Indirect access in SAP: how to license it when moving from ECC to S/4 HANA and Rise with SAP

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Differences and evolutions in the SAP licensing model

?ECC, S/4 HANA On-prem, Rise with SAP: an in-depth look at what changes in indirect access management in SAP, along with some strategies for optimizing management and licensing-related costs.

?When we talk about indirect access in SAP, we refer to a scenario in which access to or use of system functionality occurs without users having direct access to the system itself. This typically occurs when an external system, software, application or device interacts with SAP, using its resources or data, without a user manually logging into the SAP system.

?Here are some examples:

• Access via external portals or third-party systems. A typical scenario is an e-commerce or customer portal that collects online orders and transmits them to SAP for inventory management and shipping.
• Integration with warehouse management systems (WMS) to automatically send updates on inventories and movements to SAP without users connecting directly to the SAP system.
• Integration with third-party software (CRM or BI) to obtain financial data, customer orders, or product information. Although users operate primarily in CRM or BI software, these systems communicate with SAP to receive or send data.
• Robotic process automation (RPA) bots that interact with SAP to perform automated tasks, such as data entry, report extraction, or transaction management. For example, a bot might use SAP APIs to update customer records.
• Interface with IoT (Internet of Things) systems in that IoT devices can send information (e.g., production data from industrial machines or sensors) directly to SAP to monitor real-time production, machine performance, or asset management. Although IoT devices do not “access” SAP in the traditional way, they still interact with it, creating an indirect data flow.
• EDI (Electronic Data Interchange) processes for exchanging electronic documents between SAP systems and those of suppliers or business partners. Data are transferred directly between systems without human intervention, but this represents indirect access to SAP resources.

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In SAP's System Measurement Guide we find the definition of “use” of software: Use” as a ”means to activate the processing capabilities of the software, load, execute, access, employ the software, or display information resulting from such capabilities.”

Accordingly, SAP (all along in truth) considers indirect access to be a form of SAP software use and therefore requires that customers obtain licenses to regulate this type of use.

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How does SAP measure indirect access?

Traditionally, indirect access was managed by SAP through licenses based on named users (or named user licenses ). This model licensed every user who accessed the system, regardless of how they accessed SAP (via SAP GUI, a Web interface, or a system integration). However, the increasing integrations with external systems led to challenges in managing indirect access. In particular, named licenses did not clearly account for situations where no direct human user was involved.?

Indeed, third-party applications interact with SAP, and behind these interactions (extractions, processing, insertions, etc.), there could be a human user, but also a bot or an automated system that replicates human actions. In contracts, the definitions of “use” and “named user” may not be unambiguous and generate doubts about their interpretation. Some contracts, in fact, may specify that a user is a “human” user; others may not.?

This situation created misunderstandings and disputes during audits, as companies often did not properly account for these indirect accesses ... until they landed in court. The 2017 Diageo vs SAP case is emblematic of this.?

Within this paradigm there are, in addition, special situations to be excluded from license counting such as:?

• the indirect static read, i.e., those situations where data is exported from a SAP system to a non-SAP system without any updates/processing on the SAP digital core. During the 2017 Sapphire conference, SAP CEO Bill McDermott confirmed that a license is not required for static reads from third-party systems. In this paper on page 7 , are outlined various scenarios in detail.
• paradigms that differentiate user-collaborative bots from independent bots (the unattended type, to be clear). The former could potentially already be covered by a named user license and would not require a license.

The problem is that SAP’s measurement tools often do not provide a clear understanding of the different usage scenarios, and we know that any auditors go out and investigate the log of interfaces that connect to SAP systems on a timely basis.

By analyzing the data extracted from these tables, they identify the presence of users not covered by the designated user types, such as Professional and Limited Professional. The presence of “anomalous” indicators (such as multiple logons or work volume) that may indicate iterations through automated bots is definitely a red flag of potential indirect access, and SAP checks to see if there is already a named license covering the required functionality.???

If overages or mismanagement are discovered, they can result in significant costs.

To make it easier for its customers to gain clarity on the issue, SAP in 2018 introduced the Digital Access model , which established a metric based no longer on the number of users, but on the number of documents (not all, there are 9 types) that non-SAP third-party systems go to create on SAP systems. It also launched in the past few years the Digital Access Adoption Program (DAAP) , which ended in 2022, where it offered attractive incentive programs to switch to the new model.

Indeed, companies that joined could get a 90 percent discount on licenses for digital documents created through indirect access or alternatively choose to purchase 115 percent of the estimated documents to cover future growth, paying for only 15 percent of that volume.

These significant financial incentives were intended to help customers to regularize their usage and obtain a clearer and more predictable licensing model. DAAP, in SAP's intentions, was also meant to accelerate the adoption of SAP S/4HANA, the new ERP suite, by encouraging companies to migrate. The new licensing model for S/4HANA, based on Digital Access, was better aligned with modern business needs, particularly those related to digitization and the integration of external systems.

?As SAP aims to globally complete the transition to the new suite by 2027, it has introduced business models to ease the transition paths for existing customers. Of the two options offered, only one remains: the only way to migrate to S/4HANA on-premise is through S/4HANA Contract Conversion.

