Metrics for License Audits in SAP
- Track User Access Levels: Measure access rights by role.
- Monitor License Usage: Review active and inactive licenses.
- Check Role Compliance: Ensure roles align with license types.
- Review User Activity: Track the frequency of system use.
- Identify License Overlaps: Spot unused or duplicate licenses.
Metrics for License Audits in SAP
SAP license auditing involves complex metrics and measurement processes that organizations must carefully navigate to maintain compliance and optimize costs.
Understanding these metrics is essential for organizations using SAP to ensure compliance and cost-effectiveness in their licensing strategies.
Let’s explore the key aspects of SAP license audit metrics and their implications for successful management.
Named User License Metrics
Named user licenses are a core component of SAP licensing and can account for 40-70% of an organization’s total SAP contract costs.
Each user requires a specific license type, determined by their system access and usage patterns.
Organizations must regularly evaluate user activity across all systems to ensure compliance. They must also align the assigned license type with each user’s role and activities.
License Type Hierarchy
SAP offers a tiered structure for named user licenses, each tier providing different levels of access and system capabilities:
- Developer Licenses: These licenses are at the highest tier, allowing users to create custom features and perform development tasks within the SAP system.
- Professional Licenses: These licenses, designed for management and system administration users, allow broad access to SAP’s features.
- Limited Professional Licenses: These licenses offer restricted capabilities and suit users with more operational, task-specific responsibilities.
- Employee Self-Service (ESS): Aimed at users who need to perform basic HR functions such as updating personal details or requesting time off.
- Worker User: Primarily for production data entry, this license is ideal for manufacturing or assembly line workers.
- Logistics User: Tailored for roles in transport and warehouse management, these users have specific functionalities related to inventory and logistics.
Named user licenses involve careful analysis of user behavior to prevent under-licensing or over-licensing.
Each user’s activity must be monitored to determine whether they continue requiring the same license type or if their role changes.
Employee promotions, departmental changes, or job transitions often necessitate adjustments to user license types. Organizations should automate this reclassification process to reduce administrative burden and ensure timely compliance.
Engine and Package Metrics
Apart from named user licenses, SAP also employs a wide range of metrics to measure the use of engines and packages, often referred to as “modules” or specialized functional units within SAP.
More than 100 metrics vary based on the industry and the specific business processes used.
Common Engine Metrics
Common metrics used for engines and packages include:
- Number of Employees: A measure often used for Human Capital Management (HCM) engines.
- Number of Orders Processed: Typically used for logistics or supply chain modules.
- Annual Revenue: Used as a metric for engines supporting sales or financial operations.
- Annual Spend Volume: Measures procurement activities and is common in supplier management engines.
- Processor Cores: Relevant for engines closely tied to computational power requirements.
- Storage Volume in Gigabytes: Metrics that apply to data-intensive engines, such as SAP HANA or data archiving solutions.
Accurately measuring engine and package usage metrics is critical for organizations to stay compliant and avoid incurring additional costs due to incorrect measurements.
Engine licenses are typically attached to specific functionalities beyond the basic SAP platform and require constant monitoring to determine peak usage levels, functional overlaps, and redundant engine utilization.
Digital Access Metrics
In addition to user licenses and engine metrics, SAP has introduced licensing for digital access, which primarily focuses on document-based measurements.
Digital access covers indirect system access, such as third-party applications interacting with SAP systems. The measurement process for digital access typically involves two primary methods:
SAP Passport Method
The SAP Passport method automatically tracks externally triggered documents. It logs these interactions within USMM (Usage Statistics Maintenance Manager) and records them in LAW (License Administration Workbench) logs for further validation.
This automated counting mechanism helps ensure that all digital interactions are accounted for without manual intervention.
Digital Access Estimation
The Digital Access Estimation approach requires installing specific SAP notes, which enable the system to estimate the volume of documents generated by external systems. This estimation is followed by manual analysis to ensure that internal documents, which should not be counted, are excluded from the final figures.
Organizations must have comprehensive mapping strategies to distinguish between direct and indirect system interactions.
This includes classifying whether data generation occurs from internal employee actions or external third-party interaction, directly impacting the digital access audit outcomes.
System Measurement Tools
SAP provides system measurement tools that collect and consolidate usage data to conduct license audits effectively. Two primary tools are used for this purpose:
USMM (Usage Statistics Maintenance Manager)
USMM is the primary tool for gathering system usage data during license audits. It is responsible for:
- Extracting usage statistics from all connected SAP systems.
