Displaying items by tag: sap
Understanding Licensing and Cost Shift from SAP Solution Manager (SolMan) to Cloud ALM (CALM)
Understanding Licensing and Cost Shift from SAP Solution Manager (SolMan) to Cloud ALM (CALM)
Comprehensive Guide to SAP Indirect Access and How to measure Digital Access in 2023
Introduction
In the ever-evolving world of SAP software, indirect access has become a critical consideration for businesses when it comes to licensing, and it’s even more problematic if a customer is undergoing an enhanced audit or has received a SAP indirect access query from SAP sales. SAP has also weaponized indirect access to create leverage forcing customers to move to S4/HANA or RISE/GROW. The 2017 SAP v Diageo court case highlighted the issue of indirect access and under-licensing. Diageo, the defendant, faced significant fines for not having sufficient licenses for their indirect use of SAP software.
Comprehensive Guide to Choosing the Perfect SAP HANA License for Your Business
Introduction
The trend of organizations shifting towards the SAP HANA Database has gained considerable momentum in recent times. Nevertheless, during this transition, it's essential for customers to comprehend the intricacies of SAP's licensing policies, discern the different editions and their licensing constraints, and curtail the potential risks of licensing non-compliance associated with the use of the HANA Database. Of late, we've observed SAP and their auditing organization actively interacting with customers to verify HANA database licensing usage, placing emphasis on functionalities and restrictions. In this blog post, we aim to delve into the various SAP HANA editions and the optimization strategies at their disposal, empowering organizations to make choices that best align with their specific requirements.
What is SAP HANA Database?
Decoding SAP FUE: A Comprehensive Guide to Full Usage Equivalents
Definition of SAP FUE
SAP Full Use Equivalent (FUE) is a unit of measurement utilized by SAP to grant licenses for its S/4 HANA Cloud applications. It signifies the permission given to users to access certain solution features within the S/4HANA Cloud. SAP FUE establishes a consistent framework for licensing, assuring that companies have the appropriate level of access for their users, tailored to their unique requirements. In today's context, gaining a solid understanding of FUE is essential as this is the favored metric for SAP, particularly with S/4 HANA.
Different Types of FUEs:
SAP FUE encompasses distinct types that cater to varying user requirements:
- SAP S/4HANA for Advanced Use: This FUE type grants users full access to the S/4HANA Cloud application, enabling them to create and modify data, run reports, and utilize its complete range of business processes. It is typically assigned to users who require extensive functionality and plays a key role in managing critical business operations. One user is equal to one SAP FUE. This category has the lowest compliance risk but the highest over-allocation risk.
The table below represents the S/4HANA cloud roles & responsibilities for Advanced Use.
Source: https://assets.cdn.sap.com/agreements/product-policy/css/service-specifications/sap-s4hana-cloud-service-use-descriptions-english-v1-2021.pdf
- SAP S/4HANA for Core Use: This FUE type is intended for users who require limited access to the S/4HANA Cloud application, allowing them to view data, run reports, and engage in basic business processes. It is suitable for users needing access to specific information or who perform routine tasks without the need for extensive functionality. Five core users make up one FUE. This category has a medium compliance risk and medium over-allocation risk.
The table below represents the S/4HANA cloud roles & responsibilities for Core Use.
- SAP S/4HANA for Self-Service Use: This FUE type is designed for those using the S/4HANA Cloud application through self-service portals, offering access to data viewing, report generation, and basic business processes. It caters to users who primarily consume information or interact with the application through predefined self-service capabilities. It is also used to display and approve use rights. 30 Self-Service Users make up one FUE. This category has the highest compliance risk but the lowest over-allocation risk. Customers should carry out internal audits or hire a third party like LDS to regularly check for risk with this allocation. The table below represents the S/4HANA cloud roles & responsibilities for Self-Service Use.
The table below represents the S/4HANA cloud roles & responsibilities for Self-Service Use.
How to Calculate SAP FUEs (Full Usage Equivalents)?
