Every year, the license and maintenance invoice for your ERP arrives, and every year it gets approved without anyone being able to say exactly how many of those licenses are in use. The quality management module bought during the project and slated for “phase 2”, which never came. The 40 accounts of former employees that are still active. The “full user” profiles assigned to people who open one report a month.
This phenomenon has a name: shelfware, software that sits on the shelf. This article focuses on usage and adoption: how to measure it, put a number on it, and act before your next renewal. Vendor compliance and audits are covered elsewhere on this blog, so we link to those pieces rather than repeat them.
What Is Shelfware and Why It Hits ERP Hard
Shelfware is any software or license you pay for without using it, or while using it far below what you are billed for. On an office suite, the stakes are modest. On an ERP, the problem is structural, for three reasons.
An ERP is bought once, at the moment you know the least. The contractual scope is frozen during selection, based on assumptions about volumes, organization and processes that will change before go-live. Out of caution, or to secure a volume discount, companies buy big.
The cost is recurring and indexed. Whether it is annual maintenance on a perpetual license or a SaaS subscription, an unused module keeps costing money every year, and the calculation base grows with each price indexation. Our article on renegotiating SaaS ERP contracts 180 days before renewal explains the mechanics (French version).
Nobody owns the topic. IT manages access, procurement manages the contract, the business units manage their needs. None of the three has the full picture of “what we pay versus what we use.”
Shelfware comes in two forms. The first concerns modules: features purchased and never deployed, or only partly deployed. The second concerns ghost users: named licenses assigned to people who no longer log in, or barely do.
As an industry benchmark, the Flexera 2025 State of ITAM report indicates that 59% of organizations actively track their software usage and 56% adjust contracts and subscriptions to eliminate unnecessary spend. In other words, a significant share of companies still do not. We will not quote any other market figure here: without a verifiable primary source, you are better off measuring your own situation.
The 4 Sources of ERP Shelfware
1. Initial Oversizing
This is the most common cause. The contract was sized on “potential” users, on planned growth, or on a like-for-like carry-over of the legacy estate with no trade-offs. Three years later, the growth did not happen, or it took another form (more subcontracting, fewer in-house staff).
2. Modules That Were Never Deployed
The commercial bundle included maintenance management, contract management, payroll, CRM and an advanced reporting tool. The project targeted finance and procurement. The rest is waiting. The longer it waits, the less likely deployment becomes: the project team has been disbanded, configuration knowledge has been lost, the version has moved on.
3. Leavers Who Are Never Deactivated
An employee leaves, their directory account is closed, but their ERP account stays active and billed. With many vendors, a named license is only released if the user is explicitly deactivated or deleted in the ERP. Companies with high turnover or many temporary workers lose the most.
4. Named Licenses vs. Concurrent Licenses
A named license is reserved for one person whether or not they log in. A concurrent (or floating) license is shared by a pool of users, and only those logged in at the same time consume it. For populations who connect intermittently (managers approving requests, department heads checking dashboards), named licenses are mechanically more expensive. The problem often comes from a license type chosen by default, without analyzing actual user profiles.
Measuring: A 5-Step Method
You cannot renegotiate what you do not measure. Here is a method that works on most ERPs, whatever the vendor.
Step 1: inventory what you pay for. Pull the contract, amendments and latest invoices. List every module, license type, number of entitlements, unit price and renewal date. Many companies find lines at this stage that nobody can explain.
Step 2: inventory what is assigned. Export the list of user accounts with their license type, status, creation date and last login date.
Step 3: cross-check with usage data. For each account and each module, retrieve the last login, the frequency and the transactions actually executed. This is the core of the measurement.
Step 4: reconcile with HR. Match the account list against the register of active employees. Any account with no HR match is an immediate candidate for deactivation.
Step 5: segment and validate with the business. Classify each license: regularly used, occasionally used, inactive for more than 90 days, orphaned. Have business owners validate the result, because an “inactive” account may reflect seasonal use (year-end close, inventory count).
Where to Find Usage Data by Vendor
Tools differ, the logic is the same. Exact features vary by version and edition, so check with your vendor or integrator.
| Vendor | Typical information source |
|---|---|
| SAP | License measurement and reports in ECC or S/4HANA, transaction statistics, last-login dates in user management |
| Microsoft (Dynamics 365) | Admin center, license assignment reports, Entra ID sign-in logs |
| Oracle | Usage reports and role assignment in the application, audit logs |
| Odoo | User list with last login date, subscription management, access logs |
| Sage | User management and sign-in logs of the product concerned |
When the ERP does not provide a usable report, application logs or those of your corporate directory (SSO) let you reconstruct the logins. If you have none of these sources, start by turning on logging: without six to twelve months of history, the measurement stays fragile.
For a lasting setup (SAM tooling, FinOps governance), see our guide Optimizing ERP Costs After Go-Live.
Telling Inactivity From Under-Adoption
An account that no longer logs in is easy to spot. The costlier case is the module that is “technically used” but reduced to a fraction of its capabilities: a procurement module where only purchase orders are entered, while tenders, framework agreements and supplier evaluation live in Excel files. The login exists, the value does not.
