A Texas-based oil and gas enterprise with 65,000 employees faced a massive one-size-fits-all RISE with SAP proposal. By engaging Redress Compliance, the company transformed an inflexible proposal into a tailored phased agreement, saving tens of millions and securing hybrid landscape provisions during the transition.
RISE with SAP Case Study. See also: SAP RISE Advisory Services | SAP Contract Negotiation Service | California Tech Manufacturer Case Study.
As SAP ECC, the company's long-standing ERP backbone supporting upstream exploration, refinery operations, distribution logistics, trading, and corporate functions across global operations, approached its end-of-mainstream-support date, SAP's sales team presented a RISE with SAP proposal. The proposal was a classic one-size-fits-all deal: a massive contract that assumed the enterprise would migrate its entire global operations to SAP's cloud in a single big-bang transition. The proposed RISE subscription bundled software licences, cloud infrastructure, and migration services for every user and every system, carrying an enormous price tag and rigid terms that left virtually no room for the phased, risk-managed approach the company's technical reality demanded.
The oil and gas enterprise had deep reservations. The company operated complex upstream and downstream applications tightly integrated with SAP, including specialised refinery management and process control systems, pipeline monitoring and SCADA interfaces feeding real-time operational data into SAP, commodity trading platforms processing thousands of daily transactions against SAP's financial and logistics modules, and distribution logistics applications orchestrating product movement from refineries to terminals and retail locations. Many of these integrations had been developed and refined over more than a decade of ECC operation, and they could not be migrated safely without extensive testing, validation, and in many cases re-engineering of interfaces and custom code.
An immediate big-bang switch to S/4HANA Cloud risked jeopardising critical business processes that operated continuously. Refinery operations running around the clock could not tolerate migration-related downtime. Trading operations executing time-sensitive commodity transactions could not accept system instability during a rushed platform transition. The standard RISE contract offered little flexibility for user count adjustments or phased implementation, meaning the company would pay the full 65,000-user subscription price from contract start even though large parts of the business would not be cloud-ready for years.
The company's CFO characterised SAP's initial RISE proposal as fundamentally disconnected from operational reality. The proposal ignored the company's complex application landscape with dozens of SAP-integrated systems built and refined over more than fifteen years, its regulatory requirements for certain on-premises systems in jurisdictions where cloud hosting of operational data was subject to compliance obligations, the deep technical dependencies between SAP and specialised oil and gas industry applications requiring careful interface re-engineering, and the practical impossibility of migrating 65,000 users across multiple continents simultaneously without creating unacceptable business disruption in an industry where operational downtime translates directly into revenue loss and safety concerns.
Accepting the proposal as presented would have created a financially punishing scenario: paying the full RISE subscription for 65,000 cloud users from contract day one while simultaneously maintaining the on-premises ECC environment, including hardware, infrastructure support, database licensing, and SAP maintenance, that the majority of the business would continue relying on during a multi-year transition. The company estimated idle cloud capacity alone during the first two years would represent tens of millions in wasted expenditure.
"SAP's initial RISE proposal was essentially 'move everything now and trust us.' It ignored the reality on the ground. Our landscape, our timelines, our industry-specific systems that can't just be lifted and shifted to the cloud overnight. We were looking at a hefty bill and a lot of uncertainty. The risk of disrupting refinery operations or trading systems during a forced migration was simply not acceptable to the board."
CFO, Texas Oil and Gas Enterprise
Determined to avoid a costly misstep, the enterprise brought in Redress Compliance to advise on contract negotiation and strategic planning, with the explicit goal of rejecting the cookie-cutter approach and negotiating a phased migration model aligned with the company's actual technical readiness and business transformation roadmap.
Working closely with the client's IT leadership, procurement team, and business unit stakeholders, Redress Compliance fundamentally reshaped the conversation with SAP. Rather than accepting SAP's migration playbook and negotiating only on price, Redress built a custom negotiation strategy putting the customer's operational requirements, risk tolerance, and transformation timeline at the centre of every commercial discussion.
