SAP License Optimization Case Study: Brazilian Food Distributor Saves $1.5M in Unused License Waste
Background
A leading food distribution company in Brazil, servicing thousands of retailers and restaurants, relied on SAP to run its supply chain and logistics.
Over the years of growth and acquisitions, the company had accumulated more SAP users and engine licenses than it actively used. The IT department suspected significant shelfware (licenses purchased but not deployed effectively) was inflating costs.
Challenges
The distributor was paying substantial yearly maintenance fees on SAP licenses that brought little to no value. An internal analysis estimated that $1.5 million worth of licenses were either unassigned or assigned to inactive users – essentially money wasted.
The challenge was to identify exactly where the waste was, retire or reallocate those licenses, and negotiate terms with SAP to reduce ongoing costs, all without jeopardizing any critical system access for the business.
Solution (How SAP Licensing Experts Helped)
- Comprehensive License Audit: The company brought in SAP Licensing Experts to conduct a full SAP License Optimization audit. The team gathered SAP system data on user logins, license assignments, and engine usage over the past year.
- Identification of Shelfware: Analysis quickly revealed thousands of licenses tied up in dormant accounts or allocated to modules that the company had phased out. For instance, the firm had licenses for a manufacturing module that was no longer in use after a business unit sale. The advisors compiled a list of these underutilized or unused licenses, totaling roughly $1.5 million in value.
- Reallocation and Cleanup: Next, the experts oversaw a cleanup campaign. Licenses assigned to departed employees were reclaimed. Dozens of power-user licenses were downgraded to standard users where appropriate. Unused engine licenses (for SAP components not in production) were put aside for termination. By reassigning licenses to needed areas and eliminating duplicates, the company optimized its license portfolio without affecting operations.
- Vendor Negotiation: Reducing license waste often requires renegotiating terms with SAP. SAP Licensing Experts guided the company’s leadership in discussions with SAP to adjust the support agreement. They leveraged SAP’s policies on license termination and support fee reductions, ensuring the client could drop the surplus licenses from their maintenance contract with minimal penalties. In some cases, they negotiated exchanging idle licenses for credits towards future SAP products that the company truly needed.
- Governance Implementation: Finally, the team helped establish an ongoing governance process. They introduced quarterly license usage reviews and an approval workflow for new license purchases, so the organization wouldn’t fall into the same trap of over-licensing again.
Outcome and Savings
By the end of the engagement, the Brazilian distributor eliminated $1.5 million in unnecessary SAP licenses from their books.
This translated to immediate cost savings, particularly in annual maintenance fees that were slashed once those licenses were retired or repurposed.
The company’s SAP environment became more cost-efficient, with every license now justified by actual usage. Moreover, the internal finance team noted that the savings could be reallocated to other IT initiatives that drive business value.
The case underscored how proactive license management can significantly reduce IT overhead without impacting business productivity.
“We uncovered that we were overspending on SAP licenses we didn’t even use. The experts helped us reclaim that value — about $1.5 million — and streamline our SAP agreements. Now our licensing costs truly reflect our needs,” — IT Manager, Brazilian Food Distribution Company
