How Can S/4HANA Migration Save Your Company Thousands in Dangerous License Costs?

Why Are Companies Losing Money on S/4HANA Licenses and How Can You Win?

I've seen too many companies make costly mistakes when moving to S/4HANA. They rush the switch without fixing their user permissions first. Then they get hit with huge bills and security problems. Let me share what I've learned about doing this right.

The Big Change Coming Your Way

SAP is forcing everyone to move to S/4HANA by 2027. Maybe 2030 if you're lucky. But here's the catch - they're cutting credits for old licenses by 10% every year. Wait too long, and you'll pay more.

The new system works differently. Instead of paying for what people actually use, you pay for what they could use. Give someone too many permissions? You pay for the highest license level they could access.

This scares many business owners. But I see it as a chance to clean house and save money.

Why Most Companies Mess This Up

I've watched companies hand out permissions like candy. "Give them everything so they can help anywhere," they say. Bad idea.

Here's what happens:

• Your license costs explode overnight
• Security risks multiply
• Compliance auditors find problems
• Hackers get more access if they break in

One client told me about an employee who accidentally deleted important delivery data. Another had someone change financial records without meaning to. These mistakes happen when people have too much access.

The Smart Way to Handle Permissions

Think of permissions like keys to your house. You don't give every visitor keys to every room. Same idea here.

Step 1: Find Out What You Have

Start by looking at your current setup. I use analysis tools to see:

• Who has what permissions
• Which accounts sit unused
• What old permissions still exist from years ago

Most companies find shocking results. I once found 200 inactive user accounts still holding expensive permissions. That's money down the drain.

Step 2: Clean Up the Mess

Now comes the hard work. Create specific roles for specific jobs. Follow these rules:

For Each Role:

• Give only what's needed for the job
• Remove anything extra
• Test that work still gets done
• Document what each permission does

The Need-to-Know Rule:
People should only access data they need for their work. Period. This keeps your company safe and your costs low.

I helped one company reduce their license costs by 40% just by removing unused permissions. They also became more secure.

Step 3: Keep It Clean Forever

Don't stop after the initial cleanup. Set up systems to:

Monitor permissions monthly

• Check for new unnecessary access
• Remove permissions when people change jobs
• Flag unusual permission requests

Review everything quarterly

• Make sure permissions still match job needs
• Update roles when business changes
• Train managers on permission basics

Automate what you can

• Use tools to assign standard permissions
• Set up alerts for risky permission combinations
• Create approval workflows for special access

The Money Side of Things

Let me break down the costs. SAP licenses now work in tiers:

• Basic users: Can view and enter simple data
• Professional users: Can run reports and use advanced features
• Premium users: Get full system access

Give someone one premium permission they don't need? You pay premium prices for their entire license.

I've seen companies save $50,000 to $200,000 per year by getting this right. The bigger your company, the bigger your savings.

Security Benefits You Get for Free

When you clean up permissions, security improves automatically. Here's why:

• Fewer people can access sensitive financial data
• Mistakes become less damaging
• Hackers find fewer ways to cause harm
• Compliance audits go smoother

One client avoided a major data breach because we had limited access to customer information. The hacker got in, but couldn't reach the valuable data.

Common Mistakes to Avoid

I see these errors repeatedly:

Mistake 1: Copying old permission structures without reviewing them

Fix: Start fresh and build roles from scratch

Mistake 2: Giving temporary access that becomes permanent

Fix: Set expiration dates on all temporary permissions

Mistake 3: Not training managers on permission basics

Fix: Teach supervisors what permissions their teams actually need

Mistake 4: Waiting until the last minute to start

Fix: Begin permission cleanup at least 12 months before migration

Your Action Plan

Here's what I recommend you do this week:

1. Run a permission audit - Use SAP tools to see your current state
2. Calculate your potential savings - Count unnecessary premium permissions
3. Pick a pilot department - Start small and prove the concept works
4. Set a timeline - Plan to finish 6 months before your S/4HANA go-live

Don't try to fix everything at once. Pick one department, clean their permissions, measure the results, then expand to other areas.

The Bottom Line

Moving to S/4HANA doesn't have to break your budget or create security headaches. Companies that take time to fix their permissions first often save more money than the migration costs.

The key is starting early and being systematic. Clean up your permissions, train your people, and set up ongoing monitoring. Your CFO will thank you when the license bills arrive.

Remember - this isn't just about saving money. It's about building a more secure, compliant, and efficient business. The companies that get this right will have a competitive advantage for years to come.