Licensing Considerations for SAP Transformation

𝗕𝗿𝗲𝗮𝗸𝗶𝗻𝗴 𝗗𝗼𝘄𝗻 𝗦𝗔𝗣'𝘀 𝗨𝗽𝗱𝗮𝘁𝗲𝗱 𝗦𝗧𝗔𝗥 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗥𝘂𝗹𝗲𝘀𝗲𝘁: 𝗛𝗶𝗴𝗵𝗲𝗿 𝗖𝗼𝘀𝘁𝘀 𝗮𝗻𝗱 𝗟𝗲𝗴𝗮𝗹 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 SAP has recently released the new version of the STAR Service Ruleset (V1.69). For the first time, SAP has upgraded the license classification for several authorizations, leading to higher licensing costs for customers who aligned their authorizations based on the previous STAR Ruleset. 🔍 𝗪𝗵𝗮𝘁'𝘀 𝗖𝗵𝗮𝗻𝗴𝗲𝗱?  Several authorizations are now considered "Advanced Use" instead of "Core Use" in the Private Cloud (or "Professional Use" instead of "Functional Use" for On-Premise). This means that many customers are now facing increased costs, especially if they have already remodeled their authorization landscape to align with SAP's STAR Service, as recommended. 💡 𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀 𝘁𝗼 𝗖𝗼𝗻𝘀𝗶𝗱𝗲𝗿: 𝘐𝘮𝘱𝘢𝘤𝘵 𝘰𝘯 𝘓𝘪𝘤𝘦𝘯𝘴𝘪𝘯𝘨 𝘊𝘰𝘴𝘵s: Customers who followed the STAR Ruleset may now face higher costs due to the upgraded classifications. 𝘓𝘦𝘨𝘢𝘭 𝘐𝘮𝘱𝘭𝘪𝘤𝘢𝘵𝘪𝘰𝘯𝘴: What does this mean for the principle of the STAR Ruleset being a guide to good and compliant licensing? 𝘕𝘦𝘹𝘵 𝘚𝘵𝘦𝘱𝘴: It's crucial for SAP professionals to review the updated Ruleset and assess the impact on their organization's licensing strategy. The only way to avoid this pitfall is to include the current definition of the STAR Service in your contract whenever you sign a contract that relies on the STAR Ruleset (e.g., a "normal" SAP Cloud ERP Private contract). This way, you will not have to deal with such surprises for the duration of your contract. You will find the link to the updated STAR Note in the comments section. Let's discuss how these changes affect your SAP environment and what steps you can take to mitigate the impact. Share your thoughts and experiences below! 👇

🚨 𝗦𝗔𝗣 𝗟𝗶𝗰𝗲𝗻𝘀𝗶𝗻𝗴 𝗦𝗵𝗮𝗸𝗲-𝗨𝗽: “𝗥𝗜𝗦𝗘 𝘄𝗶𝘁𝗵 𝗦𝗔𝗣” 𝗥𝗲𝘁𝗶𝗿𝗲𝗱 𝗪𝗵𝗮𝘁 𝗖𝗼𝗺𝗲𝘀 𝗡𝗲𝘅𝘁? Another wave of license complexity has arrived. SAP has officially retired its flagship product “RISE with SAP” and replaced it with a modular Cloud ERP model, creating uncertainty, cost concerns, & disruption for many customers. 🔍 #WhatHappened? SAP’s “RISE with SAP” was launched in 2021 to help customers transition to the cloud with a bundled subscription for S/4HANA, infrastructure, tools, & support. As of April 2025: The RISE branding is gone from product SKUs. ➡️It's now replaced with SAP S/4HANA Cloud ERP, private edition. Licensing & pricing are now fully governed by Full Use Equivalent (FUE) models introducing a new calculation & packaging structure. This move affects both existing RISE customers & those currently negotiating or planning a cloud migration. ⚠️ Why It Matters ⇕ According to user groups (e.g. DSAG, the German-speaking SAP user group) & analysts at Gartner: ⇒ Unbundling has led to a redistribution of what’s included “by default” vs. what’s now an add-on changing overall cost structures. ⇒ Customers could face unexpected license hikes if FUE modeling pushes them into higher tiers or if past discounts don't carry forward. ⇒ SAP appears to be encouraging modular, cloud-native adoption, which could mean long-term transformation for how software is procured, tracked, and supported. 🧠 Key Considerations for Enterprises 📊 Reevaluate Your Current Landscape ⇝Audit your current entitlements under RISE vs. what’s now offered under Cloud ERP Private Edition. ⇝Identify any components (like SAP BTP, LOB extensions) that are no longer bundled. 📉 Model the Financial Impact ⇝FUE pricing can be less transparent, with usage tiers & packaging that vary by industry. ⇝Run a total cost of ownership (TCO) analysis compare past, present & projected future cost implications. 🧾 Prepare for Re-Negotiation ⇝Don’t accept rollovers blindly. Discounts under the RISE model may need to be resecured. ⇝Ask for detailed SKU breakdowns & clarification of “essential vs. optional” services in the Cloud ERP model. 🛡️ Risk Mitigation ⇝Gartner suggests customers formalize exit clauses, SLA baselines, & contract protections as SAP pivots more heavily to cloud subscription models. 📅 Plan for What’s Next ⇝Some experts believe this may be a prelude to a broader “Cloud-First License 2.0” model in 2026. What Should You Be Asking? ↪How will SAP’s modular Cloud ERP impact your cloud transformation journey? ↪Are your current contracts flexible enough to handle this shift? ↪Are you engaging the right advisors, analysts, or partners to navigate this change? 🚀SAP’s move to rebrand & restructure RISE is more than cosmetic it’s a seismic shift in how cloud ERP is licensed & consumed. While it offers potential for greater flexibility, it also demands a sharper eye on cost, compliance & strategic alignment. #SAP #CloudERP #LicensingStrategy #FUE #Reshare

