Avoiding SAP License Renewal Pitfalls: Common Mistakes and How to Prevent Them

Avoiding SAP License Renewal Pitfalls: Common Mistakes and How to Prevent Them

Many enterprises stumble during SAP license renewals, resulting in unnecessary costs or compliance risks.

This article is a cautionary guide for CIOs, IT Asset Managers, and Procurement Leads, highlighting the most common mistakes (pitfalls) made in SAP renewals.

Each pitfall is described in a real-world context, followed by practical advice on how to avoid it. These pitfalls can turn a renewal into a costly misstep, from waiting until the last minute to overbuying “just in case” to neglecting critical contract terms.

By learning from others’ mistakes and following the preventive tips, organizations can navigate SAP renewals more smoothly and achieve better outcomes.

Read Planning Your SAP License Renewal: Timeline, Checklist, and Best Practices.

Pitfall 1: Starting the Renewal Process Too Late

Mistake:

Treating an SAP renewal as a simple administrative update and initiating it only a few weeks (or days!) before the deadline. This often happens when busy teams let the renewal date sneak up, assuming they’ll just “renew what we have” without much fuss.

Why it’s a problem:

A last-minute renewal puts all the power in SAP’s hands. With the clock ticking, you have no time to negotiate or explore alternatives. SAP’s quote arrives, and you must accept whatever terms and fees are presented.

Additionally, you may miss contractually required notice periods to drop licenses or change support, meaning you’re locked in for another cycle of things you might have wanted to eliminate. Rushed renewals also lead to errors, like renewing unnecessary licenses because there was no time to analyze usage.

How to avoid it:

Begin renewal planning early (as detailed in the previous article’s timeline). Mark your calendar 6-12 months out from the renewal. Treat it as a project with milestones. Set automated reminders or assign a team member specifically to track software contract dates if needed.

By starting early, you retain leverage – you can negotiate with SAP, consider other options, and make deliberate choices. An early start also gives you time to secure internal approvals.

A good practice is to always pretend the renewal is due three months earlier than it is; that way, you build a buffer for unexpected delays. Remember, time pressure is a negotiation killer—keep the pressure on SAP, not on yourself.

Pitfall 2: Failing to Audit Current Usage (“Shelfware Blindness”)

Mistake:

Going into a renewal without a clear picture of what licenses are being used. Many companies simply renew the same number of licenses they purchased years ago, even if their usage has changed dramatically.

This leads to paying maintenance on shelfware (unused licenses) year after year.

Why it’s a problem:

SAP maintenance fees are roughly 20-22% of the license purchase value annually. If you have $1 million worth of licenses that nobody is using, that’s approximately $ 200,000 per year wasted on maintenance for shelfware.

Over a few years, that’s a huge sum for zero benefit. Additionally, not knowing your usage can mean you’re under-licensed in some areas, risking compliance issues (paying too much in some areas and setting up for potential audit penalties in others).

How to avoid it:

Conduct an internal license audit well before renewing.

Use SAP’s measurement tools (USMM/LAW for on-premise) or analytics for cloud to see actual user counts and activity. Identify:

• Licenses purchased, assigned, and actually in use (e.g., if 100 users have a Professional license but only 50 log in regularly, perhaps 50 could be downgraded or removed).
• Modules or engines that are not utilized (for example, you may have purchased SAP CRM but never fully implemented it).
  Once identified, make decisions: plan to terminate unused licenses at renewal (you’ll formally notify SAP and stop paying for them). If you’re underutilizing a certain type of expensive license, consider swapping some to a cheaper category. The insight here is to pay for what you need going forward, not what you thought you needed in the past. This may require organizational courage – sometimes business units resist giving up unused licenses “just in case.” But show them the cost of holding that shelfware and perhaps agree you can always buy back later if needed (paying maintenance unnecessarily “just in case” is usually not justifiable).

Pitfall 3: Overbuying “Just in Case” at Renewal Time

Mistake:

The flip side of shelfware is that companies sometimes preemptively overpurchase licenses during renewal due to uncertainty or a fear of growth, essentially buying a cushion of extra licenses “just in case we need them next year.” With volume discount logic, SAP sales might encourage this, and IT managers think it will save future hassles.

Why it’s a problem:

Overbuying leads directly to shelfware and a wasted budget. It also increases your annual maintenance base immediately. For example, if you only need 500 users now but buy 600 to be safe, you’re paying 20% maintenance on those extra 100 users every year, even if they aren’t used.

