- September 29, 2020
- Chip Hanna
- Reading Time: 4 minutes
It’s been two years since I shared the top 3 questions SAP hasn’t answered about what was at the time, its new Digital Access Model. Since then, SAP’s positioning of Digital Access with new and current customers has become increasingly prevalent so I wanted to circle back and see how much the model has matured and to what level it has become more predictable and transparent.
As to what’s changed in the past 2 years, the short answer is…not much. Here, I will answer the same questions we posed when Digital Access was first released to cover what we now know.
Question #3: As an existing SAP customer, how can I easily determine my licensing demand under the Digital Access model?
Unfortunately, the answer to this question has not gotten any clearer and the process to determine demand hasn’t gotten any easier. While SAP has introduced the Digital Access Evaluation Service and “Estimation Note” to more formally present a process to determine demand, it is in no way a comprehensive method to accurately define a customer’s Digital Access requirements. SAP has stated:
“Please note the current release of the Estimation Note does not distinguish between documents created by SAP applications and documents created by non-SAP applications. SAP is working to address differentiating these types of documents in future releases.”
The irony of this technological shortcoming is that SAP customers continue to struggle to not only determine the scope of what may be considered Digital Access, but whether those scenarios neatly fall into the 9 document types. Some use cases are easier than others as a particular document definition is clearly defined to address a competing product (e.g., Sales Document = Salesforce interaction). However, home-grown applications or niche bolt-on applications may not be as clear cut and could create confusion or frustration for customers who are trying to determine their Digital Access requirements.
What is clear is that SAP is and will continue to be opportunistic in its approach to positioning Digital Access to customers. However, this approach to demand creates two potentially negative side effects:
1. A false sense of security for customers who believe they have “solved for” Digital Access
2. The ability for SAP to come back and extract additional revenue for previously untapped Digital Access demand
Finally, rather than providing assurances to its customers regarding this matter, the following disclaimer is ubiquitous throughout SAP’s public statements and in the context of Digital Access Evaluation Services:
“Customers are advised that any measurements produced by the Service are estimates only. The number of documents a customer chooses to license is at their sole discretion and customers must remain compliant with their license level pursuant to their agreement(s) with SAP.”
You would think after a couple of years, SAP would have a better response when pressed by concerned/confused/frustrated customers than, “Yeah, us neither. Good luck!”
Question #2: How is SAP going to measure Digital Access compliance?
It’s fair to logically assume that if SAP can’t confidently determine what your demand for Digital Access is, it will be equally hard to determine if you are in compliance. Further, given SAP writes the rules, they get to choose how and when to apply them.
As an example, when a customer chooses Coupa v. Ariba, SAP may initiate an audit and require that customer to address Digital Access. However, SAP may also decide to leave a customer’s Workday HCM platform alone (for now).
There is still a lack of clarity on when use will be measured (i.e., last year, last 6 months, etc.) to address seasonality, a one-time event such as an acquisition, or a business downturn where a customer may have excess capacity that could be freed up to be better utilized elsewhere.
As it’s still the early days, SAP’s customers who have adopted Digital Access are just starting to enter the audit cycle and it will be imperative for those organizations to understand their entitlements, gaps, and risks BEFORE the audit notification is received. An informed, prepared customer is in a much better position to take a more active/aggressive role in an audit than one who is unsure of their potential exposure and mitigation strategies.
Question #1: How much does Digital Access cost?
The answer is……it still depends. As unsatisfying as that answer is, SAP has still not publicly expanded on the details, framework, or elements related to the Digital Access cost model. As SAP has previously stated, “Most documents (e.g., a sales document line item) are weighted at 100% (multiplier = 1), documents of lower value and more frequently used (e.g., a financial document journal entry) are weighted at 20% (multiplier = 0.2).” These document counts are then multiplied by the document unit price to get the total license cost.
However, the actual, effective pricing of the documents depends on total use which can influence volumes and pricing tiers. Like most of SAP’s products, the actual discount is subject to negotiation. Being informed as to what is market competitive is crucial to not only determine the total cost of Digital Access but to also determine what it may cost in the future if your organization grows or deploys incremental solutions which trigger the creation of additional document types.
Even more important is that Digital Access may not be scalable which could lead to the value no longer aligning to the cost of the model as it increases linearly (or even exponentially). This is especially concerning for large organizations with probable growth that chose not to replace non-SAP applications.
In such instances, informed customers are aware that SAP has provided alternative Digital Access license constructs and will be better positioned to provide valuable insights to their future SAP strategy roadmap. In all cases, customers must be able to obtain complete transparency and predictability in the Digital Access model to understand the financial viability of their SAP platform now and over time.
While it may seem frustrating and somewhat daunting that SAP has not been better able to articulate an easy path for customers to determine how Digital Access will affect them, there are a couple of steps you can take to address this matter:
1. Be proactive in determining how Digital Access will impact your organization.
It’s not a question of “if” but “when” Digital Access will become a part of your SAP universe. Beyond educating yourself, obtain an understanding of your demand profile if you are considering converting or if you are looking at SAP as a new customer. If you have already converted, get your house in order for the audit that will be coming and be sure you’ve quantified the risks.
2. Leverage an Industry Expert in SAP licensing practices.
An experienced third-party who has guided SAP customers through conversions and audits can provide valuable insights and benchmarks to inform your decisions related to your Digital Access strategy.
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