucial to establish whether the metrics used in the audit are accurate for the audited period.
If your organization has agreements that allow for different licensing metrics, ensure that these are accounted for in the audit.
For example, if SAP has changed its user metrics, but your agreement was signed under a previous model, you may need to prove that the previous metrics are still applicable.
Challenge Indirect Access Issues
One of the most contentious areas of SAP license audits is indirect access. Indirect access refers to scenarios where third-party applications or external systems access SAP data or functionality, potentially triggering additional licensing requirements.
Assessing indirect access can be difficult, as it is not always clearly defined. Organizations may not be aware that they are subject to these additional licensing fees.
If indirect access is identified in the audit findings, reviewing how external applications interact with SAP systems is important.
Ask questions such as:
- Are third-party systems accessing SAP data in ways that require additional licenses?
- Does the integration between systems require any special licensing terms?
- Are there any exceptions or special conditions in your contracts that address indirect access?
It’s important to clarify whether indirect access should be included in the audit and whether the associated licensing fees are justified.
1. Engage SAP for Dialogue
If you believe the audit results are inaccurate or unfair, you should often dialogue with SAP’s audit team or the external auditors. This can help resolve misunderstandings or discrepancies before they escalate into a larger dispute.
Ensure discussions are backed by solid documentation and evidence, and approach the situation collaboratively. Negotiating more favorable terms or reaching an agreement that benefits both parties is often possible.
2. Seek Legal or Expert Advice
If the audit results are complex or the dispute is significant, consulting with legal or SAP licensing experts may be worthwhile. These professionals can help you navigate the audit process’s intricacies and guide you on how best to present your case.
Legal counsel may also help you understand the terms of your licensing agreements and whether SAP’s claims are enforceable.
They can help represent your interests in negotiations or legal proceedings if necessary.
FAQ: How to Challenge SAP License Audit Results
What should I do first when receiving an SAP audit notice?
Carefully review the audit notice to understand what is being audited. Then, gather your system usage and license records.
How can I verify SAP’s findings during an audit?
Cross-check the audit data with your internal logs. Compare user and system activity records with the claimed usage.
What if the audit report shows more licenses than I use?
Challenge the audit findings with clear evidence of your usage and system activity. If possible, provide supporting documentation to prove the discrepancy.
What are my rights during an SAP license audit?
You have the right to request a clear explanation of the findings. You can also dispute any incorrect information or overestimates.
Can I dispute an audit result if I think SAP misunderstood my agreement?
If SAP misinterprets your agreement or terms, you can challenge its conclusions. To clarify, provide the correct terms from your contract.
How do I prove that my system usage complies?
Keep detailed records of user access, system logs, and configurations aligning with your licensing. Present this data during the audit process.
Is it possible to negotiate the results of an SAP audit?
If the audit findings are based on incorrect information, you can negotiate the results with SAP by presenting the correct data and agreement terms.
What should I do if I disagree with SAP’s audit conclusion?
Request a meeting with SAP to review the audit findings and provide supporting evidence. If disagreements persist, consider legal consultation.
How long does an SAP license audit typically take?
The duration can vary, depending on the audit’s scope and both parties’ responsiveness. It may take several months.
What happens if SAP audit results are not challenged?
If no challenge is made, you may be required to pay penalties or purchase additional licenses. Therefore, it is important to always ensure that audit findings are verified.
Can third-party experts assist in disputing SAP audit results?
Working with SAP licensing experts or legal consultants can help effectively challenge audit results.
What if I have incomplete records during an SAP audit?
In such cases, provide whatever documentation is available and explain the situation. You may still be able to dispute certain findings.
What are the risks of ignoring an SAP audit?
Ignoring an audit can result in heavy fines, forced licensing compliance, or legal action. Therefore, it’s important to address the audit promptly.
Can SAP audit my licenses without prior notice?
Typically, SAP will notify you before conducting an audit. However, review your contract; some agreements may allow audits without notice.
How should I keep my records organized for future audits?
To ensure quick and easy access during audits, maintain clear, organized records of user access, system logs, and all licensing agreements.