That money could be used elsewhere. Moreover, once purchased, it’s often hard to shed those extras until the next renewal, locking in waste. Over-purchasing also signals to SAP that perhaps they underpriced or you had more budget – it can weaken your position in future negotiations (they’ll think you’re willing to spend more than necessary).

How to avoid it:

Right-size the contract for the near term and include flexibility for growth rather than requiring upfront bulk. For instance, instead of buying 100 extra users now “just in case,” negotiate a clause that allows you to add users at the same discount within the year if needed. Alternatively, utilize a true-up mechanism, which means you only pay for additional users if and when you exceed the licensed amount, at an agreed-upon price.

Keep the renewal order tightly aligned to actual needs. If you anticipate growth, communicate to SAP that you will expand when it occurs, but you’re not paying now for hypothetical usage.

Good forecasting and a true-up clause can alleviate the need to overbuy.

And if SAP offers a discount that’s contingent on a larger quantity, weigh the saved license cost vs. the wasted maintenance – often it’s cheaper to buy what you need and maybe pay slightly more per license, than to get a discount on a ton of licenses you won’t use.

Pitfall 4: Ignoring Indirect Access and New Usage Patterns

Mistake:

Forgetting to address indirect usage (digital access) or other new usage models during renewal. Indirect access refers to scenarios where third-party applications or external users access SAP data (for example, an e-commerce site pulling order info from SAP).

Many companies have fallen into the trap of not licensing this properly, only to be hit by audits. At renewal, if you’re moving to S/4HANA or changing how systems integrate, ignoring indirect access can be costly later.

Why it’s a problem:

SAP introduced a Digital Access model (document-based licensing) to handle indirect use. If you ignore it and you have significant indirect data flows, you might be non-compliant. An audit or true-up could reveal that you owe a lot for these documents or external use.

Additionally, if you’re renewing your contract, that’s a prime opportunity to negotiate a deal on digital access licenses or clarify the terms – if you skip it, SAP’s default stance later might be less favorable. Furthermore, your old license metrics may not cover new usage, such as IoT devices, bots, or APIs connecting to SAP. Overlooking these is a ticking time bomb.

How to avoid it:

During renewal planning, map out all integrations and external touchpoints with your SAP system. If you have a Salesforce system creating records in SAP or a supplier portal reading data, figure out how that usage is licensed.

Consult SAP’s digital access documents to estimate if you need document licenses. If possible, negotiate a digital access license package at renewal. Sometimes, SAP offers a one-time conversion where you pay a flat fee for a certain document volume, which can resolve the indirect use issue.

Also, ensure that any new use cases (such as a planned mobile app for employees that integrates with SAP) are accounted for in your licensing.

Address it upfront: either by licensing appropriately or getting written confirmation of what’s allowed in the contract. This avoids surprise bills later.

In summary, consider not only human users but also systems and devices that indirectly utilize SAP, and ensure your renewal covers these as well.

Pitfall 5: Accepting SAP’s First Offer Without Question

Mistake:

Taking the initial quote or renewal proposal from SAP at face value, assuming it’s standard or non-negotiable. Some organizations, especially those lacking experience or uncomfortable with negotiation, will simply approve the renewal order as presented, possibly even with increases, without pushing back.

Why it’s a problem: You leave money on the table. Like any vendor, SAP often starts with a quote with room for negotiation. Their first offer may include list price on new items, full maintenance on everything, including shelfware, and no special concessions.

If you sign that as-is, you are likely overpaying or missing out on improvements you could have received.

Additionally, if SAP believes you’ll just rubber-stamp renewals, they have no incentive to offer proactive discounts in the future. It could also include terms that favor SAP heavily (since no one requested changes to them).

Essentially, it’s a lost opportunity for a better deal and sets a precedent of you being a passive customer.

How to avoid it: Always scrutinize and question the renewal quote. Treat it as an opening bid. Some steps:

• Compare year-over-year: Did costs go up? By how much and why? If maintenance increased beyond any index, ask why and negotiate it down.
• Identify any new line items: Sometimes, a renewal quote may include new items (for example, SAP may have added a new product trial or changed user type definitions). Clarify anything unfamiliar and don’t accept charges for things you didn’t explicitly agree to.
• Benchmarking vs. Others: If you can access industry data or advisors, compare the effective discount or unit prices to those of typical deals.
• Respond with a counterproposal: Even if the quote looks acceptable, it’s worth asking for a bit better – e.g., “We need a 10% reduction for budget reasons,” or “Can we fix maintenance at this rate for 2 years in exchange for renewing now?” SAP often expects negotiation, so it engages in it. The worst they can say is no to a particular ask, but they might say yes or offer an alternative concession.
• Involve a procurement specialist or a negotiator: If you’re uncomfortable, enlist someone who is. Procurement professionals negotiate as their specialty and will not take the first offer as final.

