Managing SAP Shelfware: A CIO’s Guide to Reducing Unused SAP License Costs

Managing SAP Shelfware: A CIO’s Guide to Reducing Unused SAP License Costs

Many SAP customers have more software licenses than they use – a problem known as SAP shelfware. Shelfware refers to SAP licenses that have been purchased but remain idle, bringing no business value, even though the company continues to pay annual support for them.

This unused license capacity often stems from over-forecasting needs, changes in business strategy, or a lack of license governance. For CIOs and IT leaders, managing SAP shelfware is a strategic opportunity to cut waste, reduce ongoing maintenance costs, and optimize the value of your SAP investments.

This advisory, written from the perspective of an independent SAP licensing expert (unaffiliated with SAP), explains how to identify shelfware, reclaim or reallocate unused licenses, and ultimately eliminate these hidden costs.

It provides practical steps, real-world examples, and a structured action plan to help you maximize ROI on SAP licenses while staying compliant.

SAP Shelfware and Why It Occurs

SAP Shelfware is the term for SAP software licenses – whether for users or modules – that your organization owns but doesn’t actively use.

These could be idle SAP modules or engines (functional components that were bought but never implemented or later abandoned) and dormant named-user licenses (individual user entitlements that are assigned but not being used).

Several common scenarios lead to shelfware in SAP environments:

• Over-Forecasting and Over-Purchasing: Organizations often buy more licenses than needed due to optimistic project plans, initial rollout forecasts, or vendor bundle deals. For example, a company might purchase extra user licenses anticipating growth or license a full SAP module suite “just in case” – only to use a fraction of it. Mergers and acquisitions can also multiply licenses and overlapping systems, leaving duplicates that go unused.
• Organizational Changes: Business transformations can render certain SAP tools obsolete. A planned SAP implementation might stall, or a specific module may be replaced by a new solution (e.g., switching from SAP CRM to a cloud-based CRM). The licenses remain under contract even though the business no longer uses them. Additionally, normal workforce churn (employees leaving or changing roles) often leaves behind user accounts that are no longer used.
• Lack of License Governance: Without active management, shelfware accumulates by default. SAP’s on-premise licenses are perpetual, and support fees (typically ~20% of the license price annually) continue until you take action to reduce or terminate them. SAP doesn’t automatically adjust your license counts downward, so if there’s no internal process to reclaim unused licenses, the “shelf” just gets fuller. In some cases, companies avoid touching their licenses out of fear of compliance issues or simply because license management responsibilities are unclear. The complexity of SAP’s licensing (with many user types and product metrics) can also cause misalignment, where users are given higher-cost licenses than necessary, effectively paying for features they never use.
• Bundling and Contract Complexity: SAP licensing agreements often bundle software in packages or undergo name changes over time. Companies might maintain licenses for components they didn’t even intend to use because they came as part of a deal. Or they continue to pay for older modules because they’re unsure if those are still required for compliance, especially when SAP renames or repackages products. This inertia contributes to shelfware – “we’re paying for it, so maybe we need it” – when in reality, it could be safely removed.

Why Addressing Shelfware Matters:

Left unchecked, SAP shelfware can silently drain IT budgets. Unused licenses still incur annual maintenance fees (usually 20–22% of the license cost per year), which add up to large sums for zero return.

For instance, $1 million in shelfware licenses could be costing around $ 200,000 every year in support costs. Beyond direct cost, shelfware also represents lost opportunity – dollars tied up in dead software could be reinvested in innovation or more useful tools.

Moreover, a bloated license portfolio without oversight can lead to compliance headaches during audits if not properly reconciled.

In short, reducing shelfware improves cost efficiency and keeps your SAP environment cleaner and easier to manage.

Types of SAP Shelfware

SAP’s licensing broadly falls into two categories, and shelfware can appear in both Named User Licenses and Engine/Package Licenses.

The table below outlines these categories, with examples and how shelfware occurs in each:

Named User Shelfware: Because SAP named-user licenses come in tiers (from high-cost “Professional” and “Developer” licenses down to limited or self-service users), shelfware often takes the form of dormant or misclassified user accounts.

