SAP FUE Licensing: Opportunities and Threats
Introduction: Why SAP FUE licensing matters
SAP Full User Equivalent (FUE) licensing is now a fundamental part of managing SAP environments, yet many organisations find it confusing, costly, and risky. The shift towards the FUE based licensing model has created both opportunities and threats for businesses, offering chances to optimise security and reduce costs but also exposing them to potential unnecessary expenses.
If your organisation is running SAP, you need to evaluate your licensing strategy now to avoid overpaying, non-compliance, and inefficiencies. In this blog, we explore the key opportunities SAP FUE licensing presents and the threats companies need to mitigate.
What is SAP FUE licensing?
SAP’s Full User Equivalent (FUE) licensing is a method of calculating software usage based on user roles and authorisations. Instead of simply counting the number of users or what they’ve done in the system, SAP now assigns a licence type to users based on the authorisations they have meaning licensing is now based on users’ ability to perform tasks rather than what they actually do.
Mismanagement of user roles, over-provisioning, access creep or failing to optimise licenses can now lead to unnecessary costs as well as compliance risks.
Opportunities: how to optimise SAP FUE licensing
When managed correctly, SAP FUE licensing presents significant cost-saving and efficiency enhancing opportunities:
1. Reduce over-provisioning: improve control and cut costs
One of the biggest threats from FUE licensing is that companies assigning high-tier licenses to users that don’t need them. Employees who only require basic access are often given Functional or Expert licenses because of the authorisations they have, leading to wasted spend.
Solution: Conduct a role-based licensing review to reclassify users and ensure the right licenses are assigned based on actual usage.
2. Role re-design that pays for itself
Many SAP environments suffer from access creep, sometimes caused by inefficient provisioning and deprovisioning and sometimes by overly complex and inefficient role models that drive up costs. However, traditional role redesign projects are often difficult to justify financially.
New angle: If your business optimises its role design, it can lead to lower licensing costs, making a business case for role redesign far easier to justify.
3. Prepare for S/4HANA migration the right way
If your organisation is planning to move to S/4HANA, reviewing FUE licenses before migration is crucial because failing to optimise licenses beforehand could lock in unnecessary costs for the future.
Solution: Analyse current license assignments, optimise before transitioning, and ensure the right license mix for the new environment.
4. Get ahead of SAP audits
SAP license audits can result in unexpected costs if companies aren’t prepared. Companies that don’t proactively manage FUE licensing often find themselves scrambling when SAP requests an audit.
Solution: Implement continuous SAP license monitoring to ensure compliance and avoid non-compliance fines.
Threats: risks that could significantly increase licensing costs
Despite the opportunities, SAP FUE licensing can also be a financial and operational minefield if not managed properly. Here are the top threats companies face:
1. Unnecessary licensing costs due to role creep
Role creep, where employees accumulate excessive access rights over time can cause a significant increase in licensing costs due to the new approach for assigning licence types to users. When users retain unnecessary high-level access, they can unnecessarily be classified under expensive Expert or Functional licenses instead of lower-cost alternatives which would have been more appropriate according to the authorisations they have access to.
Risk: Your organisation could be wasting money annually on misallocated licenses.
Fix: Regularly audit user roles to eliminate unnecessary high-cost licenses.
2. Failing to adapt to SAP’s changing licensing rules
SAP frequently updates and modifies its licensing policies, sometimes in ways that can negatively impact existing customers. Failing to stay ahead of these changes can result in unexpected costs and compliance issues.
Risk: Businesses that don’t track licensing changes risk being locked into unfavourable terms.
Fix: Work with licensing experts to stay informed on SAP’s evolving policies.
3. Compliance risks from indirect access and digital access
Many organisations struggle with indirect access licensing, where third-party applications interact with SAP. If not managed properly, SAP could classify these interactions under expensive licensing terms, leading to increased costs.
Risk: Unexpected audit costs due to misclassified digital interactions.
Fix: Assess indirect access exposure and align with SAP licensing best practices.
Final thoughts: act now to optimise SAP FUE licensing
SAP FUE licensing isn’t just a cost to manage, it’s an opportunity to optimise, cut expenses, and improve compliance. Businesses that proactively address their licensing strategy will not only reduce financial waste but also stay ahead of SAP audits and future proof their licensing models.
Would you like to uncover savings in your SAP licensing?
Do you need expert guidance on optimising roles and compliance?
Get in touch. Pumpkin Consulting are at the forefront of the latest thinking about how best to manage this. Contact us for a free discussion about what your options are, how best to navigate this and discover how to reduce your licensing costs and risk today.
