SAP on AWS
EDI May Put SAP Customers Offside on Licensing
by Michael Pearson
Research shows most customers not licensed appropriately for EDI
The response you'll often hear when you ask about indirect acccess is 'it depends' or 'check your license agreement'. In this article I'll attempt to give direct answers to questions about how to license appropriately for indirect access, specifically as it relates to EDI. However, the information here could be applied to any system interface with SAP.
The scenario I'll focus on is where a company running SAP ECC or S/4HANA uses EDI to communicate with trading partners, and this results in the creation of documents in SAP. It could be EDI purchase orders (inbound 850's), freight invoices (inbound 210's) or any other document being created in SAP as a result of an inbound EDI message.
According to SAP, any interface that results in the creation of documents in SAP is a licensable activity. Since there is no way of knowing how many users are involved on the sending side of the EDI message, the only way to license this is through document-based licening.
Every SAP customer who does inbound EDI must have document-based licensing corresponding to the number of documents being created in SAP. The formula for the determination of the number of documents is a complicated matter in itself (to be discussed in future articles) so for simplicity, assume that a sales order line item is equal to one document.
To illustrate by example, say you receive 5,000 EDI inbound purchases a month, each having an average of five line items. You would need to be licensed for 300,000 documents annually.
In the past SAP has licensed this though engine-based licenses such as 'SAP Sales and Service Order Processing'. Our understanding is that these license options are going away, and will be replaced with document-based licensing. In future the only way to license SAP usage via systems interfaces (such as EDI) will be document-based licensing.
Note: You cannot license EDI activity through named users - you must purchase document-based licensing.
So what is document-based licensing?
As the name implies, rather than purchasing licenses for individual named users (as almost all SAP customers have done in the past), document-based licensing means you purchase a number of documents per year. For example, you might purchase 500,000 documents per year; which covers you for the creation of up to that many documents. Remember a sales order line item counts as one document, and different documents have different document coefficients (for example, a goods movement document is 0.20 of a document).
According to our research, nearly all customers we've spoken with need document-based licensing, yet none have it. Anyone with interfaces that result in the creation of documents, including EDI, in an SAP system requires document-based licensing.
If you suspect that you are not licensed correctly, or just unsure, then you should evaluate your options. Acquiring the correct licenses doesn't necessarily involve huge additional costs. There are options to convert existing licenses to document-based licenses and other incentives for customers to comply with licensing requirements. Doing nothing and avoiding dealing with the issue is not a wise strategy. Those customers who proactively deal with their licensing compliance are more likely to avoid unnecessary and costly problems down the road.
The topic of indirect access and document-based licensing is complex, and I have not attempted to cover everything in this article.
We will be publishing more articles about SAP licensing in the coming weeks and months, so follow along with the blogs on our website.
Or, if you have specific questions about SAP licensing or indirect access please feel free to contact me directly at email@example.com.
About the Author: Michael Pearson
Michael is President of CONTAX and claims to be one of the few people in the western world who understands SAP licensing.