It’s common in large enterprises to discover that a significant percentage of SAP user IDs have not been used for months or years. Each inactive account still counts against your license allotment.

Additionally, if users are all given a default Professional license but many only perform basic tasks (such as time entry or running reports), those extra capabilities are wasted.

A Professional license might cost 5 times more in maintenance than an ESS license, for example.

Similarly, Developer licenses (meant for those who write code or configure SAP) are expensive; if a developer leaves and their account isn’t reallocated or downgraded, that license sits idle. These situations lead to paying high annual support for user licenses that deliver little value.

Engine/Package Shelfware: Shelfware in SAP engines and packages usually appears as entire modules or add-ons that are not in use. For example, a company might have purchased SAP Supplier Relationship Management (SRM) or an industry-specific solution as part of a large deal, but never went live with it.

The software may even be installed on the system, yet no business processes use it – it’s effectively on the shelf. Another form of engine shelfware is when usage metrics fall well below licensed levels.

E.g., you’re licensed for 1,000 concurrent SAP CRM users, but only 100 use it, or you pay for an SAP HCM module covering several sub-modules while only using core HR.

In each case, the organization continues to pay maintenance on the full license scope. These unused engines are prime targets for reduction or repurposing because, by definition, they aren’t critical to operations (the business is getting by without them or with alternatives).

Identifying Shelfware in Your SAP Environment

Before you can reduce shelfware, you need to identify which licenses are unused or underused. This requires gathering data on license entitlements versus actual usage. CIOs should mandate a thorough license audit using both SAP’s native tools and supplemental analysis.

Key methods to identify SAP shelfware include:

• Run SAP License Audit Reports (USMM & LAW): SAP provides built-in measurement tools to assess license usage. The User Measurement Management (USMM) report is executed in each SAP system to count named users by license type and measure engine metrics, such as the number of invoices and payroll employees, depending on the product. The results can be consolidated across systems using SAP’s License Administration Workbench (LAW) to give an enterprise-wide view. By comparing LAW results to what you have contractually purchased, you can spot glaring surpluses. For example, LAW might show you’re using 300 Professional users against 500 purchased, indicating 200 surplus user licenses. Or it might show zero usage for a particular module you own. These reports are essentially the same data SAP would see in an official audit, so they provide a factual baseline of your Effective License Position. Look for modules with no or minimal consumption, user license counts far below entitlements, and any user classified as ‘Professional’ by default. LAW will flag users as ‘Professional’ if their roles aren’t explicitly mapped to a lower category.
• Analyze User Activity and Last Login Data: To delve deeper into named-user shelfware, supplement the raw LAW counts with an analysis of actual user activity. Pull a report of all SAP user IDs, their last login dates, and usage statistics (such as the transactions they execute). This can often be done via SAP security tables, scripts, or with third-party tools. Identify inactive user accounts – for instance, any users who haven’t logged in over the last 90 or 180 days. In a real-world scenario, companies often find that 20–30% of users are inactive, even when managers believe their license assignments are up to date. Also, flag any generic or duplicate accounts (e.g., the same person having separate logins for ECC and BW systems) – those might be consolidated to use just one license. Next, review active users: check if their role permissions line up with the license type they were assigned. You may find dozens of users assigned a Professional license, but whose actual activity is just viewing reports or basic data entry. These users could likely be downgraded to a less expensive license category, such as Limited or ESS, without impacting their work. Such analysis identifies over-licensing situations, where a user’s assigned license level exceeds their needs, effectively freeing up shelfware capacity.
• Inventory All Purchased Modules/Engines: Create an inventory of every SAP product, module, and engine your organization is entitled to under your contracts. For each, determine if it’s deployed and in use, and if so, to what extent. This often involves talking to module owners or checking usage dashboards (for example, to see if anyone is using transactions from the SAP SCM module). Any module or engine with no active users or transactions should be tagged as potential shelfware. Sometimes, the existence of shelfware modules is known informally (e.g., “We bought SAP Payroll but never moved off the legacy payroll system”), but it needs to be documented with the cost impact. Note the annual maintenance cost for each unused component. Even if a module is partially used, check if the usage is far below what is licensed. If an engine license is based on a metric (say, orders processed, database size, or number of employees), compare current actuals to the licensed metric – e.g., using SAP’s measurement output or system data. Significant gaps, such as using 50% or less of licensed capacity, indicate over-licensing. This step often reveals “forgotten” shelfware, such as an add-on installed for a pilot and abandoned.
• Use Specialized License Management Tools or Services: Given the complexity of SAP licensing, many organizations leverage Software Asset Management (SAM) tools or SAP license optimization specialists to identify hidden shelfware. Third-party tools, such as VOQUZ samQ, Snow Software, or Flexera, can automatically scan your SAP environments for usage patterns. They can detect things like the same person holding multiple accounts, a mismatch between roles and actual usage, and indirect usage (users accessing SAP through other systems, which may not require full licenses). These tools often provide recommendations – for example, highlighting 100 users who have developer licenses but never execute any development transactions, or users marked as Professionals who could be reclassified as ESS. Similarly, independent SAP licensing consultants can perform an expert review of your license position, combining technical data with contract knowledge. The goal is to produce a detailed map of which licenses are truly needed and which are shelfware. With this information in hand (often summarized as a list of underused licenses and their cost), CIOs can then plan how to address the surplus.

