Background
A manufacturing enterprise running SAP ECC (ERP Central Component) and SAP BusinessObjects was paying roughly 22% of its original license value every year in maintenance fees. That translated to several million dollars annually in support costs, with automatic uplifts for inflation.
This "support tax" yielded diminishing returns. The systems were mature and stable, yet the fees continued to rise. The CIO realized that over a typical 5-year span, they could end up paying more in support than the initial software purchase price.
SAP's roadmap pressures, including urging a migration to S/4HANA by 2027, threatened even more cost in the form of upgrades. The organization needed to reduce ongoing costs without jeopardizing core business applications.
They engaged Redress Compliance to perform a comprehensive license assessment and develop a cost reduction strategy. The result: $8 million saved over three years through license optimization and a strategic shift to third-party support.
Read how you can reduce SAP support costs.
Industry
Manufacturing
Region
United States
SAP Products
ECC 6.0, BusinessObjects
Annual Support
~$5M/year to SAP
Escalating SAP Support Costs
SAP's standard support model is expensive and rigid, often consuming a significant portion of IT budgets. The challenges were clear:
High Annual Fees
SAP Enterprise Support costs approximately 22% of license fees per year. For a $10 million SAP license deployment, that means roughly $2.2 million per year in support fees. The manufacturer's annual bill was in that range, a substantial recurring expense with automatic inflation uplifts.
Limited Value Growth
ECC and BusinessObjects were in maintenance mode. SAP's updates for legacy systems had slowed, yet the costs remained high. The support contract primarily provided break-fix assistance and security patches, which they rarely needed.
Budget Pressure
The CIO and CFO viewed the status quo as unsustainable. They needed to trim "run" costs (maintenance) to free up funds for "grow" initiatives (new digital projects). This set the stage for a bold re-evaluation of their SAP support and licensing strategy.
⚠️ Key risk: Without intervention, the company faced paying more in cumulative SAP support fees over 5 years than the original software purchase price, while receiving diminishing returns on stable, mature systems.
Read Rightsizing SAP Support Levels to Optimize Cost and SLA Coverage.
How Redress Compliance Helped
Redress Compliance delivered a two-phase engagement: first a deep license assessment to identify waste, then a strategic transition to third-party support for maximum savings.
License Assessment Reveals Hidden Savings
Redress performed a thorough SAP license and usage audit across the entire estate, uncovering significant inefficiencies:
- Shelfware and inactive users: Dozens of SAP user accounts had not been used in months. Some modules were deployed but not actively utilized. Ex-employees' accounts remained allocated with named user licenses, and several BusinessObjects reporting tools were unused after initial trials.
- Misclassified license types: A significant number of employees were assigned Professional SAP user licenses (the most expensive category) despite only requiring read-only reports or basic transactions. These roles could be covered by cheaper Limited Professional or Employee Self-Service licenses.
- Overcapacity in engine metrics: Certain engine-based licenses were sized far above actual usage, inflating the maintenance base. The BusinessObjects user count licensed was significantly higher than concurrent usage justified.
By pruning approximately 15% of unnecessary licenses and adjusting user license levels, the company projected immediate savings on support fees. The license cleanup alone was estimated to cut annual support costs by over $250,000.
Insider insight: It is not uncommon to find 20-30% of an organization's SAP licenses sitting idle. Since support runs at approximately 22% of license cost, that shelfware translates directly into wasted budget yielding zero ROI.
Third-Party Support as a Strategic Alternative
With license optimization underway, the team explored third-party support for SAP as the next major cost lever. The company evaluated Rimini Street as an alternative to SAP's own support:
- 50%+ maintenance cost reduction: Instead of paying approximately $2.2M per year to SAP, the company could pay roughly $1.1M/year, saving over $1M annually. Over three years, this alone would amount to more than $3 million saved.
- No forced upgrades: With third-party support, the company could stay on ECC and BusinessObjects indefinitely without any support cutoff, avoiding a rushed, multi-million-dollar S/4HANA migration.
- Support for customizations: Rimini offered full support for custom code and integrations as part of the contract. SAP standard support does not cover customizations.
- Personalized service levels: A dedicated support engineer team with 24/7 support and guaranteed 15-minute responses for critical issues.
Key takeaway: Redress helped the company weigh the risks carefully: no new SAP versions, potential reinstatement fees if returning to SAP later, and vendor relationship implications. The third-party route was still far more attractive financially, even accounting for these factors.
