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S/4 Hana transformation from a licensing perspective

The extension of support for SAP's "old" ERP world is intended to reduce the pressure on companies to switch. The Walldorf-based software manufacturer also promises a simplified licensing structure for its product landscape.
Florian Ascherl, Deloitte
Patrick Dickinson, Deloitte
Svenja Vorwerk, Deloitte
Alexander Biliz, Deloitte
June 4, 2020
Content:
Licenses
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This text has been automatically translated from German to English.

In 2030, the last hour will strike for the aging but still most widely used SAP ERP. Until then, the corresponding support can continue to be used via additional fees.

It is unclear whether the additional time will sufficiently help companies migrate to the S/4 Hana world. In any case, SAP is making an effort to present a simpler product portfolio for the future, but the change of track will therefore by no means be simple.

Licensees should therefore prepare for the upcoming change in good time, as there are a number of changes that need to be taken into account.

The first simplification awaits companies when selecting a database. The innovative in-memory technology is mandatory with the Hana database; third-party providers are no longer required.

Instead of the 131 historically grown named-user license types (NUL), S/4 offers four direct-user access licenses for the so-called digital core use. These are one developer user and three enterprise management users, which in turn are assigned more functional authorizations in ascending hierarchical order.

This may simplify commercial license management, but additional agreements may still be included in the contracts. The four new license types are no longer attributable to natural persons, but are linked to the user accounts in the system at the technical level.

The Line of Business (LoB) Solutions have also been slimmed down. Here, there is a smaller engine portfolio with fewer customer- and industry-specific modifications than in the traditional concept. Licensing is based on value-based metrics.

Thus, as a rule, only the respective LoB license is required for use. In theory, these applications can therefore also be used with accounts without user access licenses. In practice, however, it must be demonstrated that user accounts only use LoB functionalities and do not access the Digital Core.

A tidy portfolio is a welcome change, but how do you transfer a license structure that has been cemented for years into the S/4 Hana world? SAP makes it simple and offers the crediting of licenses already in possession. However, the accurate allocation of existing NULs to the new S/4 users poses challenges for many customers.

Supposedly identical NULs can be assigned to different S/4 Hana users (depending on usage behavior). The conversion should therefore be evaluated for each user account. In fact, it is possible that some NULs will even become useless because the matching product counterpart no longer exists in S/4 or the use of the functionality does not require an additional user license.

In addition to special arrangements on the part of SAP, two transformation models offer methodical approaches for coping. The greenfield (new implementation) and brownfield (software upgrade and data transformation) approaches both offer a range of advantages and disadvantages for a wide variety of business scenarios, and these must be evaluated on a case-specific basis.

SAP also offers a number of tools (for example, the S/4 Hana Migration Cockpit) that are best used with the help of appropriate experts for planning implementation.

How could a license allocation for user accounts in S/4 Hana look like and which Line of Business Solutions should be strategically selected? What could suitable license conversions and contract conversion look like? A lot is still uncertain, especially since some options also depend on the decisions of the users.

Only those who have optimized their licenses and maintain an overview will not pay more than necessary and risk additional payments. It should be noted that the job of all license managers remains as exciting as ever!

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Florian Ascherl, Deloitte

Florian Ascherl is Director Risk Advisory at Deloitte and the head of the global SAP Licensing Competence Center.


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Patrick Dickinson, Deloitte

Patrick Dickinson is Manager SAP Licensing at Deloitte


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Svenja Vorwerk, Deloitte

Svenja Vorwerk is Senior Consultant SAP Licensing at Deloitte


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Alexander Biliz, Deloitte

Alexander Biliz is Consultant SAP Licensing at Deloitte


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Work on SAP Basis is crucial for successful S/4 conversion. This gives the so-called Competence Center strategic importance among SAP's existing customers. Regardless of the operating model of an S/4 Hana, topics such as automation, monitoring, security, application lifecycle management, and data management are the basis for the operative S/4 operation. For the second time already, E3 Magazine is hosting a summit in Salzburg for the SAP community to get comprehensive information on all aspects of S/4 Hana groundwork. With an exhibition, expert presentations, and plenty to talk about, we again expect numerous existing customers, partners, and experts in Salzburg. E3 Magazine invites you to Salzburg for learning and exchange of ideas on June 5 and 6, 2024.

Venue

Event Room, FourSide Hotel Salzburg,
At the exhibition center 2,
A-5020 Salzburg

Event date

June 5 and 6, 2024

Tickets

Early Bird Ticket - Available until 29.03.2024
EUR 440 excl. VAT
Regular ticket
EUR 590 excl. VAT

Secure your Early Bird ticket now!

Venue

Event Room, Hotel Hilton Heidelberg,
Kurfürstenanlage 1,
69115 Heidelberg

Event date

28 and 29 February 2024

Tickets

Regular ticket
EUR 590 excl. VAT
The organizer is the E3 magazine of the publishing house B4Bmedia.net AG. The presentations will be accompanied by an exhibition of selected SAP partners. The ticket price includes the attendance of all lectures of the Steampunk and BTP Summit 2024, the visit of the exhibition area, the participation in the evening event as well as the catering during the official program. The lecture program and the list of exhibitors and sponsors (SAP partners) will be published on this website in due time.