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Proactive SAP License Management – Optimization, SAM Tools, and Best Practices

Proactive SAP License Management – Optimization, SAM Tools, and Best Practices

Proactive SAP License Management

Introduction – Why Proactive License Management Matters

SAP license audits are an inevitable part of running SAP software, yet many organizations treat license management as a fire drill only when an audit hits.

This reactive approach often leads to scrambling, surprise costs, and hefty true-up bills. Proactive license management flips the script: by continuously monitoring and optimizing your SAP licenses, you can reduce compliance risks, avoid overspending, and gain leverage when it’s time to negotiate with SAP.

In essence, reactive management means playing defense against SAP’s audit tactics, whereas proactive management puts you in control – ensuring you only pay for what you need and nothing more.

Taking a proactive stance is especially important given SAP’s complex licensing models and revenue-driven audit practices. SAP’s audits can feel like revenue opportunities for them, uncovering compliance gaps that force customers to buy more licenses on SAP’s terms.

By staying ahead of those audits with your own internal checks and optimizations, you protect your budget and avoid being caught off guard.

Proactive license management is not a one-time project but an ongoing discipline – one that can save millions over time through avoided penalties, reclaimed licenses, and smarter purchasing.

The bottom line: it’s far better to continuously housekeep your SAP licenses than to face an ugly surprise once SAP’s auditors come knocking.

License Inventory & Assignment

The foundation of SAP license optimization is a clear license inventory and assignment process. Start by maintaining an up-to-date central inventory of all SAP licenses your organization owns (entitlements) and how each license is assigned to users.

This inventory should detail how many of each license type you have (Professional, Limited/Functional, Employee Self-Service, etc.) and map every active user to an assigned license type.

By knowing exactly what you’re entitled to and who is using what, you can spot mismatches and unused licenses easily.

Just as important is tracking actual usage against entitlements in real time. Monitoring user activity (logins, transactions executed, and roles) helps reveal if a user’s assigned license type is truly necessary.

For example, if a user with a Professional license only logs in once a month to run simple reports, that’s a flag for potential downgrade. Regularly compare usage data to the license type: Are expensive licenses being underutilized? Are there users with no activity still holding a license? This insight feeds directly into optimization actions.

A smart assignment policy can prevent overspending from day one. Default new users to the lowest-cost license type that fits their job, and only upgrade their license if usage data later justifies it.

Too often, companies give every new employee a high-level license “just in case,” resulting in hundreds of pricey Professional licenses when a handful of Self-Service licenses would do. Instead, start users with minimal access licenses and let actual needs drive any upgrades.

This approach ensures you’re not over-licensing by default. Also, always classify each user in the SAP system with the correct license type in their user master data – never leave a user as “unclassified,” since unclassified users may count as the most expensive category in an audit.

By diligently managing your license inventory and right-sizing assignments from the outset, you set the stage for continuous optimization rather than costly surprises.

SAP Audit Defense Strategies: How to prepare for audits, handle interactions with SAP’s auditors, and successfully negotiate outcomes.

Periodic Internal Audits

Waiting for SAP’s official audit to learn about your compliance status is a recipe for unpleasant surprises. Organizations should conduct periodic internal license audits on their own – ideally quarterly, and at least annually – to find and fix issues well before SAP’s auditors arrive.

SAP provides measurement tools (such as USMM for user measurement and LAW/SLAW2 for License Administration Workbench consolidation) that you can run anytime.

By running these tools internally on a schedule, you effectively simulate the audit process and can catch discrepancies in advance.

Perform these internal audits across all your SAP systems to get a comprehensive view of usage versus licenses. For example, run USMM in each SAP system to collect user metrics, then consolidate results in SLAW2 to detect any cross-system duplications or classification errors.

These exercises will highlight if you have more named users in the system than you have licenses for, or if certain users are classified incorrectly (e.g. someone marked as a cheap license while performing activities that require a higher license).