Executing the Transition
Redress supported the company through a carefully orchestrated switch to ensure zero gaps in coverage:
Advance Notice to SAP
Timed the change with the SAP support contract renewal date. Provided SAP with 90 days' notice of non-renewal. Confirmed retention of perpetual license usage rights.
Third-Party Onboarding
Rimini Street gathered documentation on the full SAP landscape, customizations, and interfaces. Archived the latest SAP support notes, patches, and technical documentation for a seamless Day 1 handoff.
Final Updates and Stabilization
Applied all pending SAP support packs and patches. Systems brought to a fully patched baseline. BusinessObjects servers updated to the latest stable patch before cutover.
Cutover and Support Continuity
Rimini Street assumed full support. A critical billing job failure in the first month was resolved within 30 minutes on a bridge call, meeting or exceeding prior SAP response levels.
Compliance and Audit Readiness
Maintained all license ownership proofs. Continued internal license tracking. Built a contingency plan for any future S/4HANA migration, avoiding back-maintenance fees.
Results: $8 Million Saved and Flexibility Gained
Over the three years following the transition, cumulative savings totaled approximately $8 million:
| Support Scenario | Annual Cost | 3-Year Total |
|---|---|---|
| SAP Official Support (status quo) | ~$5.0M | ~$15.0M |
| Third-Party Support (Rimini Street) | ~$2.3M | ~$7.0M |
| Net Savings | ~$2.7M | ~$8.0M |
The company transitioned from spending roughly $15 million over three years with SAP to approximately $7 million with the new approach, resulting in a 53% reduction in costs.
Extended System Life
Comfortably continued running SAP ECC 6.0 well past SAP's sunset date. With third-party support, they can operate through 2030 and beyond, aligning with business readiness rather than vendor deadlines.
Stable Operations
Critical support tickets were resolved effectively. Year-end tax and regulatory patches were delivered on time. Internal satisfaction with ERP support improved due to faster response and more knowledgeable engineers.
Negotiating Leverage
Once SAP realized the company had switched, they approached with offers to win back the business. The customer is now in a strong negotiating position for any future SAP purchases.
The $8 million saved was redirected to higher-value initiatives: the CIO funded several digital transformation projects that had been on hold, including advanced analytics on shop-floor data.
Redress Compliance gave us the confidence and the roadmap to make a move we had been considering for years. The license assessment alone uncovered over $250K in annual waste, and the transition to third-party support was seamless. We are now saving millions every year and investing those funds in innovation that actually moves the business forward.
Recommendations
For CIOs and CTOs considering similar moves, here are key recommendations based on this case study:
🔍 Conduct a License Audit
Start with a detailed SAP license and usage audit. Identify inactive users, duplicate accounts, and overpriced license assignments. Use SAP's LAW tool or a SAM solution to pinpoint shelfware.
📈 Right-Size Your Licenses
Optimize your license mix before negotiating. Downgrade user licenses where appropriate and eliminate unused licenses at the contract anniversary to reduce the maintenance base.
📅 Time Changes with Renewals
Align support changes with your contract renewal dates. Provide SAP with proper notice to avoid auto-renewal and ensure seamless continuity.
🔎 Evaluate Third-Party Providers
Get quotes and references from providers like Rimini Street or Spinnaker. Compare cost, SLAs, scope of services, and custom code support coverage.
🛡️ Mitigate Risks Proactively
Apply all final SAP patches before switching. Clarify how the third party handles critical patches and legal changes. Plan for any future SAP requirements.
🎯 Secure Executive Buy-In
Communicate the plan early. Emphasize cost savings, reinvestment strategy, and risk mitigations. Share success stories to demonstrate it is a proven approach.
📊 Maintain Compliance Governance
Continue managing licenses diligently after SAP support ends. Track usage vs. entitlements and enforce policies to stay audit-ready at all times.
💡 Leverage Savings for Innovation
Have a strategy to utilize freed budget wisely. Invest in cloud infrastructure, advanced analytics, or process automation that drives business value.
Paying Too Much for SAP Support?
Whether it is ECC, S/4HANA, BusinessObjects, or SuccessFactors, Redress Compliance helps global enterprises reduce SAP spend, eliminate shelfware, and explore every cost optimization lever. Book your SAP support assessment today.
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