By using the methods above, you’ll establish a clear picture of your SAP shelfware. It’s not uncommon to discover millions of dollars in license value sitting unused.

For instance, one analysis might find that entire modules (worth, say, $500k) have no users and hundreds of named users allocated to higher license types than necessary. This evidence is crucial for making the case internally (and with SAP) to take action.

Reallocating and Optimizing Unused Licenses (License Recycling)

Once you’ve identified shelfware, the first course of action is to reallocate those unused licenses internally before considering any contract changes.

Think of this as license recycling: making sure that if you paid for a license, it’s either being used productively by someone or being freed up, so you don’t buy another one unnecessarily.

Key strategies for reallocation and optimization include:

• Reassign Idle Named User Licenses: Implement a process to reclaim user licenses whenever an employee leaves or no longer needs SAP access. SAP’s named user licenses are transferable to new users, as long as the previous user’s access is removed. CIOs should ensure that HR off-boarding is linked to IT actions: when an SAP user departs, immediately lock or delete their SAP account and mark that license entitlement as available for reuse. This prevents “license creep,” where new hires get new licenses while old ones sit unused. Track how many licenses of each type are purchased vs. allocated at any time – for example, if you own 1,000 Professional licenses and only 800 are in active use, you have 200 that can be reassigned to new users or projects without purchasing more. Maintaining a central license pool inventory is a best practice. When a department requests access for a new SAP user, the IT asset management team should always check the existing license pool first. By actively reusing licenses from former employees or retired accounts, organizations have avoided significant spending. (One company was able to support a new regional SAP rollout entirely by reassigning dozens of shelfware licenses freed from a recent reorg instead of buying 50 new licenses.)
• Consolidate User IDs and Right-Size Roles: Shelfware can also be reduced by cleaning up how users are assigned licenses. Ensure each person has only one SAP user account (unless necessary) that aggregates their roles across systems. If a user has historically had separate accounts in ERP, BI, etc., consider using SAP’s Central User Administration or other means to link those identities, so a single license covers that user’s activities. This consolidation can immediately cut duplicate license counts. In addition, perform role rationalization: adjust SAP user roles so that each user has the minimal permissions needed for their job. This often means reducing overly broad authorizations that were forcing a higher license classification. For example, if a user was given a developer role but never develops, assign them a more appropriate role and downgrade their license type accordingly. By aligning user permissions with actual usage, many users can be moved to a cheaper license category. In practice, companies might find that a chunk of “Professional” users can be recategorized as “Limited Professional” or “Employee” licenses once their roles are adjusted, preserving functionality for them while saving costs. Regular user access reviews (e.g., quarterly) should be instituted to catch role changes, duplicates, and inactivity. This proactive housekeeping keeps the number of licenses needed at a true minimum.
• Utilize Unused Engines for New Needs (or Retire Them): If you discover a shelfware SAP module that no one uses, consider whether it could be redeployed or substituted for another need before deciding to drop it. For instance, maybe an SAP component was shelved because the project was postponed – is there now an opportunity to use it in a new initiative rather than buying a completely new solution? In some cases, companies find value in reviving a paid-for module when business needs evolve (e.g., using an unused SAP SRM module to build a supplier portal instead of investing in a new procurement system). However, be cautious: only redeploy shelfware if it aligns with the current strategy and has executive buy-in. If the module truly has no foreseeable use, the better approach is to plan for its removal or conversion (discussed in the next section). An alternative form of reuse is license conversion: working with SAP to convert an unused engine license into a license for a different product that you do need. For example, if you have an unused SAP Payroll engine license but need additional SAP Analytics Cloud licenses, you can approach SAP to repurpose that investment. This typically isn’t done unilaterally (it requires negotiation with SAP), but it’s a way to reallocate value from one shelfware asset to a more useful one. We will cover how to negotiate such swaps next.