If you find gaps, you have the chance to address them on your own terms: perhaps by cleaning up inactive users, reclassifying some users to the correct license type, or planning the purchase of additional licenses before an official audit forces the issue.

Proactively discovering a shortfall gives you time to budget or negotiate for licenses, rather than scrambling during an audit when SAP knows you’re out of compliance.

Checklist: Internal Audit Steps Before SAP’s Audit

  • Run SAP measurement tools: Execute SAP’s USMM program on all production systems to measure named user license consumption, and use LAW/SLAW2 to aggregate results for a whole-enterprise view.
  • Validate user classifications: Review the classification of each user ID. Ensure no active user is left as “Professional” by default due to missing classification – assign the appropriate license type to every user based on their role and usage.
  • Identify dormant and duplicate accounts: Cross-check the user list with HR records to find users who have left the company or duplicate user IDs. Remove or deactivate these accounts and reclaim their licenses.
  • Compare usage to entitlements: Contrast the measured license counts and activity with your purchased license entitlements. Note any deficits (more usage than licenses owned) or surpluses (licenses owned but not used).
  • Address discrepancies proactively: If internal audits show you’re under-licensed in an area, consider reallocating unused licenses from elsewhere, tightening usage, or planning a purchase before an audit. If you’re over-licensed (shelfware), mark those for possible retirement or reuse. Document all findings and actions for compliance records.

By following this internal audit checklist regularly, you maintain continuous visibility into compliance.

The goal is to catch and fix any compliance issues on your terms – not on SAP’s timeline. When SAP eventually conducts its audit, you should already know the outcome and have no nasty surprises.

Using SAM Tools for Optimization

Keeping tabs on SAP license usage manually can be like finding a needle in a haystack, especially in large enterprises. This is where Software Asset Management (SAM) tools tailored for SAP come into play.

Third-party SAP license optimization tools (and SAP’s own license analytics tools) can automate the analysis of user behavior and license assignments to uncover optimization opportunities humans might miss.

Instead of combing through logs and spreadsheets, these tools continuously monitor how users interact with SAP and compare it to their license types.

A good SAM tool will highlight, for instance, if a user assigned a Professional license only executes transactions that an Employee Self-Service user could do. It will flag that as a candidate for downgrading.

These tools also detect underused licenses (perhaps a block of users who haven’t logged in for 90 days) and even simulate different license allocation scenarios.

For example, you can model “What if we downgraded these 100 users to a Limited license? How much would we save, and would they still be compliant?” The tool can crunch the numbers and tell you the impact, taking the guesswork out of optimization decisions.

Another critical area SAM tools help with is indirect usage monitoring. Indirect access (now often termed “digital access” in SAP’s license model) occurs when non-SAP systems or external applications connect to SAP data.

It’s easy to overlook these, since no named user in SAP may be directly involved, yet SAP licensing still requires coverage for that activity.

SAM tools can track interfaces and document counts to alert you to potential indirect use charges before SAP does. In short, these tools act as a continuously running, intelligent audit and optimization engine on your side.

Below is a quick overview of how SAM tools contribute to SAP license optimization:

Tool FunctionOptimization BenefitExample Outcome (Realized Savings)
Usage Analysis & ProfilingIdentifies users with low activity or limited transaction usage who are assigned high-tier licenses. Suggests reclassifying them to cheaper license types.E.g., flagged 150 users with Professional licenses who only run reports; downgrading them to ESS saved 30% in user license costs.
Duplicate & Inactive User DetectionScans for duplicate user IDs or users who haven’t logged in for a long period, enabling cleanup of redundant accounts. Frees up licenses tied to unused accounts.E.g., found 80 redundant accounts (ex-employees and duplicates); reclaiming these licenses avoided purchasing equivalent new licenses for a new project (saving tens of thousands of dollars).
Indirect Access MonitoringMonitors external systems and interfaces that pull data from or push data into SAP (digital access). Alerts you to unlicensed scenarios of indirect use so you can remediate or license appropriately.E.g., detected a third-party sales app querying SAP data without proper licensing; addressed it early and avoided a surprise audit charge of $200K for unlicensed indirect access.
License Audit SimulationSimulates SAP audit results and compliance reports based on current usage. Helps predict audit outcomes and identify compliance gaps in advance.E.g., trial audit run showed engine metric exceeding license limits; team reduced usage before year-end, preventing an audit finding and $100K true-up.

