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Don’t Get Tripped Up by SAP’s Indirect Access License

Taking advantage of innovative new technologies such as AI, ML, and IoT likely requires access to and processing of data in a licensee’s SAP environment. As businesses race to develop the next technology-driven customer experience enhancement or cost-saving process improvement, they may be unwittingly setting themselves up for big fines due to SAP Indirect Access license compliance issues.

What is SAP Indirect Access?

According to SAP1, “Indirect Access” occurs when:

  • people or things use the Digital Core (i.e., rely on SAP ERP or S/4HANA processing power to enable processes) without directly logging into the system
  • any human, device, or system indirectly uses the Digital Core via non-SAP intermediary software, such as a non-SAP front end, a custom-solution, or any other third-party application
  • non-human devices, bots, automated systems (e.g., RPA), etc. use the Digital Core in any way

With the array of technologies at play in enterprise environments, some organizations may not be aware of the manipulation of data among systems or the potential ramifications — until a costly SAP Indirect Access license audit occurs. Here is one extreme example:

Prior to 2011, U.K.-based global alcoholic beverage manufacturer Diageo ran mySAP ERP and SAP Sales Orders for customer order processing via its call centers. Then in 2011, Diageo began using Salesforce Connect, a system that enabled its customers to place orders and manage their accounts directly with Diageo rather than through a call center, and Gen2, a platform provided by Salesforce.com to develop a mobile app for the management of customer visits and calls. Connect and Gen2 interacted with SAP ERP via SAP PI.

Although Diageo’s physical call center users were considered licensed users of mySAP ERP, the users of the Connect and Gen2 technologies that interacted with mySAP ERP were not, according to SAP. After an audit, SAP filed suit in the U.K. against Diageo, demanding more than €50 million in additional SAP Indirect Access fees. The court sided with SAP, finding Diageo liable for the unauthorized use of mySAP ERP that occurred indirectly via Connect and Gen2. The details of the settlement have not been publicly disclosed, but the potential threat of a €50 million hole in the IT budget would cause ripple effects in any IT operation.

Whether allocating resources to stay in SAP Indirect Access license compliance or shouldering heavy fines from noncompliance, the risk of error can drain resources away from everyday operations — and innovation.

Stay or exchange? Understand the options

In 2018, after bad press and upset customers likely forced its hand, SAP introduced a new Digital Access pricing model. In the new , human access and indirect access are charged differently:

  • Human access is still charged per user.1
  • Indirect static read is still allowed under certain circumstances if it doesn’t result in any updates back to the SAP system.2
  • Digital access is now charged on a weighted scale per document line item. A sales order line item would weigh in at a multiplier of 1.0x. A material order line item weighs in at 0.2x. This document-based pricing is based on nine document types, counted once with all read, update, or delete functions included.1

Short of converting to S/4HANA, which offers questionable business value for many SAP users, SAP offers licensees three options:

  1. Do nothing: A licensee can keep the existing contract and NamedUser and Engine licenses with no change.
  2. License exchange: A licensee can keep the existing SAP contract and purchase or transfer existing licenses to document-based licenses for Indirect Access sources. Under this model, SAP licensees could be eligible for credits when transferring User and/or Order licenses toward the purchase of document licenses.1
  3. Contract conversion: A licensee can convert their existing SAP license agreement to an S/4 HANA agreement and license structure. This conversion requires carrying 100% of previous maintenance under the new agreement and additional fees for S/4 functionality. If this conversion does not include Digital Access licenses, then sources of SAP Indirect Access will continue to be a compliance risk. Caution is advised.1

“SAP customers should not be pressured to accept ‘limited, one-time only’ conversion credit deals for S/4HANA. The S/4HANA decision should be driven by a thoughtful ROI assessment, not high-pressure sales tactics. And in our real-world experience, highly discounted licensing will always be available from SAP for new software platforms in the future.”

─ Doug Gibson, Managing Partner, Invictus Partners

Keep ahead of Indirect Access SAP licensing compliance

Many SAP customers choose to do nothing, which is a legitimate option. Doing nothing, however, still requires a diligent software access management process to mitigate SAP Indirect Access license compliance risk and avoid potential audit penalties. Staying ahead of an SAP audit means staying on top of license usage and entitlements.

  • This is a good time to enlist help from a third-party expert to accurately measure SAP usage and get recommendations on effective user license allocations.

An Asset Management Checklist, available in the white paper “Software Asset Management Guidance for SAP Licensees,” can help manage SAP resources:

  1. Assign a resource to manage software license assets
  2. Manage a software license inventory
  3. Implement an asset management program
    • Manage user access and license types assigned to end users
    • Create a formal process to enable new functionality
    • Institute formal provisioning and deprovisioning processes
  4. Create and maintain a product deployment record
  • Conduct a license usage evaluation at least annually
  • Self-audit or solicit a third-party provider review
  1. Validate audit results before submitting to SAP

Face the SAP audit with confidence

Organizations following a may not have the time or resources to track application licenses and contracts. And they don’t have to. The need to focus on strategic activities that create tangible business results takes priority. Rimini Street License Advisory Services can help SAP licensees understand vendor license agreements and limit exposure to license compliance risk.

Each engagement starts with an interview to gain a better understanding of system architecture, licensed products, metrics, and potential risks. SAP licensees receive guidance on vendor license policies, compliance best practices, and licensing pitfalls as part of Rimini Street complimentary advisory services.

If license usage assessment and/or optimization are needed, Rimini Street Software Asset Management (SAM) services are offered by subscription. These services find potential sources of license compliance risk, including SAP Indirect Access, by recording actual SAP usage based on transaction data analysis. Backed by Rimini Street SAP licensing expertise, SAP licensees can face an annual SAP audit with confidence and will be well-positioned to make informed decisions about future SAP licensing needs.

Rimini Street License Advisory Services have helped clients:

  • Limit exposure to additional license requirements, identifying key areas where a static, read-only export would not risk contractual misuse with SAP
  • Optimize SAP license allocations to ensure that existing licenses are assigned as effectively as possible to avoid unnecessary expenditures in the future

One Rimini Street SAM services client saved $612,000 in potential license compliance fees by optimizing its SAP usage and removing unnecessary users prior to an SAP audit.

If you have questions about SAP license compliance or would like to learn more about potential SAP Indirect Access license exposure, contact Rimini Street License Advisory Services at las@riministreet.com to schedule a complimentary discussion.

For insights into how to avoid an SAP audit, watch the Rimini Street webinar, “Five Ways to Avoid a Surprise Audit: SAP Indirect Access.”

1 https://news.sap.com/wp-content/blogs.dir/1/files/Pricing_for_Digital_Age_Overview-3.pdf

2  https://www.sap.com/documents/2019/05/eadfa9d2-4a7d-0010-87a3-c30de2ffd8ff.html

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