Overview
A $21B paper and packaging company embarked on a transformation program to move their current ERP landscape to S/4HANA and optimize their IT run model and costs. Their S/4HANA evaluation included a detailed analysis and selection process to make a platform decision between an on-premise model or RISE.
This client also evaluated whether to compete or sole-source their ERP, SI, and AMS scope, and ultimately opted for a sole-source approach. All the fees of the executed agreement were valued at over $330M.
Approach
UpperEdge provided guidance and market insight into an overall go-to-market strategy to evaluate the benefits and drawbacks of RISE. The UpperEdge team also provided support for negotiating the SI, AMS, and I&O services to address the transformation and new demand for the S/4HANA platform.
This formed 4 distinct workstreams that provided a fully integrated sourcing strategy to support 4 sole-source negotiations:
- SAP Software (RISE & Perpetual Proposals)
- Deloitte Systems Integration Services
- Deloitte AMS expansion for both legacy and S/4HANA
- HCL I&O Services expansion to include Centralized, Field, and Network Services
Leveraging deep SAP market knowledge and a proven negotiation approach, UpperEdge enabled the client to analyze the financial, commercial, and operational options that led to the selection and negotiation of SAP RISE.
The client used UpperEdge’s SI and AMS market intelligence to drive competitiveness and transparency into cost and effort to ensure improved financial accountability, operational flexibility, and risk mitigation for the transformation and steady state support.
UpperEdge facilitated discussions with tower leads to drive improved metrics, pricing models, and cost improvements that were validated against UpperEdge benchmarks.
Negotiated Outcome
As a result of UpperEdge’s negotiation strategy, the client achieved Competitive to Highly Competitive market deals for SAP RISE, Deloitte SI and AMS as well as HCL I&O Services. Here is a breakdown of the highlights from each deal:
SAP RISE Highlights:
- Achieved $5M (or 16%) Reduction in Overall Fees from initial proposal
- Obtained Highly Competitive commercial terms including cost transparency, ramped subscription commitment, price and renewal protections and Swap Rights
Deloitte SI Deal Highlights:
- Negotiated $14M reduction in total fees in a sole-source environment
- Obtained Best-in-Class fixed fee contingency as well as highly competitive rate locks, termination rights, and flexible commercial models (fixed & T&M)
Deloitte AMS Deal Highlights:
- Negotiated $12.4M fee reduction in a sole source environment
- Obtained increased flexibility with improved dead-band, Best-in-Class rate locks, SLA structure and credits
HCL I&O Deal Highlights:
- Negotiated in-term savings of $6M through cost reduction year-over-year, not just a one-time credit or one year savings
- Obtained Best-in-Class commercial terms and pricing for four added services areas
UpperEdge helps companies form strategic relationships with vendors like SAP and IT services providers like Deloitte and HCL. Explore our SAP advisory services and IT services advisory services to see how we can help you maximize the value of your key IT agreements.