By leveraging such tools, SAP license administrators can move from a reactive stance to a data-driven, proactive strategy. The tools crunch the data and produce clear actions – downgrades, recycle candidates, indirect usage alerts – which you can then execute.

This not only saves money but also frees up your team’s time from manual analysis. Remember, SAM tools complement (not replace) SAP’s own audit tools: you’ll still use SAP’s USMM/LAW for official counts, but the SAM software gives you the optimization game plan to apply before those official counts are taken.

In summary, investing in a good SAP license management tool can pay for itself many times over by continuously finding ways to eliminate waste and stay compliant.

License Recycling

One hallmark of a mature license management practice is license recycling – the routine of reclaiming and reusing licenses whenever possible. Licenses shouldn’t be treated as “one and done” assignments to users forever; instead, they should be dynamically managed throughout the user lifecycle.

When an employee who has an SAP license leaves the company or no longer needs access due to a role change, that license must be promptly removed from their account and returned to a pool of available licenses.

You can then reassign that license to a new hire or another user who needs it, instead of buying a brand new license. This simple practice of harvesting licenses from departures and disuse can yield huge savings, especially in large organizations with frequent staff turnover or role changes.

The key is to make license recycling an automatic, built-in process. Integrate it with HR offboarding so that whenever someone exits the company, one of the checklist steps (for HR or IT) is to notify the SAP license administrator or trigger a script that deactivates the user’s SAP access and frees up their license.

Ideally, this is automated via your identity management system or an IT service management workflow – so nothing slips through the cracks.

The moment a user is marked as a leaver in HR, their SAP account is locked or removed, and the license count is adjusted. This prevents the common scenario where licenses of past employees remain assigned in the system for months or years, becoming costly shelfware.

License recycling isn’t only for leavers; it also applies when people change roles internally. For example, if a finance user with a Professional license moves to a non-SAP role in marketing, that high-level license can be reclaimed or downgraded because they no longer need it in their new job.

Regular internal reviews will catch these situations (perhaps the user is now barely logging in). By cycling those licenses back into the pool, you avoid purchasing extra licenses for new users when you might already have paid-for licenses sitting idle.

In short, treat SAP licenses as recyclable assets – continually reused and reallocated to meet current needs. This keeps your license utilization high and your costs as low as possible.

Shelfware & Unused Modules

“Shelfware” refers to purchased software licenses or modules that sit unused – essentially, they remain on the shelf while you continue to pay for them. In the context of SAP, shelfware can be a silent budget killer.

It includes anything from surplus named user licenses (e.g. you bought 500 Professional users but only 300 are assigned and active) to SAP modules or engines that were licensed but never fully implemented or no longer needed.

Software not only ties up the initial license fees but also typically incurs annual maintenance costs (around 20-22% of the license price) for as long as you hold those licenses under support. Identifying and eliminating shelfware is thus a critical cost optimization move.

Start by analyzing your license inventory against actual usage (as mentioned in the internal audit steps). Which licenses are unassigned or assigned to users who haven’t logged in for, say, over 90 days?

Those are likely shelfware candidates. Also, review which SAP modules or components you’ve licensed: are there any that no one is actually using in production?

Maybe you bought licenses for an SAP add-on (like a specific industry solution or an engine measured by a certain metric) that never went live, or usage is far below the purchased level. These are prime areas for reduction.

Once identified, you have a couple of options to handle shelfware.

The most straightforward is to retire unused licenses or modules at the next renewal – meaning you inform SAP you will not renew maintenance on those licenses, effectively removing them from your entitlement (check your contract for the notice period and terms for dropping support on licenses).

