Overview
Client embarked on a multi-faceted SAP transformation journey where they sought to migrate their ECC environment to S/4HANA. As part of this journey, the client engaged UpperEdge to support key decisions and commercial negotiations related to the following:
- SAP – Licensing Model evaluation (RISE v. Perpetual), selection and negotiation
- Systems Implementation – Multi-Vendor solicitation approach and negotiation to mitigate critical risks, align RACI, and optimize commercials
Approach
UpperEdge provided guidance and market insight into an overall go-to-market strategy to assess and negotiate:
- SAP Software (RISE & Perpetual models)
- System Implementation (Analyze & Design Phase)
- System Implementation (Build & Run Phase)
Leveraging negotiated transparency, deep market knowledge and a proven approach, UpperEdge enabled the client to build a detailed 10-year TCO option analysis that led to the selection and negotiation of SAP RISE to be hosted on Azure.
For the System Implementation scope, a strategic joint Sole-Source Solicitation approach was conducted to ensure the SI Vendor aligned with program scope, roles & responsibilities, and program structure.
UE provided detailed Cost & Effort templates for the client to include in the Solicitation which were utilized to evaluate the merits of each vendor’s proposal. UE also delivered detailed Market Benchmarks which provided transparency into overall deal competitiveness & areas of opportunity.
Negotiated Outcome
As a result of the negotiation strategy laid out, the client was able to achieve Competitive to Best-in-Class RISE and SI Services Agreements.
These agreements will provide the highest degree of program and financial accountability on behalf of the SI vendors and will ensure long-term commercial predictability and flexibility in their SAP environment.
SAP RISE Deal Highlights:
- Achieved 12% reduction over 5-years compared to the original proposal through targeted negotiations, executive alignment, and leveraging SAP’s quarter-end
- Significantly optimized existing maintenance base by leveraging terminations of shelfware
- Negotiated commercial flexibility via Exchange Rights and future cloud price protections (i.e., IBP Solutions, S/4HANA Cloud, Service & Asset Manager)
Systems Integration Services Deal Highlights:
- Optimized total SI Fees, achieving $21.5M reduction
- Established a clear definition of Roles & Responsibilities across vendors ensuring the seams between the two vendors were appropriately managed
- Negotiated a financial accountability structure focused on driving cost and timeline certainty along with increased fee transparency/predictability
- Reduced overall program delivery risks and financial risk of change orders