By instituting these recycling practices, organizations can delay or avoid purchasing new licenses and ensure that their current entitlements are fully utilized. It’s important to treat license management as an ongoing operational process, not a one-time cleanup.

Consider setting up automated monitoring, such as tools or scripts that automatically flag any SAP user who hasn’t logged in for 90 days and queue their license for review or reclamation.

Some enterprises even automate the demotion of inactive users (e.g., moving them to an “inactive” license role that isn’t counted) until they need access again.

The result of diligent reallocation is a leaner license footprint internally, which then positions you to tackle the remaining shelfware in contracts.

Eliminating Shelfware and Reducing Ongoing Costs

After recycling licenses internally, you may still find surplus licenses or modules that no one in the company will ever use. These are true shelfware candidates that should be removed from your SAP agreements to stop the bleeding of maintenance fees.

SAP won’t reduce your license counts unless you take the initiative, so CIOs must proactively pursue options to eliminate shelfware from the contract and reduce costs.

Key tactics include optimizing before contract renewals, negotiating reductions or swaps with SAP, and exploring alternative support options:

• Optimize Before Renewal (Plan and Notify SAP): Timing is crucial. SAP maintenance agreements auto-renew annually, with a ~20% fee applied to all active licenses. However, there is usually a window to terminate licenses before renewal. Get ahead of your renewal date by at least 3-6 months: conduct your shelfware audit and internally decide which licenses and modules you can drop. Most SAP contracts require you to give written notice of license termination well in advance (often 3 months before the renewal date). For example, if your support renews on January 1, you might need to notify SAP by September 30 of the prior year of any licenses you intend to cancel. Missing this window means paying maintenance for another full year on those shelfware items. By planning early, one global firm was able to identify $2 million worth of unused SAP modules and gave notice to terminate them, resulting in an immediate 20% reduction in their annual SAP support bill. Action for CIOs: Align your license review cycle with contract timelines – don’t wait until a week before renewal to start negotiations. Communicate with SAP early about your intention to optimize your license count; this sets the expectation that you will not continue to pay for unused software.
• Negotiate License Terminations or Reductions: The most direct way to eliminate shelfware is to return unused licenses to SAP. This means you give up the right to use those licenses, and SAP, in turn, stops charging maintenance on them going forward. From a contract perspective, you’d execute a formal amendment to remove X number of user licenses or specific product licenses from your entitlement. While SAP sales reps may resist (since it cuts into their recurring revenue), customers are within their rights to terminate unused licenses, provided they give proper notice. Be firm and base the discussion on data, for example: “We have not deployed Module ABC or used these 100 Professional user licenses in over two years – we will remove them from our agreement.” Ensure you have an internal consensus that these licenses are truly not needed (i.e., no hidden users are planning to use them). Once removed, you will immediately stop paying maintenance on those licenses in the next billing cycle. This can yield significant savings – organizations have saved hundreds of thousands of dollars per year by trimming unused licenses. It’s wise to involve your procurement and legal teams to follow the contract procedure strictly. Also, prepare for SAP to possibly offer alternative options, such as swapping products rather than terminating – see the next bullet – as they may prefer to retain some form of your maintenance revenue.
