U.S. Healthcare Provider Identifies $3.2M in Unused SAP Licenses During Internal License Remediation Review
Challenge
A large U.S. healthcare provider with 22,000 employees faced mounting SAP licensing costs and potential compliance issues.
An internal review suspected that many SAP user licenses and modules were not actively being used, essentially “shelfware.” The organization’s SAP landscape included modules like Human Capital Management (HCM), the S/4HANA digital core, and licenses for indirect access (third-party system integrations).
Over the years of growth and change, they had accumulated excess named-user licenses and engine entitlements. The challenge was clear: identify these unused licenses and reduce waste without compromising future needs or compliance.
Leadership was concerned that they were paying annual maintenance on software licenses of no value, tying up budgets that could be better spent on patient care technology and system improvements.
Process
The provider launched an internal license remediation review led by its IT asset management and procurement teams. They first gathered SAP usage data across all systems, leveraging SAP’s measurement tools and login reports.
Usage Assessment: The team identified hundreds of inactive SAP user accounts, including employees who had left or users who hadn’t logged in for many months. These dormant accounts were consuming licenses needlessly.
They also discovered all purchased modules and add-ons (for anticipated projects or integrations) but remained underutilized. Notably, a large block of HCM user licenses was assigned to departments that had since downsized, and an initial allotment of indirect access licenses far exceeded actual usage.
Next, a license type rationalization was performed. User roles and activities were analyzed to ensure each individual had the appropriate license type. The review found many users categorized with high-level “Professional” licenses, even though they only used basic functions like time entry or reports, they could be downgraded to less costly license types.
By aligning license levels with job needs, the company freed up premium licenses for reallocation and avoided future overcharging. In parallel, the team pinpointed duplicate and shadow accounts (e.g., one person with multiple IDs in different systems). It consolidated them to further reduce the number of named licenses in use.
With a clear inventory of genuinely required licenses versus shelfware, the company moved to SAP contract remediation. The procurement group entered discussions with SAP to address the surplus.
They negotiated a contract adjustment to retire the truly unused licenses, removing those from the maintenance roll. For example, they had purchased more S/4HANA engine capacity and HCM user licenses than needed; during annual true-up, they requested a partial termination of those entitlements.
In some cases, SAP allowed the company to swap unused licenses for other products of future interest (such as trading excess on-premise licenses for cloud credits), aligning with SAP’s policies for license exchanges. Internally, the company also established new governance: a quarterly license usage audit and a formal link between HR offboarding and IT, so departed employees’ SAP access would be promptly removed or recycled.
This ongoing process would prevent shelfware from creeping back.
Results
The internal review uncovered approximately $3.2 million in unused SAP license value across the HCM module, core S/4HANA, and indirect access areas.
By retiring and reallocating this shelfware, the healthcare provider immediately reduced its annual SAP support costs, saving an estimated $600,000+ per year in maintenance fees that would have otherwise been wasted on idle licenses.
Moreover, the organization avoided future purchases: with hundreds of freed user licenses back in the pool, new SAP users can be accommodated without buying additional licenses for some time.
The license type optimization further yielded savings, as dozens of expensive user licenses were downgraded to the correct level, aligning cost with actual use.
Crucially, the remediation effort improved the provider’s compliance posture. Where before there was a risk of mislicensed users (some over-licensed, some under-licensed), each SAP user is properly classified, and the chances of an audit surprise are greatly minimized.
The company documented all changes so that if SAP audits their environment, they can demonstrate that reductions were part of a systematic, business-backed cleanup (and not an attempt to dodge compliance).
The SAP contract remediation set a new baseline that better reflects current operational needs, and the provider’s relationship with SAP remained positive. The provider showed proactivity in license management, which SAP account managers appreciate during true-ups.
Equally important, the cost savings liberated budget for strategic projects. Instead of paying for shelfware, the IT department redirected funds to analytics and patient-care systems modernization. Future compliance is also safeguarded: the organization instituted an ongoing License Management program, including periodic internal audits and a “use-it-or-lose-it” policy on SAP licenses.
Now, they maintain a leaner license inventory that can flex with the hospital network’s actual usage. This case demonstrates how a healthcare enterprise saved millions in licensing costs through diligent review and gained confidence that its SAP environment is right-sized and audit-ready.
Named Quotes
- Alexandra McKinley, IT Director: “We were astonished at the amount of shelfware hiding in our SAP environment. Cleaning up $3.2M in unused licenses wasn’t just about cost savings – it fundamentally strengthened our compliance and IT governance. Now every SAP license we pay for is delivering value.”
- Michael Chen, Procurement Manager: “Identifying unused licenses internally was a game-changer. By removing or repurposing them, we immediately trimmed our maintenance fees. It has also put us in a stronger position for future SAP negotiations because we know exactly what we have and need – no more paying for extras ‘just in case’.”
Key Results
- $3.2 Million in Shelfware Eliminated: Uncovered and addressed $3.2M worth of unused SAP licenses (HCM user licenses, S/4HANA modules, and indirect access) sitting idle.
- Annual Cost Savings: Achieved an immediate reduction of roughly 20% in annual SAP support costs by terminating maintenance on unused licenses and optimizing user license levels.
- License Optimization: Reclassified dozens of users to appropriate license types (e.g., downgrading unnecessary Professional licenses), ensuring cost-effective use of licenses without impacting operations.
- Contract Remediation: Successfully negotiated with SAP to remove or exchange surplus licenses, avoiding new purchases and securing credit for future needs as part of the contract update.
- Improved Compliance & Governance: Implemented quarterly internal license audits and user offboarding controls, improving compliance posture and preventing shelfware buildup – the organization is now audit-ready and only pays for what it truly uses.