The calculation of SAP FUE uses a weights mechanism with specific ratios assigned to each FUE type. These ratios provide a standardized approach to determine the number of FUEs required for licensing:
1 FUE- 0.5 SAP S/4HANA Cloud, Developer Access
1 FUE = 1 SAP S/4HANA for Advanced Use
1 FUE = 5 SAP S/4HANA for Core Use
1 FUE = 30 SAP S/4HANA for Self-Service Use
Here is an example of the SAP FUEs calculation:
For example, if an organization has 100 users who require advanced use, it will need 100 FUEs. However, if the organization has 100 users who require core use, it will need 20 FUEs (100 users/5 users per core FUE).
Total number of users = 180
Total FUEs required = 111
Minimum Requirements and Applicable Products
SAP imposes minimum purchase requirements on FUEs. These requirements vary depending on the specific product and licensing agreement. Organizations should review their agreements to determine the minimum FUE count applicable to their S/4HANA Cloud products.
The table below gives a clear indication of the minimum purchase value for the SAP S/4HANA Cloud products
The Advantages and Disadvantages of Using SAP FUE:
Advantages:
- Adaptability in Reallocation Minimizes Shelfware: SAP FUE facilitates the reallocation of licenses throughout the contract period, empowering businesses to maximize their license use, consequently minimizing shelfware.
- Uniform User Access Measurement: SAP FUE introduces a uniform strategy to quantify user access, eliminating the need for tracking individual user categories.
Disadvantages:
- Constraints on User Reduction: One of the downsides of SAP FUE is its inability to lower the user count beneath the minimum purchase required for the contract period, particularly during economic downturns where a company may need to decrease the number of users. As such, organizations must prudently plan and project usage and negotiate appropriate contract terms.
- Increased Risk of Non-compliance: This introduces an extra layer of complexity in the calculation for end users and SAP administrators who generally are not experts in license counting. The pre-defined FUE types might not align perfectly with certain users' specific access needs. Users may mistakenly believe certain user populations fall under lower use rights and count them as such, only to discover in an audit that they need full user rights.
- Possible Over assignment due to This "Novel" Weightage System: Many SAP end-user administrators have a mindset centered around users, not weightages. Moreover, since this system is relatively new, many are unaware of its existence. As a result, we've observed customers struggling to understand the concept of differing weightages and simplifying it to a one-to-one correspondence of one FUE to one user. This misinterpretation leads to an unnecessary overallocation of licenses.
In conclusion, understanding and managing SAP Full Use Equivalents (FUE) can significantly enhance an organization's ability to utilize SAP S/4HANA Cloud applications effectively. By identifying the distinct types of FUEs, determining user needs, and calculating the appropriate licensing requirements, businesses can ensure that they have the precise access levels they need. Nevertheless, SAP FUE does present certain challenges, including risks of non-compliance and overallocation due to the misunderstanding of its weightage system. Therefore, it's crucial to proceed with an informed and strategic approach. By partnering with Licensing Data Solutions, organizations can navigate these complexities with ease, achieve optimal SAP licensing, reduce costs, and maintain compliance. Most importantly, they can maximize the value derived from their S/4HANA Cloud investments. For any assistance in this regard, feel free to reach out to us at This email address is being protected from spambots. You need JavaScript enabled to view it..
Also, read more on this:
Unleash the Power of SAP Licensing: Top 5 Strategies for Substantial Savings
Comprehensive Guide to Choosing the Perfect SAP HANA License for Your Business
SAP Enhanced Vs SAP Basic Software Licensing Audit
Please check our SAP Licensing Services
Unleash the Power of SAP Licensing: Top 5 Strategies for Substantial Savings
Brace yourselves because SAP has recently dropped a game-changer! SAP has officially announced a 3.3% support cost increase, catching many by surprise. With fluctuating economic scenarios, are you seeking intelligent ways to enhance your SAP investment efficiency? If so, the secret lies in effective SAP license management.
In this blog post, we'll unpack five powerful strategies to help you unlock the full potential of your SAP licenses while reducing superfluous costs. By adopting a strategic licensing approach, you can trim expenses by paying only for what you genuinely need.