• Exchange Shelfware for Other Licenses (SAP Swap Programs): In some cases, you might prefer not to lose the budget value you’ve invested in licenses but still address shelfware. SAP periodically offers license exchange or conversion programs, especially when new products or cloud solutions are introduced. This is an opportunity to swap unused licenses for licenses of a different SAP product that you need. For example, suppose you have a shelfware SAP SRM module (Supplier Relationship Management) worth $ 500,000 that you’re not using, and you need $ 500,000 worth of SAP Human Experience Management (HXM) licenses. In that case, SAP might allow you to trade one for the other. Essentially, they credit the license value of the unused product toward the purchase of a new one. The catch is that SAP will usually insist the maintenance revenue stays equal or higher – they don’t want to reduce your annual payment. You may end up with new licenses of equal value, keeping your maintenance spend flat (or even slightly higher if you upgrade to more expensive software). However, from the CIO’s perspective, this can be a win because your spending is now going toward useful capabilities instead of waste. When pursuing a swap, come prepared with your analysis of what’s unused and what new software you’d like instead. Engage your SAP account executive and be ready for some negotiation and paperwork. Also, be aware of timing – often, these conversions are easiest to do at a major transition point, such as moving from ECC to S/4HANA or adopting cloud products, where SAP offers formal conversion assistance. Many companies have successfully modernized their SAP landscape by replacing outdated technologies with newer ones, essentially recouping their investment rather than writing it off.
• Consider Maintenance Fee Reductions or Third-Party Support: If outright termination or swapping isn’t feasible (perhaps you want to keep the licenses’ just in case” or SAP isn’t offering a fair trade), you have other cost-cutting options. One approach is to negotiate a reduced support fee for the shelfware portion. While SAP’s standard policy is to charge full support on all licenses, large customers sometimes negotiate exceptions. For instance, you might ask SAP to categorize an unused module as “shelfware in storage” with no support services, thus removing or discounting its maintenance. This is tough to achieve, but if SAP knows you are ready to drop the licenses, they might prefer to grant a temporary discount rather than lose the business entirely. Any such concession should be documented in writing (e.g. an addendum that for product X you won’t receive support and won’t be billed maintenance). Alternatively, you can shift shelfware products to third-party support providers. Companies like Rimini Street and Spinnaker Support will provide support for SAP systems at typically half the cost of SAP’s maintenance. Organizations do this, especially for legacy or unused systems they must keep for record-keeping, but don’t actively develop. By moving to third-party support, you save significantly on fees, albeit sacrificing upgrades and direct SAP help. This tactic can also serve as a bargaining chip – informing SAP that you’re considering third-party support for unused components may motivate them to be more flexible in a deal to eliminate or swap them. CIOs should weigh third-party support carefully (once-off SAP support can be expensive if reinstated later), but for true shelfware that you don’t plan to use in production, it can be a smart cost-saving move.
• Portfolio Rationalization (Preventing Future Shelfware): As a long-term strategy, reduce shelfware by simplifying and right-sizing your SAP portfolio. Often, shelfware accumulates because companies maintain overlapping solutions “just in case.” Conduct regular portfolio reviews to identify if any SAP module can be fully retired due to the presence of other solutions. For example, if you have both SAP’s old Planning module and a newer third-party planning tool, decide on one and eliminate the other. When planning major upgrades, such as migrating to S/4HANA or moving to the cloud, take the opportunity to drop any “dead weight” licenses rather than carrying them over into the new contract. Ensuring that every SAP component you pay for has a clear business owner and purpose will naturally minimize shelfware. This involves governance: get business stakeholders to agree that if a software isn’t providing value, it should be phased out. By continually pruning unused software from the environment, you prevent the pile of shelfware from growing back after you’ve cleaned it up. Many leading IT organizations now include license optimization reviews as part of their annual budgeting, so that any identified shelfware can be addressed before maintenance renewals are due.