Never taking the first offer blindly ensures you’re actively managing your costs and contract terms. Even small negotiated improvements can mean hundreds of thousands of dollars in savings over the contract’s life.

Pitfall 6: Neglecting to Address Future Flexibility

Mistake:

Renewing in a way that only solves immediate needs, but doesn’t consider how your needs might change before the next renewal. This includes failing to negotiate aspects such as the ability to swap licenses, adjust quantities, or transition to new SAP offerings.

Why it’s a problem:

Business environments change – you might acquire a company, divest part of your business, undergo layoffs, or adopt new tech. If your SAP contract is inflexible, you may end up with excess licenses that cannot be dropped or need new licenses at a premium later.

Another scenario is that you sign a 3-year cloud subscription but don’t include a clause to add more users at the same rate; two years in, you need more users, and SAP charges you a much higher price because you’re locked in.

Or, if you plan to migrate to S/4HANA next year, but your current renewal didn’t account for any credit/transition, you might pay a lot more later for that move.

How to avoid it: Think ahead during renewal negotiations:

• If your industry is volatile, negotiate the right to reduce licenses or suspend them if business shrinks. Even if SAP’s standard is no reductions, you can sometimes negotiate a partial termination right or at least the ability to convert the unused license value into cloud subscriptions or other products.
• Include conversion clauses if relevant: e.g., “If we move to S/4HANA or RISE during this contract period, our unused ECC licenses can be credited.” There have been SAP programs (like Conversion or Cloud Extension policies) – bring those up.
• If signing a multi-year contract, try to embed one mid-term checkpoint to rebalance if needed (maybe at the end of year 1 or 2).
• Ensure you have price locks for additions: Get an agreement that if you need more of a certain license, it will be at the same discount or rate as the current one, not at the list price.
• If you anticipate swapping user types (for example, moving some heavy users to a lighter license after a process change), negotiate a provision for such a swap.

By securing flexibility, you won’t be handcuffed by the contract if something big changes. It’s challenging to predict everything, but identify the most likely changes (such as downsizing or cloud migration) and secure contractual accommodations for those scenarios.

It might be the difference between a contract that adapts with you versus one that becomes a costly straitjacket.

Pitfall 7: Overlooking the Fine Print (Contract Terms and Conditions)

Mistake:

Focusing only on quantities and fees during renewal, and not reading the contract language carefully.

This can include ignoring changes SAP makes to the standard terms in a new renewal order or failing to ensure important protections (or the removal of unfavorable clauses).

Why it’s a problem:

The “devil is in the details.” SAP contracts are dense, and many critical details are hidden in the text, including audit rights, limitations of liability, support policies, notice periods, and price increase allowances. Overlooking these can mean:

• You might inadvertently agree to stricter audit terms (e.g., shorter response times, broader scope) that make audits more burdensome.
• SAP could insert a clause regarding cloud services data that your legal/compliance team would object to if they saw it (such as data residency or GDPR language).
• A slight change in wording on a metric could alter how licenses are counted, potentially increasing your cost.
• You may also be unaware that the contract automatically renews for 3 years if it is not cancelled by a specific date.
  If you ignore the fine print, you may be signing away your rights or taking on additional risk.

How to avoid it: Involve legal or contract experts in the review of the renewal. They should compare the renewal documents to your previous ones to spot differences.

