Indirect Access in SAP S/4HANA
- Digital Access Model: Charges based on document generation from external sources.
- Compliance Tracking: SAP tracks indirect access through third-party systems.
- Audit Preparedness: Regular audits help ensure compliance with access policies.
- Cost Implications: Unlicensed indirect access can lead to additional fees.
Managing Indirect Access in SAP S/4HANA
SAP licensing is known for its complexity, and one of the most confusing aspects for many organizations is indirect access. Indirect access is when users or systems indirectly interact with SAP software, typically without logging into SAP directly.
This can happen, for instance, when third-party applications interface with SAP to extract or modify data. As organizations expand their IT ecosystems, indirect access in SAP S/4HANA becomes a critical topic every SAP user needs to understand.
This article provides a comprehensive guide to indirect access, its implications, potential pitfalls, and how to manage these licensing challenges.
What is Indirect Access in SAP S/4HANA?
Indirect access refers to situations where non-SAP software or users interact with SAP. Indirect access occurs when an SAP system is accessed indirectly, such as through a non-SAP application or a device that interacts with SAP processes without directly logging into the SAP system.
Unlike direct access, where a named user logs into SAP with a specific ID, indirect access means that third-party tools, custom applications, or devices like IoT sensors interact with SAP data. Examples of indirect access include:
- Third-party applications that pull data from SAP for reporting or analysis.
- E-commerce platforms that interact with SAP systems to update inventory or place orders.
- Middleware is used to automate data exchanges between SAP and non-SAP software.
SAP has specific licensing policies to address these indirect usage scenarios, which often become points of contention due to the complexities involved in defining and monitoring indirect usage.
Historical Background of Indirect Access
The concept of indirect access has always been part of SAP’s licensing framework, but it gained attention around 2017 when several high-profile disputes arose.
SAP’s high-profile legal battle with the beverage company Diageo and the later case with Anheuser-Busch put indirect access in the spotlight. Both companies faced significant claims for unlicensed indirect access, amounting to millions of dollars.
In response to the industry backlash and confusion over indirect access policies, SAP introduced a revised licensing model known as Digital Access in 2018. The intent was to make indirect access licensing more transparent and easier to manage by tying it to specific business document usage rather than focusing solely on named users.
Types of Indirect Access
Understanding the different types of indirect access is crucial for determining the right approach to licensing in SAP S/4HANA systems. There are two main types:
This model allows for better predictability, shifting the licensing from user-based to document-based metrics, making it easier to understand and manage.
Classic Indirect Access:
This type is often based on user metrics. If data from SAP is accessed indirectly by non-SAP applications, SAP may require a user license for each person or system interacting with the SAP system.
For instance, if a CRM system pulls customer data from SAP for a sales process, the CRM system’s users could potentially require an SAP license, even if they never directly logged into SAP.
Digital Access:
Introduced to simplify indirect licensing, the Digital Access model calculates licenses based on the number of business documents created or processed by an external system.
Examples of documents include Sales Orders, Invoices, Purchase Orders, and Material Documents.
Challenges and Pitfalls of Indirect Access
Indirect access presents several challenges for organizations that use SAP S/4HANA. These challenges typically revolve around compliance, cost management, and understanding the extent of indirect usage:
- Lack of Visibility:
- One of the most significant challenges in managing indirect access is the lack of visibility into which third-party systems and processes interact with SAP data. Organizations often struggle to keep track of every integration, making it difficult to determine which systems are indirectly accessing SAP.
- Complex Integration Landscape:
- Modern businesses operate in a connected ecosystem where SAP is just one of many systems. Middleware, e-commerce platforms, and IoT devices may all indirectly access SAP data, which adds complexity to licensing assessments. If not managed correctly, this can lead to surprise costs during an audit.
- Risk of Non-Compliance:
- The biggest risk of not properly managing indirect access is failing an SAP audit, which can result in large backdated licensing fees and penalties. Many companies underestimate the implications of indirect access and face substantial costs during audits.
- Difficulty in Estimating Costs:
Under the classic user-based licensing model, determining how indirect users need to be counted can be incredibly complex. This leads to difficulty in estimating costs accurately and avoiding budget overruns
Digital Access Model: Pros and Cons
The Digital Access Model was introduced to address the issues associated with traditional indirect access licensing. However, it also has its advantages and disadvantages.
Pros:
- Simplified Licensing: Digital Access simplifies licensing by focusing on business documents rather than named users, making it easier to understand what you’re paying for.
- Predictable Costs: The document-based approach enables more predictable costs for organizations that understand their document creation volume.
- Improved Transparency: The switch to document metrics adds transparency and helps organizations avoid the murky gray areas of traditional indirect access.
Cons:
Assessment Complexity: Transitioning to the Digital Access model requires a comprehensive understanding of your system landscape and the types of documents generated, which can still be daunting. This includes all systems that interact with SAP S/4HANA.
Document Volume Uncertainty: If your organization has high volumes of document transactions, costs can spiral quickly. Companies that struggle to forecast document growth may find themselves paying far more than anticipated.
Key Strategies for Managing Indirect Access
Managing indirect access efficiently is crucial for avoiding unexpected costs and ensuring compliance with SAP’s licensing policies. Here are several strategies that organizations can adopt:
- Conduct a Comprehensive System Audit:
- Conduct a full audit of all the systems and applications that interact with your SAP environment. Identify which third-party systems, internal applications, or devices access SAP data and assess how they do so.
- Consider the Digital Access Adoption Program (DAAP):
- SAP has introduced a Digital Access Adoption Program (DAAP) to help organizations transition from traditional indirect licensing models to Digital Access. DAAP provides incentives and transitional pricing to help companies shift without incurring massive costs.
