Background
A leading Latin American consumer goods company headquartered in São Paulo, Brazil, with 12,000 employees and $5.2 billion in annual revenue, ran SAP ECC for its core ERP across finance, supply chain, and production on a primarily on-premises landscape.
Facing SAP's 2027 end-of-support deadline for ECC, the firm began evaluating RISE with SAP to transition to S/4HANA Cloud. The company's leadership recognised the urgency — but also the risk of moving too quickly without independent validation of SAP's commercial proposal. They engaged Redress Compliance to provide an independent assessment before committing to any deal. For a full overview of RISE with SAP considerations, see our SAP S/4HANA Advisory Service.
The company operated across three core domains: consumer products finance, supply chain for LATAM distribution, and production management for multiple manufacturing plants. All three ran on SAP ECC, making the migration scope substantial and the commercial stakes high.
Challenges
The engagement presented four distinct and interrelated challenges that combined escalating commercial pressure with genuine technical complexity and a looming compliance threat.
Escalating Costs
SAP's initial RISE proposal was a five-year, $30 million subscription — far above the company's budget. The bundled cloud infrastructure came at rates padded with hefty markups over market rates. SAP positioned this as a "special offer" contingent on signing within the current quarter.
Licensing Complexity — The FUE Model
Moving to RISE meant adopting SAP's Full User Equivalent (FUE) model. The client struggled to map 3,500 existing SAP users into FUE categories and feared over-buying licences. There was also concern about SAP indirect access / digital access licensing fees from third-party systems such as a distributor portal accessing SAP data.
Sales Pressure & Audit Leverage
SAP pushed for a quick commitment before quarter-end with a "one-time" discount. The account team also reminded the client of an ongoing audit, implying that compliance issues could result in penalties if they didn't sign RISE. This combination of artificial urgency and veiled threat created significant pressure on the CIO and CFO to act quickly — on SAP's terms.
$5M Compliance Exposure
SAP's audit preview indicated a potential $5 million penalty for unlicensed indirect usage — the e-commerce site creating SAP documents without proper licensing. This looming exposure added significant anxiety for the CIO and CFO, and was being used by SAP as leverage to accelerate the RISE signing.
Facing SAP audit pressure on a RISE deal?
How Redress Compliance Helped
Redress Compliance executed a five-phase strategy that separated the audit threat from the commercial deal, established a credible alternative scenario, and forced SAP to compete on price and terms.
1. Independent Licence Review
Redress conducted a comprehensive licence and usage audit, quantifying actual SAP usage and translating it into FUEs. They found SAP's proposal overestimated needs by approximately 15% and included cloud services the client didn't need. This immediately created a baseline for renegotiation, as the inflated FUE count was the foundation of SAP's overpriced proposal.
2. Optimised Deal Scope
Redress recommended a tailored contract approach: a smaller RISE scope focused on essential S/4HANA modules while keeping certain non-critical systems on-premises or on third-party cloud hosting. They helped the client push back on unnecessary components, including excess SAP BTP capacity that SAP had bundled into the deal to inflate the total contract value. This is consistent with our broader SAP contract negotiation approach.
3. Competitive Benchmarking
Using global benchmarks, Redress showed the initial offer was overpriced compared to peer deals in the LATAM region and globally. Armed with these facts, the client confidently countered SAP's pricing — no longer operating on assumptions but on verified market data that demonstrated the "special offer" was anything but special.
4. Credible Alternative Strategy
Redress orchestrated a credible alternative scenario — the client was prepared to purchase S/4HANA licences outright and use a local cloud provider if SAP didn't improve terms. This leverage forced SAP to substantially revise its offer. The willingness to walk away from RISE — backed by a fully costed alternative plan — was the decisive negotiation lever.
