- Based on the number of named users.
- Different license types (professional, limited, developer, etc.).
- Additional licenses are required for indirect access.
- SAP audits usage to ensure compliance.
- Some licenses cover specific modules or applications.
- Usage is monitored via SAP’s License Management system.
SAP Employee Licensing: A Quick Guide for Businesses
SAP (Systems, Applications, and Products) is one of the leading enterprise software providers worldwide, offering integrated solutions that help companies manage their business operations effectively.
Employee licensing is crucial for organizations using SAP, as it determines how employees access SAP systems and functionalities.
This article will explore SAP employee licensing in detail, breaking down key concepts, types, best practices, and considerations.
What is SAP employee licensing?
SAP employee licensing refers to the system by which SAP charges customers for allowing employees to access SAP’s applications and services.
SAP does not sell its software in a one-size-fits-all format; instead, licenses are structured based on each employee’s roles and functions within the system.
Key Concepts:
- License assignment: Each user in the SAP system is assigned a specific license type that governs their access to various SAP functionalities.
- Compliance: SAP customers are responsible for ensuring their employees are assigned the appropriate licenses based on usage to remain compliant and avoid audits or penalties.
SAP employee licensing can be complex due to the different license types and metrics available. Understanding these nuances is essential for any company using SAP products.
Types of SAP Licenses
SAP offers various licenses tailored to employees’ roles and the degree of system usage. Let’s look at the most common SAP license types.
SAP Named User Licenses
A Named User License is assigned to an individual employee and provides access to specific functionalities within SAP. Each named user must have a license tied to their unique user ID. This license type is typically required for employees who must interact regularly with SAP modules.
Example: If a financial analyst frequently uses SAP’s Financial Accounting (FI) module for reporting and analytics, they would be assigned a Named User License to access that functionality.
SAP Concurrent User Licenses
A Concurrent User License allows multiple employees to share a pool of licenses. However, only a limited number of users can access the system anytime. This license type is useful for employees who only occasionally need to access SAP.
Example: If an organization has 50 employees who need periodic access to SAP but no more than ten are using it simultaneously, they could purchase 10 Concurrent User Licenses.
SAP Employee Self-Service (ESS) and Manager Self-Service (MSS) Licenses
The ESS and MSS licenses allow employees and managers limited access to SAP for performing basic HR-related tasks.
- ESS License: Enables employees to access personal information, submit leave requests, view pay slips, etc.
- MSS License: Managers can approve or reject employee requests, review team information, and manage performance reviews.
Example: A company could assign all employees an ESS license for accessing payslips and requesting time off, while department heads might be assigned MSS licenses for managing approvals.
SAP Professional, Limited Professional, and Developer Licenses
- Professional License: This license provides full access to SAP functionality and is designed for users whose work depends heavily on SAP across multiple modules and business processes.
- Limited Professional License: This license offers a more restricted level of access for users who need access to a smaller subset of SAP functions.
- Developer License: This license is for technical users who need to develop and customize applications in the SAP environment, such as SAP ABAP (Advanced Business Application Programming) developers.
License Metrics and Usage
Understanding how licenses are measured and assigned is key to managing SAP employee licensing effectively.
License Metrics Overview
SAP typically uses named user licensing or engine-based licensing models.
- Named User License: As the name suggests, this license is tied to a specific employee. These licenses are usually role-based, meaning that employees who perform certain functions (e.g., HR, finance) are assigned licenses based on their organizational roles.
- Engine-Based Licensing: This refers to licensing based on the usage of certain functionalities or engines (e.g., the number of transactions processed or database size).
User Licensing vs. Role Licensing
In user licensing, employees are assigned licenses based on their usage of SAP functionalities. In role licensing, the license type is assigned based on the employee’s role in the company (e.g., finance, HR, sales). License assignment can also depend on the user’s access to specific SAP modules.
SAP Indirect Access and License Compliance
One of the most complex aspects of SAP licensing is indirect access.
What is Indirect Access?
Indirect access occurs when an SAP system is accessed through a third-party application or an interface without directly logging into SAP. This could be through non-SAP software that interacts with SAP systems via an API (Application Programming Interface) or other integration methods.
Example: If a sales system outside SAP sends an order into the SAP ERP system for processing, this could be considered indirect access.
Indirect Access Challenges
Indirect access has become critical for many companies, especially during SAP audits. If employees indirectly use third-party applications to access SAP, additional licensing could be required even if those users are not logging into SAP.