Key items to watch:

• Audit Clause: Ensure it hasn’t become more onerous. If anything, try to insert limits (as discussed in the negotiation sections, such as notice periods for audits, etc.).
• Price Increase Clauses: Some contracts explicitly state SAP can increase maintenance by a certain percentage each year or after a certain date. If you find such language, try to cap or remove it in renewal.
• Usage Definitions: Verify that the definitions of user types, engines, and other relevant terms align with your understanding. If SAP updated the definitions (they do update pricing metrics over time), be sure it doesn’t force you to need more licenses than before.
• Termination and Notice: Double-check how and when you can terminate support or reduce users. If those rights are not in place, consider negotiating them or at least be aware of the deadlines by which you must act.
• New Product T&Cs: Read those terms if you’re adding something new (like a cloud service or a new module). Cloud contracts, for example, often come with separate service descriptions and SLAs—ensure they meet your needs and include everything you require (such as data backup commitments or service credits for downtime).
• Prior Amendments Carryover: If you had previously negotiated special terms (e.g., a cap on increases or a flexible conversion right), ensure that these carry over into the new renewal. Don’t assume SAP will copy them over – sometimes a renewal order form might accidentally (or conveniently) omit earlier concessions, effectively resetting terms to standard. You must catch that and insist on retaining the previously agreed special terms.

Essentially, never treat a renewal as a simple PO. Treat it as a contract signing. Read it, understand it, and only sign when you’re comfortable, every line is acceptable or at least understood, with risk.

Pitfall 8: Neglecting Third-Party Support or Alternative Options as Leverage

Mistake:

Immediately assuming you must renew with SAP’s support and licenses, without evaluating other options like third-party support, cloud migration deals, or different licensing models. Some organizations don’t do this out of loyalty, fear, or lack of awareness.

Why it’s a problem:

If you don’t explore alternatives, you have zero leverage. SAP reps generally know they have more pricing power if a customer doesn’t consider third-party support. Third-party support (offered by companies like Rimini Street, Spinnaker, etc.) can often cut annual support fees by 50%.

If you don’t even gather a quote from them, you’ll never know how strong an alternative you have. Similarly, SAP sometimes offers special incentives if you switch models (like moving to RISE cloud). If you ignore those options, you may miss out on a better deal or, at the very least, a bargaining chip. You’re effectively negotiating in a vacuum, which favors SAP.

How to avoid it: Always assess your BATNA (Best Alternative To a Negotiated Agreement).

In practice:

• Even if you love SAP support, consider getting a quote from a third-party support provider when your renewal is nearing. It costs nothing to talk to them. Their quote gives you a concrete number (“We could pay $X instead of SAP’s $Y”). If $X is significantly lower, you can present that to SAP to seek a price match or other concessions.
• Consider whether all parts of SAP need to be renewed. Perhaps a minor SAP module could be retired and replaced with a more cost-effective solution. List parts of your SAP usage that are candidates to drop or migrate if costs get too high.
• Stay informed on SAP’s offerings. Sometimes, they offer promotions, such as “move to SAP Cloud and get a support waiver,” or similar. If one aligns with your direction, that could be a Plan B or a point for negotiation.
• If you also have Oracle or another ERP in-house, occasionally consider shifting focus (“If SAP is too costly, we might expand our other ERP instead”). Use it carefully, but multi-ERP shops can pit vendors against each other for investment dollars in some environments.
• Internally, thoroughly discuss the pros and cons of third-party support. It’s not for everyone (loss of upgrades, etc.), but having that strategy fleshed out means you can credibly tell SAP, “We have Board approval to switch to third-party if needed.” That’s powerful.

By not neglecting alternatives, even if you don’t ultimately choose them, you put yourself in a stronger position and ensure that renewing with SAP is truly the right decision and at the right price.

Pitfall 9: Poor Internal Coordination and Stakeholder Buy-In

Mistake: Handling SAP renewal in a silo (for example, IT alone or procurement alone) and not involving all relevant stakeholders early.

This can result in misaligned expectations or even internal conflict at the last minute. For example, IT might negotiate a license reduction only for a business unit to protest that it needs those licenses.

Why it’s a problem:

Without cross-department coordination, you might cut something critical or fail to consider a department’s plans. Or procurement might negotiate a term that IT can’t technically abide by.

A lack of CFO/finance involvement may mean that the final pricing doesn’t receive budget approval. If legal isn’t involved, you might agree to terms that breach corporate policies (like certain liability clauses or data terms).

In worst cases, deals fail in final approvals because someone important was left in the dark. At a minimum, it causes last-minute scrambles and potentially a weaker negotiation outcome because your team wasn’t aligned.

How to avoid it: Create a core renewal team and an extended circle of stakeholders.

