Part 1: Why SAP licence audits go wrong in the first place

Grey Monarch and Azurious

Too many organisations see their annual SAP licence audit submission as a technical process that is undertaken without senior management, contractual or commercial scrutiny of the final submission. 

 It is often left to the last minute - and then BANG! - an invoice arrives for often hundreds of thousands, or sometimes millions of pounds, with a demand to pay it within a matter of weeks.

Sound familiar? If not then it may do during the next year as we’ve noticed that the SAP Global Licence Audit and Compliance team have been taking a much more detailed, almost forensic, approach to licence audits resulting in bills arriving for any usage nuances from the licence agreement.

This is no complete surprise considering that, like many other companies, SAP revenues will have been adversely affected by the world economy. SAP Audits provide them with an extremely valuable revenue stream, especially so during a bad ‘new business’ revenue generating year.

Non-compliance demands can often be incorrect and/or miscalculated.

SAP of course have every right to audit and, as a licensed SAP user, you are obliged to remain compliant within your agreement. However, non-compliance demands can often be incorrect and/or miscalculated. A recent client, after receiving an initial non-compliance bill for £60m, engaged with us to perform a detailed contractual check which resulted in us being able to build a robust, factual defence with the new result of reducing the exposure down to £330,000 within 3 weeks.

Rather than defend non-compliance claims, it is of course much better to know your compliance position before audit submission. Our first tips therefore, and probably the most important ones of the whole series, are;

  • Do not treat your SAP licence audit as a technical process - it is a contractual engagement with potentially substantial commercial implications
  • Even if you do have the detailed SAP licensing knowledge and experience in-house you should engage with expert consultants who will understand the intricacies of your licences and contract
  • Be proactive rather than reactive and give yourself plenty of time - 6 months if possible - prior to an SAP audit to understand fully what your current licensed usage and contract rights are, and how your actual usage compares to it. This specific topic will be the subject of our next article in this series.
  • You must make any changes to your Licence deployment and user classification well (months) before Audit submission for SAP to accept them.

Grey Monarch and Azurious Limited provide software and expertise in all aspects of SAP Licensing, from licence requirements analysis, licence optimisation, preparations for licence audits and compliance, licence contract management, and compliance defence. Our services are tailored for each organisation and can range from ad-hoc advice to a fully managed service.

Please contact us for a no-obligation exploratory conversation.

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