| Workstream | Activities | Outcome |
|---|---|---|
| Baseline assessment and right-sizing | Thorough audit of current SAP ECC usage. Analysed active vs inactive users. Identified duplicate licence assignments across business units and geographies. Flagged modules that could be retired or consolidated during the S/4HANA transition | Significantly reduced the baseline for S/4HANA subscription. Demonstrated the enterprise needed substantially fewer FUEs than SAP's proposal assumed, immediately strengthening the bargaining position on pricing and scope |
| Phased migration roadmap | Crafted multi-year migration plan with client executives. Phase 1: finance and HR to RISE S/4HANA private cloud. Phase 2: supply chain and procurement. Phase 3: manufacturing, trading, and specialised operations. Pilot migration for one regional unit planned before full Phase 1 rollout | Became a powerful negotiation tool: gave SAP a credible committed vision justifying a contract that ramped up over time rather than charging for everything from day one |
| Hybrid landscape provisions | Negotiated explicit contract terms allowing hybrid IT landscape during multi-year transition. ECC on-premises for certain operations while moving other systems to S/4HANA Cloud without double licensing for users accessing both environments | Formally recognised co-existence of legacy and cloud systems as legitimate operational reality rather than compliance exception |
| Customised RISE contract terms | Subscription adjustments aligned to phased schedule. Initial subscription covered Phase 1 scope only (approximately 20,000 users). Contractual options to expand in predefined increments. Right to reallocate or reduce licence counts. Cap on annual price increases. Indirect access assurance during hybrid period. Baseline BTP credits with transparent pricing | Tailored contract structure matching business reality with built-in flexibility and cost protection |
Redress Compliance's negotiation approach was built on a clear understanding of SAP's commercial incentives and pressure points. With the ECC end-of-support deadline creating urgency for customers to commit to S/4HANA, SAP was strongly motivated to secure RISE commitments from major enterprise customers, particularly high-profile oil and gas companies whose commitments would serve as reference cases. Redress used this dynamic strategically: SAP's eagerness to secure the commitment became leverage for winning concessions on flexibility, phasing, pricing, and contractual protections that SAP's standard RISE terms did not offer.
The timing of the negotiation was deliberately managed to maximise leverage. Rather than engaging with SAP under time pressure immediately before the ECC support deadline, Redress ensured the negotiation began with sufficient runway to conduct thorough analysis, develop the phased roadmap, and negotiate from a position of informed strength rather than reactive urgency.
The negotiation was structured to present the phased approach as a mutual benefit. SAP would receive a firm, multi-year commitment to RISE with contractual expansion provisions. The customer would receive the flexibility, risk management, and cost alignment the business required. This framing was essential: positioning the custom terms as a partnership rather than a concession made SAP's account team more willing to advocate internally for the non-standard provisions.
| Metric | SAP's Original Proposal | Negotiated Outcome |
|---|---|---|
| Migration approach | Big-bang: all 65,000 users immediately | Three-phase roadmap: approximately 20K, 25K, 20K users |
| Initial subscription scope | Full estate from day one | Phase 1 only: finance and HR |
| Cost versus original proposal | Maximum: full pricing from contract start | Tens of millions saved over migration period |
| Hybrid ECC/S/4HANA co-existence | Not addressed: double licensing risk | Explicit provisions: no double licensing |
| Licence flexibility | Rigid: fixed counts for full term | Reallocation and reduction rights included |
| Price protection | Standard annual increases | Cap on annual increases for renewal periods |
The financial impact was substantial and multi-dimensional. Right-sizing user counts during the baseline assessment meant the initial subscription was based on actual demonstrated need rather than SAP's inflated estimate. The phased structure meant the company paid for cloud capacity as it actually used it rather than years in advance, eliminating the dead cost of idle licences during the transition. The hybrid landscape provisions prevented double licensing costs from running both ECC and S/4HANA simultaneously under SAP's standard terms. The flexibility provisions, including the right to adjust licence counts and the cap on price increases, protected the company against future cost escalation.
Compared to SAP's original all-in RISE proposal, the negotiated deal was expected to save tens of millions of dollars over the total migration period. These savings were not achieved by reducing the scope of the S/4HANA transformation. The company maintained its full commitment to migrating the entire SAP estate to S/4HANA by the target completion date. The savings came entirely from structuring the commercial agreement to match business reality: paying for what the business actually needed when it needed it, eliminating accumulated user count waste, phasing subscription costs to align with actual migration milestones, and negotiating commercial terms reflecting the customer's genuine leverage position.
Funds that would have been spent on idle licences and unused cloud capacity were redirected to training programmes, change management initiatives, and process optimisation investments that would make each subsequent migration phase more successful.
The hybrid landscape provisions proved essential for maintaining business continuity during the phased migration. During Phase 1, while core finance and HR systems operated in the S/4HANA cloud, refinery management, pipeline operations, commodity trading, and distribution logistics continued running on the proven ECC platform without disruption. Users who needed access to both environments, such as finance controllers requiring data from manufacturing cost centres still on ECC or procurement specialists processing purchase orders across both platforms, could operate under a single coherent licence framework without compliance risk or additional licensing costs.
The hybrid provisions also covered automated data flows between environments, ensuring system-to-system integrations required for month-end close, consolidated reporting, and cross-module business processes did not trigger indirect access charges during the transition period.
This approach eliminated the operational risk that had made the original big-bang proposal unacceptable. Critical oil and gas operations that could not tolerate any migration-related disruption were protected by the phased timeline and could be migrated only when thorough testing confirmed readiness. The negotiated contract explicitly defined how licensing worked during each phase, including provisions for users transitioning between environments, data replication between ECC and S/4HANA, and the gradual decommissioning of ECC modules as each phase completed.
