Webinar: Take Proactive Control of Your SAP Licensing, Indirect Usage and Vendor Management

© 2017 UpperEdge / Flexera
Learn More About Managing and Optimizing SAP
Indirect Access Licensing
>>Click here to Watch this Webinar On Demand Now<<

Eric Feldman
Senior Product Marketing Manager
• 7 years of marketing experience in IT Asset
Management, Software Asset
Management, and IT Service Management
• 15 years experience in Enterprise
Architecture, IT Service Management, IT
Financial Management, pre-sales, and
enterprise customer facing engagements.
• MBA 2007 Long Island University – CW
Post Campus
Rob Comella
Senior Director, Consulting Services
• Sr. Director with 8 years with Flexera
Software in leadership positions in Global
Consulting Services and Solutions
Engineering
• 30 years in IT and Software sales and
service with leadership positions at Procter
and Gamble, SAP, Siebel Systems,
Information Builders and SAS Institute
• MBA 2011 University of Tampa - Sykes
College of Business

Len Riley
SAP Sourcing & Commercial Advisory
Practice Lead
• 20 years of IT sourcing, contracting, vendor
management and financial management
experience
• Diverse industry background comprised of
buy side, sell side and advisory experience
• Demonstrated experience leading sourcing
initiatives and negotiations required to
support Business and IT transformation
initiatives
David Blake
Founder & CEO
• 20+ years of experience negotiating
software, implementation and outsourcing
agreements
• Industry leader in advising Global 1000
companies on how to most effectively
establish sustainable, high value
relationships with key IT suppliers
• Trusted advisor to C-Level executives
responsible for critical relationships

Over 350
SAP Transactions
$82M Savings
Q416
“This was
truly a
home run
for us!”
“I am a
customer
for life!”
CIO, Consumer
Goods Company
CIO, Global
Distribution Company
All SAP
Agreement Types
Trusted Advisors
& Practitioners

Evolving Anxiety Around Indirect Use
Since 2010
UpperEdge has been
leaders in Customer
Advocacy
Behind the scenes we’ve
seen claims amounting to
between $220M-$250M
Concept of Indirect Usage
has been around for over
10 Years
Second
Break
$
SAPPHIRE 2017
“Empathy”
?
SAP vs. Diageo
$600M
SAP vs. Anheuser-Busch
$70M
SAP ERP
SAP’s Indirect Use
SAP apps
(OP / Cloud)
3rd Party SW
(OP / Cloud)
3rd Party
Apps
3rd Party
Platform
3rd Party Apps
SAP apps
3rd Party
Apps

CALM
Home Grown
Software
Home Grown
Software
Home Grown
Software
Home Grown
Software
SAP as Backbone Increases Use

Intellectual Property
SAP has an obligation to
protect its Intellectual
Property
Customer Specific
It is appropriate to
determine use on a
customer by customer
basis
License Fees
SAP has the right to
additional fees related to
the use of their software
$
Contract Terms
SAP has the contractual
right to enforce use of its
software via Indirect
Access
Customer Value
Customers are deriving
Value from 3rd Pty
Software Interfacing with
SAP
Indirect Use Justified Through Business
and Contractual Rationale

Sales
Courtesy
Heads-Up
• Minimize level of
influence over Audit
• Defer details and
process to Audit
Audit Process
Formal
Notice
• Initiated by Strategic
Initiatives Group
• Typically provided at
Director level or lower
• Details on scope,
timeline & process
vary
Audit Process
Data
Request
• Standard request for
LAW reports
• Indirect Access
includes:
• System architecture
worksheets
• Higher level business
process request
• Offer to conduct
session to review
interfacing systems
Audit Process
Audit
Findings
• Support findings with
contract terms
• Underutilization will
likely be excluded
• Exclude financial
impact of findings
• Advanced agreement
on findings before
commercial phase
Sales
Commercial
Resolution
• Re-position role as a
relationship advocate
• Express desire for
commercial resolution
• Position “narrow”
commercial proposal
• Leverage Audit as
escalation point
Enforced by a Mature Strategy and Process

Conditions That Increase Your Risk
Visibility
• Limited visibility
into a customers
future roadmap
• Higher degree of
collaboration with
competing partners
Architecture
• Non-SAP Software
supporting e-
Commerce, SCM,
and CRM processes
• Design and business
process flow that is
bi-directional in
nature
Competition
• Competitive losses
to best of breed
vendors
• Trend toward a best
of breed strategy
Investment
• Limited on-premise
organic growth
• Limited adoption of
SAP cloud or Next
Gen Solutions
Relationship
• Change in customer
executive
leadership
• Lack of SAP
executive
sponsorship

