The Importance of Properly Managing Your Oracle E-Business Suite Licenses

December 6, 2016

Author

Brian Lowinger

SAM Oracle Compliance Consultant at SoftwareONE SoftwareONE The University of Montana Linkedin

Although Oracle is most known for their flagship database products, they are also a global leader in front-end applications. One of Oracle’s primary application product sets are the ERP modules that are collectively known as E-Business Suite, or commonly EBS for short. EBS provides modules for everything a company would need to run their business, including human resources, finance, logistics, etc. As with any software, customers using EBS should ensure they have good SAM programs in place as Oracle regularly includes EBS within the scope of their audits. There are some unique challenges, however, to understanding your EBS usage and maintaining compliance. In this post we cover some of those challenges and emphasize the importance of good SAM around EBS.

Multiple metrics, multiple risks

One SAM challenge around EBS is that modules are licensed by many distinctly different metrics, each with its own potential compliance pitfalls. The variety of metrics and their respective contractual definitions often create confusion for customers. For example, one of the most common metrics offered within the EBS product set is “Application User.” As we’ve highlighted in related posts, an “Application User” refers to an individual that is given access to the program, regardless of whether or not they actually log in. By this definition, any user that has not been end-dated, even if they are no longer employed by the company, is consuming a license, and Oracle will deem a license to be needed in the event of an EBS audit. Many customers aren’t diligent about end-dating users and consequently face steep compliance fees.

As with “Application User,” when customers license by “Employee,” another common metric, the number of actual people using the software is irrelevant from a licensing perspective. Unlike “Application User,” however, access to the software is irrelevant as well. When modules are licensed by “Employee,” customers must license their entire employee population, regardless of who actually accesses or uses the software. For this reason, customers sometimes become non-compliant when their company headcount grows, even if they don’t use the EBS module at all.

Some EBS modules are licensed by the amount of use, rather than the number of users or employees.  For example, Oracle sells their Internet Expenses application by the “Expense Report” metric. In this case, customers must license each expense report that is created in the system. Another common application licensed by amount is Order Management, which may be licensed by the number of electronic order lines created in the program. Customers can easily become non-compliant with these kinds of modules by simply miscalculating how much they will use when they buy licensing. While these “amount-based” programs often have a low per-unit cost, the fees can add up quickly if customers’ usage greatly surpasses their entitlement.

In addition to the metrics we’ve discussed above, there are numerous others, including “Record,” “Trainee,” and even “$M Cost of Goods Sold.”  This variety of metrics adds complexity in managing EBS licensing.

Self-audit blues

Unlike many other applications that allow administrators easy visibility into access, usage, and, ultimately, compliance, achieving a complete grasp of EBS compliance is unusually complicated. With EBS, users may be given any number of responsibilities within the system. Each responsibility maps to a specific application, which in turn maps to a licensable product. Tying this all together to understand who is doing what in EBS is a complicated process that involves exporting and analyzing large amounts of data and, most importantly, old fashioned experience around how EBS applications map to licensable products. In short, assessing EBS compliance, unfortunately, is highly specialized compared to many other application products, and can be a daunting exercise for Oracle customers.

SoftwareONE can help unravel the complexities of E-business Suite Licensing

We routinely clarify for customers how their EBS usage truly stacks up against license entitlement, and help maximize customers’ EBS investment by illuminating discrepancies between the actual value customers are realizing and what Oracle would deem to be licensable. Our recommendations for ongoing EBS management also helps customers remain compliant and avoid potential risks associated with an audit. To learn more about how SoftwareONE can help you with Oracle EBS, click on the banner below.

Leave a Reply