• From day one, identify key stakeholders, including IT operations (for usage information), business unit representatives (for needs), SAM/licensing specialists, procurement, legal, and finance.
• Communicate regularly. Maybe a bi-weekly update email or meeting to keep everyone in sync during the planning and negotiation phases.
• Get sign-off from business units on license reductions or changes to ensure they won’t scream later. Conversely, confirm any expected new needs with them so you can include them.
• Ensure finance is aware of the plan – if your goal is cost savings, they’ll appreciate tracking that; if costs might increase due to growth, prepare them accordingly.
• Legal should review early drafts of changes so that if something is unacceptable, you know early and can negotiate it out.
• Essentially, no surprises internally. It’s much easier to negotiate when you know everyone behind you agrees. If SAP senses internal disagreement (such as one executive wanting to renew all, while another wants to cut), they can exploit it by going around your negotiation lead.
• Present a unified front: For example, if the CIO and CFO message SAP account management that “we need a better deal due to X,” it’s taken seriously. But if one of them was never looped in and later questions the approach, it can derail momentum.

Strong internal coordination ensures that the decisions made during renewal are effective and serve the interests of the entire organization, not just those of a single department.

Pitfall 10: Missing the Opportunity for Value-Adds and Relationship Building

Mistake:

Many people view renewal as merely a transaction and miss out on leveraging it to gain additional value or strategically strengthen their vendor relationship. They think, “Just get this over with,” and they renew with minimal interaction beyond price, losing a chance for goodies or better support.

Why it’s a problem:

You might secure a good price, but leave intangible benefits on the table. SAP (and its vendors) often have programs or incentives that require you to request permission to volunteer.

For example, you might get free staff training, a direct technical contact for high-priority support issues, or inclusion in a customer advisory board (which can give you influence).

These have real value in the long run – free training could save tens of thousands, and a better support channel could save downtime. By not engaging beyond dollars, you potentially pay the same but get less service.

How to avoid it: Ask and ye shall (sometimes) receive:

• In negotiations, once you’re close on financials, ask, “What else can you do for us?” Perhaps SAP can offer some soft benefits, such as several consulting hours, an executive briefing session on SAP strategy for your leadership team, or access to beta programs.
• If you had any issues in the past, bring them up. “We had some service issues last year – as part of this renewal, can SAP commit a dedicated support advisor to our account?” These items may not be specified in the contract, but can be documented in writing via an email or customer success plan.
• Utilize the renewal discussion to get SAP updates on product roadmaps or special offers. For instance, perhaps SAP has a cloud extension policy (moving to the cloud, converting licenses) – even if you don’t use it now, being aware of it and having SAP’s informal commitment to let you join later could be useful.
• Ensure you maintain a good rapport: Don’t make every interaction combative. Be firm but cordial so that your relationship with the SAP team is intact, or even better, after the negotiation. You might need their goodwill for a critical support issue or project. The aim is a win-win situation where you get a good deal, and SAP knows they retained a satisfied customer.
• Finally, once you’re done, consider a debrief call with SAP account management to learn how to maximize the value of your licenses. They might offer optimization tips or connect you with user groups. It’s part of the value you can derive at no extra cost.

Avoiding this pitfall means thinking beyond the contract signature and looking at the renewal as a checkpoint in a larger partnership. You pay a lot to SAP; ensure you get maximum value from the services and support for that investment.

Recommendations

• Start early and give yourself time—avoid rushing any renewal project. Time is leverage, allowing for careful decision-making.
• Know your deployment – always perform an internal audit to determine exactly which licenses you use and which ones you don’t. Data will prevent buying too much or renewing shelfware.
• Challenge assumptions – never assume the renewal must look exactly like the past. Question every license and fee: “Do we still need this? Can we reduce it? Is there a better way to license this functionality?”
• Don’t hesitate to negotiate – SAP’s first offer is just a starting point. Be prepared to counter and ask for improvements on pricing and terms.
• Mind the details – read the contract fine print or have a lawyer do it. Tighten loose ends and ensure you do not unknowingly agree to unfavorable terms.
• Use leverage—whether it’s third-party support, alternative solutions, or timing with SAP’s sales goals —use whatever leverage you have. Even a small leverage point is better than none.
• Coordinate internally – make SAP renewal a team sport. Input from all sides (IT, procurement, finance, legal, business units) will lead to a well-rounded and accepted outcome.
• Aim for flexibility – negotiate your contract to allow future changes (growth or reduction). Flexibility clauses are gold when business circumstances shift.
• Learn from each renewal. Keep a playbook of pitfalls you encountered and avoided. Institutionalize that knowledge so new team members or next cycles don’t repeat past mistakes.
• Focus on value, not just cost – keep an eye on the overall value equation. Sometimes, a slightly higher cost with significantly better terms/support is the smarter choice. Avoid false economies that save pennies now but cost dollars later.

