SAP licensing can feel like navigating a maze. One wrong turn, and you’re facing unexpected costs, compliance issues, or an unwelcome audit. But most of the expensive mistakes companies make are entirely avoidable with a little foresight. Here’s a rundown of the most common SAP licensing pitfalls and how you can sidestep them.
1. Over-Licensing and Shelfware
It’s shockingly common for organisations to pay for licenses or modules they never fully deploy. Sometimes 20–30% of purchased licenses go unused.
Why it happens:
- Initial scoping overestimates user needs.
- Projects get delayed or cancelled, leaving licenses stranded.
- Departments purchase licenses independently without central oversight.
How to avoid it:
- Perform regular internal audits of license usage.
- Use tools like SAP’s USMM/LAW or third-party SAM solutions to track active users.
- Re-harvest unused licenses or downgrade users who no longer need a higher level of access.
- Review users who have been classified by default to ensure they haven’t been assigned too high a license.
2. Misclassified User Types
The user license (Professional, Functional, Productivity) assigned in an SAP system doesn’t technically restrict what a user can do. A user who should be classified as a Productivity User can inadvertently accumulate permissions that bump them into the Professional category, meaning a significantly higher cost.
How to avoid it:
- Review and clean up authorisations periodically.
- Implement governance processes for role changes.
- Use tools to track which license a user should be assigned.
3. Ignoring Indirect or Digital Access
Indirect Access—now licensed as Digital Access—is still one of SAP’s most misunderstood areas. Integrations or automated systems that create documents in SAP (like sales orders or invoices) can quietly rack up charges.
How to avoid it:
- Map out all third-party integrations and middleware.
- Use Digital Access estimation tools to track document volumes.
- Deep dive into estimation tool outputs to establish actual license requirement.
4. Underestimating the Impact of Organisational Change
Mergers, acquisitions, or restructures can wreak havoc on your license position: duplicated entitlements, overlapping contracts, and inconsistent user types can leave you exposed during audits.
How to avoid it:
- Conduct a license baseline review immediately after any major organisational change.
- Consolidate contracts and entitlements under a single governance process.
- Re-negotiate where overlaps or redundancies exist. Don’t pay for licenses you don’t need.
5. Forgetting About Support and Maintenance Costs
Focusing only on license purchases while ignoring support and maintenance fees can lead to runaway operational costs. As perpetual licenses fade, SAP may increase support fees for legacy products like ECC to push you toward S/4HANA or Cloud propositions.
How to avoid it:
- Include maintenance in TCO modelling for 5–10 years.
- Challenge SAP on increases or consider third-party support if appropriate.
Not Benchmarking or Negotiating
SAP’s pricing isn’t set in stone. Accepting the first offer or failing to benchmark against peers can leave significant savings on the table.
How to avoid it:
- Use independent benchmarks to understand market rates.
- Take into account SAP financial milestones (e.g. quarter end) to help achieve beneficial pricing.
- Separate licensing discussions from product demos. Avoid conflating excitement over features with pricing commitments.
Steps to Stay in Control
- Run Regular Compliance Checks: Make internal audits part of your annual process, not a last-minute scramble.
- Integrate Data Sources: Combine insights from your SAM tools, CMDB, and contract repository for a holistic view.
- Engage Stakeholders: Involve procurement, IT, and finance early in any licensing or migration decisions.
- Use Advisory Support: Independent experts (like Livingstone) can expose gaps and negotiate on your behalf.
Livingstone Perspective
SAP licensing pitfalls aren’t inevitable. They’re the result of inattention, siloed data, and rushed decisions. By cleaning up user roles, monitoring Digital Access, and actively managing contracts, you can avoid waste, reduce risk, and stay ahead of SAP’s next audit. Proactivity now beats panic later.
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Author
Lucy Shillito, Senior Consultant at Livingstone Technology