Case Study – Rise with SAP Advisory – U.S. Manufacturing Company Avoids Costly Shelfware and Secures 35% Savings on RISE with SAP
Background
A large American manufacturing firm (industrial equipment sector) was running SAP ECC on-premise with heavy customizations for plant operations.
They were considering RISE with SAP to upgrade to S/4HANA Cloud. SAP’s RISE proposal bundled core S/4HANA with SAP Business Technology Platform (BTP) credits and SAP Analytics Cloud for analytics.
The landscape consisted of on-site factories and a central data center. The company had thousands of SAP users, from office staff to factory floor operators, and integrated SAP with IoT systems on production lines.
Challenges
- Escalating Cloud Costs: The initial RISE quote was $8 M over three years – significantly higher than expected. SAP’s pricing included cloud infrastructure and a limited BTP “starter pack.” The team feared overage fees if their extensive custom apps consumed more BTP resources than were included. They also suspected the quote was padded with services they wouldn’t fully use, effectively shelfware.
- Bundled Licensing Rigidness: The manufacturer’s usage profile was unusual – a core of 500 heavy ERP users but over 3,000 shop-floor users with minimal access. SAP’s bundled user licensing (FUE model) risked over-counting these light users. Standard RISE contracts wouldn’t let them drop unused subscriptions mid-term if they overestimated. They needed a way to right-size the contract to actual usage.
- Migration Timing Concerns: SAP pushed for a single big-bang migration of all plants onto RISE. This raised risks around downtime and change management. The company wanted a phased approach (plant by plant), but SAP’s all-in proposal didn’t accommodate a hybrid transition or dual operations.
- Compliance & Indirect Use: With sensors and third-party systems feeding data into SAP (IoT integration), the firm worried about indirect access charges. Moving to RISE without clarity on IoT data licensing could expose them to unexpected fees or compliance gaps.
How Redress Compliance Helped
- Usage Analysis & FUE Optimization: Redress performed a detailed usage analysis. They mapped each user role to appropriate FUE levels, ensuring that thousands of limited shop-floor users were correctly classified (many as self-service users at 1/30th of an FUE each). This revealed SAP had overestimated required FUEs by ~30%. By eliminating inactive accounts and using lower-tier licenses for basic users, Redress slashed the projected subscription size. They also flagged unused modules in the quote, using this shelfware identification to demand their removal.
- Phased Deployment Plan: Redress modeled a phased migration. Instead of a single massive RISE contract covering all plants on day one, they proposed starting with corporate headquarters and one pilot plant on RISE, with others to follow over the next two years. They negotiated a dual-use clause, allowing both legacy ECC and new S/4HANA to run in parallel during the transition without incurring extra fees. This allowed the company to migrate factories one by one without incurring double licensing fees or risking operational disruption.
- Cost Reallocation & Negotiation: The team tackled cost drivers head-on. By demonstrating that self-managing parts of the environment were viable, Redress pressured SAP into major concessions. SAP increased the included BTP capacity and capped any excess consumption fees. Redress also leveraged industry benchmarks to target a steep discount. Ultimately, these efforts resulted in approximately 35% savings off the initial subscription cost.
- Compliance Safeguards: Redress addressed the indirect access worry by negotiating explicit terms. The final contract covered known IoT and shop-floor system interfaces, so the client wouldn’t face surprise fees for those data flows. It also documented the usage assumptions (e.g,. IoT transaction volumes) to prevent future disputes. With these protections, the company entered RISE confident that its hybrid operations wouldn’t trigger unexpected licensing costs.
Read about other Rise with SAP Case Studies.
Outcome and Impact
By engaging Redress, the manufacturer transformed an intimidating RISE proposal into a manageable, tailored contract. Cost-wise, the final 3-year RISE agreement totaled approximately $5.2 million, instead of $8 million – a roughly 35% savings. This $2.8 million reduction resulted from stripping out unused components and securing better pricing on the necessary ones. Importantly, the value has improved: the company now receives significantly more BTP resources and flexibility for the same amount of money as SAP’s original offer.
The company also gained confidence in moving to S/4HANA Cloud. They can modernize at their own pace – one plant at a time – without incurring upfront costs for all users and capacity. The phased approach and dual-use allowance mean minimal disruption to manufacturing operations. On the compliance front, the firm effectively “immunized” itself against known indirect usage risks. No sudden audit surprises lurk: data integrations are covered and agreed in writing.
Strategic benefits include better budget predictability and agility. If the company automates more processes or adjusts staffing, the RISE contract can realign licenses at the next phase rather than wasting money. The manufacturer now views SAP as a continued partner, but on their terms – a stark change from the one-sided deal initially presented.
Client Quote
“Our SAP rep wanted us to go all-in blindly. Redress showed us a smarter path. They squeezed out the fluff we’d have paid for but never used, and got SAP to agree to a phased approach that fits how we operate. We ended up saving a fortune and can roll out S/4HANA without risking our production schedule. Having an independent expert solely in our corner made all the difference.” – IT Director, Manufacturing Firm (USA)
Call-to-Action
Planning a move to RISE with SAP in manufacturing or any industry? Don’t sign on SAP’s dotted line without a second look. Contact Redress Compliance for a free RISE readiness and cost assessment. We help you negotiate flexible terms, control cloud costs, and safeguard your operations – so you get the benefits of SAP’s cloud on your terms.
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