The Challenge: Escalating SAP Support Costs
A global manufacturer with a mature SAP ECC and BusinessObjects environment was facing a critical cost challenge. Annual SAP support fees had climbed to $5 million, representing 22 percent of their total software licence base. The organisation had been through years of organic growth, system expansion, and acquisition integration—but nobody had conducted a comprehensive audit of what they were actually running or paying for.
Support costs were growing faster than headcount, escalators were climbing at 8 to 12 percent annually, and business leaders were increasingly questioning the return on investment. The vendor showed no appetite to negotiate: SAP maintained that support was a mandatory 22 percent of licence value, with no room for flexibility. The client faced a binary choice: pay up or migrate to S/4HANA—a project estimated to cost $10 to $15 million and take 18 to 24 months.
Phase 1: Licence Assessment Reveals Hidden Savings
We began with a comprehensive audit of the SAP environment, mapping every licence module, user type, and active instance. What we discovered was striking:
- Approximately 15 percent of licences were completely unused—legacy modules from acquisitions, dormant instances, and duplicate roles
- A significant number of users were on higher-tier licence types (Enterprise) when Professional-grade licences would have sufficed
- Maintenance contracts covered redundant modules that had been sunset but were still being billed
- The licence inventory itself was inaccurate: SAP's records didn't match the client's actual deployment
In total, the audit identified more than $250,000 per year in quantifiable waste. Simply cleaning up the licence estate reduced the support base from $5 million to $4.75 million—the first, immediate win.
Phase 2: Evaluating Third-Party Support
With the licence estate optimised, we shifted focus to the larger question: was SAP support actually worth 22 percent of licence value? The short answer was no. Market data and structured benchmarking showed that third-party support providers—specialising in SAP ECC maintenance—were offering equivalent or superior support for 8 to 12 percent of licence value.
But migrating to third-party support comes with legitimate risks. We conducted a rigorous risk assessment:
- Audit exposure: What happens if SAP audits you post-exit? We structured an orderly exit that documented the transition and maintained compliance throughout.
- Support quality: Third-party providers specialise in keeping ECC systems running; they don't push you to upgrade. We validated the provider's response times, escalation procedures, and patch management.
- Operational continuity: We ensured overlap periods, knowledge transfer, and 24/7 support continuity during the handoff.
- Future flexibility: The contract with the third-party provider included break clauses, preventing lock-in and allowing the organisation to return to SAP (or switch providers) if needed.
Phase 3: Executing the Transition
The migration to third-party support was executed in phases to eliminate risk:
- Month 1 to 3: Parallel support with vendor overlap, knowledge transfer, and system handoff
- Month 4 to 6: Full transition to third-party support for non-critical modules; SAP retained for core ECC
- Month 7 to 18: Gradual phase-out of SAP support for remaining modules, with regular health checks and performance reviews
Throughout the engagement, we maintained zero unplanned downtime and zero critical incidents. The organisation experienced no service disruption and reported improved response times post-transition.
$8M
Cumulative savings over 3 years (phases 1-3)
The Results: $8 Million in Cumulative Savings
The engagement delivered measurable financial and operational outcomes:
- Year 1: $1.8 million savings (licence optimisation + partial third-party transition)
- Year 2: $2.7 million savings (full third-party support in place)
- Year 3: $3.5 million savings (sustained third-party support, no escalators)
The original $5 million annual spend was reduced to $2.3 million—a 53 percent reduction. This wasn't achieved by cutting support quality; it was achieved through optimisation, vendor consolidation, and leveraging specialist providers.
The $2.7 million in annual savings funded strategic digital initiatives that would otherwise have been deferred or scaled back. The organisation was able to invest in modern analytics, cloud infrastructure, and business intelligence—initiatives that SAP maintenance costs had previously crowded out.
Equally important: the organisation avoided a $10 to $15 million S/4HANA migration project. By optimising ECC support, they extended the life of their existing system while maintaining full functionality and compliance.
Key Lessons Learned
Start 18 Months Before Renewal
Licence audits and third-party evaluations take time. Starting early gives you leverage in negotiations and prevents last-minute panic renewals.
Audit Before You Renew
Most organisations renew SAP support at their current licence base without auditing. A 10 to 15 percent licence prune is typical. Don't pay support on licences you don't need.
Evaluate Third-Party Support Objectively
Third-party support is not a cost-cutting shortcut; it's a specialised service model that works well for mature ECC environments. Assess providers on response times, expertise, and contract flexibility—not just price.
Structure the Exit Carefully
SAP audits can happen post-exit. Work with an advisor to document the transition, maintain compliance, and ensure you're not exposed to back-charges or licence true-up claims.
Operational Benefits Beyond Cost
- Freed headcount: Reduced time spent on SAP administrative tasks and vendor management
- Audit immunity: The transition was documented and compliant, eliminating future audit risk on unused licences
- Vendor diversification: Reduced dependency on a single vendor; ability to shop support quality
- Strategic flexibility: Capital freed from support costs could be directed to competitive priorities
Frequently Asked Questions
Is third-party SAP support as reliable as SAP support?
Third-party support specialises in ECC maintenance and is often faster for routine issues. However, SAP-specific patches and critical security updates may require closer coordination. The key is choosing a provider with proven expertise and clear SLAs. Many organisations see faster response times post-migration.
Will SAP audit us after we exit support?
It's possible, but unlikely if the transition is structured correctly. Our audit defense protocols document the transition, maintain licence compliance throughout, and create a clear paper trail. Most organisations see no audit activity post-exit if the engagement is executed transparently.
How much can we realistically save with licence optimisation?
Most clients find 10 to 15 percent licence waste through comprehensive audits. Some organisations find 20 to 25 percent if they've experienced significant M&A or system consolidation. The waste typically includes unused modules, over-provisioned user roles, and legacy systems.
What's the timeline for a third-party support migration?
A phased migration typically takes 6 to 12 months, with 3 to 6 months of parallel support to ensure operational stability. Some organisations accelerate this to 3 to 4 months if their tolerance for risk is higher. Zero downtime is achievable with proper planning.
Can we return to SAP support after switching to third-party?
Yes—if your third-party contract includes break clauses (which ours do). Some clients eventually return to SAP if their business strategy shifts, or they upgrade systems. The key is contractual flexibility, not lock-in.
What happens during the S/4HANA question? Does third-party support complicate migration?
Not at all. Third-party support can continue during S/4HANA migration or can be wound down as your new system goes live. Many organisations use the savings from third-party support to fund their modernisation roadmap.