The Best of S/4 Conversion With License Optimization

Companies need to consider a number of aspects to ensure a successful transition. For many companies, switching to S/4 Hana is a milestone and an important part of their digital transformation. Those who are still hesitating to switch to S/4 or are having problems implementing the migration are already clearly feeling the consequences. This is because SAP has not brought any more innovations to the Business Suite for six years. And from 2027, SAP will no longer support the old SAP systems at all.

To this end, SAP presented the Rise with SAP initiative in 2021, which aims to help companies move to the cloud and transform their business processes in the process. With the introduction of Joule, an AI-based assistant, the Walldorf-based company increased the pressure on its customers once again in the fall of 2023. This is because Joule is only intended for the Cloud Enterprise portfolio. Users of S/4 Hana Cloud, Public Edition, can look forward to new AI functions in spring 2024. The offer will not be available to on-prem customers.

If the changeover is to succeed and not get out of hand financially, companies need to consider a few aspects in advance. The focus here is on a comprehensive and precise understanding of the existing ECC license portfolio in order to know which S/4 licenses will be required afterwards.

This is the only way to optimize licenses and finally get rid of unproductive shelfware. SAP offers users the option of converting their "old" ECC licenses into the correct S/4 licenses and receiving up to 100 percent SAV (SAP Application Value). 

SAP systems are known to have a complex and multi-layered license structure. There are different license types, for example user licenses or engines, packages and line-of-business (LoB) products for certain applications. In addition, authorization-based licensing (Abap Authorization Concept) presents SAP admins with new problems. Based on this authorization concept, the administrator assigns authorizations to users that determine which actions a user may perform in the SAP system after logging on to the system and authenticating. This information is important for license optimization in order to measure usage and calculate future SAP license requirements.

Unfortunately, license optimization is often neglected in many S/4 migration processes, even though SAP is usually dealing with investments in the millions. There is often a lack of internal resources and expertise to adequately deal with this strategic issue. An S/4 migration is very difficult, if not impossible, to reverse. A "bad" migration will therefore far exceed the planned costs and take longer.

With our USU Software Asset Management solution, we help SAP users migrate to S/4 by: identifying shelfware and exchanging it for S/4 products; identifying underutilized licenses and reallocating these resources to other users or systems; managing licenses and ensuring that all users have the right permissions; preparing customers for audits and helping to ensure compliance; optimizing processes such as software deployment, license tracking and permission reconciliation; scaling systems up or down in the SAP cloud and increasing flexibility; and automating processes.

Achieving average savings of more than 10 percent through license optimization - that's a six-figure sum for many companies! Although SAP in the cloud offers many advantages per se, there are good reasons why companies are even better positioned with the use of a license management and optimization tool. Software asset management allows SAP users to use valuable time and expensive SAP licenses more efficiently, reduce software costs and minimize compliance risks.