SAP Digital Access: An outcome-based model aligned to Company Size? The numbers say NO.

SAP Digital Access: An outcome-based model aligned to Company Size? The numbers say NO.

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When you connect a non-SAP application to SAP, which transfers one or more of nine different kinds of pre-defined data objects into SAP, you’ll have to acquire additional licenses from SAP. Which implies your organisation will have to cover additional costs. Not something that most executives would like to hear right now. What do we propose?

In 2018, SAP published three documents explaining their contentious new digital licensing model for connected applications, a model which, according to SAP’s documents should be “outcome based [1]”.

According to Oxford’s English Dictionary, “outcome” stands for “the way a thing turns out; a consequence”. The pitfall with this is, you may think that the alignment is linked to company size, number of employees as an outcome. However, the reality is very different. So, what is the hidden indication for this licensing model’s in reality? Let us look at what the numbers tell us.

We picked out the results of our last 25 digital access projects and their document counts. The numbers shown stand for the document counts after applying the 20% factor for material and financial documents and after excluding document counts from SAP to SAP communication, subsequent documents, indirect-static-read and any exclusion rule allowed by SAP in their Digital licence model.

Table 1

 

As we can see in the diagram, there is clearly no correlation between the companies’ size in employees and the digital access document counts. Moreover, we find a company with 800 employees and 16 million documents, one with 2,050 employees and 115 million documents and one 105,000 employees and 2.8 million documents.

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Tabelle 2

Considering SAP’s DAAP 90% discount (Digital Access Adoption Program), a one-time payment for the document license and 10 years paying 22% maintenance on the one-time payment, we end up with the 10-year TCO shown in Table 2.

What does this mean for your company?

Company size and the number of employees has no direct relationship to the potential financial risk posed by SAP’s new digital licence model. Companies that benefited from a small SAP Named User licence base may now be severely impacted by the new digital access licence model.

This statement is supported by testimonies from our clients, indicating pressure from SAP should they considering buying non-SAP solutions like Salesforce, Workday, Automation Anywhere and strongly backing their claims for additional Digital Access costs. Implying that moving away from SAP applications has a negative financial impact on future costs.

What can you do to mitigate this potential financial impact?

We have shown the tables and graphics above that doing a SAP digital access review within your organization is the best starting point. A lack of transparency, visibility and accuracy with regards to your document counts will lead to unacceptable financial risk. If you would like a smooth journey towards an acceptable digital licence model then let’s get you started in the right way.

 

[1] April 2018, SAP ERP Pricing for the Digital Age, Addressing Indirect/Digital Access, Page 3

Francisco Hansen

Francisco Fernández Hansen has been Head of Advisory at VOQUZ Labs since 2019. He is responsible for sales in the USA and Latin America. Francisco leads the team and the offices in New York and Mexico City.

Francisco Hansen

Francisco Fernández Hansen has been Head of Advisory at VOQUZ Labs since 2019. He is responsible for sales in the USA and Latin America. Francisco leads the team and the offices in New York and Mexico City.

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