- Measuring named user activity to ensure accurate license assignment.
- Tracking the consumption of SAP engines and packages.
- Identifying technical user accounts that may require licensing.
Regular evaluations through USMM can reveal if a user is actively contributing to system usage or is simply occupying an unnecessary license seat.
This is especially important for companies with high user turnover, where employees may leave, but their system credentials remain active, causing companies to pay for unneeded licenses.
License Administration Workbench (LAW)
The LAW tool works alongside USMM to consolidate measurement results across multiple SAP systems. Its key functions include:
- Eliminating Duplicate User Counts: LAW helps ensure that a user with access to multiple systems is counted only once for licensing purposes.
- Consolidating Engine Metrics: It combines all engine and package data to present a unified audit report.
- Generating Audit Reports: LAW provides detailed audit results for compliance verification.
- Facilitating Data Transfer to SAP: The tool streamlines the audit data submission to SAP for review.
LAW also allows businesses to simulate the effects of licensing changes.
This “what-if” capability allows for testing new configurations or the potential impact of shifting users to different license types, providing insight into how costs might be impacted.
Read about SAP license metrics for large enterprises.
Audit Process Metrics
SAP license audits are typically conducted annually, with each audit following a structured approach that involves specific measurement criteria:
Measurement Scope
The measurement scope during an SAP license audit covers the following:
- ABAP Systems Measurement: Measurement of core SAP systems using ABAP (Advanced Business Application Programming).
- JAVA-Based Systems Evaluation: Measurement of SAP systems built on the JAVA platform.
- Cloud Product Usage Assessment: Assessment of cloud-based solutions to determine compliance.
- Self-Declaration for Unmeasurable Products: Organizations must provide self-declared metrics for certain products that cannot be automatically measured.
Coverage Limitations
One of the challenges of SAP licensing audits is that standard measurement tools only cover 60-70% of license assets. Some products, particularly newer or niche solutions, may require manual reporting. Cloud-based solutions are generally measured directly by SAP, adding another layer of complexity to the audit.
Compliance Measurement
Organizations must carefully manage compliance metrics to meet SAP’s licensing requirements. Key areas of compliance include:
- User Classification: Ensuring that users are classified accurately based on their activities.
- Activity-Based License Assignment: Assigning licenses based on the user’s activities and access patterns.
- Function Usage Tracking: Monitoring which SAP functions are used to determine the appropriate license type.
- Transaction Frequency: Analyzing how often users access different functions to optimize license assignments.
Addressing indirect access is also crucial to maintaining an ongoing record of compliance. Policies to document indirect access scenarios, such as third-party interfaces and system-to-system integrations, are vital.
Ensuring these interactions are accurately reflected in the licensing counts helps organizations avoid surprises during audits.
Engine Utilization
Accurate engine utilization metrics are also crucial for compliance. Organizations should measure consumption patterns, identify peak usage periods, and consolidate system-wide metrics to ensure engine licenses are optimally assigned.
Understanding how engines are utilized during peak business cycles provides insight into potential licensing needs that may not be apparent during off-peak times.
For example, a retail company may need more logistics engine licenses during the holiday season. By recognizing these patterns and adapting licensing levels accordingly, businesses can avoid non-compliance during high-demand periods.
Read about real-time monitoring of license metrics.
Cost Optimization Metrics
In addition to compliance, organizations need to focus on cost optimization to reduce the overall financial burden of SAP licensing. Cost optimization efforts should include tracking the following:
Usage Efficiency
- Active vs. Inactive Users: Identify inactive users who are still assigned licenses and can be reclassified or deactivated to save costs.
- License Type Distribution: Ensuring that users are assigned the lowest possible license type that meets their requirements.
- Function Utilization Rates: Evaluating which features and functions are used to avoid paying for unnecessary access.
- System Access Patterns: Understanding how users access SAP systems to optimize license allocation.
License Distribution
Organizations should also monitor their user license allocation, engine consumption trends, package utilization rates, and digital access volumes to ensure that licenses are used effectively.
Identifying Cost-Saving Opportunities
One key strategy for cost optimization is to look for underutilized licenses. By identifying users with Professional licenses who do not need such broad access, organizations can downgrade them to Limited Professional or other more suitable types.
