ISG assists a global multi-billion-dollar commodity trading company in successfully migrating from its SAP ERP central component (ECC) platform to S/4HANA, saving $80 million in the on-premise and cloud redesign and sourcing process.
Opportunity
A global commodity trading company wanted to migrate from “SAP Classic” to S/4HANA. It also wanted to simultaneously mitigate its exposure to digital access, platform migration, maintenance and cloud costs. To ensure the best possible outcome, ISG deployed a team of SAP licensing experts and software architecture and technical auditors who worked with the company’s various stakeholders to create an engagement approach which eliminated risks and optimized costs.
We created a “current state” inventory of its existing SAP infrastructure which identified surplus and under-licensed assets. Then ISG conducted workshops to identify and rationalize S/4HANA sizing requirements, license unit tiering, upgrade requirements, interfaces, third-party applications and a deployment roadmap. Finally, ISG developed a bill of materials (BOM) based on the outputs of the current state assessment and the company’s roadmap and deployment roadmaps.
Imagining IT Differently
ISG strategically leveraged our reputation as a “deal advocate” to achieve the following deal attributes:
- Pricing: ISG advised on pricing based on the company’s invest and run costs, our deep market data, conversion credits, reduced maintenance rates, phase-in of maintenance and software-as-a-service (SaaS) subscription fees.
- Contract Flexibility: We secured value flexibility on the on-premise engines and step-in on the cloud products.
- Risk Mitigation: ISG helped it suspend compliance audits, conform digital access based on its business model, and expand territory restrictions and affiliate use.
- Partnership: We obtained an upfront SAP investment to ensure a successful transition from ECC to S/4HANA.
Future Made Possible
The company received a market-leading agreement which achieved each of the cost and risk mitigation goals it outlined at the engagement’s start. Under the agreement negotiated by ISG, it realized the following benefits:
- Savings of $80 million,
- A maintenance holiday of 3 years,
- Flexibility to manage its SAP estate for a period of 3 years before crystallization of the environment,
- Audit holiday of 2 years,
- Free MaxAttention for a period of 2 years, and
- An upfront SAP investment of free training, which covers the first year of the transition from ECC to S/HANA.
