Case Study – Rise with SAP Advisory – German Automotive Manufacturer Avoids €4M Audit Risk and Negotiates Phased RISE with SAP Migration
Background
A German automotive parts manufacturer (25,000 employees, global operations) relied on SAP ECC for decades. With SAP pushing the 2027 deadline to move to S/4HANA, the firm considered RISE with SAP for a cloud-based S/4HANA transition.
SAP’s proposal offered an all-inclusive RISE deal that covered ERP and certain SAP Business Network add-ons. However, the company had highly customized processes and multiple production plants on different SAP instances.
They were not convinced a one-size-fits-all migration would work. The German SAP user group (DSAG) had also advised caution regarding RISE costs, prompting the company to proceed carefully.
Challenges
- “Big Bang” Pressure: SAP’s initial RISE proposal required migrating all systems simultaneously, bundling every module and region into a single contract. This approach was risky and costly. It disregarded the manufacturer’s phased rollout plan and included cloud services for plants that were not yet ready to transition. The company felt SAP’s plan was about SAP’s cloud targets, not their operational reality.
- High Cost & Unclear Value: The quoted price (tens of millions of Euros) seemed inflated. Much of the cost was for capacity that they wouldn’t initially use. Analyses by DSAG indicated that SAP’s new RISE pricing had higher base rates than before – the manufacturer suspected that SAP had overpriced them on a larger package than needed. They needed costs aligned to a realistic ramp-up, not an overshot bundle.
- Compliance and Indirect Use Risks: As a long-time SAP customer, the firm had known compliance gaps. An internal review found that data interfaces with suppliers (through a supplier portal) may be considered indirect usage, potentially exposing them to over €4 million in audit fees if unresolved. Simply moving to RISE wouldn’t erase these issues; SAP could even use them as pressure. The company needed to address compliance (indirect access, license classification) in the deal to avoid future penalties.
How Redress Compliance Helped
- License & Usage Audit: Redress conducted a comprehensive review of the SAP landscape. They used SAP’s tools (e.g., LAW reports) to pinpoint over- and under-licensing. This audit quantified the indirect usage exposure – e.g., the number of supplier portal documents that violated SAP’s digital access rules. With that data, Redress devised a plan to either negotiate these into the RISE contract or remediate them upfront so they couldn’t be used against the client.
- Phased Migration Strategy: Redress proposed and negotiated a phased approach despite SAP’s resistance. Instead of a single big go-live, the contract allowed for a phased migration by region. Crucially, SAP agreed to dual-use licensing during the transition – the client could run ECC and S/4HANA in parallel without incurring additional fees. This enabled a gradual, factory-by-factory migration without downtime or double payment for licenses.
- Cost Alignment & Discounts: The team unbundled RISE pricing, allowing the company to pay only for what it needed, when it needed it. They negotiated to remove or delay services not immediately required (like infrastructure for regions migrating later). Redress leveraged benchmarks from DSAG and other enterprises to obtain a substantial discount. The final deal achieved ~30% cost reduction and a pricing schedule that ramps up only as new sites go live, avoiding huge upfront costs for idle capacity.
- Compliance Safe Harbor: A major win was integrating compliance resolutions. SAP agreed to waive any past indirect usage claims – essentially an amnesty on the supplier portal issue once the client moved to RISE. Additionally, Redress secured clear contract language that normal data exchanges with partners won’t trigger future license violations. This proactive approach eliminated the looming audit risk, giving the manufacturer peace of mind.
Outcome and Impact
The German manufacturer turned SAP’s mandate into a balanced, strategic plan. Financially, the negotiated agreement came in roughly 30% under SAP’s initial quote, and the payment schedule matches the deployment schedule.
By not overpaying for idle capacity, the company retained significant capital that would have been wasted in an all-at-once deal.
The project will proceed on the company’s terms: a stepwise cloud migration aligned with their readiness. They have the flexibility to pause between phases if needed, without breaching the contract. SAP’s golden handcuffs were transformed into a client-centric arrangement.
Meanwhile, the firm dramatically reduced its compliance risk. As they enter RISE with SAP, they do so with a clean slate – known indirect usage issues are settled and contractually addressed.
IT leadership noted that for the first time, they feel in control of an SAP project rather than coerced. They can report to the board that the RISE move will deliver value without unwelcome surprises or on one-sided terms.
Read about other Rise with SAP Case Studies.
Client Quote
“We’d heard from DSAG and others not to accept SAP’s first offer, and Redress helped us prove why. They turned SAP’s big-bang plan into something that fits how we operate. Most importantly, we erased a huge compliance worry in the process. Redress saved us from a potential licensing disaster and got us a deal we can actually work with.” – CIO, Automotive Manufacturer (Germany)
Call-to-Action
If you’re a European enterprise facing a push to RISE with SAP, don’t go in blind. Contact Redress Compliance for an independent assessment of your SAP contract. We’ll help you leverage user-group insights, negotiate phased plans and cost protections, and eliminate compliance pitfalls – so your SAP transformation succeeds on your terms.
Read about our Rise with SAP Contract and Licensing Advisory Services.
