Case Study – Rise with SAP Advisory – Asia-Pacific Telecom Conglomerate Achieves 30% RISE with SAP Cost Reduction and Greater Flexibility
Industry:
Telecommunications | Location: Singapore (APAC) | Employees: 15,000 | Annual Revenue: $7 Billion
Background:
‘A major Asia-Pacific telecommunications group with operations across the region relied on SAP ECC for enterprise resource planning (finance, procurement, supply chain).
The company ran its own data centers and was now evaluating RISE with SAP to migrate to S/4HANA Cloud as a unified platform for its subsidiaries.
Challenges:
- High Cost Proposal: SAP’s initial RISE quote was approximately $50 million over five years – far above the client’s budget. The all-in-one pricing appeared to hide hefty markups on cloud infrastructure and services compared to market rates.
- Licensing Complexity: RISE’s Full User Equivalent (FUE) model introduced uncertainty. The client struggled to categorize its 3,500 users under the FUE system and worried about over-licensing. They were also unsure if RISE would fully cover certain indirect access scenarios (like network management tools and customer self-service portals interacting with SAP data).
- Loss of Control: Handing all ERP systems to SAP’s managed cloud raised flags about loss of control. Leadership feared vendor lock-in – with no easy way to switch providers or revert to in-house hosting if service or costs became unfavorable.
- Sales Pressure: SAP tied a “last-chance” discount to signing before quarter-end and stressed the 2027 ECC support deadline to instill urgency. This high-pressure approach left the client feeling cornered into a massive decision on SAP’s terms.
How Redress Compliance Helped:
- Usage & Cost Analysis: Redress Compliance performed an independent audit of the telco’s SAP usage and requirements. They found SAP’s proposal was oversized – user counts and cloud capacity were inflated well beyond actual needs. This fact-based analysis enabled the client to credibly challenge SAP’s cost assumptions.
- Phased Adoption Plan: Redress recommended a phased RISE adoption. They negotiated for the initial contract to cover only core corporate systems, with the option to onboard additional subsidiaries later at the same discounted rate. This prevented the client from paying upfront for divisions that weren’t ready to migrate, aligning costs with actual rollout.
- Benchmarking & Negotiation: Using market benchmarks, Redress showed the initial offer was overpriced compared to peer deals. They led a data-driven negotiation, breaking down SAP’s bundled pricing. Facing a well-informed customer with a viable alternative, SAP ultimately conceded about 30% off the initial price.
- Contractual Safeguards: Redress secured critical safeguards in the contract. The finalized agreement allows the telco to adjust user volumes annually (up or down by ~10%) to match actual needs, with no penalty. A strict cap on future price increases was included. Importantly, an exit clause gives the company the right to leave the RISE arrangement at renewal without punitive fees, protecting against long-term lock-in. The contract also explicitly addresses data residency and includes SAP’s digital access provisions for third-party integrations, eliminating surprise compliance costs.
Outcome and Impact:
- Cost Savings: Initial Offer: $50M over 5 years. Negotiated Deal: ~$35M over 5 years – a 30% reduction. The telco saved approximately $15 million while still obtaining the necessary S/4HANA capabilities. By unbundling components, the client ensured it pays cloud fees at market-competitive rates instead of SAP’s premium.
- Flexible Terms & Risk Mitigation: The final contract is tailored, not one-size-fits-all. The company isn’t forced into an all-at-once migration – additional units can be onboarded later at the locked-in discounts. All known integrations and data location requirements are outlined in the agreement, ensuring there are no hidden compliance or data sovereignty risks. With exit rights in place, the telco retains control – if SAP’s service doesn’t meet expectations, they can pivot without prohibitive costs.
Read about other Rise with SAP Case Studies.
Client Quote:
“Without Redress’s guidance, we likely would have overpaid and locked ourselves into a rigid contract. Their expertise gave us leverage to secure a deal on our terms – we saved over $10 million and, just as critically, gained the flexibility to manage SAP as our business evolves,” said the CFO.
Call-to-Action: Before committing to a RISE with SAP contract, make sure you have expert allies. Contact Redress Compliance for a complimentary RISE with SAP assessment to benchmark your deal, maximize value, and minimize risk.
Read about our Rise with SAP Contract and Licensing Advisory Services.