- Leverage Automation Tools:
- Utilize tools that can automate the monitoring of SAP interactions across different platforms. Tools like SAP Solution Manager or third-party Software Asset Management (SAM) solutions can help provide better visibility into indirect access scenarios.
- Evaluate License Optimization Opportunities:
- Work with an SAP licensing expert or partner to identify opportunities for optimizing your license estate. It’s often possible to consolidate licenses, reduce the number of named users, or shift to a more favorable licensing model.
- Choose the Right Licensing Model:
- Evaluate whether the Digital Access model or the traditional user-based model is the right fit for your organization. Organizations with high volumes of document transactions may benefit from sticking with user-based models, whereas those with fewer transactions could see savings with Digital Access.
Best Practices for Compliance
Ensuring compliance with SAP’s indirect access policies involves proactive management and careful monitoring. Here are some best practices to keep in mind:
- Centralized Documentation: Document all interfaces with SAP in detail and centrally. This includes third-party tools, middleware, APIs, and custom integrations.
- Periodic Reviews: Schedule regular reviews to ensure that new systems or integrations have not inadvertently created new indirect access instances requiring additional licenses.
- Training for IT and Business Units: Train IT and business unit leaders on the implications of indirect access. Everyone involved should understand the basics of SAP licensing to avoid unexpected costs due to misunderstandings.
- Negotiation with SAP: Discuss indirect access up front when negotiating new contracts or renewals. SAP is often willing to work with customers to define clear terms to avoid misunderstandings later.
The Role of Third-Party Applications and Middleware
The increasing use of third-party applications and middleware has been one of the biggest drivers of indirect access concerns in SAP environments. Middleware platforms like MuleSoft, Boomi, and SAP PI are commonly used to connect various applications, creating multiple potential indirect access points.
- E-commerce Integrations: A common scenario involves e-commerce platforms that interface with SAP to process orders. In this case, the e-commerce system indirectly triggers transactions within SAP, such as inventory updates or sales order creation, which must be accounted for under SAP’s licensing policies.
- CRM Systems: Customer Relationship Management (CRM) systems often pull data from SAP, leading to indirect access. For example, a sales representative accessing customer order information stored in SAP through a CRM portal may trigger indirect usage costs.
- IoT Devices: As more organizations adopt Internet of Things (IoT) technologies, indirect access through devices that collect and report data to SAP systems has become increasingly common. Each sensor or device potentially represents an indirect user or document, adding another layer of complexity to the licensing equation.
Transitioning to Digital Access
For organizations looking to transition to the Digital Access model, there are a few critical steps to consider:
- Analyze Current Usage:
- Start by analyzing the types and volumes of documents generated by third-party systems and external applications. This will help determine if the Digital Access model is a cost-effective option.
- Negotiate Contract Terms:
- When negotiating with SAP, explicitly addressing all indirect access scenarios is essential. Be transparent about your usage needs and discuss future growth to ensure your contract terms align with your business goals.
- Utilize SAP Tools for Assessment:
- SAP offers tools like SAP Passport to help customers identify and quantify their indirect access activities. These tools can provide insights into document creation, making it easier to estimate costs under the Digital Access model.
Indirect Access in SAP S/4HANA FAQ
What is indirect access in SAP S/4HANA?
Indirect access in SAP S/4HANA occurs when third-party systems or applications access SAP data without a direct SAP login, often via APIs or automated interactions.
How does SAP S/4HANA define indirect access?
SAP defines indirect access as any data interaction initiated by external users or systems that don’t log in directly to SAP but still access its data.
Why is indirect access relevant in SAP S/4HANA?
Indirect access is essential for licensing compliance as it can lead to additional licensing costs based on data usage and document creation by external systems.
What is the SAP Digital Access model in S/4HANA?
The Digital Access model charges for indirect access based on the number of documents created rather than user logins, helping track external data usage.
Which documents are counted under Digital Access in SAP S/4HANA?
Documents like sales orders, purchase orders, and invoices generated through third-party systems are counted under Digital Access licensing.
How does SAP track indirect access in S/4HANA?
SAP monitors indirect access by tracking document creation and external system interactions with SAP data, particularly through APIs.
What is the risk of unlicensed indirect access?
Unlicensed indirect access can lead to compliance issues, unexpected fees, and penalties during SAP audits, increasing total licensing costs.
Are all third-party applications subject to indirect access fees?
Yes, depending on how it interacts with the SAP system, generally, any application that indirectly accesses or modifies SAP data may require licensing.
Can indirect access affect overall S/4HANA licensing costs?
Yes, indirect access can significantly impact costs, as SAP charges are based on document creation and data access through third-party systems.
What best practices help manage indirect access in SAP S/4HANA?
Monitoring third-party integrations, conducting regular audits, and aligning licensing with actual usage help manage indirect access effectively.
How can businesses ensure compliance with indirect access?
Review external connections regularly, track document usage, and maintain clear documentation to ensure compliance with SAP’s indirect access policies.
How does SAP audit indirect access in S/4HANA?
SAP audits document creation and external data access patterns to confirm that all interactions are properly licensed.
Are there alternatives to Digital Access in S/4HANA?
Some businesses negotiate customized licensing models, although Digital Access is often the preferred method for managing indirect access costs.
Can indirect access be managed within existing licenses?
Yes, indirect access can sometimes be managed with Named User licenses if the usage model aligns with SAP’s licensing requirements.
How can SAP S/4HANA users reduce indirect access costs?
Optimizing third-party interactions, choosing the right licensing model, and minimizing unnecessary external access can help reduce costs associated with indirect access.