To detect this second case, look at transactions, not just logins: which functions of the module are actually executed, by how many people, how often. Then compare with the scope defined in the original requirements. The gap feeds directly into the decision between relaunching adoption (training, simpler configuration, a business sponsor) and reducing the contractual scope.
Quantifying the Waste
The formula is deliberately simple:
Annual waste = (licenses paid − licenses used) × annual unit cost, plus the annual cost of undeployed modules
The “annual unit cost” should include the license or subscription, the associated maintenance and, where applicable, the related infrastructure costs.
Fictional Example, for Illustration Only
The figures below are invented to illustrate the calculation. They do not come from any real company and are not a benchmark.
A mid-sized manufacturer holds 300 named “full user” licenses at €1,500 per year, maintenance included. After analysis:
- 220 accounts are used regularly;
- 30 accounts belong to people who have left or have not used the system for more than 6 months;
- 50 accounts are used for read-only consultation and could move to a light profile at €400 per year.
It also pays €18,000 per year for a maintenance management module that was never deployed.
The calculation gives:
- orphaned accounts: 30 × €1,500 = €45,000;
- downgrade: 50 × (€1,500 − €400) = €55,000;
- undeployed module: €18,000;
- total: €118,000 per year on a €450,000 license base, a little over a quarter.
This gives an order of magnitude of what you can reasonably aim for, not what you will get. Contract terms (see below) often limit the recoverable share.
Taking Action: Five Levers
Deactivate. The fastest and least risky. Set up a monthly review of accounts with no login for 90 days, with automatic deactivation after notifying the manager. Check in your contract whether deactivation actually frees the entitlement or only the access.
Reassign. A freed license can cover a new hire instead of buying an additional entitlement. This assumes the contract allows reassignment and sets a minimum delay between two assignments, which is not always the case.
Downgrade the license type. Move full profiles to consultation, approval or self-service profiles. It is often the most profitable lever for intermittent populations, but you must verify that the rights of the lighter profile really cover the actions performed.
Renegotiate at renewal. Your strongest negotiating moment is before the renewal date, with usage data in hand. Present facts (utilization rate by module and by profile type) rather than a generic request for a discount.
Decide between deploying and terminating. For each unused module, ask the question frankly: is there a real business need, a sponsor, a deployment budget and a deadline? If so, plan the deployment, because the module is worth more when used. If not, terminate it or drop it from scope at the next renewal. Keeping a module “just in case” for three years often costs more than buying it again later.
Risks to Anticipate
The vendor audit. Reducing your license estate does not in itself expose you to a back-charge, but a poorly documented deactivation or a misunderstood license type change can create an under-licensing position on other lines. Keep a record of every decision. The compliance angle is covered in our article on ERP license audits and compliance (French version).
Volume reduction clauses. Many contracts forbid reducing volume mid-term, or set an annual reduction cap. Read the clause before promising management a saving.
Multi-year commitment. A three-to-five-year contract with a volume discount can make any saving impossible before the term ends. In that case, focus on reassignment (to avoid new purchases) and prepare the renewal 12 to 18 months ahead.
Loss of discount. Reducing volume can drop you out of a pricing tier and raise the unit price of the remaining licenses. Ask the vendor for a simulation before deciding.
The other hidden costs around maintenance, application management services and audits are covered in our article on recovering your ERP maintenance budget.
90-Day Action Plan
Days 1 to 30: measure.
- Appoint an owner (IT director or IT procurement) and a sponsor on the CFO side.
- Gather the contract, amendments and invoices, then build the entitlement inventory.
- Extract accounts, license types and last logins.
- Turn on logging if it is missing.
Days 31 to 60: qualify and quantify.
- Cross-check against the HR register.
- Segment licenses and have business owners validate them.
- Apply the waste formula and rank the levers by gain and ease.
- Read the reduction and reassignment clauses and note the renewal date.
Days 61 to 90: act.
- Deactivate orphaned accounts and launch the validated downgrade.
- Decide, module by module, between deployment and termination.
- Prepare the renegotiation file with the usage data.
- Put the monthly review of inactive accounts in place.
What to Write Into the Contract to Avoid Starting Over
At the next renewal, or on a new project, get the following in writing:
- An annual right to reduce volume, even partially, on the anniversary date.
- The right to reassign licenses between users, free of charge, with a short minimum delay.
- A right to convert license types (full to light) without penalty.
- Phased module deployment: pricing triggered at go-live rather than at signature.
- A cap on annual indexation of license and maintenance prices.
- Access to the vendor’s usage reports, at a defined frequency.
- A 12-month review clause to readjust scope to observed usage.
These clauses cost something to negotiate, but they turn a frozen contract into one that follows real usage.
Going Further
If you want an outside view of your ERP shelfware, DigitsLane offers an ERP audit: entitlement inventory, usage analysis and a renegotiation plan. Get in touch to discuss it.
To go deeper, also read our guide on ERP license audits (French version) and our article on recovering your ERP maintenance budget.