By doing this, you stop the ongoing maintenance bleed for things you aren’t using. SAP typically doesn’t refund license fees for unused licenses, but at least you won’t keep paying maintenance.

Another approach is to negotiate conversion credits or swaps for shelfware during renewal or purchasing discussions.

For example, if you have 100 unused SAP CRM licenses and you’re now looking to invest in a different SAP product, you can ask SAP to trade those in for credit towards the new purchase.

SAP, at times, offers conversion programs (especially when migrating to newer offerings, such as S/4HANA or cloud solutions), where a portion of your legacy software value can be credited. Even outside formal programs, everything is negotiable – but you must bring it up.

Bundle the shelfware into your negotiation: “We have $X worth of licenses we’re not using. Instead of letting that go to waste, we want to apply it towards Y product or get a discount.” This turns your shelfware into a cost offset rather than pure waste.

In short, shine a light on unused licenses and modules well before renewals. Every shelfware license is money on the table that can either be saved or repurposed.

By proactively dealing with shelfware, you’ll slim down your SAP portfolio to what you truly need, and ensure you’re not paying maintenance on virtual paperweights.

Governance & Processes

Having the right tools and one-off cleanups is great, but without solid governance and processes, optimization gains can evaporate over time. Governance in SAP license management means embedding license considerations into the DNA of your IT and business processes.

One best practice is to involve your SAP license administrator or SAM team in all projects that intersect with SAP, especially those introducing new integrations or systems.

For example, if the sales department wants to connect a new CRM system to SAP, the governance process should require a licensing impact assessment (for indirect usage) before that project gets a green light.

This way, you catch potential indirect access licensing needs or extra user licenses early in the project, not after go-live when an audit finds you unprepared.

Another critical process is to embed license checks into user onboarding and role change procedures. When a new user needs SAP access, don’t just have IT create an account blindly – make them follow a process where the appropriate license type is determined as part of access provisioning.

This could involve a simple decision tree or a quick review by the license management team to assign the correct license type based on the user’s role. It ensures no new user gets more access (and a more expensive license) than necessary.

Similarly, when users change roles or departments, they should have a process in place to review their SAP access and adjust their license classification accordingly.

For instance, if a user moves from an operational role to a read-only oversight role, governance should dictate a license downgrade if applicable.

Governance also encompasses policies and controls to prevent unexpected indirect access. Define rules such as: any new third-party system interfacing with SAP must be evaluated for digital access license impact; or any purchase of a non-SAP software that will use SAP data triggers a license team review.

These policies keep everyone aware that SAP licensing isn’t an afterthought. Cross-functional governance committees can be useful – bringing together IT, procurement, finance, and business stakeholders periodically to review license consumption reports and upcoming changes.

With regular meetings, the organization stays aligned on license usage versus entitlements, upcoming projects that may require licenses, and opportunities to optimize.

In summary, governance and process discipline make proactive license management a business-as-usual effort rather than a sporadic one, ensuring continuous compliance and cost control.

Training & Awareness

Even with great processes and tools in place, an often-overlooked aspect of proactive license management is training and awareness.

SAP licensing is notoriously complex, and it’s not just the IT asset manager or SAP admin who needs to understand it.

Educating a broad audience in the organization – from procurement and finance teams to department heads and project managers – will create a culture of license mindfulness that multiplies your efforts. When people know the rules of the game, they’re far less likely to unknowingly create compliance issues or overspend scenarios.

Start with the basics: run internal workshops or include an overview of how SAP licensing works in onboarding training for key stakeholders. Explain the different user license types and why it matters to assign the right ones (e.g., “giving everyone a Professional license is not only unnecessary, it’s extremely costly – here’s why we care about right-sizing”).

Clarify the concept of indirect or digital access in simple terms: for example, “If you connect another system to SAP, even if no person is logging in, SAP may require a license for those transactions, so involve us early.” When business and IT teams are aware of this, they’re more likely to flag plans that could trigger licensing needs.

Creating visibility is another powerful form of awareness. Consider implementing license usage dashboards for different business units or application owners to provide visibility into license usage across the organization.

