SAP Renewal Negotiation Checklist
When and Why to Use This Checklist
SAP contract renewals are high-stakes events that can significantly impact your IT budget and vendor relationship.
SAP’s sales teams often push for price uplifts (increases in fees) and product expansions (adding more licenses or new cloud services) during renewals.
If you approach a renewal unprepared, you risk overpaying for software and locking into inflexible terms that don’t serve your business.
The key to avoiding these pitfalls is to start your renewal planning well in advance of the contract end date. Ideally, begin 12–18 months in advance of an SAP renewal.
This lead time lets you gather detailed usage data, align internal stakeholders, and evaluate alternatives without the pressure of a ticking clock. Early preparation prevents the last-minute scramble where SAP has the upper hand because you’re out of time.
Using a structured checklist ensures you don’t miss any critical steps. It keeps your team organized and proactive throughout the process.
Ultimately, this checklist serves as your playbook to drive the renewal on your terms – securing a better deal and a contract that aligns with your business needs.
Read more, SAP Contract Negotiation Playbook: 10 Strategies for CIOs to Secure a Better Deal.
12-Step SAP Renewal Negotiation Checklist
Follow these 12 steps to prepare and execute a successful SAP renewal negotiation.
This checklist will guide you through each phase from team formation to final review so you can approach the renewal confidently and strategically:
- Assemble the Negotiation Team & Assign Roles – Form a cross-functional team for the renewal. Appoint a lead negotiator to coordinate the process. Include stakeholders from legal, finance, IT, and key business units—each with a defined role (e.g., legal handles contracts, finance handles budget, IT provides usage data, business units share needs). A well-rounded team covers all angles and prevents SAP from exploiting internal misalignment.
- Review Current Contract & Usage – Gather all SAP contracts and licensing documents. Catalog what you’ve purchased versus what’s in use, and flag any shelfware (unused licenses) to cut. Also, check if any usage exceeds your entitlements to catch compliance risks early.
Note key contract details like auto-renewal dates and required notice periods for changes. This review gives you a clear baseline and shows where you can optimize. - Engage Internal Stakeholders – Speak with each department that utilizes SAP and gather their forward-looking needs. Find out who plans to increase usage or add modules, and who expects to reduce usage or drop certain SAP features. Make sure the renewal reflects these real business needs. This engagement also fosters internal consensus, ensuring stakeholders support the license cuts or additions that will impact them.
- Determine Renewal Scope – Use your findings to decide what will and won’t be part of the renewal. Identify which unused licenses or underutilized modules to cut. Determine if any products should be dropped or replaced entirely.
Also factor in any planned changes (like moving some systems to the cloud) so you don’t renew something you’ll phase out soon. Be skeptical of SAP’s push to renew everything “as is” or add products you didn’t request. By focusing on what you need, you avoid extras and gain leverage. - Gather Benchmark Data – Research what a fair SAP deal looks like. Gather data on typical discounts and pricing for companies similar to yours. Know your costs and compare them to market benchmarks (with industry research or expert input if available).
Armed with these facts, you can set realistic targets and push back on any offer that doesn’t measure up. - Set Targets & Walk-Away Plan – Define what a successful deal looks like and have a fallback ready. Decide on your must-have outcomes (e.g., the maximum total cost, minimum savings, and key terms like caps on fees or an exit clause).
Also, decide how you’ll respond if SAP won’t meet those targets. That might mean switching to third-party support, pausing a project, or dropping certain SAP components. With a clear walk-away plan, you won’t be pressured into a bad deal. - Initiate Discussion with SAP – Engage SAP early instead of waiting until the last minute. Let your rep know you’re preparing for the renewal and want to discuss a few points (like support costs or license levels). Keep it high-level at first and don’t reveal your full strategy.
By starting talks proactively, you show you’re serious and informed. At the same time, hint that you’re exploring all options for the best value. That tells SAP they must earn your business with a compelling offer. - Explore Alternatives or Run RFPs – Pursue alternative options in parallel so you have leverage and a backup. For example, get quotes from third-party support providers and research competing software for any SAP modules you might drop.
The goal is to have credible alternatives ready. Even if you stay with SAP, knowing other options (and letting SAP sense it) strengthens your hand. And if SAP’s offer falls short, you have a Plan B ready. - Negotiate in Rounds – Be ready for several rounds of back-and-forth. SAP’s first proposal is rarely its best, so plan to counteroffer and keep the dialogue going. Document each round’s changes so nothing gets lost.
