Pressure to act: S/4 and the new SAP licensing policy

SAP's new license model is not to everyone's liking, is the unanimous verdict in the SAP community. The International Association for SAP Partners e. V. (IA4SP) complains:

"Initial use cases from our member companies have shown that the additional costs for indirect use through the new license system still lead to a considerable increase in the cost of connecting third-party applications."

IA4SP believes that this is a dangerous development, as it reduces the diversity of offerings and innovative strength in the SAP market. SAP users have repeatedly decided not to purchase third-party solutions because they would be too expensive to integrate with SAP.

The Bundesverband der IT-Anwender e. V. (Voice), the association representing the interests of CIOs in Germany, also criticizes the additional SAP license and maintenance fees to be paid in future as a contradiction to the principle of interoperability.

End of maintenance for SRM

In fact, SAP's new pricing policy is also causing problems for SAP-based purchasing, which, like all other business areas, is affected by the expiry of maintenance for traditional SAP products.

With S/4, SAP is providing a new business suite which, according to an IDC study, is "a must-have for two thirds of SAP users". However, while users of modules such as S/4 Finance or Human Resources can expect a modernization of business processes, the situation is different in procurement.

An S/4 migration appears less attractive here, as SAP SRM in the on-premise area is being replaced by a functionally reduced module - S/4 Sourcing and Procurement.

The public cloud platform Ariba also fails to convince many users, even if numerous classic SRM functions could be mapped there. Many companies are therefore currently looking for alternatives to make their procurement fit for the digital transformation. However, those considering partner and third-party solutions run the risk of having to shoulder considerable additional costs.

Additional costs and a lack of transparency

According to SAP, the new license model should make indirect access binding and calculable for customers and partners. Critics, on the other hand, fear the opposite: namely that indirect use will become a massively unpredictable cost factor.

In the increasingly heterogeneous SAP system landscapes, there is often no overview of which documents are created directly by licensed SAP users and which are created indirectly via partner and third-party solutions.

The consequences this can have in purchasing can be seen in the example of a company that uses the procurement solution of a third-party provider. There are already 500 licensed users who are authorized to access SAP systems in order to create purchasing documents.

If 500 new users are now added who are to create procurement documents via the external solution, the new SAP license model will lead to a disproportionate increase in costs and a lack of transparency.

This is because the company now has to pay twice - both for the document items of all 1000 users and for the licenses of the 500 SAP users already in place.

Way out through add-ons

In view of the approaching end of SRM maintenance, should purchasing departments therefore prefer the slimmed-down S/4 version to a third-party solution? Intelligent SAP add-ons offer a way out, which, in addition to deep SAP integration, enable optional user management and thus more cost-effective use of the new document-based SAP license model.

With user management running on an upstream non-SAP server, a user can choose flexibly between "SAP Human Access" and "SAP Digital Access".

Once they have logged in, they have the option of only communicating indirectly with the SAP system and can decide each time whether they want to work with SAP's own user management and therefore directly with an SAP user or indirectly via the add-on, depending on which is the more cost-effective option.

With the 2bits Procurement Suite and the 2bits Collaboration Suite, two intelligent SAP add-ons are available with which purchasing departments can circumvent the controversial new SAP license model.

Thanks to the upstream user management, they do not have to limit themselves completely to the newly defined digital SAP usage, as would be necessary when using a pure third-party solution.

They can optimize their license volume and avoid a lack of transparency - and at the same time benefit from the range of functions of two add-ons that are deeply integrated into SAP and enable fast and secure purchasing of goods and services.