For instance, a dashboard might display each department’s number of SAP licenses, their types, and the corresponding utilization percentage. When a department manager sees that 20 of their 50 licenses haven’t been used in months, they’ll be prompted to question if those can be given up or reassigned.

Transparency drives accountability – it shifts license optimization from being an “IT problem” to a shared responsibility. You might even establish internal KPIs or targets (say, maintain at least 90% active use of allocated licenses) to encourage teams to avoid hoarding licenses they don’t need.

Additionally, keep the conversation alive. Regularly share updates or tips, perhaps a quarterly email newsletter: “License Management Tip of the Quarter,” highlighting successes (like “IT reduced costs by $100k through license recycling last quarter”) or cautionary tales from the SAP world (like a news story of a company hit by a big audit penalty, to reinforce why these efforts matter).

When everyone, from end-users to executives, understands the stakes and sees tangible benefits, they are more likely to support and participate in proactive license management practices.

Cost Optimization Levers

Beyond the structural practices we’ve covered, there are specific cost optimization levers you can pull to reduce SAP license spend.

These are tactics to ensure you’re squeezing the most value out of each license dollar and not paying a penny more than necessary.

One major lever is downgrading or right-sizing user licenses. We touched on this in inventory management, but it bears repeating as a cost strategy: Regularly review users with high-cost licenses (e.g., Professional) and analyze if their usage truly demands that level. If not, downgrading them to a lower tier (Limited or ESS) directly cuts costs without impacting their work.

Many organizations find that 10-20% of users can be safely downgraded because their actual system usage is minimal or read-only. Each downgrade from a Professional to a Limited user license, for example, could halve the cost for that user.

Multiply that across dozens or hundreds of user,s and the savings are substantial. Additionally, ensure that new SAP users always start at the lowest appropriate license tier, as mentioned – this prevents over-licensing from creeping back in.

Another lever is to negotiate tiered pricing and volume discounts with SAP whenever you purchase licenses. SAP’s price list is not set in stone; if you’re adding a significant number of licenses or expanding into new modules, use that as an opportunity to obtain better pricing per unit.

For instance, if you foresee needing 500 additional Employee Self-Service users over the next year, don’t buy them ad hoc in small batches. Instead, approach SAP to negotiate a bulk purchase or an anticipated growth bundle at a discounted rate.

SAP sales teams often have flexibility, especially at the end of the quarter/year, to offer tiered pricing (the per-license cost drops as you buy more).

The key is to plan and consolidate purchases to maximize your bargaining power, rather than one-off buys, which give SAP the upper hand.

You should also use all the data from your proactive efforts as leverage in negotiations and renewal talks.

This means coming to the table with clear evidence of what you actually use. When SAP’s sales team suggests renewing 1,000 licenses because that’s what you purchased five years ago, you can counter with, “Our analysis shows we only need 700 now, here’s the breakdown by license type.”

By demonstrating that you have a grip on your usage and licenses, you make it harder for SAP to upsell or overcharge you. In fact, you might uncover you’ve been overpaying for maintenance on those extra 300 licenses and demand a reduction.

Always remember, optimized license data is power – it provides the factual backup to push for better terms and avoid the “fear, uncertainty, and doubt” tactics that can lead to over-licensing.

In summary, continuously look for ways to reduce license counts safely, pay less for the licenses you do need, and use your proactive management results to drive better deals.

These cost levers, combined with the governance and tools mentioned earlier, form a comprehensive approach to minimizing SAP spend without risking compliance.

Renewal Leverage

SAP contract renewals (or true-up negotiations) are critical moments where proactive license management pays off in a big way.

If you’ve done your homework up to this point – cleaned up unused licenses, optimized allocations, tracked your usage you enter renewal discussions with hard data and a strong hand. This section focuses on how to leverage that preparation to secure the best possible outcome at renewal time.

Firstly, bring a precise, data-backed understanding of your needs to the negotiation.

