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SAP Insight: ITAA facilitates Global Manufacturer in S/4HANA Contract Migration Decision

*Apex Industries is a global leader in manufacturing renewable packaging, with a focus on environmental, social and economic sustainability.

Challenges

In their strategic move towards SAP S/4HANA, the company faced a twofold challenge. Firstly, they needed to determine the most suitable S/4HANA product for their unique requirements. Secondly, due to a series of acquisitions, they found themselves holding multiple SAP contracts across different SAP entities. Their goal was to streamline and consolidate these agreements.

ITAA stepped in to guide Apex Industries through this complex process. Leveraging their extensive expertise with S/4HANA, ITAA meticulously explored all available options. They evaluated each choice based on Apex Industries’ existing usage, future plans, and both immediate and long-term objectives. From the initial investigation to the final contract signing, ITAA provided unwavering support, ensuring a seamless transition.

 

The Solution

Review current requirements

Apex Industries required a thorough review of their existing licensing landscape to gain insights into their current usage. This analysis was crucial in determining their precise requirements for the upcoming contract. To achieve this, ITAA created an Effective License Position (ELP), which also included an assessment of Indirect Access. This comprehensive evaluation identified any risks in their estate that needed to be managed and allowed Apex Industries to make informed decisions regarding their licensing needs.

Furthermore, ITAA played a pivotal role in optimizing Apex Industries’ license consumption. They employed various strategies, including an analysis of Named User assignments, ensuring that the correct Named User licenses were utilized. By doing so, ITAA assured cost-effectiveness and compliance for Apex Industries.

 

Review future requirements 

The next stage was to understand Apex Industries future requirements and long-term strategy with SAP. ITAA collaborated with them to forecast potential product changes over the next 3-5 years. Additionally, they explored whether Apex Industries planned to transition to the cloud or remain on-premise.

 

Calculate costs based on migration options 

ITAA have a comprehensive database of benchmarking information as well as insights and research into SAP’s roadmap of solutions. Using their experience and this knowledge, ITAA created cost models to identify the potential value and assess the cost of

  • S/4HANA for on-premise
  • S/4HANA Cloud, public edition
  • S/4HANA , private edition
  • RISE with SAP
  • remaining on ECC (their current version of SAP)

 

S/4HANA Decision

Apex Industries had not defined their future IT and during the current requirements investigations, ITTA also discovered a significant amount of non-compliant software use. These reasons led Apex Industries to migrate to S/4HANA on-premise for the purpose of reducing risk, consolidating contracts and preparing to migrate to S/4HANA Cloud in the future.

 

Negotiation Support

ITAA developed a strategy to help Apex Industries negotiate an optimal S/4HANA on-premise agreement for their requirements. As an added challenge, SAP’s reluctance to sell products that are not cloud-based makes it more difficult to purchase S/4HANA on-premise at a low price.

To provide Apex Industries with all the tools they required to communicate with SAP yet still avoid a license audit, ITAA devised an effective strategy and project plan that incorporated all known goals and identified leverage. The advice, guidance and support provided by ITAA enabled Apex Industries to broker a viable deal with SAP for a product that they are reluctant to sell to a brand-new SAP entity.

 

Negotiation Execution

During the negotiation, ITAA supported both the technical and procurement teams to positively influence communication and data sharing. Proposals were benchmarked and thoroughly reviewed to identify areas to counter or adjust. Regular workshops were organized with Apex Industries to ensure the deal progressed efficiently and that the goals of this negotiation were always at the forefront of decision-making.

 

Outcome

Apex Industries successfully negotiated a better-than-average deal with SAP, even in the face of challenging circumstances.

Leveraging ITAA’s insights and their deep understanding of SAP’s S/4HANA solution sales process, Apex Industries managed to achieve substantial cost savings. They successfully trimmed 63% from their initial expenses and slashed annual support costs by more than 34%.

The main benefit that Apex Industries derived from this approach was ITAA’s meticulous preparation. Apex Industries’ end goals were always their primary focus and the clarity they provided regarding the available options assisted them in making informed decision. ITAA provided Apex Industries the confidence that their choice will be the right one for at least the next five years.

The process also ensured Apex effectively communicated with SAP, established a robust foundation for future collaboration and led to an above-market-average deal for their new contract. The new agreement not only addressed their initial challenges but also provided them the flexibility to transition to S/4HANA Cloud at their own pace over the next few years.

*Protecting our clients’ confidence is of the utmost importance at ITAA. While our case studies are based on true projects, we have used fictitious names and removed or changed other identifiable details.

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