SAP Indirect Access Licensing
- Definition: Use of SAP data via third-party systems without direct login.
- Licensing Models: Named User and Document-Based.
- Common Scenarios: CRM integrations, e-commerce platforms, RPA bots.
- Cost Drivers: Number of documents generated or users interacting indirectly.
SAP Indirect Access Licensing
SAP licensing is one of the most intricate areas for enterprises to navigate, especially with the growing complexity of data ecosystems and integration layers. One of the most debated topics in this space is SAP Indirect Access—a term that can perplex even experienced IT managers.
Indirect access refers to the use of SAP data or functionality by third-party applications, external users, or non-SAP software, which, if not managed correctly, could lead to licensing costs.
To help businesses better understand SAP Indirect Access, this article dives deep into its nuances, potential pitfalls, and strategies to mitigate associated costs. By the end, you’ll understand what indirect access entails, how SAP assesses licensing fees for it, and what you can do to negotiate favorable terms.
What is SAP Indirect Access?
Indirect Access, or Digital Access, occurs when an SAP system is accessed by an external application or system that isn’t directly licensed for SAP. Instead of a direct user logging in via an SAP GUI, data might be transferred to another system with which employees or customers can interact. This creates a grey area where businesses may need additional licenses to stay compliant.
Here are some common scenarios where indirect access can arise:
- Third-Party Applications: Your CRM or e-commerce system connects to SAP to read and write data, such as inventory levels, prices, or customer orders.
- External Users: Customers or suppliers accessing data indirectly through portals or integrated platforms.
- Robotic Process Automation (RPA): Bots that read data or initiate processes on the SAP system without directly logging in as traditional users.
Indirect access is more than just technical integration; it’s about how those connections are used and whether they generate, modify, or interact with SAP data. SAP historically used this licensing model to ensure customers aren’t bypassing user licenses by funneling data through third-party applications.
How is SAP Indirect Access Measured?
To understand the licensing implications of indirect access, it’s important to grasp how SAP measures this type of usage. SAP has established specific rules for Digital Access to determine which transactions or documents created by indirect usage should incur a licensing fee.
Digital Access Metrics SAP categorizes indirect usage based on creating or generating specific document types. The following are examples of document categories that SAP assesses for indirect access:
- Sales Documents: Orders, invoices, delivery notes, etc.
- Financial Documents: Payment records, journal entries.
- Material Management: Inventory management, goods receipts.
- Human Resources: Employee records, payroll activities.
SAP assigns a value to these document types, and customers are billed based on the volume of documents generated by non-SAP systems. Each document type may have different associated costs, depending on its role within SAP’s licensing framework.
The Evolution of SAP Indirect Access Licensing
Indirect access has been a contentious issue for years, with many SAP customers finding themselves embroiled in licensing audits that led to unexpected fees. Historically, SAP used a Named User License model to try and cover indirect usage, but it led to confusion and inconsistencies. To address this, SAP introduced the Digital Access Adoption Program (DAAP) to provide a clearer and more predictable approach.
The main stages in SAP’s evolution of indirect access licensing include:
- Named User License: Previously, any indirect access needed to be covered by licensing each individual interacting indirectly. This created scalability issues, especially for external customers.
- Document-Based Licensing (Digital Access): Introduced in 2018, this new model bases licensing on the number of documents created by indirect access, providing a clearer metric for customers.
- Digital Access Adoption Program (DAAP): Introduced in 2019, this program allows existing customers to transition to document-based pricing with a clearer understanding of costs.
Licensing Models for Indirect Access
SAP currently offers two key models for indirect access licensing:
- Named User Licensing: This model is based on individual users accessing SAP systems directly or indirectly. Every person involved needs a named user license if a third-party system is accessing SAP data. For example, an employee accessing an external warehouse system that queries SAP inventory levels would need an SAP license.
- Digital Access (Document-Based Licensing): Digital Access licenses are based on the types and number of documents created within SAP systems. Rather than tracking individuals, it tracks how the data flows, how documents are generated, and how much SAP functionality is being triggered.