Before Redress
- $30M over 5 years
- One-size-fits-all scope
- FUE counts inflated by ~15%
- Unresolved $5M audit exposure
- No price escalation cap
After Redress
- $22.5M over 5 years (25% reduction)
- Rightsized scope tailored to actual needs
- FUE counts corrected, excess removed
- Audit penalty fully eliminated
- 5% renewal escalation cap + exit clause
5. Compliance Resolution & Flexibility
Redress negotiated inclusion of SAP's Digital Access licence in the contract to cover known third-party integrations and secured a full waiver of the $5M audit claim. They also built in future flexibility by capping annual price increases at 5%, adding an exit clause, and securing ECC licence credit — ensuring the company migrates on its own timetable, not SAP's.
Download the SAP RISE Negotiation Guide
Outcome and Impact
Initial offer: $30M over 5 years. Negotiated deal: $22.5M — a 25% reduction. Rightsized scope and removed unnecessary cloud components brought costs in line with market rates.
All known compliance gaps resolved through contractual provisions. Digital Access licence covers third-party integrations. The company migrates on its timetable without fear of unexpected fees.
Combined subscription savings ($7.5M) and eliminated audit penalty ($5M) deliver $12.5M in total financial benefit — funds now available for innovation instead of unwarranted licensing costs.
ECC licence credit secured. 5% renewal escalation cap and exit clause prevent lock-in. Ability to reallocate user licences as needs evolve. The company regained control of its SAP roadmap.
"Redress Compliance was our secret weapon in the SAP negotiations. Their independent insight exposed hidden costs and pushed SAP into a deal on our terms. We saved millions and averted a compliance disaster while gaining a more flexible agreement."
The Enterprise Spend Navigator
Weekly insights on SAP pricing changes, RISE with SAP tactics, and licensing traps. Read by 4,000+ procurement leaders and CIOs.
Unsubscribe anytime. No spam.
Frequently Asked Questions
Yes. SAP frequently uses pending audit findings as leverage to push RISE deals, but those same findings can become negotiation currency. In this case, Redress secured a complete waiver of the $5M audit claim as part of the RISE agreement. The key is separating the audit from the commercial deal and quantifying the true exposure independently — SAP's initial penalty claims are almost always inflated. An independent adviser who knows SAP's internal assessment methodology can usually demonstrate that the real exposure is significantly lower than the claimed figure.
Absolutely. S/4HANA is available as a perpetual on-premise licence, and many enterprises choose to self-host on AWS, Azure, or local cloud providers. This is often the strongest negotiation lever against SAP — a credible willingness to walk away from RISE forces SAP to compete on price. In this case, preparing a local cloud alternative helped secure a 25% discount. The key word is "credible" — SAP's account team will test whether you are truly prepared to walk away, so the alternative scenario must be fully costed and ready to execute.
SAP's initial FUE proposals typically overestimate needs by 10 to 20%. The most common errors are categorising too many users as Advanced (1.0 FUE) when they should be Core (0.2 FUE) or Self-Service (0.033 FUE). An independent licence review that maps actual user activities to the correct FUE categories typically reduces the total FUE count significantly. In this case, the overestimate was approximately 15%. The review should be based on actual login data, transaction logs, and role analysis — not on SAP's default mapping assumptions.
Digital Access licences cover "indirect" or "digital" access to SAP — when third-party systems such as e-commerce platforms, distributor portals, or IoT devices create or read SAP documents. Without proper coverage, these interactions can trigger compliance penalties. In this case, Redress ensured Digital Access was explicitly included in the RISE contract, covering the client's e-commerce site and distributor portal. There are nine document types in SAP's digital access framework — each with different pricing implications — and it is critical to identify which apply to your environment before signing any RISE agreement. See our SAP Digital Access Advisory Service for more detail.
Yes. RISE doesn't require migrating your entire SAP landscape. In this case, Redress negotiated for core S/4HANA modules to move to RISE while non-critical systems remained on-premises or on third-party cloud hosting. This hybrid approach reduces the RISE contract scope and cost while maintaining flexibility for future decisions. SAP does not publicise this option — they prefer to present RISE as an all-or-nothing proposition — but it is commercially available and increasingly common in complex enterprise environments.
Related SAP Case Studies
Exploring RISE with SAP? Get a second opinion first.