Abstract: This blog post highlights the basic licensing issues of S/4HANA compared to SAP R/3, such as the differences in user and feature licensing, and recommends carefully reviewing licensing requirements to minimize potential risks and costs. A clear understanding of the licensing terms is important to ensure legitimate use of S/4HANA and avoid unexpected costs.
The S/4HANA integrates most parts of the SAP R/3 ERP systems (exceptions see Simplification List) as well as some other SAP products that were previously operated stand-alone (e.g. EWM, APO, BI, etc.). However, it is not the case that all these components can be used free of charge within the framework of the S/4HANA ERP licensing.
S/4HANA free of charge or only usable with licensing?
Basically, it can be said that the use of functionalities of these new components is not subject to separate costs if it concerns functions that were already available in the SAP R/3 ERP system and are now represented by functionalities of the new component. This is probably most evident in the example of WM (warehouse management) or new in S/4 HANA eEWM (embedded Extended Warehouse Management) – where it was stated: “The classic WM is replaced by an integrated EWM solution – the so-called “embedded EWM” (eEWM). It has been part of the SAP S/4HANA solution since Release 1709 and can be activated without additional license costs.”
S/4HANA Advanced Functions
The use of the functionalities, which were already available in the WM of the R/3 system and are now provided in the eEWM, can be used free of charge within the scope of the S/4HANA ERP licensing. SAP refers to additional functionalities as “advanced”. These must be licensed as a separate package if they are to be used. This affects a whole range of functions, such as PP-DS (the former APO component PP-Detailed Scheduling), the CS (Customer Service) successor in S/4 CM (Customer Management), Advanced ATP, variant configuration, cash management, BPC (planning and consolidation) and various others. And this can quickly lead to a significant increase in the license costs originally planned for the conversion to S/4HANA, since at least in my opinion this topic was not communicated very aggressively by SAP in the context of marketing the conversion to S/4HANA.
So be on your guard!
Discuss with the person responsible for the sale of your S/4HANA licenses the details of all relevant new function packages. Here is an incomplete overview of some of these packages that are relevant for the manufacturing industry:
Individual licensing policy
The topic becomes even more complex or confusing by the fact that the licensing policy is handled individually by advanced components, e.g. it takes place:
– BPC optimized licensing per user
– Advanced ATP licensing per 210 TCHF turnover
– Advanced eEWM licensing per 5’000 stock items
– Advanced Variant Configuration Licensing per user
– …
License compliance analysis
We have made the experience in the project that it is difficult to determine, especially when using the S/4HANA eEWM, whether one is still in the area of free use within the framework of the S/4HANA ERP licensing or whether one is already using the functions of the advanced eEWM that is to be licensed separately. In this context, we came across two very helpful reports on license conformity analysis (executable via SA38):
/SCWM/RP_COMPLIANCE_CHECK and
/SCWM/RP_LICENCE_ANALYSIS
With the help of this we were able to analyse where and with which functionalities we are already in the area of advanced functions:
/SCWM/RP_LICENCE_ANALYSIS
/SCWM/RP_COMPLIANCE_CHECK
So it is essential that you clarify the details of the future S/4HANA licensing completely so that you have the right figures in your budget and the return on investment consideration – this is not only about the one-time license purchase, but also about the annually recurring maintenance costs.
Tip: If you are unsure at this point, let us provide you with competent support – this can be done with very manageable effort.
License costs per subscription licensing?
At this point it should also be pointed out that this topic must also be seen in connection with the future operation of the S/4HANA system, since in some operating models offered by SAP, such as “Cloud ERP” or “ERP in the SAP HEC”, the license costs are included in the provision costs via subscription licensing. On the topic of the different operating models then later more at this point in a separate BLOG article.