Enhanced License Audit Metrics
Every three years, SAP conducts an enhanced audit process that examines several additional aspects of system usage, including:
- Detailed User Activity Analysis: SAP analyzes user activity more deeply to verify that licenses match usage patterns.
- Engine Consumption Patterns: A detailed review of engine consumption is conducted to identify potential compliance issues.
- Package Utilization Metrics: Package usage is scrutinized to ensure alignment with contractual entitlements.
- Indirect Access Assessment: This process reviews indirect access to determine whether third-party applications interact with SAP systems in ways that require licensing.
Compliance Verification and Self-Declaration Requirements
Organizations must verify compliance through license inventory validation, usage rights confirmation, contract alignment checks, and technical user evaluation.
Organizations must self-declare product metrics that cannot be measured through standard tools, such as CRM usage statistics, Business Objects utilization, HANA consumption, and third-party integration points.
Self-declaration requires maintaining a strong and transparent documentation trail. Organizations should keep detailed records of user activity, access levels, and all SAP system interactions.
This ensures that SAP’s auditing team can easily cross-referenced and validated the self-declared metrics during an audit.
Future-Proofing Metrics
As organizations grow and evolve, they should consider emerging measurement requirements to future-proof their licensing strategy.
Key considerations include:
- Cloud Transition Impacts: Understanding how migrating to cloud solutions will affect licensing.
- Digital Transformation Measures: Identifying new metrics that arise from digital transformation initiatives.
- Integration Complexity: Evaluating how complex integrations with third-party applications impact licensing needs.
- User Behavior Patterns: Monitoring changes in user behavior to adjust license types and optimize costs.
Planning for future-proofing involves adopting a flexible licensing strategy that can adapt to changing business environments.
SAP’s licensing models evolve as more organizations migrate to the cloud. Companies must keep abreast of these changes to ensure they take advantage of the most beneficial pricing and licensing options.
Measurement Best Practices
To maintain accurate and efficient metrics for SAP licensing audits, organizations should implement the following best practices:
Regular Monitoring
Conduct quarterly internal audits to track usage patterns, monitor engine consumption, and review user classifications. Regular internal audits help identify potential compliance risks before the annual SAP audit.
Regular monitoring also enables organizations to identify trends over time, such as increased use of a particular engine or a shift in the type of licenses required due to changing business processes.
Documentation Requirements
Maintained detailed usage logs, recorded system configurations, documented license assignments, and tracked measurement results. Proper documentation is critical for proving compliance and ensuring that all license-related decisions can be supported during an audit.
FAQ: Metrics for License Audits in SAP
What is an SAP license audit?
An SAP license audit checks whether your organization complies with the terms of its SAP software licenses and ensures that the correct number of licenses are in use.
Why are SAP license audits important?
They help avoid costly fines for overuse, underuse, or non-compliance with SAP’s licensing agreements.
How often should SAP license audits occur?
It’s recommended that SAP license audits be conducted at least annually or whenever there is a significant change in system usage or personnel.
What happens if I don’t comply with SAP licenses?
Non-compliance can lead to penalties, backdated license fees, or legal action from SAP.
What tools can assist in SAP license audits?
SAP License Management tools and third-party audit software can simplify tracking and compliance.
How do I monitor SAP license usage?
Monitor user activity, check license assignments, and analyze reports for discrepancies between licenses used and purchased.
What role do SAP user roles play in license audits?
User roles define the type of license required. Proper mapping ensures you don’t over-purchase or under-use licenses.
Can SAP license audits identify redundant licenses?
Yes, audits can reveal duplicate licenses and users who no longer require access, helping reduce costs.
How can I avoid SAP license audit issues?
Maintain up-to-date records of user roles, system usage, and license assignments. Regularly review your system for compliance.
What is the best way to prepare for an SAP audit?
Ensure all user roles are properly assigned, license usage is accurately tracked, and your SAP data is clean and organized.
How does SAP classify licenses?
SAP classifies licenses by user roles, system usage, and functionality needed. Common categories include Professional, Limited, and Employee licenses.
What are indirect users in SAP licensing?
Indirect users access SAP data through other systems or applications. These users often require additional licenses.
Can I reassign SAP licenses during an audit?
Reassigning licenses can be done, but it should be properly documented to ensure compliance during audits.
What data is required for an SAP license audit?
You’ll need detailed reports on user roles, system usage, and license assignments.
How does SAP licensing impact my costs?
The type and number of licenses needed directly influence the SAP system cost. Proper management helps avoid overspending.
