Case Study – Rise with SAP Advisory – U.S. Retailer Achieves 25% Cost Savings and Seasonal Flexibility in RISE with SAP Deal
Background
A nationwide retail company (500+ stores and a growing e-commerce platform) was negotiating RISE with SAP to migrate from SAP ECC to S/4HANA.
The retailer utilized SAP for finance, inventory, and supply chain management, integrating it with their online storefront and point-of-sale systems.
SAP’s RISE proposal bundles core S/4HANA Cloud ERP, SAP Commerce Cloud, and SAP Ariba into a single subscription. Given thin retail margins and seasonal business swings, the company was highly sensitive to cost and contract flexibility.
Challenges
- Over-Bundled & Costly Package: SAP’s initial offer was packed with extras – including analytics and Business Network access – inflating the price to $10 M over five years. Several components would likely go unused (shelfware) yet still cost money. The retailer needed to strip the deal to the essentials and cut these unnecessary costs.
- Seasonal User Fluctuations: The retailer’s workforce and system usage peak during holidays and dip afterward. Standard RISE licensing (fixed FUE count) didn’t account for these swings. They faced paying year-round for peak capacity, which was only needed for a few months, resulting in wasted money during off-peak periods. Without the flexibility to scale down after peak season, the contract was a poor fit.
- Indirect Access Risk: Integrating the online store with SAP meant heavy third-party interactions (customer orders flowing into SAP). They worried these interactions might incur indirect access fees under SAP’s policies. The retailer needed assurance that e-commerce integrations wouldn’t trigger a surprise audit bill.
How Redress Compliance Helped
- Contract Decomposition: Redress analyzed the RISE bill of materials line by line. They identified components unnecessary for the retailer’s operations (e.g. an included SAP Analytics Cloud license the client would not use). Redress negotiated to remove or separately price these items, preventing the retailer from paying for shelfware. This immediately lowered the projected spend.
- Flexible Licensing Terms: Aware of seasonal peaks, Redress pushed for an elastic licensing model. While SAP rarely allows short-term reductions, they secured a compromise: the contract was structured with a base FUE count plus an option to add extra users during peak months (at pre-negotiated rates) and scale back afterward. This seasonal capacity clause helps avoid overspending in off-peak periods. Redress also negotiated a cap on annual cost increases, so even with business growth, expenses won’t balloon unpredictably.
- Indirect Usage Protections: Redress ensured SAP formally included the retailer’s online sales channels in the contract’s usage scope, ensuring no indirect access penalties for normal operations. The agreement explicitly covered digital orders and integrations, so an influx of e-commerce activity wouldn’t trigger an audit surprise.
- Price Benchmarking & Negotiation: Redress leveraged retail industry benchmarks, knowing SAP often grants discounts to win cloud deals in this sector. They targeted ~25% savings and presented alternative paths (e.g., extending ECC life) to strengthen the client’s stance. Ultimately, SAP relented with a much-improved offer. In the final agreement, the retailer achieved about 25% savings off the initial quote, making the RISE move financially viable.
Outcome and Impact
By engaging Redress, the retail company secured a RISE with SAP contract tailored to its needs.
The final 5-year deal totaled approximately $7.5 million, representing a savings of around $2.5 million (25%) compared to the original $10 million proposal. Those savings improved the project’s ROI and freed funds for customer-facing initiatives, such as store upgrades and e-commerce enhancements.
Crucially, the retailer gained flexibility to align costs with its business cycle. They no longer pay year-round for licenses only needed at holiday peak – the seasonal scaling clause ensures IT spend tracks actual usage (a rare win in SaaS).
The risk of unexpected fees was also eliminated. By addressing indirect usage in the contract, the company can confidently integrate its online storefront and third-party apps with SAP, knowing that a surge in digital orders won’t trigger unexpected charges.
Overall, the outcome is a more efficient and predictable SAP engagement. The retailer moved to a modern S/4HANA platform with confidence that costs are contained and transparent. With Redress’s guidance, a boilerplate SAP deal became a strategic asset rather than a liability.
Read about other Rise with SAP Case Studies.
Client Quote
“Retail is a tough environment – every dollar counts. Redress Compliance understood that and helped us cut out the fat from SAP’s proposal. We got the cost down and even built in flexibility for our seasonal business. It’s the first time I’ve seen SAP bend their standard terms. Having an independent expert who knew exactly where to push made all the difference in getting a deal we’re actually happy with.” – CFO, National Retail Co.
Call-to-Action
Before you accept SAP’s one-size-fits-all cloud contract, see what a tailored deal could look like. Contact Redress Compliance for a free RISE with SAP contract review. We help retailers and other enterprises negotiate out the fluff, lock in flexibility, and save money – so your SAP transformation delivers real value.
Read about our Rise with SAP Contract and Licensing Advisory Services.