Contract Conversion, in fact, allows companies to convert their current SAP ECC contract (or earlier versions) to a new one that is compatible with SAP S/4HANA. This approach involves a complete change in the licensing structure from a model based on named user licensing and indirect access, to a more modern and flexible model tied to SAP S/4HANA, where indirect access is managed through the Digital Access model.

Until the second quarter of 2023, it was also possible to migrate to SAP S/4 HANA with another model, called Product Conversion, an option that offered gradual migration of existing licenses to equivalent S/4HANA solutions.

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Indirect access in the transition to SAP S/4 HANA and Rise with SAP

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As mentioned earlier, SAP ECC indirect access was generally regulated through named user licenses. Every person (or automated bot) who accessed the system, either directly or indirectly, had to have a license. It was difficult to monitor and measure because the concept of indirect access was not clearly defined.

Compared with ECC, SAP S/4 HANA and its new Digital Access licensing model eliminate the need to track each indirect user individually, making it easier for companies to understand and plan licensing costs for integrations with third-party systems. In fact, this model no longer relies on named licenses but focuses on digital documents created or processed by SAP through external systems.

?SAP has defined nine types of documents (such as sales orders, invoices, production documents, etc.) that must be accounted for when they are created by indirect integrations. This accounting is mostly at the line level (e.g., an order of 5 lines is worth 5).

Each type of document has a different multiplier, representing the impact of that document on the cost of the license. Documents with a higher multiplier have a higher cost than those with a lower multiplier. This system helps differentiate the weight of different documents based on their complexity or importance in the SAP system. The final cost of licenses is based on the annual volume of documents generated, simplifying the management process and making costs more predictable.

With Rise with SAP, an as-a-service solution that includes S/4HANA, cloud infrastructure, and managed services with a subscription-based licensing model, we have an even more flexible, as-a-service oriented model.?

Keep in mind that the RISE with SAP license does not automatically include Digital Access. In fact, you have a simplified licensing model that covers various aspects of the system, but indirect access via Digital Access is still measured and licensed based on digital documents created or processed by external systems (such as sales orders, invoices, etc.). We find this specified here as well.

Because of the integrated licensing of Rise with SAP, the Digital Access count is tracked and reported in SAP for Me , the centralized management and monitoring platform for SAP services. SAP for Me serves as a dashboard for SAP customers, providing visibility into various aspects of licensing, system utilization, support management, and compliance, including consumption of digital documents via the Digital Access model.

While from a visibility and control perspective, companies benefit by now having centralized licensing and usage data, Digital Access still needs to be managed according to each company's needs.

?In fact, if a company uses numerous third-party systems that create or process documents in SAP, it will still have to assess how many of those documents are generated and pay the associated cost based on the Digital Access metric. It is possible to negotiate or purchase packages that cover an estimate of the volume of documents needed, but these costs are separate from the basic RISE with SAP license.

Let's make a summary table:

What assessments are needed

When transitioning from SAP ECC to SAP S/4 HANA and consequently to the Digital Access model, always keep in mind the volumes of direct and indirect iterations. In fact, companies need to analyze their current usage to understand how many documents they generate through direct and indirect accesses and what multipliers apply to different types of documents.

If a company has a high frequency of document creation from third-party systems (e.g., multiple integrations with CRM, e-commerce platforms, or IoT devices), it may be more cost-effective to purchase or negotiate packages that cover estimated volumes than to have to pay variable costs.

For companies with a relatively low or moderate volume of indirect interactions, counting based on the volume of documents generated might be more cost-effective, as Digital Access costs will be proportional to the quantities generated.

Mapping all current and future interactions to identify where and how digital documents are generated could also benefit cost optimization. It would, in fact, help to understand if there are workflows or processes that generate more documents than necessary. For example, reviewing processes that are overly fragmented or duplicate multiple documents across multiple streams could be an area of improvement to reduce costs related to Digital Access.

For those in the process of renewing contracts, these considerations can come in handy because:?

• predicting the future volume of digital documents helps to plan with SAP for contracts and packages that take into account potential growth. For example, you can negotiate clauses that allow for greater flexibility, such as the ability to periodically review the number of documents used without facing excessive penalties.
• do benchmarking: examining indirect access volumes could help you understand how to manage Digital Access-related license purchases (fixed fee or variable fee)

In addition, internal reviews of licenses allow companies to be proactive and identify possible inefficiencies or areas for optimization before renewal.

In conclusion, we can say that companies already migrated to SAP S/4HANA or RISE with SAP can improve their digital access management by reducing document volume, actively monitoring licenses, and optimizing business processes. These steps help not only improve compliance, but also reduce the costs associated with using the system and protect future investments.

We will explore these issues in detail with concrete examples in the webinar “SAP and the New ERP Licenses” sponsored by ASSI scheduled for Oct. 9 at 5:30 pm. We at WEGG will bring our decades of experience in SAP licensing and our independent point of view, as we are consultants unrelated to SAP.

Join the webinar at this link !