This is the third installment in our SAPPHIRE blog series focused on helping executives make the most of SAP’s largest annual event and maximize the value they receive from their SAP relationship. Stay tuned for more blogs in the upcoming weeks leading up to SAPPHIRE.
Our previous post in the series can be read here: How to Make the Most of Your 2018 SAP SAPPHIRE Experience.
In the past year, SAP made commercial updates to Ariba and Concur that impact transparency and may complicate your ability to obtain renewal price protections. If your company has any upcoming Ariba or Concur negotiation with SAP, be aware of these relevant updates as there may be related opportunities to drive greater value to the organization through cost avoidance.
Repackaged Ariba Products
Since 2017, SAP repackaged its Ariba products into new solutions so those who contracted with Ariba prior to 2017 will likely have to be re-educated on Ariba’s products and packaging.
While they will point you to their website to freshen up on Ariba’s products, we recommend asking SAP for a walkthrough of your prior Ariba products and how they compare to the new solutions. This should provide you with the information you need to appropriately gather your requirements for your Ariba negotiation.
Tiered Ariba Pricing
It should come as no surprise that the repackaging of Ariba products also comes with new pricing. SAP introduced a tiered pricing model that provides some additional discounting as you commit to more during the subscription term.
While additional discounting of SAP’s Ariba products is certainly a positive thing, they usually only expose you to the pricing for the tier you are procuring. This means that any monetary benefit that can be realized by moving to the next tier will not be presented to you. As such, we recommend asking SAP to provide transparency into all relevant volume tiers, so you can commit to a higher volume tier if it makes financial sense to do so.
Premium for Additional Concur Expense Reports
Counterintuitive and very much the opposite of what SAP is offering to Ariba customers with tiered pricing, they have taken a hard line if you require additional expense reports beyond your subscription commitment for Concur during the term. Rather than providing flat or better pricing for additional expense reports, SAP almost penalizes Concur customers with a premium on these during the term.
If you received flat or better pricing for additional expense reports during your previous Concur subscription term, leverage it. If you haven’t, provide your company with some flexibility within your commercial terms by adjusting other components of your deal such as how you are billed. For example, quarterly billing versus monthly billing for Concur will provide your company with the ability to smooth out potential overages attributable to a peak month over a 3-month period.
Concur Renewal Increases and Protections
While we haven’t seen SAP exhibit the same level of renewal increases that we have seen from other cloud vendors such as Microsoft and Salesforce, it doesn’t mean that SAP will not employ the strategy that others have trail-blazed to meet their Capital Markets Day commitments to Wall Street. To protect this strategy as an option in the future, SAP has been hesitant to offer Concur customers renewal protections on competitive pricing.
Though SAP will not offer the same level of renewal protections they offered in other cloud portfolio products, we have seen them offer protections to Concur customers in the past. Therefore, we recommend leveraging your company’s prior precedent with SAP. If you have no prior precedent, we always recommend ‘hanging your hat’ on the fact that your company values predictability and that this is something that the cloud market is bringing to bear for cloud customers across the board.
These are just a few updates we have encountered related to Ariba and Concur that should impact your negotiation strategy with SAP. Overall, stay informed of SAP’s various product and pricing changes to help ensure you purchase the optimal solution for your organization without letting cost-saving opportunities slip through the cracks.
Additional posts from this series:
- SAP’s Indirect Access Pricing for the Digital Age
- How to Make the Most of Your 2018 SAP SAPPHIRE Experience