SAP S/4HANA Migration Benchmark
How a manufacturing group used ISVCOSELL to benchmark SAP S/4HANA migration costs and save $9.4M versus initial proposals.
Key points
- The total program cost in SAP's initial proposal reached $38 million over five years, a figure the group's IT sourcing team immediately flagged as requiring independent validation.
- S/4HANA Cloud licensing, priced by SAP based on their initial FUE sizing, was overstated by 22% versus comparable manufacturing enterprises.
- Correcting the FUE count alone reduced licensing cost by $4.1M over five years.
- Based on the group's transaction volumes, this would generate approximately $1.4M in annual document access charges by Year 3, costs that did not appear anywhere in SAP's proposal summary.
- SAP's initial response was to offer a 5% "goodwill discount" on the total contract value, framing it as a migration incentive.
- The final negotiated outcome reduced the five-year total contract from $38M to $28.6M, a $9.4M reduction.
- The BTP bundle was restructured to reflect actual integration needs, reducing BTP capacity by 65% and saving $2.1M. The Digital Access licensing was restructured with a capped document access agreement that limited annual charges regardless of transaction volume growth.
- Price escalation was reduced to 2.5% annually, and the contract was shortened to three years with a renewal option, preserving the group's ability to renegotiate as the S/4HANA market matures.
- The $9.4M reduction in contract value was the headline figure, but the structural improvements to the agreement, the Digital Access cap, the reduced escalation rate, and the shortened term, represent ongoing value that compounds over the contract lifecycle.
- Oracle · Retail Fortune 500 Retailer: $12M Saved on Oracle Renewal Read case study →Microsoft · Financial Services Global Bank: 35% Below Market on Microsoft EA Read case study →SaaS Portfolio · Healthcare Healthcare System: $8M Savings Across SaaS Portfolio Read case study →.
More Enterprise Benchmark Results
Oracle · Retail Fortune 500 Retailer: $12M Saved on Oracle Renewal Read case study →Microsoft · Financial Services Global Bank: 35% Below Market on Microsoft EA Read case study →SaaS Portfolio · Healthcare Healthcare System: $8M Savings Across SaaS Portfolio Read case study →
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Related reading
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- Microsoft · Financial Services Global Bank: 35% Below Market on Microsoft EA Read case study
- Oracle · Retail Fortune 500 Retailer: $12M Saved on Oracle Renewal Read case study
- SaaS Portfolio · Healthcare Healthcare System: $8M Savings Across SaaS Portfolio Read case study
Pricing data and source text from the VendorBenchmark library. Co-sell reading is this site’s.