With Salesforce as the market leader in CRM software and SAP as the market leader in ERP software we speak to a lot of customers and prospects that have or are considering a landscape where Salesforce and SAP are combined to optimize operational excellence by maximizing the use of Best of Breed solutions. One of the major worries all of these customers share is that they will have to pay extensive amounts of money to SAP for Indirect Access when they start using Salesforce solutions. This has been fueled by high-profile lawsuits where companies were forced to pay additional licensing fees. However, a lot has happened around this topic recently meaning this worry is not always valid anymore.
What is SAP Indirect Access?
Before diving into the risks and options let’s start by defining SAP Indirect Access. SAP distinguishes different types of access to SAP ERP:
- Direct human access through the tools and user interfaces SAP provides with the ERP solution;
- Application access through any of the other SAP solutions that are connected to SAP ERP;
- Indirect access (also known as indirect usage) through third-party applications, platforms and devices that connect to SAP ERP.
For the first category you pay user-based licenses. For the second category no additional ERP license is required. Where the fuss is about is for the last category as in that category additional SAP ERP licenses are required when, for example, users access data from SAP ERP through Salesforce. In SAP’s old licensing model this even means a named user license is required which could lead to extensive costs. That this is no longer the case is something I will explain later in this blog.
When are you at risk?
There are a few different angles here. Let’s start with what is allowed and what not? This is quite simple. Basically, all indirect access must be licensed. Regardless of whether you are only reading information or writing as well, whether it is synchronous or asynchronous, whether there are systems (like middleware) in between, whether you use an interface user instead of a named user. All these cases have to be licensed. There is only one exception: the indirect static read, which refers to scenarios where you periodically export data from SAP (so not real time) and the use of this information, for example in reporting, does not lead to any processing in SAP ERP (like updating information or creating transactions).
Another angle to look at risks is through use cases when implementing Salesforce. In this case you could say that you run a risk with regards to SAP Indirect Access when you give users access to information in SAP ERP that previously did not have access to this information. Let’s take the example of sales orders in SAP ERP. Before implementing Salesforce there are already users in SAP ERP that have access to these sales orders. These persons have an appropriate SAP license. If you decide that these exact users will start using Salesforce and will still be able to see the sales orders in SAP ERP they still have an appropriate license. You are at risk though when you give new groups of users access to these sales orders through Salesforce. What are typical examples in Salesforce where you risk additional SAP licenses?
- Your service agents start working in Salesforce and you want to give them a 360 customer overview, including an overview of the sales orders from SAP ERP. If these service agents were not working in SAP ERP before there is a fair chance that you will need additional SAP licenses. Even when they are only displaying the sales orders.
- You provide self service functionality resulting in transactions in SAP ERP. So, for example, you provide a Customer Community where your customers can log service cases that in some cases result in a notification in SAP ERP. In that case, you potentially have a large number of users that are all of a sudden creating transactions in SAP ERP, and who need an appropriate license.
- You have a web store on Salesforce that result in sales orders or financial documents in SAP ERP.
Sample Scenario for Integrating Order & Financial Data from SAP
The last angle to look at the risk is the contractual angle. In practice, it appears that the biggest problems related to SAP Indirect Access emerge when there is a situation of non-compliance in combination with a relatively old contract that is still based on user based licensing, even for indirect access (for new ways of contracting with SAP please refer to the next paragraph). Meaning that there is a license violation due to SAP Indirect Access that appears through a license audit which leads to high claims because the license fee is based on number of users. This is also exactly what happened in the high profile cases that have been all over the news (like Diageo). On the other hand we have seen multiple examples where customers discussed the issue upfront with SAP and managed to agree on a license model where this did not result in extensive license costs.
So I risk additional license costs for Indirect Access. Should I abandon Salesforce?
So suppose you have identified use cases in Salesforce that lead to additional licenses required for SAP ERP. Is that the end of it? Should you abandon your plans to start using Salesforce? No, of course not. Salesforce is the market leader in CRM software, and for good reasons (which I will not explain in this blog). And SAP has realised the world is changing as well. That is why SAP has announced a new licensing model in 2018, the Digital Access model.
In this model you don’t pay for Indirect Access based on users, but licensing is outcome-based. In this model 9 document types are counted (like sales documents and invoices), and you only pay for the initial creation of these documents. This means that when you are on this model you don’t pay any longer for, following the earlier example, displaying sales orders to service agents. You only pay when sales orders are created via Salesforce.
Obviously, this is far more favourable for customers wanting to implement solutions like Salesforce. So why are not all SAP customers using this model yet? This mainly has to do with anxiety among SAP customers to renegotiate their current SAP contracts. Why? Because they fear disputes that trace back to historical constructs and there is ambiguity as to exactly determining the extent of Indirect Access.
Sample Scenario for Integrating Order & Financial Data from SAP
With regards to this, SAP has made important announcements, following extensive discussion with the SAP user groups, at Sapphire in May 2019 stating that “SAP will waive back-maintenance for indirect access to SAP software for customers who proactively engage with us in good faith”. In a related press release SAP is emphasizing this point saying: “The days are over in which customers believed, fairly or not, that any discussion of indirect access, could lead to a confrontation with SAP and the assessment of financial penalties for inadequate licensing. In fact, SAP expects that for many customers a conversion to the new licensing program will largely come at little to no net-new costs and will ensure that no customer will be penalized for violating license rules in the past.”
So, that is a big step forward. What remains is the unclarity in the extent of Indirect Access. Also there SAP has announced new steps and is now providing two objective ways to determine the exact extent of Indirect Access: an estimation tool that can be installed very easily, and a tool that can measure it exactly but needs a service pack and a longer period to run.
Tips for dealing with SAP Indirect Access
So, where does this leave us? We started this blog with the observation that there are a lot of worries among existing SAP customers for additional SAP license costs when starting to use Salesforce solutions because of SAP Indirect Access. Are these worries justified? Well, yes and no.
Yes, because including data coming from SAP ERP in your Salesforce solution is defined as SAP Indirect Access and requires appropriate licenses.No, because SAP is changing their policies around SAP Indirect Access and there are ways to deal with it.
What are the key takeaways to deal with SAP Indirect Access?
- Consider the new SAP Digital Access License Model where you pay based on outcomes instead of named users. In many cases where you combine best of breed solutions like Salesforce and SAP this will be the favourable license model;
- Be prepared. The ambiguity around SAP Indirect Access is not completely gone. However, SAP is making strides with software that can measure the extent of Indirect Access. And, of course, you know your functionality & requirements better than anyone else. So, make sure you start to understand your current situation and the target situation when you start using Salesforce solutions;
- Address the issue head on. When you have a full picture of your current and future situation talk to SAP and discuss the best possible solution and license model for your situation. As mentioned in this blog SAP is promising you will not have to be afraid of a backlash when you discuss it upfront with SAP and in most cases this will lead to no or little extra costs. And this is not only what SAP says. This is also what we see in practice.
So, rather than to be influenced by worries, it is better to be prepared, make your plans and take appropriate action.
Do you have any questions regarding SAP Indirect Access in relation to Salesforce? Or do you want to know more? Nextview has extensive Salesforce and SAP experience and can help you address this issue. So, please reach out to me by dropping me a message on firstname.lastname@example.org.