Background
A major UK-based financial services group operating across insurance and asset management with approximately 10,000 employees was facing a complex SAP situation that combined compliance risk with cloud transformation pressure.
The company ran SAP ECC for financials and was evaluating RISE with SAP to move to S/4HANA. Simultaneously, the company was undergoing a SAP licence audit. SAP auditors had flagged potential indirect access issues: the firm's customer portal and CRM (Salesforce) were pulling data from SAP without proper licensing. SAP hinted at over £5M in back-licence fees if not resolved.
Compliance warning. SAP's sales team aggressively pushed a RISE with SAP deal that would purportedly "cleanse" these compliance issues. The client was interested in moving to the cloud but wary of being strong-armed into an overpriced contract under audit duress.
The Challenges
1
Audit leverage and compliance pressure. SAP was using the looming indirect access charges (estimated at £5M+) as leverage to expedite a quick RISE sign-up. The firm felt cornered. They had to resolve the compliance issue but did not want to rush into a bad deal.
2
High initial pricing. The RISE offer was roughly 30% higher than the firm's current SAP spend over a similar term. It bundled many services and converted existing licences to subscriptions, but the value was not evident. The client suspected the quote included a "penalty premium" inflated by the audit situation.
3
Contract terms and currency risk. The standard SAP contract had rigid terms and was priced in euros. As a UK company budgeting in GBP, this introduced currency risk. The 5-year term offered limited flexibility to adjust for divestitures or post-Brexit regulatory shifts.
How Redress Compliance Helped
1. Audit defence and leverage neutralisation. Redress separated the compliance issue from the cloud deal. Their experts quantified the true indirect usage exposure and found SAP's £5M claim to be vastly inflated. Using SAP's own framework, Redress demonstrated that the real compliance cost would be much lower. They made clear the client was willing to settle the audit separately, neutralising SAP's pressure tactic and forcing SAP to negotiate RISE on its merits.
2. Fair-market pricing. With the audit threat defused, Redress focused on improving the RISE offer. Benchmarking against similar UK/EU deals showed the initial quote was far above market. Redress negotiated vigorously, securing a cost reduction of approximately 30% in subscription fees by insisting on standard discounts and removing unnecessary components. An unused HR cloud service (SuccessFactors) was discontinued, resulting in immediate cost savings.
3. Contractual protections. Redress restructured contract terms to favour the client. They obtained a clause waiving all indirect access claims in the new agreement. SAP would drop those charges entirely once RISE was in effect, eliminating the compliance liability. Additionally, Redress negotiated flexible terms: a mid-term review at year 3 for potential re-scoping, and rightsizing provisions to adjust user counts by plus or minus 15% annually.
4. Future exit flexibility. Although SAP typically does not allow easy exits, Redress secured language that if the client chose not to renew after 5 years, they would receive credit for the value of their converted licences toward any future on-premise licences. The company could leave RISE later without starting from zero on licensing.
SAP's initial offer vs negotiated deal. SAP's initial offer: 30% above current SAP spend, bundled unnecessary SuccessFactors, EUR-denominated with currency risk, rigid 5-year term with no flexibility. Redress-negotiated deal: 30% below SAP's initial quote, unused modules removed, GBP pricing with FX protections, mid-term review plus 15% annual rightsizing.
Outcome and Impact
30% cost reduction. RISE contract reduced by approximately 30% from SAP's initial quote, saving around £3M. Subscription now priced in GBP, insulating the firm from post-Brexit currency volatility.
Audit threat eliminated. The signed agreement explicitly resolves all prior audit issues. The £5M+ indirect access penalty threat vanished. The firm begins its RISE journey with a clean compliance slate.
Flexible contract terms. Mid-term review at year 3, plus or minus 15% annual rightsizing, and an exit card at term end with licence credit. The client can adjust if the business downsizes or divests units.
Restored confidence. What began as a stressful audit showdown ended as a win-win. The firm modernises on SAP's cloud, avoids compliance risks, and maintains control of costs and leverage going forward.
"We felt backed into a corner by the audit. SAP was holding a hefty fine over our heads. Redress completely changed the game. They neutralised the audit threat and then negotiated a cloud deal that was fair and flexible. We went from feeling extorted to feeling like a valued customer again. In the end, we are moving to the cloud with zero compliance baggage and a contract we can live with. That outcome is priceless." CFO, UK Financial Services Company
Frequently Asked Questions
Can SAP use an audit to force a RISE with SAP migration?+
SAP cannot legally force a migration, but they frequently use audit findings as commercial leverage to push RISE subscriptions. The key defence is to separate the audit settlement from the cloud deal: address compliance independently, then negotiate RISE on its merits. An independent advisor can quantify the true exposure and prevent SAP from inflating audit claims.
How much discount is realistic on RISE with SAP?+
Discounts of 25-40% off list price are common in well-negotiated RISE deals, depending on deal size, timing (SAP quarter/year-end), and competitive alternatives. This case achieved 30%, in line with market benchmarks. Without independent benchmarking, most enterprises overpay significantly on their initial RISE subscription.
Can RISE with SAP contracts be priced in local currency?+
Yes. While SAP defaults to EUR pricing for European deals, local currency pricing (GBP, CHF, NOK, etc.) can be negotiated. This case secured GBP pricing with FX protection clauses, eliminating budget uncertainty from exchange rate fluctuations.
What happens to existing SAP licences when moving to RISE?+
Existing on-premise licences are typically "converted" to cloud subscriptions. However, the conversion terms vary significantly. In this case, Redress secured a clause ensuring the client would receive credit for converted licence value if they chose not to renew RISE. Without such protections, companies risk losing the value of their perpetual licences permanently.
What flexibility provisions should a RISE contract include?+
Key provisions include annual rightsizing (typically 10-15% user adjustment), mid-term reviews for re-scoping, exit terms with licence credit, removal of unused modules, and escalation caps on annual price increases. This case secured all of these, turning a rigid 5-year lock-in into an adaptable agreement.
Related Resources
FF
Fredrik Filipsson
Co-Founder, Redress Compliance
Former Oracle, SAP, and IBM. Now helping enterprises worldwide negotiate better software deals. 20+ years in enterprise licensing, 500+ clients served. Fredrik specialises in RISE with SAP negotiations, SAP audit defence, and contract restructuring for financial services organisations.
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