Sales Order creation by customer
user. Shipment / Delivery information
3rd Party Systems
Ship Load confirmation /
Display of inventory levels
Sales Order initiation /
Display of order status
Employee Profile creation /
Storage of cost center information
Asset Management / Financial /
Billing Postings
Use Case
Representative Indirect Use Examples
Audit Findings: recent case study scenarios involved at least 3 or more compliance areas, list license fee $8-$100 million

1. Customer Use
Customers may be
considered Named Users
2. Data Access
Access to data may
constitute use
3. Predictable Pricing
Reasonable that SAP
does not have defined
pricing
4. Diageo’s Exposure May be Higher
Court findings only illustrate a couple
of use cases via one business process
area
Significance of the SAP v. Diageo Case
S4 HANA

Agreement Use Cases Quantity of Use User & Metric Cost
$
Informs Holistic
Strategy
Approach to Mitigating Indirect Access Risk

Typical SAP Customers’ Business Goals
• Minimize SAP license costs
• Maintain continuous license compliance and minimize
audit risk
• Eliminate unbudgeted expenditures
• Empower contract negotiation—have all the facts on hand
• Use what you have; Buy only what you need
Flexera
Optimized$ $Over-Licensed
Out of
Compliance

SAP License Optimization Lifecycle
Collect user, usage and other
information from SAP systems
Inventory
Identify inactive and
duplicate users, and
apply license rules to
calculate an optimal
license position
Analysis
Determine updates that are required to
achieve an optimal license position
Recommendations
Apply updates to SAP
systems, making them
accessible by License
Administration
Workbench (LAW)
Remediation

Named User License Optimization Techniques
Identify and retire idle user accounts
• SAP requires active user accounts to be licensed regardless if they are used
• Set user master record “Valid To” field prior to system measurement date
• Every retired user will reduce the total license consumption by 1
Find and resolve duplicate users
• A single named user can have user accounts on multiple SAP systems
• SAP License Administration Workbench (LAW) combines users on a single field
• Rarely sufficient – M&A, regional issues, name changes, incomplete records, etc.
• Every resolved duplicate user will reduce the total license consumption by 1
Make license assignments according to real usage data
• License assignments are commonly theoretical or out-dated
• Empty assignments are given the system default – normally Professional User
• Analysing real usage typically reveals less consumption of expensive types
• Where applicable, license ratios may limit the extent of license re-assignment

Discovery of 3rd party applications
• Review PI adapters
• Review RFC connections not made from SAP systems
• Review fraud check results for evidence of user multiplexing
• Collaborate with IT department
Optimizing Indirect Access - Recommendations
Optimization of license position
Idle user accounts should be identified and retired, or access to data
sourced from SAP systems revoked
Duplicate users can occur between multiple 3rd party applications, or
between SAP users and 3rd party application users
Understanding the role of users on 3rd party systems may require
user authorizations and audit logs on those systems to be examined
in order to determine the most appropriate license assignment
Optimization should maximize the identified overlaps between SAP
users and 3rd party application users to minimize license consumption

Policy Changes and License Optimization
SAP Package Licensing Example:
Run package
measurements
to collect
raw metrics
Convert
raw metrics
into license
consumption
Which metrics are relevant for
licensing?
How should multiple metrics be
combined?
Is this package active?
What is the BASIS release?
What is the price list version?
Is there a counting function?
What is the measurement period?

FlexNet Manager for SAP Applications
Tracks and Analyzes Detailed Usage Data
What SAP packages
do I access and what
transactions do I run?
How long do I
use the system?
Do I access SAP
directly, indirectly,
or both?
What are my
authorization roles?
Have I been assigned
more than one license?

Holistic Approach Affords Preferred Outcomes
Negotiation Levers Next Generation RelationshipTypical Customer State
Lack of Relationship Strong Relationship
Best Value
Best-in-Class Terms
Optimal ROI
100% Compliant
Value Gap
Best-in-Class Pricing

Panel Q&A
David Blake Len Riley Rob ComellaEric Feldman

Visit our website:
www.flexerasoftware.com/SLO
Read our whitepaper:
Curing the SAP Overpayment Syndrome
http://bit.ly/SAPOverpayment
Download the Datasheet:
FlexNet Manager for SAP Applications
http://bit.ly/FNMSAP-DS
Read our Blog:
http://blogs.flexerasoftware.com/elo/
Follow us on Twitter:
@SAMInsights
David Blake
dblake@upperedge.com
781-910-3363
For more information on UpperEdge visit:
www.upperedge.com
For strategic insights on IT sourcing visit:
www.upperedge.com/blog
SAP Indirect Access Resource Center
http://bit.ly/SAP-Resource-Center

Thank You!
www.upperedge.com www.flexerasoftware.com/SLO

Webinar: Take Proactive Control of Your SAP Licensing, Indirect Usage and Vendor Management

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Webinar: Take Proactive Control of Your SAP Licensing, Indirect Usage and Vendor Management