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How can effective SAP License Management lead to costs savings?

SAP licenses can be a huge expense, but there are ways for enterprises to reduce licensing costs and ensure a better ROI on SAP investments.

Managing a large number of SAP user licenses can be a herculean task for an SAP system administrator. But effective...

SAP license management can bring about significant cost savings.

As IT budgets shrink, SAP system administrators consistently need to find ways to improve business processes. Effectively managing SAP user licenses can lead to a decent return on the SAP investment. SAP user roles should be monitored constantly to identify areas where expense can be reduced, particularly when employees leave, move to another internal department or simply move to non-SAP-related work.

Here are five ways a system administrator can improve SAP license management:

  • Identify and reclassify dormant users. Infrequent SAP users should be identified and reclassified based on SAP licenses categories. These categories -- such as professional, limited-professional and employee users -- are based on actual SAP usage and have associated costs. Higher SAP usage means a greater cost.
  • Identify and reuse duplicate SAP licenses. In the absence of any standard policies about usernames in the SAP system, a single SAP user can end up with multiple usernames. This is especially true when an employee moves from one job responsibility or job location to another. With each move, a new SAP username is created without deleting or reassigning the previous SAP username. To address this issue, it is important to put in place a well-defined policy to assign roles and authorizations to SAP users based on the nature of their work.
  • Automate and centralize usage data collection. System administrators typically need to compile SAP usage data to successfully clear an SAP license audit. A system administrator may choose to use third-party software to monitor SAP usage and help consolidate the usage data from a central location. This approach works especially well for companies with several manufacturing locations, sales offices, regional or satellite offices spread across the country or the world. With some or all of these locations using SAP, compiling and consolidating the SAP usage data becomes a gigantic task.
  • Monitor and validate SAP license compliance. Simply compiling SAP usage data is not enough for decisions related to a license audit. System administrators need to thoroughly check the SAP usage data for compliance with various categories of SAP licenses.
  • Consider usage-based SAP licenses procurement. System administrators can review how the users work in the SAP system and plan for future SAP licenses based on the types and numbers of activities that the users carry out.

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This was last published in May 2015

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What's the most challenging aspect of effective SAP license management?
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The process to assign the proper SAP License Type based on the SAP System.
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