Which Model Should You Choose? For companies with many third-party applications accessing SAP data, the Digital Access model is generally more cost-effective, as it avoids licensing every individual to access data indirectly. However, Named User Licensing may still make sense for organizations with fewer integrations.
Scenarios Where Indirect Access Applies
Let’s take a closer look at common scenarios where indirect access can apply and how licensing works for them:
1. CRM Integration
Many businesses have a separate CRM system, such as Salesforce, integrated with SAP for backend operations like inventory checks or customer order status updates. If Salesforce sends a customer order to SAP, it generates a sales document, which would fall under indirect access.
2. E-commerce Platforms
Another classic case of indirect access is an online store connected to SAP for pricing, inventory, and fulfillment. Whenever a customer places an order, the e-commerce platform might generate several documents in SAP: a sales order, an invoice, and a goods issue. Each document generated can incur licensing costs under Digital Access.
3. Supplier Portals
Suppliers interacting with SAP through a portal to update inventory data and delivery schedules or submit invoices will also create SAP documents. These actions fall under indirect access, particularly in procurement and supply chain workflows.
4. Robotic Process Automation (RPA)
Automation bots accessing SAP for process optimization or data retrieval create an indirect access situation. Every document these bots generate, from sales invoices to goods receipts, must be accounted for, and appropriate licenses are required.
Mitigating SAP Indirect Access Costs
Licensing for indirect access can quickly become a significant cost for organizations, especially those heavily integrated with non-SAP systems. Here are some strategies to mitigate these costs:
1. Conduct a License Audit
The first step to managing indirect access costs is understanding your current usage. Conducting a thorough audit of who and what is accessing your SAP environment will help determine the most appropriate licensing model. Pay attention to all touchpoints between third-party systems and SAP.
2. Consider the Digital Access Adoption Program (DAAP)
If your organization generates many documents via indirect usage, consider transitioning to document-based licensing under the DAAP. This approach provides more transparency and may help avoid unexpected costs during SAP audits.
3. Optimize System Integrations
Review your system integrations to identify inefficiencies. Reducing the number of transactions or documents generated via third-party systems can reduce licensing costs. For instance, batching transactions or consolidating certain processes can help.
4. Consolidate Systems Where Possible
Consolidating systems to minimize the need for third-party applications interfacing with SAP can lead to significant cost savings. For example, using SAP-native modules instead of external systems for specific functionalities may reduce the need for indirect access licenses.
5. Engage in SAP Negotiations
Negotiating directly with SAP can sometimes result in customized agreements that suit your business needs better. Engage SAP account managers early, especially if your business is rapidly scaling or has complex integration needs.
Best Practices for SAP Indirect Access
- Map All External Touchpoints: Create a clear map of every third-party system that connects to SAP. Understanding these connections will help you choose between the Named User and Document-Based licensing models.
- Use SAP’s License Optimization Tools: SAP provides tools to help track and manage licensing compliance. Tools like SAP License Administration Workbench (LAW) and SAP Solution Manager can provide visibility into your indirect usage and help you manage compliance more effectively.
- Avoid Overlapping Integrations: Duplicate integrations can drive up licensing costs. Use middleware or integration platforms that can minimize the number of direct connections to SAP, helping reduce the document footprint.
- Keep Communication Open During Audits: Audits are a big concern for businesses using SAP products. If SAP initiates an audit, be transparent but prepared. Engage licensing specialists or consultants familiar with SAP’s audit process and can guide your organization through it.
Legal Disputes and SAP Indirect Access
SAP’s approach to indirect access licensing has led to some high-profile disputes over the years. One example was Diageo in 2017, where SAP claimed millions of dollars in unpaid licensing fees because the company’s Salesforce system was indirectly accessing SAP without the proper licenses. The dispute highlighted the risks involved and the importance of understanding indirect access.
These disputes have prompted SAP to clarify how indirect access is licensed, leading to the introduction of the Digital Access model. However, businesses must remain vigilant about licensing obligations to avoid legal and financial penalties.
