SAP Audit Case Study – German Manufacturer Avoids €5M in Indirect Access Fees
Background
A global German manufacturing company, known for its industrial machinery and export business, ran a complex SAP environment across its production plants and supply chain.
The company had integrated SAP with various third-party systems, including customer portals and an IoT platform for machine telemetry. These integrations were crucial for efficiency, but unbeknownst to the company, they posed a potential SAP licensing pitfall.
When SAP initiated a routine license audit, the manufacturer was caught off guard by allegations of indirect access violations.
SAP’s auditors claimed that external systems were accessing SAP data without proper licenses, and they calculated a multi-million euro compliance gap.
Challenges
The audit report presented a shocking figure: nearly €5 million in additional licenses would be required to rectify the indirect usage.
Key challenges the company faced included:
- Understanding Scope: The definition of indirect access was complex. The audit claimed that thousands of documents (sales orders, production updates) created via non-SAP applications required separate licensing. The IT team needed clarity on what truly constituted indirect use versus covered scenarios.
- Data Overlap & Double Counting: The manufacturer suspected the auditors had double-counted certain interactions. For instance, the IoT platform feeding sensor data into SAP might have been counted as multiple users or transactions erroneously.
- Business Impact: Paying €5M in unplanned fees would devastate the IT budget and possibly stall planned projects (like a factory S/4HANA upgrade). Yet, fighting the audit risked straining a critical vendor relationship.
- Urgency: The audit letter imposed a tight timeline to respond and resolve the findings, adding pressure on the relatively small license management team.
Solution (How SAP Licensing Experts Helped)
- Audit Data Reconciliation: SAP Licensing Experts were called in immediately to act as the company’s audit defense team. They obtained the raw usage data from SAP’s audit tools and performed an independent analysis. By cross-referencing system logs, they identified inconsistencies in SAP’s report. For example, certain system accounts were counted as multiple users, and some document counts were inflated due to test system data being included.
- Indirect Usage Clarification: The experts brought deep knowledge of SAP’s indirect access policy. They clarified which indirect scenarios actually required the new Digital Access licenses and which were already covered under existing named user licenses. This analysis dramatically shrank the scope – many of the IoT interactions, it turned out, were updates initiated by licensed SAP users, not truly external usage.
- Strategic Compliance Plan: Armed with facts, the team worked with the manufacturer to develop a remediation plan. Where there were genuine indirect access needs, they proposed adopting SAP’s digital document licensing model but in a controlled way. They calculated that with a moderate number of Digital Access documents, the company could cover the necessary scope for a fraction of the €5M originally cited.
- Negotiation with SAP: In parallel, the SAP Licensing Experts led discussions with SAP’s audit and sales representatives. They presented the corrected usage analysis, pushing back on overestimated claims. The negotiation reframed the situation from a compliance “violation” to a collaborative resolution: the customer would modernize its license model (embracing digital access) if SAP provided a reasonable offer. By leveraging the upcoming S/4HANA upgrade as context (SAP’s incentive to maintain a good relationship), they secured agreement on a much smaller purchase.
- License Settlement Deal: Ultimately, SAP agreed to a settlement where the manufacturer purchased a limited pack of digital access licenses (far below the initial count). The cost was just a small fraction of the €5M originally demanded, spread as credits applied toward the future S/4HANA license conversion. Essentially, the issue was resolved by folding it into the transformation roadmap.
Outcome and Savings
Through expert audit defense and savvy negotiation, the German manufacturer avoided the €5 million bill that was initially on the table. In the end, the out-of-pocket cost to resolve the indirect access matter was negligible, largely handled through credits and minor license adjustments. The immediate financial crisis was averted, preserving funds for the company’s strategic IT initiatives.
Additionally, the process yielded positive side effects: the manufacturer cleaned up its user and integration records, ensuring clearer compliance going forward. By converting to the digital access model in a negotiated way, the company aligned its licensing with SAP’s latest standards without suffering a budget shock.
This case proved that with data-driven analysis and firm SAP license negotiation, even a seemingly dire audit finding can be turned around. The manufacturer’s leadership was relieved to continue its SAP partnership without litigation or massive fees, and SAP retained a major customer gearing up for future investments.
“SAP’s audit had us expecting the worst – a multi-million euro hit. But once the experts stepped in, it was a completely different story. They dissected the audit, negotiated firmly, and saved us from an enormous expense. We came out not only compliant, but with our SAP costs under control,” — Head of IT Operations, German Manufacturing Company
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