FAQ

Q1: We renewed some unused licenses last time because we weren’t sure if we’d need them. How can we be more certain?
Uncertainty is common, but there are ways to mitigate it without blindly renewing everything:

• Analyze trends: Look at usage over the past 1-2 years. Is the decline for that module or user type steady? If yes, you likely won’t suddenly need it.
• Pilot removal: Sometimes, you can test the impact of turning off a feature or reassigning users to see the effect. For instance, if you have an SAP component that nobody logs into, decommission it in a sandbox environment to ensure no one is affected.
• Stakeholder agreement: Get a sign-off from the business owner of that area: “We plan not to renew module X. Do you foresee any need for it in the next year?” Having their written agreement gives confidence.
• Contractual safety net: If you are unsure, consider negotiating a small volume that you can add later at the same price. Alternatively, consider a short renewal (such as renewing for 6 months instead of 1 year for that component, if possible) to keep options open.

Essentially, gather evidence and buy time. It’s better to shed it and re-buy later if needed (even if at slightly higher cost) than pay maintenance indefinitely “just in case,” but ensure key people concur so you’re not caught off guard.

Q2: How can I tell if we’re over-licensed or under-licensed without an official SAP audit?
Use internal tools and processes:

• For on-premise SAP, run the license measurement (USMM/LAW). It will tell you how many users of each type you have and compare that number with your license entitlement if you input it. This is essentially what SAP auditors do.
• For under-licensing signs: If LAW shows, for example, that you have 100 Professional users assigned but have only purchased 80, you’re under-licensed by 20. Or if an engine license allows 1000 transactions and IT reports you processed 1200 last year, that’s an overage.
• For the cloud, check the admin portals to compare active users with contracted users.
• If budget permits, third-party SAP license management tools (like Snow or the Flexera SAP module) can automate this analysis regularly.
• Additionally, a common-sense check is to consult with administrators. If they had to deny new accounts due to license limits, you might be on the brink of under-licensing in that area.

Regular internal “true-up” exercises (quarterly or biannually) can catch these before renewal. The goal is to self-audit so you know your position and can rectify it in renewal by either dropping excess or buying shortages on your terms.

Q3: SAP says we can’t drop licenses because of a contract clause. Are we stuck with them?
SAP often includes a clause stating that the maintenance base cannot be reduced or support cannot be partially terminated. While such clauses exist, in practice, you are not completely without options:

• If you truly don’t need some licenses, you can formally terminate them, which means you give up the right to use them. SAP can’t force you to keep a license you no longer own. The clause may mean they won’t refund you money or they consider the contract whole, but you can choose to stop using and paying for something (with proper notice).
• SAP reps often resist and say, “Policy says no reductions.” This is where negotiation comes in. You may need to offer something in return or consider a higher offer. For example, “We will drop these 500 licenses – how about we buy something else with an equivalent maintenance fee so it’s revenue neutral?” They might allow a swap (this is called give-and-take).
• Engage your legal team: Sometimes, the contract language is ambiguous. Legal may argue that since the contract term ends, you’re not obligated to renew everything, only that you can’t mid-term drop it. At the term’s end, you have freedom.
• In the worst case, you may choose not to renew the entire contract and re-license what you need in a new contract (a drastic approach, but technically, you could not renew and then sign a fresh agreement for only what you need).

In summary, you’re not entirely stuck – it’s a matter of how you approach SAP with it. They may not like it, but if you’re firm that you won’t pay for unused stuff, they’ll usually come to the table to find a compromise (because they’d rather keep some business than lose all of it).

Q4: We were hit by an indirect usage claim in an audit. How can we prevent this from happening again at renewal?
If you have already faced an indirect access issue:

• Use the renewal to settle it once and for all. Negotiate a conversion to SAP’s digital access licenses. Often, SAP offers a deal (like a certain number of document packs at a discount, or a one-time amnesty conversion where you trade some existing license value for a digital access bundle).
• Ensure the contract explicitly states what indirect usage is covered. SAP’s modern contracts often list the document types and their licensing details (e.g., Sales Order, Invoice). Make sure that’s included so it’s clear.
• Implement an internal policy to track new integrations. Have the architecture review the licensing impact of any new system that will interface with SAP. This way, you won’t be caught off guard in the future.
• Possibly include an audit clause specific to indirect use in the contract. If an audit finds indirect usage, you can rectify it by purchasing digital access at standard rates (preventing penalties).

