ISG helps a Fortune 100 agricultural cooperative in creating its agreement to migrate from ERP central component (ECC) 6.0 to S/4 HANA, saving it $14.2 million in the process.
Opportunity
A Fortune 100 agricultural cooperative engaged ISG to help it negotiate an agreement to migrate from ECC 6.0 to S/4HANA based on its deployment roadmap, approved capital and operating expenditure (CapEx and OpEx) budgets and SAP feature set requirements.
To drive a success, ISG deployed a team of SAP licensing experts and software architecture/technical auditors who worked with the company’s various stakeholders to create a S/4 negotiating strategy to align the proposed license, subscription and maintenance costs to market. ISG created a “current state” inventory of its existing SAP infrastructure based on its review of USMM, SLAW files, XI/PI/PO data extracts, order forms, cloud agreements, maintenance invoices, etc.
We conducted workshops to identify and rationalize S/4HANA sizing requirements, license unit tiering, upgrade requirements, interfaces, third-party applications and a deployment roadmap. ISG also developed a bill of materials (BOM) based on the outputs of the current state assessment and a client and deployment roadmap.
To drive a success, ISG deployed a team of SAP licensing experts and software architecture/technical auditors who worked with the company’s various stakeholders to create a S/4 negotiating strategy to align the proposed license, subscription and maintenance costs to market. ISG created a “current state” inventory of its existing SAP infrastructure based on its review of USMM, SLAW files, XI/PI/PO data extracts, order forms, cloud agreements, maintenance invoices, etc.
We conducted workshops to identify and rationalize S/4HANA sizing requirements, license unit tiering, upgrade requirements, interfaces, third-party applications and a deployment roadmap. ISG also developed a bill of materials (BOM) based on the outputs of the current state assessment and a client and deployment roadmap.
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 and secure participation rights in SAP’s Agricultural Products Roadmap Council.
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 $14.2 million,
- A maintenance holiday of 2 years,
- Flexibility to manage its SAP estate for a period of 3 years before crystallization of the environment,
- Single-use metric negotiation, eliminating audit compliance risk,
- Free MaxAttention for a period of 2 years,
- Training seats covering the first year of transition at no cost to enable the company to support its creation of an internal SAP Center of Excellence, and
Company’s participation in SAP agricultural commodity product roadmap council.
