sap license maintain

8/13/2019 Sap License Maintain

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SEVEN STEPS TO DYNAMICALLYMANAGING YOUR SAP

®

LICENSES



AT LAST, GET CONTROL OVER YOUR SAP LICENSES AND COSTS

EXECUTIVE SUMMARY

Proactive license management is the key to getting the most productivity andROI from your SAP solutions. You’ll have greater visibility into your current

and future license requirements, gain control over deployment and ongoingoperational costs and achieve a transparency never before possible.

The global business environment is continually changing with competition increasing in markets on

every continent. To succeed in this dynamic and hyper-competitive environment, global enterprises must

constantly adjust strategies and operations. These changes include major adjustments such as shift ing

manufacturing from one country to another, making strategic acquisitions and divesting non-core businesses.

Along with this growth comes growing pains—including managing the relentless increase in software

licenses and the complexity and costs of large-sca le software deployments. Today, more and more Enterprise

CFOs and CIOs are finding the answer in proactive license management. Being proactive means knowing

exactly how many licenses you have, who is using

them and if they are being used productively.

With this proactive approach, companies can now

monitor all their SAP licenses enterprise-wide in

real-time, compute their exact usage and costs,

and forecast future needs.

In this document, you’ll learn the seven steps your

enterprise can ta ke right now to put licensingcontrol back into the hands of IT a nd corporate

management.



OVERVIEW

SAP licensing is one of the most complex and expensive components that large enterprises have to manage.

Much of the complexity is due to SAP’s licensing system and SAP’s multi-dimensional approach to capturing

the value of t he SAP system and data. SAP’s “open cafeteria” plan allows new user, engine, and HANA

licenses into the system at any time beyond what was contractually purchased. Compounding the problem

is that quite often not all licenses purchased a re actual ly being used. The bottom line, it’s critical for every

enterprise to know what SAP licenses it has purchased, how many have been deployed, and what is actually

being used.

Figure 1: Procurement, Deployment, Actual Usage – Three Disparate Views

There are seven simple steps required to move from an unmanaged, opaque SAP license environment to

a transparent, proactive and fully managed system. As an enterprise moves through the seven steps, it

continuously gains benefits including greater control, reduced costs, mitigated risk, better overall governance

and forward-looking visibility and forecasting.

Right now, sophisticated analytical tools are available to help IT operations achieve a more proactive license

management system. These tools operate directly on the SAP ser vers in the enterprise and extract and

monitor key usage information in real-time. This information is used throughout the seven step process to

enable proactive SAP license management.

What has been contractually

purchased from SAP

What has been deployed

across the enterpriseWhat is actually being used

and how it is used



THE SEVEN STEPS

In the past, enterprises have routinely increased the number of SAP licenses purchased w ithout a full

awareness of what they actually need . With new SAP technologies and the increase in use of mobile

applications, they’re now faced with adding even more licenses to the mix. While they may have matured innew development work around their exist ing ERP requirements, enterprises find they now need ana lytics

capability, PPM, SRM, interconnected mobile devices and the high-performance, in-memory HANA database.

What’s the true impact of this increase in licensing requirements? One result is the explosion in ongoing

maintenance requirements and costs. These costs are growing far faster than other areas of the IT budget.

These increasing maintenance requirements include everyth ing from SAP license maintenance and databaselicense costs to operational server and administrative costs. In the current envi ronment of slower economic

growth and greater pressure on margins , many enterprises are star ting to take a hard look at these costs. Best

Practices are now dictating a seven-step process to tra nsition from a loosely disciplined approach to a pro-

active approach:

Step 1: RECOGNITION: Accept that there is a more strategic, organized and cost-effective way to manage

SAP licenses.

Step 2: USER ANALYSIS & OPTIMIZATION: Using available tools, analyze and understand the user

population and weed out duplicate, unused and erroneous licenses.

Step 3: USAGE ANALYSIS: Using available tools, analyze a nd understand the engines, portals, indirect

usage, vertical industry applications, functionality and future plans.

Step 4: CONTROLS: Establish a centralized approach to user and contract administration.

Step 5: GOVERNANCE AND RISK: Assure that each user is given the proper level of access and control to

enable integrity of operations and compliance.

Step 6: TRANSPARENCY: Create awareness and transparency throughout the organization via dash boards,

alerts, internal resource tracking and departmental billing.

Step 7: PROACTIVITY: Utilize t he accomplishments of the prior steps to begin forecasting and predicting

license requirements.



STEP 1: RECOGNITION – THE STATUS QUO IS PUSHING COSTS

OUT OF CONTROL

At some point in an enterprise, someone begins feeling the impact of escalating IT costs and starts ask ing

questions. A little analysis typically finds one of the main culprits is ballooning SAP license and maintenance

costs. While large multinational enterprises spend hundreds of mill ions of dollars deploying an SAP sys tem,

they often find t hat it’s just a down payment on what lies ahead. Is an enterprise mak ing the best choice by

passively waiting for the SAP audit—and then paying a large, unbudgeted charge each year? Many enterprises

begin by doing a quick sanity check over the number of users defined across their SAP system to determine if

they have a problem:

•

Does the number of users exceed the number of employees in the firm—or does the number seemextraordinary?

