A Fortune 500 industrial manufacturer rebuilt its SAP user model, challenged the engine measurement, and settled at sixty-eight per cent below SAP's opening position.
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The manufacturer is a Fortune 500 industrial group with thirty-eight production plants across the United States, Germany, and Singapore. SAP ECC 6.0 had been the operational backbone since the mid-2000s, with eleven engine licences layered on top: HANA runtime, Process Orchestration, SAP PI, MII, Quality Issue Management, and several application-specific engines for plant maintenance and warehouse management.
In the autumn of the audit year, SAP's Global License Audit and Compliance group issued a formal notification. The opening position quoted eighteen million seven hundred thousand dollars in licence non-compliance, broken into three principal lines: a USMM under-classification of approximately 4,800 Professional users currently licensed as Limited Professional or Employee Self-Service; a Process Orchestration engine measurement nine times the contracted value; and an indirect-use exposure spanning four non-SAP applications including a custom dealer portal and a Salesforce integration.
The manufacturer's internal SAM team had been working a USMM run for eleven weeks. The output of that run was the basis for SAP's claim — a fact the SAM team only discovered when the audit notification arrived. SAP also signalled, informally, that resolution would be linked to commencing a RISE conversion discussion, with credits available to offset the claim against a multi-year contract.
The procurement leadership made the decision to engage outside counsel before any further data was released to SAP, and before any meetings were taken with the regional account team.
We took the matter under engagement letter and put the audit on a written procedural footing within five business days. The first action was a scope letter to SAP defining the entitlement of the audit, the data-exchange protocol, the location of the work, and the resolution timeline. We also confirmed in writing that no informal calls between SAP and the client's SAM team would continue.
We then rebuilt the user model independently. The internal USMM had classified users on the basis of role-collection assignment alone, which is the SAP-recommended approach but produces over-classification in environments where role design is broad. We re-ran the classification against transaction-history evidence over a rolling twelve-month window, and demonstrated that approximately 3,600 of the 4,800 disputed users had no Professional-grade activity on record. The remaining 1,200 were reclassified into the correct band — mostly Limited Professional, with a smaller tail of Employee Self-Service.
On the Process Orchestration measurement, we obtained the raw measurement output from SAP and reconstructed the message-count methodology line by line. The measurement had counted internal system-to-system traffic that was, by the licence definition, explicitly excluded. The correct measurement was approximately 1.1x the contracted value, not 9.0x.
On indirect use, we documented the integration topology for each of the four applications and demonstrated that two of them — the dealer portal and a smaller field-service tool — produced no chargeable indirect-use events under the contract definitions in force at the time of the original ECC licence. The Salesforce and warehouse-management integrations had genuine exposure, but at a fraction of the claimed value once the Digital Access conversion option was modelled.
Settlement closed at six million dollars in cash and conversion credits, against an opening claim of eighteen point seven. The reduction was approximately sixty-eight per cent. No additional licences were purchased outside the contracted bundle. The Salesforce indirect-use position was converted to Digital Access at a negotiated document-tier pricing structure with a measurement cap and a re-measurement protection clause valid for the remaining contract term.
Three contract clauses were rewritten as part of the settlement: the audit-rights clause was narrowed to a two-year cycle with sixty days' notice and a defined data-exchange scope; the engine measurement clause for Process Orchestration was redefined to exclude internal traffic explicitly; and a settlement-as-release clause was added confirming that no further claim could be raised on the audited period.
Total elapsed time from the audit notification to signed settlement was twelve weeks. The matter closed within a single quarter, allowing the manufacturer to remove the contingent liability from its year-end disclosures.
They rebuilt our measurement before SAP could anchor a number. By the time the negotiation opened, our position had evidence and theirs did not.
End-to-end audit response. We take control of the matter the day the letter arrives, define the scope of the engagement with SAP in writing, validate every measurement, and negotiate the settlement.
Read the brief →The measurement report is the entire audit. We validate the configuration, clean the user classifications against transaction evidence, and prepare the submission that goes to SAP.
Read the brief →The complete defence sequence from notification through settlement, with the seventeen contract levers we negotiate.
The five most common mis-classifications in role-collection-based USMM runs, and how to correct them before SAP sees the data.
How a global retailer rebuilt its integration topology and reduced an $11M Salesforce indirect-use claim to $1.9M.
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