Impact on Maintenance and Support Costs:

The payoff from eliminating shelfware is directly visible in reduced support expenses. Since SAP maintenance is a percentage of the license value, cutting $1 of license shelfware often saves $ 0.20 or more every year in the future. Beyond the immediate savings, this has a compounding effect over time – money not spent on shelfware support can be redirected to innovation.

In addition, having only the licenses you use can improve your negotiating leverage with SAP in the future, as your spending is more targeted on value. It also lowers the risk of compliance surprises, since there are fewer unused pieces to track.

In short, addressing shelfware is one of the most tangible quick wins for IT cost optimization in an SAP-heavy organization.

Real-World Examples of SAP Shelfware Reduction

To illustrate how organizations tackle SAP shelfware, here are a couple of anonymized real-world examples that mirror common scenarios:

• Global Manufacturer Frees Up Dormant User Licenses: A Fortune 500 manufacturing company conducted an internal SAP license audit and was surprised to find that about 25% of their named user accounts were inactive (users who had left or not logged in for over a year). This amounted to over 800 dormant SAP users holding expensive Professional and Limited Professional licenses. By systematically removing these users and reclaiming the licenses, the IT team was able to avoid purchasing new licenses for an upcoming SAP rollout in another division. They reassigned the freed licenses to the new project. In financial terms, they saved an estimated $300,000 in new license purchase costs and reduced their annual maintenance fees by approximately $60,000, as those 800 licenses were no longer included in support. The exercise also revealed that many remaining users had been given Professional licenses when a lower-tier license would have been sufficient. After reclassifying roles and downgrading 200 of those users to ESS licenses, the company expects to save an additional $50,000 per year in maintenance. This example highlights how cleaning up user shelfware not only cuts costs but also supports business growth without additional spending.
• Financial Services Firm Cuts Maintenance by Dropping Unused Modules: An international bank has acquired various SAP engines over the years, including SAP Customer Relationship Management (CRM) and an SAP Supply Chain Management (SCM) module, as part of enterprise license agreements. Over time, the bank migrated to specialized platforms, including Salesforce for CRM and a bespoke system for supply chain management, leaving SAP CRM and SCM largely unused. These modules together were consuming over $1 million in license value, with annual maintenance costs of around $ 200,000. The CIO led a portfolio review and, seeing no future need for those modules, decided to terminate the licenses. The bank consulted with SAP about its intention to surrender the CRM and SCM licenses before renewal. After some negotiation (and SAP’s attempts to interest them in swapping for other products), the bank proceeded to cancel those licenses, resulting in an immediate 15% reduction in their SAP maintenance costs moving forward. In another case at the same bank, they found that their licensed SAP HCM user count was much higher than their actual employee count due to a past overestimation. They negotiated to adjust the contract down by 2,000 users, avoiding approximately $ 250,000 per year in unnecessary support. These actions freed up the budget, which the bank reinvested in SAP SuccessFactors, a cloud HR solution, aligning spending with actual usage. The example shows the value of confronting shelfware head-on and renegotiating with SAP to stop paying for what isn’t used.

(These examples are representative; individual results will vary, but many large enterprises report similar findings – double-digit percentages of SAP spending tied up in shelfware until proactive measures are taken.)

Recommendations for CIOs and IT Leaders

To effectively manage SAP shelfware and improve license value, CIOs should take a proactive, structured approach.