"We achieved what we set out to do: a tailor-made journey to S/4HANA. Instead of a forced march, we have a flexible migration in stages that our business can absorb. Each phase is manageable, testable, and reversible if we encounter problems."
CIO, Texas Oil and Gas Enterprise
| Dimension | CIO Assessment |
|---|---|
| Tailored migration path | Flexible migration in stages the business can absorb. Each phase manageable, testable, and reversible |
| Financial discipline | Subscription ramps up as each business area actually migrates. No pre-payment for capacity that cannot be consumed for years |
| Strategic flexibility | If market conditions change, the pace of later phases can be adjusted without breaking the contract. Flexibility alone worth millions in risk mitigation |
| Win-win outcome | SAP gets firm commitment to RISE and S/4HANA. Customer gets the right terms to make it successful. Relationship actually stronger because terms were negotiated honestly |
| Lesson | Detail |
|---|---|
| Reject one-size-fits-all proposals | SAP's standard RISE proposals maximise initial commitment: all users, all systems, all services at the highest price point. Every enterprise has a unique landscape, migration readiness profile, and timeline that should drive the contract structure. The gap between SAP's initial proposal and what can be achieved through informed negotiation is typically tens of millions for large enterprises |
| Right-size before negotiating price | A thorough baseline assessment of current SAP usage before entering price negotiations is essential. Most large estates contain significant inactive users, duplicate licences, retired modules, and over-provisioned user types. Right-sizing ensures the subscription is based on actual need rather than historical accumulation. This is the single highest-ROI activity in any RISE negotiation |
| Secure hybrid landscape provisions | Any organisation that cannot migrate its entire SAP estate in a single phase needs explicit contract provisions for hybrid co-existence when both ECC and S/4HANA are operational. Without these, the organisation faces double licensing risk. Negotiate clear terms defining how licensing works during transition, confirming users accessing both environments are not double-counted, and ensuring data flows do not trigger indirect access charges |
RISE with SAP is SAP's bundled offering for migrating to S/4HANA Cloud. It combines the S/4HANA software licence, cloud infrastructure (hosted by SAP or a hyperscaler partner), SAP Business Technology Platform, migration tools and services, and ongoing support into a single subscription. RISE is SAP's preferred vehicle for moving customers from on-premises ECC to S/4HANA cloud, but the standard terms and pricing are negotiable, particularly for large enterprises with significant SAP estates.
Yes. Although SAP's default proposals assume full-estate commitment from day one, phased contracts are achievable through negotiation. This case study demonstrates a multi-phase approach migrating different business areas sequentially with subscription scaling aligned to each phase. The key is presenting SAP with a credible migration roadmap demonstrating genuine commitment while justifying incremental capacity expansion rather than upfront full payment.
Savings vary based on estate size, the gap between SAP's initial proposal and right-sized baseline, migration duration, and negotiation leverage. For large enterprises (10,000+ users), the difference between accepting SAP's initial proposal and negotiating optimised terms is typically tens of millions over the contract period. Primary savings drivers are user count right-sizing, phased subscription scaling, elimination of double licensing during hybrid periods, and price protection provisions.
Double licensing occurs when an organisation pays for SAP licences on both the legacy ECC system and the new S/4HANA cloud during the transition. Without explicit contract provisions, users accessing both environments may require licensing in each, effectively doubling per-user cost. Negotiating hybrid provisions that address co-existence, confirm single licensing for users accessing both environments, and clarify data flow treatment is essential for any phased migration.
Most large SAP estates contain significant inactive users, duplicate licence assignments, users assigned to higher tiers than their usage requires, and modules no longer actively used. SAP's RISE proposals are typically based on current licence entitlement or user count, not actual active usage. A thorough baseline assessment identifies this waste and establishes a reduced, accurate user count as the foundation for subscription pricing, reducing both initial cost and recurring annual subscription.
More than they typically realise. SAP is under significant commercial pressure to migrate its installed base to S/4HANA Cloud via RISE, and securing commitments from large enterprise customers is a strategic priority. This creates leverage for customers who negotiate from an informed position: SAP's eagerness to secure commitments can be used to win concessions on phasing, pricing, flexibility, hybrid terms, and price protection that standard terms do not offer.
SAP's RISE proposals are complex, commercially significant, and structured to maximise SAP's revenue. Most organisations negotiate a RISE contract once, while SAP's sales teams negotiate hundreds. Independent advisory firms bring deep SAP licensing expertise, RISE contract experience, current market benchmarking data, and negotiation skills that level the information asymmetry, ensuring the customer achieves terms reflecting market reality rather than SAP's opening position.
Redress Compliance provides independent RISE with SAP advisory, S/4HANA migration planning, contract negotiation, and licence optimisation. No SAP partnerships, reseller relationships, or referral arrangements. 100% vendor-independent. Fixed-fee engagement.
SAP RISE Advisory ServicesIndependent SAP advisory. RISE evaluation. Contract negotiation. Licence optimisation. 100% vendor-independent, fixed-fee engagement.