Rather than simply renewing what you had last time (which might include shelfware or inflated numbers), present SAP with the facts: for example, “We currently have 70 Professional users actively using the system, not the 100 we originally licensed, so we will be renewing support for 70 and require credits or termination for the rest.”

By clearly stating what you need (and no more), you prevent SAP from defaulting the contract to historical usage or their own forecasts.

It flips the conversation to be based on your actual environment. Be prepared to show how you arrived at those numbers (internal audit reports, usage metrics) to counter any pushback.

Next, use your optimization achievements as bargaining chips.

If over the past year you reclaimed 50 licenses via recycling and eliminated a costly engine you weren’t using, bring that up: “We’ve optimized internally and won’t be needing these licenses/modules in the future. We’d like to convert them to something more useful or remove them from the contract to lower our costs.”

This tells SAP you are an informed customer actively managing your licenses – and you expect the renewal to reflect that efficiency. SAP representatives may try to persuade you to keep shelfware “just in case” or bundle in products you didn’t ask for. Stay firm and stick to the data. Highlight that any shelfware you identified is on the chopping block.

One effective tactic is to request conversion of shelfware into newer products or services. For instance, if you’re adopting an SAP cloud service, ask to trade those 50 unused on-premises licenses for credits toward the cloud subscription.

The key is to get value for what you’ve paid for, rather than continuing to pay maintenance on something you don’t use.

Also, negotiate maintenance terms on any changes. If you downgraded a bunch of users from Professional to a cheaper license, ensure your maintenance bill reflects that lower-cost license going forward. Don’t allow SAP to keep charging maintenance as if they were all still Professional.

This might require explicitly adjusting the license counts in the contract. Similarly, if you are removing licenses, push to remove their maintenance fees entirely.

Be aware that SAP (like many vendors) is reluctant to decrease the support base because it’s lost revenue for them, but this is exactly why you need to use renewal time to assert these changes.

You might consider aligning any request for additional licenses or new products with concessions on removing old ones (“We’ll purchase X new licenses, but we need to drop Y shelfware licenses without penalty”).

In summary, approach your SAP renewal like a well-prepared buyer: armed with data, clear on what you do and do not need, and ready to push for terms that reflect your optimized state.

Proactive license management ensures that when you sit at that table, you have leverage – you’re not at SAP’s mercy, because you know your environment better than anyone and have already taken steps to minimize your requirements.

This often leads to tens of percent in savings on renewals and avoids the costly trap of over-licensing “to be safe.” In the end, renewal leverage is about capitalizing on all the proactive work you’ve done: it’s where the strategy yields concrete financial results.

FAQs

Q: How often should internal audits be run?
A: Aim to run internal SAP license audits at least quarterly. This frequency ensures you catch compliance issues or usage changes early. Many companies only check annually (or just before an anticipated SAP audit), but quarterly audits provide a much tighter control loop. In fast-changing environments, some even perform cursory checks monthly. The goal is to spot and resolve discrepancies well before any official audit – so when SAP comes, you’re fully prepared and compliant.

Q: Do SAM tools replace SAP’s USMM/LAW for audits?
A: No – SAM tools complement SAP’s own measurement tools but don’t replace them. You will still use SAP’s USMM/LAW or newer measurement programs to generate the official license audit data that SAP recognizes. What SAM tools do is help you analyze and optimize in advance: they might even use USMM data under the hood, but with added intelligence to recommend optimizations. Think of SAM tools as your internal assistant to get everything in order; when it’s audit time, you’ll still run SAP’s tools to produce the figures for SAP, with confidence that your SAM tool has helped you get those figures where you want them.