- Dive Deep into Demand/Consumption Analysis
The first significant stride toward SAP license optimization is a meticulous demand/consumption analysis, which we lovingly call ELP (Enterprise License Position). By mapping license allocation with actual usage, you can streamline your licensing strategy and magnify the return on your SAP investments. This in-depth evaluation involves an exhaustive review of your current license inventory, a robust understanding of the various license types, and a careful assessment of your license utilization. Notably, LDS found that, on average, 30% of the SAP software licenses purchased by customers are unused, which presents a goldmine of potential savings that can be right-sized or exchanged for the funding of new initiatives.
- Conduct a Compliance Check and Grasp Your Indirect Access Risk
Indirect access risk, the potential licensing violations resulting from users accessing SAP systems via interfaces or third-party applications, looms in all software spaces. Regular compliance checks are indispensable in managing your SAP licenses effectively. These checks offer visibility into your indirect access risk, enabling you to proactively nip unnecessary licensing expenses in the bud and ensure compliance with licensing agreements. You should tackle this risk proactively and purchase digital access documents on your terms instead of SAP’s, avoiding unpleasant surprises and back penalties in a SAP audit.
- Sweep Out Inactive and Unrequired User Licenses
Rooting out inactive and unneeded user licenses is vital in boosting the efficiency of your SAP investments. Routine license audits can help pinpoint licenses that have become redundant due to changes in user roles or business procedures. Establishing a clear understanding of license usage across your organization is critical during this cleanup process. Upon initiating reviews, we've noticed a fascinating pattern. Many of our clients are initially confident, as assured by their SAP admins, in the robustness of their processes and the absence of inactive users. However, once the review concludes, it's a regular occurrence to discover that over 20% of users are, in fact, inactive.
- Spot and Eliminate Shelfware Software Licenses and Support
'Shelfware' denotes unused or inadequately used software licenses and support agreements, leading to unnecessary expenses. SAP operates differently from other providers such as Microsoft, among others, where your Enterprise Agreement (EA) maintenance is typically renegotiated every three years. With SAP, upon purchase, you are instantly signed up for lifetime maintenance until you decide to terminate it. Over time, even if a product is no longer in use, clients frequently continue paying for support due to lack of awareness caused by numerous name changes or fear of discontinuing if the product is still in use. Here, a thorough in-house or third-party assessment of your SAP software suite can aid in discovering these inactive licenses and understanding the evolution of various product name changes. Collaborating with licensing professionals can expedite the process of spotting and terminating shelfware licenses, yielding substantial cost savings.
- Explore the Potential of Third-Party Support Providers
When contemplating third-party support, examine your existing support agreements and compare them with different providers. Consider factors like service quality, response time, and cost savings. Transitioning to reputable third-party support like Remini Street or Spinnaker can substantially reduce costs while efficiently maintaining your SAP systems. Benefits may include proactive system monitoring, performance optimization, and access to an expansive knowledge base, often with a significant cost reduction on the support bill.
Final Thoughts
At Licensing Data Solutions (LDS), we adopt the same tools like SLAW, LMBI, USMM, etc., as well as the methodology that SAP uses during an enhanced audit to assess demand and consumption needs. Remember, SAP investment optimization goes beyond the software—it demands a strategic approach to licensing. You can maximize the value derived from your SAP investments by evaluating your licenses, cleaning up unnecessary ones, understanding indirect access risk, and exploring third-party support. Reach out to Licensing Data Solutions (This email address is being protected from spambots. You need JavaScript enabled to view it.) to navigate the complexities of SAP licensing and drive substantial cost efficiencies. Command your SAP investments today and uncover the full potential of your software while cutting down on unnecessary expenses.
Also read more on this:
Decoding Sap Fue: A Comprehensive Guide To Full Usage Equiv
Comprehensive Guide to Choosing the Perfect SAP HANA License for Your Business
SAP Enhanced Vs SAP Basic Software Licensing Audit
Please check our SAP Licensing Services