• Do the number of people granted broad-based rights to enterprise financial data appear too high f rom a

risk and governance perspective?

• Is there indirect usage of SAP data with the deployment of interconnected devices, for example, mobile

devices, portals and 3rd party products?

• Is there a central ized process for creating new users so standardized controls can be implemented and

maintained?



STEP 3: USAGE ANALYSIS – ENGINES, PORTALS AND MORE

Refining the number of named SAP users is the next step in gaining control over the system costs. Once the

named user population is under control, it’s time to begin monitoring the daily a nd monthly usage patterns of

each named user. This can be accomplished with an SAP-certified analy tical tool installed on an SAP server.

On day one, these tools are able to extract a 2-month

history of activity by each user. After that, they can

extract and aggregate data every day or week to build a

longer and more detailed usage history. By eva luating

the actual usage patterns, a better determination can

be made as to the license ty pe that best fits, such as

a “professional user”, “limited professional user” or

“employee user.”

The next area of usage analysis is typically “indirect

access” or “indirect usage” to SAP system and data.

Often this is done using a 3rd party PC, browser ormobile application. These indirect access applications

can be used by employees within the f irm, by

partners or suppliers within an eco-system or even by

customers. Generally, any access to the SAP system

must happen through a contractually licensed user.

If not, it can generate large unexpected charges at t he

next audit.

Understanding the patterns of access and usage and

what applications are pulling in SAP data is vita l. At a

minimum, this knowledge provides visibility into what

is likely to be a very rapidly growing annua l expense.It also enables management to begin working with the

users of those applications to help them understand t he potential costs involved. In some cases , technical

workarounds can stabilize t he indirect usage and should be explored.

SAP license pricing not only involves named direct a nd indirect users but engines as well. These engines take

an already complex framework to a new level. Engine licensing varies depending on the par ticular engine, but

generally is tied to usage based on data maintained by the system. For example, the SAP payroll engine uses

the number of master records as the key licensing metric as opposed to e-Recruiting which uses t he number

of employees in the enterprise.

By employing powerful analytica l applications such as the Dynamic Licensing Suite from Intelligent

Licensing, management can gain productive insights into the enterprise SAP environment and achieve major

efficiencies. This suite includes an array of functions to identify all licenses within the enterprise, who is

using them, how often and if they’re being used cost effect ively. For instance, one application, the Dynamic

Usage Optimizer identifies what users are accessing which engines, how often and how much. The Dynamic

Bill Controller module ensures that all SAP usage is billed back to the correct individuals, departments and

projects. If managed careful ly, these applications can help eliminate waste — such as simple reports that cost

thousands of dollars because of an invocation of an engine.

A historic inventory of contracts with SAP should be assembled and aggregated during this step. At the end of

Step 3, an enterprise will have a much clearer picture of what has been contractua lly purchased, what has been

explicitly deployed and what is actually being used in rea l-time. Gaining visibility into this complex triage of

information will greatly improve the understanding, control, transparency and management of the system.



After accurately adjusting the named user list, the next step is centrali zing the user license process. Central

control partnered with a n internal bill ing capability wil l go a long way towards preventing the explosion of

named users in t he system. With periodic maintenance, incremental refinements will be necessa ry but prove

far less painful and time consuming.

The enterprise can develop a central process to add or remove a named user from the SAP system. This

process should simultaneously assure the uniqueness of the user as well as the appropriate user level. These

controls are put in place so the proper limitations to information access and funct ionality are maintained

from a governance, risk a nd compliance perspective.

Each user being added to the system should be authorized by his or her respective superior. This is important

since there will be costs associated with each user that can potentially be charged back to the department via

an internal billing system.

The best way to avoid major named user cleanups is to instill d iscipline through a central ized approach to

adding and deleting users.

STEP 4: CONTROLS – CENTRALIZING THE USER LICENSE PROCESS



Transparency throughout the SAP system

is vital to gaining control and achieving

proactive license management. Every system

user consumes resources. What are t he

estimated or projected costs of that usage?

Enterprises use an internal billing capabilityto solve this problem, particularly those that

categorize their IT capability as a separate

entity.

The key to an internal bil ling system is

actively monitoring and capturing each

user engagement throughout the system.

Products such as Dynamic Data Capture from

Intelligent

Licensing collect this information down to

milliseconds of CPU time on the servers,

including the functions carried out and the

database reads and writes. By accumulating

the resource consumption of each session of each user, a clear picture of user a nd department usage can

be developed. Within a billing engine, a rating engine can assign estimated costs for the various resource

consumption types—and project costs by the week, month or year.

This transparency gives depar tment managers a better understanding of the costs of direct and indirect usage

as well as access to engines , portals and vertical market functionality. As a result, they can be more dil igent

controlling both new costs and their overall depar tmental costs. It also provides IT management with dozens

of additional eyes to monitor usage growth and keep it in check.