Common challenges include:
- Undocumented indirect usage: Companies may not realize they are in breach of licensing terms because employees are accessing SAP systems indirectly.
- Audit risks: SAP audits can incur significant financial penalties if indirect access is discovered without proper licensing.
How to Manage SAP Licenses Effectively
Managing SAP licenses effectively requires proactive strategies and constant monitoring to ensure compliance and cost efficiency.
Here are steps to manage your SAP licenses:
- Track Usage Regularly: Continuously monitor how employees are using SAP systems. Identify underutilized or unused licenses to optimize the licensing structure.
- Assign Appropriate Licenses: Ensure employees are assigned licenses matching their usage. Employees accessing only self-service functionalities should not be assigned Professional Licenses.
- Implement Role-Based Access: Instead of giving all employees broad access, use role-based assignments to limit access to only the functionalities necessary for their jobs.
- Use License Management Tools: SAP offers solutions such as SAP License Management to help organizations track usage and optimize licenses. Third-party tools like Snow Software or Aspera can also help manage licenses more effectively.
Best Practices for SAP License Optimization
Optimizing SAP licenses can save your company significant costs and ensure compliance. Below are best practices for managing and optimizing SAP employee licenses.
Best Practices:
- Conduct Regular Audits: Regular internal audits help identify over- or under-licensing situations and ensure that license assignments match the organization’s current needs.
- Rightsize Licenses: Eliminate licenses for inactive users and rightsize licenses for users who may have been assigned higher-tier licenses than necessary.
- Negotiate with SAP: If your company is growing or making significant changes to its SAP environment, it’s essential to negotiate favorable licensing terms with SAP to meet future needs.
- Monitor Indirect Access: Analyze all interfaces between SAP and non-SAP systems to identify potential indirect access risks. If indirect access is used, ensure the proper licenses are in place to avoid penalties.
- Automate license management: leverage automated tools to continuously monitor user activities and license utilization.
- Training and Awareness: Educate employees about the importance of proper system usage and its impact on license costs and compliance.
SAP Employee Licensing FAQs
What is SAP employee licensing?
SAP Employee Licensing is based on the number of named users who access the system. Each user is assigned a specific license type based on their role and required access.
How does SAP determine licensing costs?
License costs are determined by the number of users, their roles, and the level of system access they require. Additional costs may apply for indirect access or specific modules.
What are the different types of SAP licenses?
SAP offers several license types, including Professional, Limited Professional, Developer, and Employee. Each type is tailored to specific user roles and system usage.
Do all employees require an individual license?
Yes, each employee who accesses SAP must have a named user license. The license type depends on their level of access and responsibilities within the system.
What is indirect access in SAP licensing?
Indirect access occurs when users or systems interact with SAP indirectly through third-party applications. SAP may require additional licenses for such interactions.
How is user activity monitored in SAP?
User activity is tracked through SAP’s License Management system, which records access patterns and helps ensure compliance with licensing agreements.
What happens during an SAP license audit?
During an audit, SAP reviews your system usage to confirm the number and type of licenses match your user activity. Non-compliance may lead to additional costs.
Can licenses be shared among multiple employees?
No, SAP licenses are assigned to named users and cannot be shared. Each employee requires a license.
Is there a difference between employee and external user licenses?
Yes, SAP differentiates between internal employees and external users, such as partners or customers. Each group requires specific license types.
Can I upgrade or change a user’s license type?
User license types can be upgraded based on evolving roles or system access needs. This must be done in coordination with SAP.
Do I need to license users accessing SAP through third-party applications?
Yes, depending on their interactions with SAP data, users who access SAP through third-party applications may still require a license.
How can I manage SAP license compliance?
SAP provides tools for monitoring license usage, such as the License Management system. Regular audits and reviews help ensure compliance with SAP’s licensing policies.
What should I do if my company exceeds the number of licensed users?
If your company exceeds the licensed number of users, additional licenses must be purchased to cover the extra usage.
Do specific modules require separate licenses?
Yes, some SAP modules, such as CRM or Supply Chain Management, may require additional licenses depending on user access and usage needs.
How can I reduce the cost of SAP licenses?
Managing user roles carefully and ensuring that employees only have access to necessary functions can help control costs. Indirect access also needs to be carefully monitored to avoid additional fees.
