SAP LICENSING
Enterprising Licensing Strategy
SAP Licensing
Effective Strategies
SAP Enterprise Licensing Strategy evaluates the needs of the business and identifies the licensing solution which best serves the needs of the business both now and in the future.
Organisations are constantly changing, and this poses major challenges and opportunities for SAP licensing.
JNC’s SAP Enterprise License Strategy consulting services look at both the present and future states of a business and identify the contract and licensing models that will deliver the greatest value to the business, typically resulting in significant commercial benefits.
Business change often presents significant opportunities to improve your licensing position both from a simplicity and cost point of view.
Methodology
Fundamentally Enterprise Licensing Strategy is about looking and what you have, what you need and how you will get from A to B, and in doing so delivering the most efficient and cost-effective contract and licensing solution for your business.
Years of mergers, acquisitions and divestments can result in a complex picture of contracts, entitlement and license assets. Consolidating all this change into an effective licensing model is a complex task which requires expertise. At a high level here is how we do it:
Collect all Software and Service Order Forms, Invoices and Master Agreements with SAP. Create a Bill of Material and calculate the Total Cost of Ownership. Review, analyse and associate specific software use terms and conditions with the purchased software.
Create an ELP (Effective License Position) by comparing licensing entitlement with measured software use and determine potential compliancy concerns and surplus software assets.
Involves the analysis of the target SAP landscape and/or new organisational structure. This includes; quantifying future SAP product requirements and associated licensing quantities and costs for; Named-User Licenses, Packages, Databases and Cloud subscriptions.
The gap analysis is a quantified overview of the as-is state, “what we have and use“, and the to-be state, “what we need“. This will also include quantifying surplus software and any potential shortfalls (compliancy concerns).
Getting from A to B can involve a number of techniques and approaches which means knowing what is the least and most acceptable outcome to you in the negotiation; defining your BATNA, ZOPA, etc. The negotiation may include; terminating existing SAP agreements, migrating to alternative licensing models negotiation and purchase of SAP software and services that reflect your target outcome or the most effective compromise.
The strategy will include the desired and likely.
JNC will also develop Cost Models for each outcome.
Licensing Services
Assist in the consolidation of multiple group organisations into one or more SAP instances providing improved business operations, financial reporting and supply chain integration.
SAP licensing can be simplified and aligned with the new SAP landscape and organisational structure by evaluating the optimal future-to-be licensing model and road mapping the business transition from the current as-is state.
Following the legal and operational merger of two organisations into one there are the various contract and licensing challenges. The new organisation will operate as one with a single business systems solution.
Relying on SAP to negotiate the new contract and licensing deal is not likely to earn you the best value or the solution that meets your needs. JNC can assist evaluation of the existing SAP assets and what assets are required to cover the new state.
Often the combined assets of two merging SAP organisations exceeds the new entitlement required. Surplus can be traded against future strategic license purchases or catalogued accurately as a pool of new usable and manageable surplus.
Typically acquired businesses operate separately whilst either being owned directly by a parent organisation or operate as part of a group company. Acquired business may continue to operate on their own SAP system, may be migrated onto an existing company system, or indeed their system might be rolled out to the company that acquired it.
In all scenarios either the landscape changes or the extent of the user changes. The as-is and to-be licensing requirements are typically different. JNC can accurately reconcile current license entitlements to the to-be state and identify any gaps which need to be addressed.
In any case, if the business has its own system the license assets owned by that business will go with it. However, where that businesses usage was covered by an umbrella enterprise licensing agreement a deal to separate license assets will be required.
With divestment’s we help clients identify the needs of the remaining and divested entity; which products can be split, which can’t and associated surplus and deficits on both sides.
SAP may not be so eager to acquiesce to the needs of either the remaining or divested entity. We help develop a strategy which addresses the needs of all parties and is likely to be agreed by SAP.
There is often a time lag between the purchase of solutions from SAP and their rollout. Not only does this mean unnecessary CapEx upfront, but also increased OpEx in the form of annual maintenance for products which are not deployed. We help clients consider all these timings in their purchase plan and the benefits of deferring purchases weighed up against the incentives, such as increased discount, of an upfront purchase. Cost Models for all these scenarios are provided.
JNC define the as-is and to-be states and perform a licensing gap analysis to identify what you have that you won’t need, and what you need that you don’t have.