Spend Matters welcomes another guest post from NPI (), a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.
SAP contract optimization is a complex and ongoing exercise that few companies have been able to master. Heck -- it's probably one of the reasons that SAP reported record financial performance in 2011. If you're renewing, upgrading or purchasing a new SAP solution in 2012, be sure to avoid these three spending mistakes:
- Over-licensing. Most companies are overpaying for their SAP user licenses in two ways: by paying for unused licenses and/or paying for higher-level licenses than they actually need. Make sure your SAP user and package licenses are fully optimized from a quantity, functionality and authorization perspective.
- Contractual misalignment. Managing SAP user licenses goes well beyond auditing utilization numbers and roles. It requires a deep understanding of SAP's contract terms and conditions that can either drive your SAP costs up -- or rein them in. Carefully evaluate the terms that govern your unique license types, grants and exchange rights to reduce current maintenance costs and avoid additional license purchases.
- Hidden integration costs. SAP has recently started charging customers for any form of integration between their applications and those of third parties. Many companies are unaware of this hidden cost, which can translate into significant professional service and license costs. In some cases, SAP is requiring expensive user licenses for users in other systems that wish to access information in their applications. Your contract should specify (and, if negotiated well, prevent) third-party integration costs. The fewer integration surprises you encounter down the road -- the better!
-- Jeff Muscarella, EVP of IT, NPI