Pros and Cons of SAP Indirect Access Licensing Models
| Licensing Model | Pros | Cons |
|---|---|---|
| Named User Licensing | Predictable cost for each direct or indirect user | Expensive for large numbers of external users |
| Document-Based Licensing | Cost-effective for high-volume document creation | Complexity in counting and categorizing documents |
Named User Licensing may be suitable for internal use, where each user interacting with SAP can be clearly defined. However, as external systems grow, this model becomes cost-prohibitive. In contrast, Document-Based Licensing can simplify costs when multiple applications interact with SAP data, but it requires careful monitoring of document volumes.
How to Choose the Right Licensing Model
Scalability: If your company is growing rapidly and adding more integration layers, the document-based model may offer greater scalability and cost predictability.
Assess the Number of Integrations: Document-based licensing is likely more cost-effective if your business uses multiple third-party systems that need to interact with SAP data.
Volume of Documents Created: If only a limited number of documents are being created through indirect access, Named User Licensing may still make sense.
FAQ: SAP Indirect Access Licensing
What is SAP Indirect Access?
SAP Indirect Access occurs when external applications or systems access SAP systems without a direct user login. This could involve third-party applications, CRM platforms, or automation bots interacting with SAP data.
How does SAP license indirect access?
SAP offers two primary licensing models for indirect access: Named User Licensing, which licenses individual users, and Digital Access Licensing, which charges based on the number of documents generated by indirect interactions.
What is the Digital Access Adoption Program (DAAP)?
DAAP allows customers to transition to document-based licensing for indirect access. This helps businesses have a clearer cost structure compared to user-based licenses.
Which licensing model is better: Named User or Document-Based?
It depends on your use case. User licensing is ideal for limited integrations, whereas document-based licensing is generally more cost-effective for high-volume, integrated environments.
How does indirect access apply to CRM systems like Salesforce?
If Salesforce is integrated with SAP to create orders or check inventory, the transactions initiated by Salesforce are classified as indirect access, potentially requiring Digital Access licenses for generated documents.
Are e-commerce systems subject to SAP indirect access?
Yes, when an e-commerce platform accesses SAP for inventory, pricing, or fulfillment, it generates SAP documents like sales orders or invoices, which may require Digital Access licensing.
How do Robotic Process Automation (RPA) bots affect SAP licensing?
RPA bots that read, write, or create documents in SAP trigger indirect access. Each document created or modified by an RPA bot needs to be accounted for under the Digital Access model.
Can indirect access costs be mitigated?
Yes, costs can be mitigated by optimizing system integrations, transitioning to Digital Access via DAAP, and consolidating third-party applications to minimize document generation.
What are the most common compliance issues with SAP indirect access?
Common compliance issues include failing to license indirect users, underestimating the documents generated, and not adequately tracking third-party system interactions.
How can I prepare for an SAP licensing audit?
Start by mapping all external touchpoints, accessing SAP, conducting regular internal audits, and engaging licensing experts to verify compliance. Transparency during audits can also help mitigate potential penalties.
What is document-based licensing?
Document-based licensing, or Digital Access, charges based on the number and type of documents created by indirect access. Examples include sales orders, invoices, and payment records generated by third-party systems.
How does Named User Licensing work for indirect access?
Under Named User Licensing, every user accessing SAP data, whether directly or through a third-party system, requires a named user license. This can become costly for large numbers of external users.
How can businesses optimize their SAP licensing strategy?
Businesses should thoroughly audit SAP usage, consider consolidating system integrations, evaluate their document volume, and potentially transition to Digital Access licensing to better align costs with actual use.
How does the Digital Access model affect scalability?
The Digital Access model scales based on the number of documents generated, making it more predictable for businesses experiencing growth. This model avoids licensing every new user who interacts indirectly with SAP.
Are there any legal risks associated with SAP indirect access?
Yes, improper licensing for indirect access can lead to legal disputes and financial penalties, as seen in several high-profile cases. To mitigate these risks, it is essential to ensure compliance by using the appropriate licensing model.
