SAP | Mega Vendors | SAP Licensing

Take control to optimize the costs of your SAP estate

The current pace and variety of change in technology systems is unprecedented. As many large enterprises are struggling to keep their ERP systems and IT infrastructure modernized to maintain a competitive edge, SAP pushes for major changes. There is pressure and encouragement to move ERP to cloud hosting via RISE with SAP, while a major upgrade of the ERP application backbone to S/4HANA is almost inevitable and the 2027/2030 deadlines closer than they seem. Both would be big contractual challenges that are hard to execute optimally, and ignoring or postponing has its own technological, competitive, and licensing disadvantages. Either way, you want to have SAP license management high on the agenda.

Avoiding unnecessary SAP expenditure means you need to have an SAP contract with the right product mix and the right flavour and number of licenses to match IT requirements. This is a challenge in a time of rapidly increasing automation, digitization and global inter-connectedness, and it is not made easier by SAP’s offering a growing number of solutions and deployment options. Most organizations opt for a hybrid of SAP/non-SAP infrastructure, which increases the complexity and adds a separate challenge around Indirect/Digital Access.

The RISE with SAP programme is SAP’s answer to tackle these challenges and manage the business transformation. It is also a strong push to move customers’ core ERP stack from on premise to a cloud hosting via SAP. While there are many advantages to this, it is a big step that comes with a price tag and its own challenges, so it comes as no surprise that many organizations are not ready yet or not convinced that this is the direction they want to go. The alternative of not cutting the Gordian knot is not attractive either, as chances are that you would be stuck with a portfolio that is not well fit for purpose, you pay significant support fees on shelfware, and face complex and risky license audits. So, it is a time of big decisions that impact how organizations avoid that SAP costs spiral out of control.

USEFUL CONTENT:
SAP briefing series for valuable insights and recommendations to implement within your organization to manage your SAP estate.

SAP Cloud Migration White Paper key steps organizations should follow to ensure a successful transformation to the SAP Cloud.

SAP S/4 HANA Advisory

After 2027 SAP will increase the fee for support on classic Business Suite and after 2030 will only support customer who are converted to S/4HANA. Many of Livingstone Group’s clients are already in the process of planning the technical migration since this is a quite complex exercise. Whilst the technical migration is complicated, the license conversion will present its own challenges. It is essential to understand the functionality, pricing model and metric of new products offered and the impact on updated licences. Additionally, there are changes to user types which are very different from the classic SAP. Livingstone’s experts will help you understand what is new in S/4 HANA and when & why you should migrate.

Watch our recent video on this topic - SAP S/4Hana: What do I need to know?

SAP Commercial & Contractual Optimization

As SAP customers face the challenges of rapidly increasing complexity and cost, a variety of causes need to be considered and addressed if organizations are to remain in control, compliant and on budget. These challenges are being driven by the required migration to S/4HANA by 2030 and migrating to new cloud solutions. These are not just major technical considerations, but they also have important commercial and contractual implications that need to be carefully planned and managed. SAP has some of the most complex pricing and commercial contracts in the industry, as pricing is dependent upon a range of variables including an organization’s employee, partner and customer base, solution portfolio, overall architecture and deployment option (cloud vs on-premise). In addition to this, and unlike most of the mega vendors, new on-premise SAP contracts are usually added to the existing contract portfolio instead of replacing past contracts, which often leads to a very complex license estate over time, especially after some mergers and acquisitions.

Our approach is made up of two key phases, typically delivered over a 3 to 9 month period prior to and during the engagement with SAP. During this engagement period we work in partnership with key stakeholders to help them articulate their overall requirement and harmonize it across all stakeholder groups, to define an optimal Bill of Materials, contract solution and SAP engagement strategy.

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SAP Cloud Migration

SAP has been gradually testing and refining what Cloud provision works best for its customers – for example considering the pros and cons of a public versus private cloud approach. But this journey is very much still ongoing – and so organizations must understand the more recent changes and consequent challenges arising from SAP’s Cloud transformation strategy. It is important to consider the available SAP services in the areas of business transformation, application and IT infrastructure management, and what level of control to have over your IT estate – RISE with SAP, for example, means SAP will have a high level of control - and also what level of flexibility is needed in terms of custom developments, updates, and upgrades. Understanding SAP's licencing structure and pricing logic is another major challenge, striking the right balance between contractual terms and required flexibility in the face of future uncertainties will be crucial to your organization’s success.

Managing an SAP Cloud transformation is a complex process and requires in-depth knowledge. When it comes to SAP Cloud transformation, our SAP Managed Services support organizations every step of the way – before, during, and after negotiations. We divide and conquer by taking a phased approach to the entire process, taking the burden off IT teams and business leaders.

Find out more in our SAP Cloud Migration White Paper