The key is to proactively license indirect use or have an agreed-upon framework in place to manage it. Don’t ignore it. I hope it won’t resurface—it will, because your systems will likely continue to interface in growing ways.

Q5: I’m worried negotiating hard will provoke an SAP audit. Is that a real risk?
A common fear is that they might retaliate with an audit if you push SAP on pricing or drop licenses. While SAP’s audit selection is officially independent of sales, anecdotal evidence suggests unhappy sales teams can sometimes lead to more scrutiny.
However:

• If you’ve managed licenses well, an audit is nothing to fear – you’ll be prepared. Sometimes, just the fear is worse than reality.
• To mitigate, you could schedule a voluntary compliance check with SAP after renewal to show good faith (if the relationship is strained) or engage a third-party audit defense firm to be ready.
• Remember, audits are part of SAP’s business, but they can happen regardless of negotiation stance. Plenty of customers who never negotiated also get audited.
• Focus on compliance (so the audit threat is toothless) and maintain professionalism. Don’t use hostile language or accuse SAP of anything unethical during negotiations. Keep it about business.
• Some customers include a clause in their renewal that if they are audited, any compliance shortfall can be purchased at the same discount as the renewal, essentially mitigating the impact of audit threats.

In short, don’t let audit fear prevent you from negotiating a fair deal. Just cover your bases by ensuring compliance and, if necessary, diplomatically conveying that you value the SAP partnership (so they don’t feel you’re adversarial, just prudent).

Q6: We ended up with a multi-year deal that we regret because things have changed. How can we avoid that pitfall next time?
Multi-year deals are double-edged. To avoid regret:

• Assess the need for flexibility: If your business is in flux, insist on a shorter term or clauses that allow you to adjust.
• Negotiate escape hatches: It could be as simple as “after year 2, the customer may opt out of year 3 by giving notice” or a tolerable penalty (like forfeiting a discount if you exit early). Even if SAP initially says no, they might allow some wiggle room for a large deal.
• Start small: If last time you committed to a 5-year plan and it went south, maybe this time only commit to 2 years and see.
• Keep management informed: Often, regrets arise because someone didn’t realize what a multi-year contract would lock them into. Therefore, ensure that everyone understands the implications and agrees to them at the time of signing.
• If you’re already in a regrettable deal, you can sometimes renegotiate mid-term. It’s tough, but if your situation changed (e.g., you divested half the company), approach SAP to modify the contract. They might require some concessions, but you may be able to salvage it. Alternatively, you might deliberately breach/terminate and negotiate a settlement if it’s untenable – a last resort, though.

The lesson is to only go multi-year to get a benefit you’re sure you need and build in Plan B. No one can predict the future, but at least plan for uncertainty to the extent possible.

Q7: We got an attractive offer to move to SAP RISE (cloud) during renewal, but we’re unsure if it’s a trap.
SAP RISE or cloud migration offers often arise at renewal as SAP tries to shift customers to the cloud.
Pros: They might offer steep discounts, migration incentives, or even “free” periods. Cons: Once in RISE, you’re on subscription – it’s a different model and can be hard to compare costs.
To avoid a pitfall:

• Analyze TCO: Model the 5-year cost of RISE versus staying on-premises. Include everything (subscriptions vs. current maintenance + infrastructure costs).
• Read the RISE contract carefully. Please note that subscriptions may increase after the term. Ensure any “special price” is not just a teaser that balloons later.
• Don’t be rushed. SAP might tie the special deal to a quick decision. Remind them that you need due diligence. A true good deal shouldn’t vanish overnight.
• Check functionality: RISE might have limitations or differences (e.g., less customization flexibility). Confirm that it fully meets your needs before making the switch.
• If unsure, you can negotiate to include a RISE conversion clause in your renewal: e.g., “We’ll renew on-prem now, but SAP agrees we can transition to RISE in 12 months at the following rate if we choose.” That way, you lock an option without committing immediately.

In summary, cloud offers can be great or not, but the pitfall is jumping in without understanding. Vet it thoroughly like any major IT decision, even if it’s presented as part of renewal. And ensure any move aligns with your IT strategy, not just short-term savings.

