Digital Access is a term coined by SAP as part of their approach to modernizing Indirect Access. Digital Access and Indirect Access are however one and the same thing. Both terms actually refer to the licensing of “Indirect Use” of SAP ERP.
According to SAP agreements all Use of SAP software (whether directly via dialogue access or indirectly via upstream third-party of proprietary intermediary system) needs to be licensed. It’s worth remember that Indirect Access doesn’t necessarily result in licensable Indirect Use of SAP. In some cases, the functions being performed doesn’t constitute Use as it is described in the contracts. However, if it does qualify as Use then you would need either a package license, a user license or in some cases both, in order to be compliant.
The Digital Access licensing model involves licensing indirect use according to the number of Digital Documents entered into SAP via external third-party systems. Digital Documents being things like Sales & Purchase Orders, Financial Postings and Material Movements.
Indirect Access remains a major concern for many companies who didn’t fully understand the implications of indirect access or weren’t aware of the licensing conditions when implementing new technologies. Around the time of the infamous Diageo Indirect Access court case SAP were known for being highly aggressive with their audit tactics often targeting indirect access in order to generate high license revenues. The lack of understand within customers and the emergence of automation and digitization in recent times made many customers easy pickings. Despite the launch of the new Digital Access Licensing Model in 2018 customers have remained tentative about indirect access risk. However, with SAP now openly promising to be more collaborative, customers should take advantage and address the risk one way or another this year.
Here are the top 5 things you need to consider if you are to successfully get on top of Digital Access once and for all in 2021:
1. Do you have any existing un-licensed indirect use that needs to be addressed?
How non-compliant are you?! You should carry out the work necessary to identify if you have any existing un-licensed indirect access and quantify the exposure in terms of licensing costs. If you haven’t adopted the new Digital Access licensing model you will need to calculate the cost of exposure in terms of the Business Suite licensing model (i.e. Package/User). If you have a high-risk exposure you ought to address the risk sooner rather than later in order to get compliant.
2. Which license model is more cost effective for your business?
Licensing Indirect Access via the User/Package license model can be extremely expensive. Hence some of the horror stories featured in the press. In some cases, Digital Document licensing can work out cheaper, so it is important to perform a comparative cost analysis of the two models before you consider buying any licenses. Don’t ever be pressured into buying and settling as you are perfectly entitled to take your time and properly evaluate your options.
You would also be strongly advised to take into consideration your 3-5-year IT roadmap. You need to consider how future innovations and system integrations will impact indirect access and future licensing costs. Knowing this will help you decide whether to switch or not and more-over what level of entitlement you need to buy to ensure current and future compliance.
3. How and when do I negotiate the licenses I need?
Firstly, do you have any up and coming purchases like S/4 HANA for instance? If so, you can buy smart by building your purchases into other licensing deals. If you are migrating to S/4 HANA it can often be beneficial to convert to Digital Access as part of that transaction.
Secondly, do you have urgent demand for license coverage? If you have or are in the process of integrating third-party applications with SAP, you should be considering the licensing cost now and buying the licenses you need to be compliant today.
4. Are you aware of SAP’s Digital Access Adoption Programme (DAAP)?
This Programme offers commercial incentives including up to 90% discount for customers who switch to the new model. The framework also makes provision for the exchange of old Indirect Access relevant licenses for Digital Document licenses often reducing the net cost of purchasing the total volume you need. This programme has been extended until the end of 2021 to further incentivize adoption of the new model. When calculating your comparative costs, you will need to account for the pricing structures for DAAP, of which there are 2; DAAP Model A, and DAAP Model B. I would certainly encourage every SAP customer who hasn’t already done so, to take a serious look at Digital Access this year whilst DAAP is still available.
5. Digital Access can be more expensive!
It is my firm opinion that the Digital Access Licensing Model was not developed as a customer friendly solution to indirect access but was in-fact intended to monetize digital transformation. SAP were finding it increasingly difficult to justify license fees for indirect access. I know as I have worked on numerous successfully indirect access audit defences. They also saw from emerging technologies like RPA, AI, IoT and other smart technologies that Use of SAP was going to come increasingly from connected systems not dialogue named users. I read an internal SAP document detailing the digital access licensing model before it was released to the public where the model was described by SAP as “monetization” of indirect access. It doesn’t get any clearer than that! Furthermore, from practical experience on the customer side I can confirm that digital access can result in existing compliant scenarios suddenly being subject to additional charges, which again would benefit SAP and open up new license revenue streams.
That said, I have also witnessed and equal number of cases where Digital Access worked out cheaper for the customer. Research previously conducted by VOQUZ Labs Advisory Director Francisco Hansen revealed that there is no link between company size and how much digital access will cost. Results varied significantly on a case by case basis. It is therefore crucial that you do the analysis properly to identify the right solution for your business. And now is definitely the right time to act.
Getting expert help can help you buy the right licenses at the right time at the right price and on the best conditions. If you are looking expert help to support your evaluation of Digital Access licensing, then don’t hesitate to get in touch today to find out more.