Q: Can shelfware be traded for credits or other licenses?
A: Often yes, but it’s not automatic – you have to negotiate for it. SAP doesn’t typically volunteer to give you credit for unused licenses. Still, if you bring it up during a renewal or a migration (say to S/4HANA or to cloud services), they have been known to offer conversion programs or one-time credits. For example, SAP has programs that allow you to convert the value of on-premise licenses into cloud subscription credits. Even outside formal programs, if you have a chunk of shelfware, you can ask: “We want to drop these 200 unused licenses and get equivalent value applied to new products we do need.” The outcome will depend on your negotiation leverage and SAP’s willingness to maintain the relationship, but customers have successfully traded shelfware for other investments. The key is to identify the shelfware and raise the request; if you don’t ask, you won’t get it.

Q: How do I prevent over-licensing at true-up or year-end?
A: Preventing over-licensing comes down to continuously aligning licenses with actual usage before the true-up event. Throughout the year, track usage and reclaim or reassign licenses as usage patterns change (via the strategies discussed: downgrades, recycling, etc.). By the time the true-up (annual reconciliation) arrives, you should have an accurate count of what’s truly needed – no more, no less. This means you won’t be buying “extra” licenses out of uncertainty. Another tip: communicate with business units as true-up time approaches, so there are no surprise new users or projects that demand licenses at the last minute. And if you do discover a need to true-up (buy additional licenses due to growth), use that moment to right-size everything. Don’t just add licenses blindly; see if any can be freed from elsewhere. In short, constant monitoring and internal adjustment prevent the scenario of over-buying in a panic at year-end. It turns true-up into a planned activity rather than a reactive one.

Q: What ROI can proactive license management deliver?
A: Proactive license management can deliver a very compelling ROI. In hard numbers, organizations often see double-digit percentage reductions in their annual SAP spend. For example, through a combination of user downgrades, recycling, and cleaning up shelfware, a company might cut 15-30% of its license and maintenance costs – savings that recur year after year. If you’re spending $5 million a year on SAP, even a 10% optimization is $500k saved annually. Those savings alone often dwarf the cost of any tools or staff time invested in license management. Beyond direct cost savings, consider the avoidance of unbudgeted audit fees (which can be millions) – that risk reduction is a form of ROI too. There’s also value in the improved bargaining position you gain; you might negotiate a better deal at renewal because you have your house in order. When all is said and done, proactive management not only pays for itself, it becomes a strategic cost management lever. Many CIOs and CFOs report that the visibility and control gained is priceless – you’re no longer flying blind in one of your biggest IT expenditures.

Five Expert Recommendations

  1. Run quarterly internal audits, not just annually. Regular self-audits catch compliance issues early and keep you continuously compliant, avoiding last-minute scrambles.
  2. Automate license recycling via HR offboarding. Make reclaimed licenses from departing staff an automatic process to prevent the buildup of unused accounts and needless purchases.
  3. Use SAM tools to uncover and act on optimization opportunities. Leverage specialized tools to identify downgrades, duplicates, and indirect usage – then follow through on those insights to save money.
  4. Retire or convert shelfware at every renewal. Don’t keep paying maintenance on unused licenses or modules; eliminate them or negotiate their value into something useful whenever you renegotiate with SAP.
  5. Always bring optimized license data to SAP negotiations. Go into renewals or audits armed with facts and figures from your proactive management – it’s your best weapon to right-size contracts and push back on any upsell pressure.

By following these expert recommendations and fostering a culture of proactive SAP license management, your organization can significantly reduce wasteful spending and audit risks. Instead of dreading SAP audits or true-ups, you’ll approach them with confidence, knowing you have a firm grip on your license landscape and costs.

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  • Fredrik Filipsson

    Fredrik Filipsson is the co-founder of Redress Compliance, a leading independent advisory firm specializing in Oracle, Microsoft, SAP, IBM, and Salesforce licensing. With over 20 years of experience in software licensing and contract negotiations, Fredrik has helped hundreds of organizations—including numerous Fortune 500 companies—optimize costs, avoid compliance risks, and secure favorable terms with major software vendors. Fredrik built his expertise over two decades working directly for IBM, SAP, and Oracle, where he gained in-depth knowledge of their licensing programs and sales practices. For the past 11 years, he has worked as a consultant, advising global enterprises on complex licensing challenges and large-scale contract negotiations.

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