Understanding On-Prem SAP S/4 HANA Licenses for New Customers
SAP S4 HANA is the latest ERP edition of the old SAP ECC ERP. 80% of the new SAP ERP customers go with SAP S4 HANA licenses if not a cloud ERP solution like SAP Business ByDesign or SAP S4 Public/Private Cloud.
(If you are on SAP ECC and looking to optimize your licenses for the move to S/4HANA, do check out KTern – the all-in-one product for S/4HANA Conversions to handle licenses, project management, impact analysis, testing, and more)
On-Premise SAP S4 HANA Licenses Classification
- Life Science
- Oil & Gas
- Public Sector
- User licenses
- Sales & Service order execution
- Purchase order execution
Line of Business Portfolio
- Customer engagement and Commerce
- Internet of Things (IoT) & Digital Supply Chain
- Finance & Governance, Risk & Compliance
Digital Enterprise Platform
- Analytics & Insight
- Databases & Data Management
For a new customer, SAP license working is made simple. Unlike SAP ERP Central Component (ECC), you don’t have to buy ERP Foundation Package (Engine) & user licenses separately. For SAP S4 HANA licenses, S/4 HANA ERP engine comes as part of S/4 HANA user licenses. There are three types of User licenses in SAP S/4 HANA Enterprise Management.
- Professional Use SAP S4 HANA Enterprise Management
- Functional Use SAP S4 HANA Enterprise Management
- Productivity Use SAP S4 HANA Enterprise Management
With only user licenses, one will be able to implement a full-fledged ERP solution.
Customers must buy ‘SAP S/4 HANA Enterprise Management for Developer Use in one quantity per 200 ERP users along with other user types.
Definition of User types:
SAP S/4 HANA Enterprise Management for Developer Use
Use is allowed by the number of individuals included in the Licensed Level who access the development tools provided with the licensed S/4 HANA Enterprise Management Software for making ABAP Modifications and/or Add-ons to any S/4 HANA Packages.
SAP S/4 HANA Enterprise Management for Productivity Use
Use is allowed by the number of individuals included in the Licensed Level who are authorized to use the following Solution Capabilities supported by the Software:
1) Production Control and Basic Production Execution;
2) Material Requirement Planning;
3) Basic Order Promising / Available to Promise;
4) Goods Issue; Good receipt; Basic Shipping;
5) Basic Warehouse Management;
6) Maintenance Execution;
7) Self-Service Requisitioning;
8) Time Sheet.
SAP S/4 HANA Enterprise Management for Functional Use
Use is allowed by the number of individuals included in the Licensed Level
(a) who are employees of Licensee’s Business Partners authorized to perform any role supported by the Software in accordance with the license grant set forth in the GTC or Software License Agreement
(b) who are employees of Licensee authorized to use the following Solution Capabilities supported by the Software:
1) Project Financial Controls
2) Project logistics Control
3) Basic subcontracting and Basic External Processing
4) Product Development Foundation
5) Production BOM Management
6) Recipe / Routing Management
7) Inspection Planning
8) Quality Engineering and Quality Improvement
9) Kanban, JIT Outbound, and Inbound Processing
10) Production Control and basic Production Execution
11) Repetitive Manufacturing
12) Material Requirement Planning
13) Basic Order Promising / Available to Promise
14) Goods Issue, Good receipt, Basic Shipping
15) Basic Warehouse Management
16) Maintenance Planning and Scheduling and maintenance execution
17) Master Data Maintenance
18) Self-Service Requisitioning
19) Time Sheet
SAP S/4 HANA Enterprise Management for Professional Use
Use is allowed by the number of individuals included in the Licensed Level who are authorized to use all such individual’s operational, system administration and management roles supported by the Software for Licensee’s internal business purposes and perform the functionalities of Productivity & Functional Use.
For a 300-employee manufacturing organization, the typical number of ERP users are in the range of 80 to 120 employees depending on whether the organization belongs to a holding company and other factors which change from company to company.
Customers should identify the named users in each department in the organization for effective optimization of the bill of quantity. Upon identifying the named users, role matching must be done against the functionalities of user license types. For 100 user’s requirements, typical proposition against Professional: Functional: Productivity is 15:35:50. This is arrived at by working with more than 30 manufacturing companies. This proposition changes for EC&O, Retail, Automotive etc.
Do get in touch with email@example.com to learn more about the licenses and to choose the right licenses for your company.