SAP is sounding the alarm for S/4HANA users as the end of Compatibility Pack licensing approaches. Here's a breakdown of the key points: - **Deadline:** By December 31, 2025, most customers must cease using Compatibility Packs to avoid breaching their contract with SAP. - **Background:** Introduced in 2015 to aid the transition from SAP ECC to S/4HANA, Compatibility Packs are now deemed largely unnecessary post the 2023 SAP release. - **Consequences:** Non-compliance post-2025 could lead to technical unavailability of pack functions, legal repercussions, and intensified audits by SAP. - **Exceptions:** Certain packs and SAP RISE customers enjoy extended rights until 2030. - **Challenge:** Around 70% of S/4HANA users may unknowingly rely on Compatibility Packs, necessitating process reengineering, user training, and potential module adoption. - **Recommended Action:** Companies are advised to conduct system audits promptly, identify pack dependencies, and initiate corrective measures to prevent licensing infringements and legal entanglements. Ensuring compliance with SAP's directives demands a strategic approach, encompassing planning, adequate resources, and proficient consultants. Stay ahead of the curve to sidestep complications down the line. #SAP #S4HANA #CompatibilityPack #BusinessTransformation

How SAP Signavio helps in SAP License optimization SAP Signavio plays a crucial role in SAP license optimization by providing powerful tools for process analysis, visualization, and optimization. Here's how it contributes to effective license management: ✅ Process Visibility and Analysis SAP Signavio offers comprehensive process modeling and analysis capabilities, allowing organizations to gain deep insights into their SAP usage patterns. By visualizing end-to-end business processes, companies can identify: - Underutilized licenses - Overallocated user roles - Inefficient workflows that may lead to unnecessary licensing costs This visibility enables data-driven decision-making for optimizing SAP license distribution and usage. ✅ AI-Powered Optimization Leveraging artificial intelligence and machine learning, SAP Signavio can: - Automate license allocation based on user roles and historical usage patterns - Detect anomalies in SAP usage that may indicate compliance risks or overuse - Predict future license needs, allowing for more effective budgeting and resource planning These AI-driven insights help organizations avoid over-licensing and ensure compliance with SAP agreements. ✅ Continuous Improvement SAP Signavio supports a culture of continuous process improvement, which is essential for ongoing license optimization. By providing tools for: - Collaborative process modeling - Real-time monitoring of process performance - Simulation of process changes Organizations can iteratively refine their SAP usage, leading to more efficient license utilization over time. ✅ Integration with SAP Ecosystem As part of the SAP Business Transformation Suite, Signavio integrates seamlessly with other SAP tools. This integration allows for: - Holistic analysis of SAP environments - Streamlined implementation of license optimization strategies - Alignment of process improvements with SAP best practices By leveraging these capabilities, organizations can ensure that their license optimization efforts are coordinated across their entire SAP landscape. ✅ Cost Reduction and Compliance Ultimately, SAP Signavio's role in license optimization translates to significant benefits: - Reduced licensing costs through right-sizing and efficient allocation - Improved compliance by ensuring proper license usage and avoiding unintentional overuse - Enhanced decision-making for SAP investments and upgrades By providing a data-driven approach to process management and optimization, SAP Signavio empowers organizations to maximize the value of their SAP investments while minimizing licensing expenses. By leveraging these features, organizations can achieve tangible cost reductions through improved efficiency, reduced waste, and data-driven process optimization. --- ♻️ Repost to empower your network to thrive in their careers 🔔 Follow Alok Kumar for more insights, tips, and opportunities to elevate your professional journey.