Case Study – Rise with SAP Advisory – U.S. Healthcare Network Saves 30% on RISE with SAP and Protects Patient Care Budget
Background
A regional healthcare network in the U.S. (with multiple hospitals and clinics) was exploring RISE with SAP to move from SAP ECC to S/4HANA. The organization had ~15,000 employees using SAP for finance, supply chain, and HR. In SAP’s initial RISE proposal, the hospital system would receive S/4HANA Cloud, SuccessFactors (HR), and other services under a single subscription.
As a healthcare provider, they placed high importance on data security, regulatory compliance (HIPAA), and ensuring IT costs didn’t siphon funds away from patient services.
Challenges
- Prohibitive Initial Cost: SAP’s first RISE quote was very high – tens of millions over five years – far beyond their budget. The pricing included cloud infrastructure and add-ons that the network didn’t fully need. Leadership was concerned that the bundle likely concealed hidden costs (premium hosting markups, automatic escalators) that could increase costs later.
- Rigid Long-Term Commitment: The standard RISE contract offered little flexibility for a nonprofit healthcare environment with unpredictable funding. The hospital feared being locked into a 5-year term without the ability to scale down if needed. SAP’s one-size-fits-all bundle left no opt-outs, leaving them little recourse if needs or budgets changed mid-term.
- Licensing & Compliance Complexity: The user base ranged from power-users in finance to hundreds of occasional users (doctors accessing analytics). They struggled to map these roles to SAP’s FUE model and feared over-licensing. Moreover, any cloud contract had to meet healthcare regulations. It was unclear whether SAP’s boilerplate terms met all HIPAA requirements for data handling and auditability.
How Redress Compliance Helped
- Needs Assessment & Rightsizing: Redress worked with the hospital’s IT and finance teams to dissect the RISE proposal. They performed a meticulous usage analysis to determine which SAP components and how many users were truly needed. By cutting modules with no clinical/business value and right-sizing user licenses (ensuring staff with basic needs weren’t on expensive Professional licenses), they identified over 25% in potential savings. This rightsizing ensured the hospital wouldn’t pay for shelfware or excessive FUE counts.
- Benchmarking & Alternative Options: Leveraging its experience in healthcare deals, Redress benchmarked the quote against those of similar organizations. They showed that peer institutions secured significant discounts and flexibility from SAP. Redress also evaluated alternatives, such as staying on ECC longer or utilizing third-party support, to provide the client with credible leverage. Armed with data, they approached SAP with a clear message: the hospital had options, knew the market, and expected a better deal.
- Contract Flexibility Negotiation: A key goal was to inject flexibility into the rigid contract. Redress negotiated provisions tailored for healthcare: the final agreement allowed the client to adjust subscription volumes by ±10% each year to account for swings in patient volume or funding. They also secured a shorter term (3 years instead of 5) with an option to renew, giving the network an “out” if the cloud benefits didn’t meet expectations. Additionally, they ensured critical data protections were included (e.g., all patient data stays in-country and SAP signs a HIPAA Business Associate Agreement).
- Cost Reduction & Incentives: Redress’s strategy led SAP to apply healthcare sector incentives and offer deeper discounts. SAP removed or heavily discounted bundled services the client didn’t need and offered credits for the hospital’s existing licenses. The final deal came in about 30% lower in total cost than the original quote. Redress also negotiated price protections, capping annual rate increases, so the hospital had predictable IT costs year over year.
Outcome and Impact
With Redress, the healthcare network completed its SAP cloud transition on terms that aligned with its mission and budget. Cost-wise, the final RISE contract was approximately 30% cheaper than SAP’s initial offer, saving millions that can be allocated to patient care and medical technology.
The contract is also uniquely flexible for a cloud deal. The hospital can scale usage up or down within set bounds each year, avoiding the typical SaaS trap of paying for unused capacity. They also have a mid-term checkpoint after three years to reevaluate or exit if needed – a safety net rarely seen in standard SAP agreements.
Importantly, this solution didn’t compromise on compliance or service. All regulatory requirements (HIPAA, data residency, audit rights) are baked into the contract. The hospital moves to RISE with SAP confident that sensitive data is handled properly and that they won’t face compliance surprises.
Business outcome: The healthcare provider now enjoys a modern, cloud-based SAP system with a predictable cost structure and agility to respond to change. By avoiding overcommitment, they maintain the ability to invest in what matters most – quality patient care – rather than overspending on enterprise software.
Read about other Rise with SAP Case Studies.
Client Quote
“Redress Compliance treated our budget and mission as if it were their own. They cut through SAP’s complex proposal and found us a path that preserves critical funds for patient care. We went from feeling cornered by a huge contract to feeling in control of our tech future. Redress’s independent advice gave us confidence that every decision was in our best interest.” – CFO, Regional Healthcare Network
Call-to-Action
For healthcare and beyond, an SAP cloud deal should never force trade-offs between budget and mission. Before committing to RISE with SAP, contact Redress Compliance for a free consultation. We’ll help you negotiate a right-sized, compliant, and cost-effective contract that safeguards your organization’s priorities.
Read about our Rise with SAP Contract and Licensing Advisory Services.