Q8: During renewal, SAP sales kept pushing additional products (Upsell). We just wanted to renew what we had—was it a mistake not to entertain those?
It depends:

• If the additional products were unnecessary, you did right by not buying unneeded things (that’d be shelfware). However, sometimes considering upsells strategically can help negotiation (as mentioned before, bundling a new purchase in can get you better terms overall).
• The pitfall would be either automatically buying the upsell (wasting money) or flatly refusing to discuss it (missing a lever). The balanced approach is to listen to the pitch and evaluate whether it has real value for you. If not now, maybe later—you can say, “Not this renewal, but maybe next year.”
• If an upsell is relevant, you can use it as a bargaining chip: “We might take Product X, but only if we get a Y concession on the renewal.” That way, if SAP wants to sell X, they’ll sweeten Y.
• One caution: don’t let upsell discussions distract or delay the main renewal too much. Some SAP reps might introduce new items to confuse or shift focus. Keep the core renewal as a priority; you can always do a separate deal later for new stuff once the core is sorted.

In essence, skipping upsells that don’t align with your plan is not a mistake. Just be aware that showing some openness (“we’ll consider this, but…”) could be used to your advantage. If you shut it down outright, you lose that negotiating leverage. If you accept needlessly, you overspend. So navigate upsells with a strategic lens.

Q9: We worry about saying the wrong thing to SAP during negotiations. Do you have any communication tips to avoid pitfalls?
Great question. A few communication pitfalls and how to avoid them:

• Don’t reveal your budget or approval limits: If SAP asks, “What’s your budget for this?” don’t answer directly. Pitfall is that they’ll charge exactly that. Instead, say, “Our goal is to get the most cost-effective deal, and we’ll evaluate any proposal’s value.”
• Avoid internal conflict in front of SAP. For example, if one team member says, “Actually, we might afford more” in a meeting, have prep meetings to ensure a consistent message. If SAP senses disunity, it might press the weaker link.
• Be factual and avoid bluffing too far: If you have a third-party quote, you can mention it generally (“we have a 50% lower support offer on the table”). If you outright lie (like “we will drop everything and leave SAP” when you can’t), that can backfire if they call your bluff. Be prepared to follow through on any strong statement.
• Stay professional: Even if frustrated, never threaten or yell. A collaborative tone with firm points is far more effective. For example, say, “We need your help to make this work for both of us” rather than “You must do this or else.”
• Clarify responses: If SAP says, “We can’t do X,” ask, “Can you explain why? Is it a policy or price issue? What if we adjust Y, would X be possible then?” This keeps the dialogue going rather than hitting a wall.
• Summarize understanding: End calls by summarizing: “So SAP will consider a 10% price decrease, and we will consider a 3-year term, and we’ll reconvene next week. Is that correct?” This avoids miscommunication pitfalls.

Measure your words, coordinate internally, and maintain open and clear communication. Many pitfalls arise when something said is misconstrued or unexpectedly leveraged by the other side.

Q10: After avoiding these pitfalls and doing our best, what if our renewal still didn’t meet all our goals?
Not every negotiation yields 100% of what you want. If you avoided major mistakes, you likely still got a much better outcome than if you hadn’t. Some thoughts:

• Prioritize Satisfaction: Did you hit the most important goals (e.g., avoiding a big cost increase and removing shelfware)? If yes, that’s a win even if some minor wishes fell through.
• Iterate Next Time: Use this experience to aim for a better next renewal. Maybe SAP didn’t give a price cap this time. Note that and plan how to tackle it in the next cycle (maybe engage higher executives or show competitor moves).
• Mid-Term Optimization: A Renewal Is Not the Only Time to Optimize. If you didn’t get something, you can still manage proactively. For example, suppose you didn’t get a license flexibility clause. In that case, you might keep closer tabs and plan to negotiate an adjustment mid-term or optimize usage internally to avoid needing that clause.
• Consider escalation post-renewal: If something is bothering you (say, high support costs), you could later in the year bring it up with SAP in a business review, outside the pressured context, to see if they’ll address it. Sometimes, vendors will make a goodwill adjustment once the situation has settled, especially if you demonstrate continued concern.
• Ultimately, pat yourselves on the back for avoiding pitfalls—many companies fall into them and end up far worse. Continuous improvement is key; rarely is any complex negotiation perfect, but by sidestepping common mistakes, you gave your organization a significantly better deal and position than the status quo.

Read about our SAP Contract Negotiation Service.

SAP Contract Negotiation Serivce - Win Your Next SAP Deal

Do you want to know more about our SAP Contract Negotiation Service?