Thought Leadership

SAP Licensing: The Impact of Named Users and the New Measurement Approach 

April 25, 2025 By Soterion

SAP licensing has long been a complex and evolving topic, particularly when it comes to named users. With the transition to S/4HANA, whether on-premise or on RISE with SAP, SAP has introduced a new approach to measuring named users. This shift is a crucial consideration for all SAP customers, impacting cost, compliance, and overall system efficiency.  

In this article, we will explore the key changes in SAP licensing, the impact of the new named user measurement methodology, and how organisations can navigate this transition effectively. Our insights are drawn from a recent episode of Soterion’s SAP Security & GRC Podcast featuring Nikolaj Gontcharenko from EY Switzerland and Ross Robertson from Soterion.  

Listen

Watch

The evolution of SAP licensing 

Historically, SAP licensing was a grey area, with significant ambiguity around how users were classified. Under ECC, companies determined their annual SAP license requirements by running standard measurement tools like USMM and SLAW. However, there were no strict guidelines defining what constituted a “Professional” or “Limited Professional” user, leading to inconsistencies in classification.

This lack of clarity resulted in challenges for customers attempting to optimise their licensing costs and ensure compliance. SAP recognised this issue and has now introduced a more structured methodology, particularly for customers transitioning to S/4HANA, whether on-premise or on RISE with SAP. 

The shift to a structured measurement approach 

SAP’s new approach to licensing introduces a more transparent and rule-based classification system. The key change is how named users are determined based on the actual authorisations assigned to them, rather than a broad functional description. 

Organisations using S/4HANA on-premise will still follow traditional named user classifications, which include:

  • Professional License: Full access to SAP functionality, including configuration and financial transactions.
  • Functional License: Limited professional use for specific business areas.
  • Productivity License: Used for basic system interactions such as data entry.  

For RISE with SAP customers operating in a cloud-based environment, SAP has moved to a Full Use Equivalent (FUE) model. Instead of managing individual license types, organisations now purchase FUE blocks, which are allocated to users based on their access levels. 

    Understanding Full Use Equivalent (FUE) in RISE with SAP  

    The FUE model aims to simplify SAP licensing by consolidating named user licenses into a single metric. However, the transition to this model presents challenges for organisations, particularly in how they allocate licenses across user roles.   

    SAP classifies users under three categories within the FUE model:

    1. Self-Service Users – Primarily for display activities, HR tasks, and basic requisitioning. 
    1. Core Users – Those engaged in master data maintenance, reporting, and operational planning.
    2. Advanced Users – Individuals involved in high-level functions such as financial transactions, system configurations, and invoice processing. 

    Each of these user types consumes FUE blocks at different ratios: 

    • Self-Service Users: 30:1 (i.e. 30 self-service users consume 1 FUE block)
    • Core Users: 5:1 (i.e. 5 core users consume 1 FUE block)
    • Advanced Users: 1:1 (each advanced user consumes an entire FUE block)

      Key challenges in transitioning to the new licensing model 

      The shift to the FUE model introduces several challenges for organisations:

      1. Lack of Visibility into Actual Usage:  Many companies do not have a clear view of what their users are actually doing within the system. As a result, users may be over-classified, leading to unnecessary licensing costs. 
      1. Standardisation vs. Cost Optimisation:  Historically, organisations have favoured standardised role structures for efficiency. However, under the new model, excessive role standardisation can inflate licensing costs by assigning higher access levels than necessary. 
      1. Understanding the SAP Trusted Authorisation Review (STAR) Service:  SAP offers the STAR service to help organisations analyse their licensing needs using its rule-based measurement tools. While this service can highlight inefficiencies, it does not necessarily optimise license usage. Companies must still conduct their own deep-dive analysis to align licensing with actual business needs.
      2. Complexity of Role Adjustments:  To optimise licensing costs, organisations must refine user roles and authorisations. This is a time-intensive, technical process that requires careful planning and execution to ensure compliance while avoiding operational disruptions.

      Optimising SAP licensing: best practices  

      To manage the transition effectively and control costs, organisations should consider the following best practices: 

      1. Conduct a Licensing Audit: Before transitioning to S/4HANA, whether on-premise or on RISE with SAP, perform a thorough review of current user classifications and access levels. Identify potential misclassifications that could lead to unnecessary costs. 
      1. Focus on Actual Usage, Not Just Assigned Access:  Utilise SAP’s measurement tools to analyse what users are actually doing within the system. Consider restricting access to only what is necessary for each user’s role. 
      1. Leverage Role-Based Access Control (RBAC) Strategies:  Design user roles with licensing cost considerations in mind. Avoid excessive permissions that may automatically push users into higher licensing tiers. 
      1. Utilise Third-Party GRC Solutions:  Partnering with a governance, risk, and compliance (GRC) specialist can help ensure that your licensing strategy aligns with security best practices and business needs. 
      1. Regularly Review and Optimise Licensing:  SAP licensing should not be a one-time exercise. Organisations should periodically reassess user classifications and access rights to ensure ongoing cost efficiency. 
      2. Update Access Management Policies: With the potential and significant impact any authorisation change can have on licensing, it is essential that access change requests are not only reviewed for risk, but also for the license impact.

      Conclusion

      The transition to SAP’s new licensing methodology represents a major shift for SAP customers. While the move towards structured user classification offers greater transparency, it also presents new challenges, particularly in optimising costs and managing user access efficiently. 

      Organisations must take a proactive approach to SAP licensing, leveraging both SAP’s tools and independent analysis to ensure compliance while avoiding unnecessary expenses. By adopting best practices such as conducting regular audits, focusing on actual usage, and optimising role design, businesses can navigate this transition smoothly and achieve long-term licensing efficiency. 

      As SAP licensing continues to evolve, staying informed and prepared will be critical for organisations looking to maximise the value of their SAP investment.

      Looking for a solution?  

      Soterion’s SAP Licence Manager helps organisations preparing to transition to RISE with SAP by delivering a comprehensive analysis of SAP role design to determine the required number of Full Use Equivalent (FUE) licences. Many organisations grant users broader SAP access than necessary, leading to potential inefficiencies and unnecessary costs. 

      By utilising Soterion’s SAP Licence Manager, you can optimise costs, achieve significant savings, and ensure licence compliance. 

      For more information, contact us at [email protected] 

      You may find this interesting