Hold firm on your key issues like price and terms. If talks stall, bring in senior executives on your side (and ask SAP to do likewise) to break any impasse. By staying patient and persistent, you can often turn an okay offer into a great one by the final round. - Review Draft Contracts Thoroughly – Don’t consider the negotiation done until the contract is signed – and only sign after a thorough review. When SAP sends the draft agreement, scrutinize it with your legal team. Make sure every concession and term you negotiated is captured correctly, and double-check all the numbers.
Watch for any standard SAP clauses that weren’t part of your deal (like automatic price hikes or strict auto-renewals) and insist on removing or changing them. Take your time to get the contract right. A careful review now will prevent costly surprises later. - Plan for Transition Scenarios – Don’t let the ticking clock force a bad decision. As the renewal date nears, be ready with a backup plan in case you don’t reach a deal in time. For example, you could seek a short-term extension of your current contract or prepare to switch to third-party support temporarily.
If you plan to drop an SAP product, have an alternative or workaround ready. Showing SAP that you can carry on past the deadline takes away their time-pressure advantage. It tells them you won’t be cornered into a deal just because the date is near. - Finalize and Run a Post-Mortem – After signing the new agreement, wrap up and reflect. Inform all relevant teams about any changes in the contract so there are no surprises later.
Then gather your negotiation team for a post-mortem. Discuss what went well and what didn’t, and document any effective tactics or mistakes. These lessons become a playbook for next time. So celebrate the win, but make sure the experience strengthens your future strategy.
Side Tips for Negotiation Success
- Use SAP’s fiscal deadlines as leverage. Timing can influence the deal. If you time your final discussions to close just before SAP’s end-of-quarter or fiscal year-end, their urgency to hit sales targets can work to your advantage. When under deadline pressure, SAP reps may be much more generous with discounts or concessions to close the deal.
- Don’t show urgency – patience extracts discounts. Maintain a calm, patient front throughout the negotiation. Even if the renewal date is near, avoid acting desperate to close.
If SAP senses urgency, they have little incentive to give concessions. But if you show you’re willing to wait (or even walk away), they’ll feel pressure to offer a better deal. The more patient side usually ends up with better terms. - Bring executives into the final rounds for added weight. Consider involving a C-level executive sponsor (like your CIO or CFO) in the final stage of talks. For SAP, seeing your top brass underscores how important the deal is.
They’ll likely bring in their higher-ups who can approve bigger discounts or special terms. Executive presence on both sides usually pushes SAP to work harder and close the deal on terms that will satisfy your leadership.
Five Recommendations for Procurement Leaders
- Start internal prep 12 months in advance. Kick off the renewal prep one year in advance (or more). Early planning gives you time to thoroughly analyze contracts and usage, align stakeholders, and explore options calmly. Renewals tackled with ample lead time almost always yield better outcomes than last-minute rush jobs.
- Build the renewal scope based on real usage, not SAP’s push. Build your renewal plan around actual usage and needs. Don’t simply accept whatever bundle SAP is pushing. If some licenses or modules aren’t delivering value, cut or swap them out. Shape the renewal to fit your business strategy, not SAP’s sales goals.
- Always negotiate caps on price increases and uplifts. Protect your organization from unchecked cost increases. Negotiate a cap on any yearly maintenance or subscription price uplifts. For example, set a maximum percentage increase per year or secure a fixed-rate period. Avoid agreeing to open-ended inflation adjustments with no limit. Capping increases makes your costs predictable and guards your budget.
- Pressure-test SAP with third-party alternatives. Even if you plan to stick with SAP, consider exploring other options as well. Check out third-party support and alternative software for key needs. The mere fact that you have a credible alternative (and SAP is aware of it) is a powerful bargaining chip. SAP will work harder to offer a great deal if they know you have the option to walk away.
- Capture and share lessons learned for the future. Make your SAP renewal experience count for the future. Once it’s over, document what you learned about SAP’s tactics, what you did well, and what you’d do differently. Share those insights with your team and incorporate them into your processes. By keeping an internal playbook that grows with each renewal, you equip your organization to negotiate even better deals next time.
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