A recent study suggested most SAP projects have a 50% chance of failure. The risk of having incorrect SAP licensing could be far higher.
The implementation of SAP is a major IT initiative that has the potential to streamline business processes and make the organisation more efficient.
But, as Computer Weekly previously reported, many projects fail to meet the business objectives and expectations of their key stakeholders.
Incorrect licensing can be costly and may reverse any potential return on investment in a SAP implementation.
Indirect access
A recent example is the Diageo ruling in February 2017, which highlighted SAP’s stance on indirect access. Diageo wanted to empower its business customers and sales representatives through a Salesforce system, which connect to its back-end SAP.
The high court ruled that by connecting its Salesforce system to SAP, Diageo was using the core ERP in an unlicensed way. The sales team and each and every business customer was considered a SAP professional user, which incurs the highest licence fee. Diageo was fined £55 million for the unlicensed use SAP.
Among the issues businesses should be wary of when trying to maximise their SAP investment is that SAP may offer tempting software bundle deals, which include extra modules either free or heavily discounted.
In a recent Computer Weekly article, Sebastian Grady, president of third-party SAP maintenance provider, Rimini Street, wrote: “SAP ECC6 – SAP’s flagship product – is an incredibly robust set of business applications containing more than 400 million lines of code, with many customers adding millions more in custom code to meet their business and specific industry needs.
“It appears, however, that innovation into this core product has slowed to a snail’s pace, and many customers are finding it harder to justify the high and rising costs of upgrades and maintenance and, more recently, the push towards its cloud product S/4 Hana.”
This article originally appeared on ComputerWeekly.