Below is a prioritized action plan that encapsulates the steps and best practices discussed:

1. Launch a Comprehensive License Utilization Audit: Start by auditing your current SAP license deployment against actual usage. Leverage SAP’s USMM/LAW reports and, if possible, data from SAM tools to pinpoint unused modules, inactive user IDs, and over-provisioned licenses. Quantify the impact – e.g., “We have 150 Professional user licenses assigned but only ~90 active users” or “Module XYZ costs $100k/year in support and hasn’t been used in 12 months.” Present these findings to stakeholders, such as the CFO and IT governance board, to raise awareness of the shelfware issue and create a sense of urgency for optimization. A data-driven baseline is critical for making informed decisions and justifying changes.

2. Establish License Governance and Ownership: Treat SAP licenses as strategic assets that require ongoing management. Assign clear ownership – for example, designate a Software Asset Management (SAM) team or an SAP License Manager role responsible for tracking license usage and compliance. Set policies such as no purchase of new SAP licenses without first checking for internal availability, mandatory removal or reassignment of licenses when employees exit, and regular (e.g., quarterly) reconciliation of user lists across all SAP systems. Incorporate license oversight into IT governance forums – for instance, have a quarterly review with the CIO and application owners on license utilization metrics. The goal is to make license management an embedded practice so that shelfware is regularly identified and addressed rather than accumulating unchecked.

3. Implement License Recycling Processes: Convert the policies into day-to-day processes that are supported by IT and HR workflows. Integrate license management with onboarding and offboarding: When HR notifies IT of a departure, a task should be created to remove the user’s SAP access and free the license. Likewise, have a standardized procedure for new SAP user requests – for example, a form that the requesting manager submits, which triggers the license administrator to either allocate an existing free license or, if none is available, approve the purchase of a new one. Document how to evaluate and downgrade user licenses if needed (perhaps as part of periodic user access reviews). Then, train your SAP admin or support teams on these procedures so everyone follows them. By institutionalizing license recycling, much like recycling hardware assets, you ensure that reclaimed licenses are tracked and reused efficiently. Over time, this will significantly slow down any growth in license count and keep shelfware to a minimum.

4. Engage SAP (and Vendors) Proactively for Optimization: Don’t wait until a contract deadline or audit to discuss shelfware with SAP. Once your internal analysis is complete, open a dialogue with your SAP account executive about optimizing your license estate. Clearly express which licenses you intend to terminate or swap – being transparent can lead SAP to present options, such as conversion programs or incentives to move to cloud subscriptions using your shelfware credits. It can be beneficial to involve an independent licensing advisor or legal counsel experienced in SAP contracts during these talks, especially if large amounts of money are involved. Aim for a win-win outcome: for example, you drop truly unused licenses but perhaps invest in something new that provides value, keeping the relationship positive. Importantly, start these negotiations well before maintenance renewal dates, so you have time to reach an agreement or exercise the right to terminate if needed. By engaging early, you avoid a last-minute rush and signal to SAP that you are serious about avoiding shelfware, which may make them more willing to collaborate on solutions.

5. Track Progress and Continuously Improve: After taking action, monitor the results regularly. Verify that any licenses you dropped are indeed removed from the next maintenance invoice (audit your SAP bill against the expected reductions). Track your SAP license utilization metrics over time – for instance, report annually how many licenses are in use vs purchased and how that ratio is improving. Celebrate the savings or cost avoidance achieved (e.g., “this year we saved $500k by optimizing licenses and avoiding unnecessary purchases”), and communicate this to the CIO, CFO, and other executives. This not only demonstrates the value of the shelfware reduction initiative but also keeps momentum. Make license optimization a continuous cycle: as your business evolves, new shelfware might emerge (e.g., after a major project, some licenses could become idle again). With a governance framework in place, your team should catch and correct these regularly. Additionally, stay informed about SAP’s licensing changes – SAP may introduce new licensing models or metrics (such as digital access or moves to subscription models like RISE with SAP) that could present new opportunities or require adjustments in your strategy. A savvy IT leader will keep adapting the license management approach to ensure the organization only pays for what it truly needs, year after year.

By following these recommendations, CIOs can systematically reduce SAP shelfware and instill a culture of proactive license management. The result is a leaner SAP license footprint aligned to actual business use, lower ongoing costs, and greater agility to support new initiatives without waste.