STEP 6: TRANSPARENCY – PUTTING INTERNAL BILLING IN PLACE

In Step 2, a process was carried out to reduce the number of redundant, erroneous or obsolete users. This

provides meaningful benef its in risk and governance by dramatica lly reducing inadvertent access to the

system.

In Step 4, a process was put in place to centralize the issuance of named user licenses and the corresponding

power capabilities and functional access. This is forward-looking and seeks to reduce the effort required

when the next annual user-cleanup is carr ied out. It also helps minimize the access risk problem within the

organization, enabling the enterprise to achieve better compliance.

It is important that departmental administration periodically review a list of named users and their assigned

access rights and capabilities. Finding the right balance of maximiz ing productivity and minimizing risk is

best done by the people overseeing the work process.

Analyt ical tools can help capture the frequency and type of usage by each SAP user. This data can be

aggregated and v iewed to enable better decisions regarding the appropriate level of capability for each while

minimizing access risk. By combining real usage data with thoughtfu l judgment, a proactive approach canbalance the risks and opportunities.

STEP 5: GOVERNANCE, RISK AND COMPLIANCE



Today most large enterprises are reactive in t heir management of SAP licenses. Dozens of test servers,thousands of extra user licenses, and unmonitored mobile applications are causing exponential growth

in indirect usage. New integrated capabilities such as HANA, Business Objects™ and Ariba® in-memory

databases promise to compound the problem.

Each year, a SAP audit provides a new set of incremental license requirements and charges. At the end of

every audit, the enterprise pays the ex tra charges to avoid compliance issues. With limited tra nsparency,

nominal analytical capability for ana lyzing the situation and a complex underlying system for licensing,

being reactive is t he only option.

By taking this seven step approach to refining SAP license management practices, an enterprise can move from a

passive and reactionary approach to a decisively proactive regime. Proactive SAP License management is:

• Focused—imposing organizational disc ipline and taking control.

• Transparent—achieving v isibility that helps individuals and departments use their SAP licenses more

productively and ef ficiently.

• Strategic—empowering enterprises to better achieve st rategic business requirements by mapping out and

budgeting for projected needs.

By better controlling the growth of the SAP license requirements, enterprises can more accurately determine

whether they have excess capacity in one type of user, such as developers, and need to shift to increase

indirect usage. By being proactive, IT management can better align its investment in SAP licenses to its

evolving needs.

Proactive SAP license management demands an organizational commitment and process ref inement. Italso requires the use of sophisticated monitoring and analytica l tools to provide steady, consistent real-time

feedback and increased transparency. With these tools, enterprises will better control their destiny in both

business and information technology.

STEP 7: GETTING PROACTIVE – TAKING THE WHEEL

AND DRIVING EFFICIENCIES



About the Author

Brian E. Skiba is a co-founder and CEO of Intelligent Licensing Corporation. Hehas been involved in the software industry for more than 35 years beginning with

the founding of his first sof tware company in his early 20s. Mr. Skiba was a lso a

top-ranked Wall Street equity research ana lyst for a decade covering the enterprise

software industry. Over the past two decades, he has authored more than three

dozen strategic white papers covering a wide range of contemporary IT industry

topics. Mr. Skiba holds a BSBA from Boston University and an MBA from The Amos

Tuck School at Dar tmouth College. He currently resides in Silicon Valley.

About Intelligent Licensing CorporationIntelligent Licensing is a leading provider of SAP License Management solutions. The company’s mission is

helping large global enterprises generate the highest strategic and financial value from their SAP soft ware

licensing commitments. Over the past several years, the principals of Intelligent Licensing have worked with

more than 40 enterprises, helping them achieve a high level of transparency with their SAP systems.

Intelligent Licensing clients better understand what has been procured, deployed and used—and how that

maps out against their expectations.

Intelligent Licensing is the developer of Dynamic Usage Optimizer , a powerful SAP certified analytical toolused to help assess, analyze, refine and optimize named direct/indirect SAP users, engine and portals. The

firm also developed Dynamic Billing Controller , an internal departmental billing solution to distribute SAP

costs across users and depar tments in an enterprise by measuring system resource consumption.

Intelligent Licensing serves the Americas and Asia f rom its San Francisco office, ser ves Germany from its

Hamburg office, and the rest of Europe through its office in Zurich, Switzerland.

AMERICAS

Intelligent Licensing Corporation

2121 N. California Blvd, Suite 290

Walnut Creek, CA 94596 USA

+ 1 925 974 3611

[email protected]

GERMANY

Intelligent Licensing GmbH

Poststrasse 14/16

20354 Hamburg GERMANY

+ 49 40 300 39 67 - 00

[email protected]

©2012 Intellige nt Licensing. All rights reserved. Intelligent Licensing, Dynamic License Suite, Dynamic Data Capture, DynamicUsage Optimizer, Dynamic Billing Controller and the Intelligent Licensing logo are trademarks or service marks of IntelligentLicensing, Inc in the United States and other countries. .SAP is a registered trademark of SAP AG in Germany and in several other

countries Ariba is a registered trademark of Ariba Inc Business Objects is a trademark of Business Objects Software Ltd Ariba

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