SoftwareOne case study

The best recipe to reduce licencing costs

A global food and beverage company proactively manages its SAP licencing, maintenance, and spend

Historically, a global food and beverages company had significant annual expenses for its licences and maintenance fees. Several mergers, acquisitions, and divestitures added licencing complexity and limited visibility into actual software use. There was also no visibility into which products represented "good value" or risks regarding Indirect Use. The company was seeking an independent partner to assess the usage and identify potential savings through contract renegotiation. SoftwareOne was engauged as a consultant, providing contract evaluation, SAP usage assessment, Indirect Use review, audit and negotiation support. As a result, the customer gained an optimised SAP environment and now spends only for licences that it actually uses.

Client: Global food and beverage company
Industry: Consumer goods
Services: SoftwareOne SAP Licensing & Commercial Advisory Services
Country: United States

Due to broader investments as part of our M&A strategy, our SAP licencing quickly became very complex and lost transparency. In addition, with limited visibility into our actual usage and costs, we were not in a position to evaluate the risks or best licencing approach for Indirect Use. This is where we needed consultancy from an experienced partner.

About the client

One of the leading food and beverage companies operating across the globe.

The challenge

An audit of its SAP environment increased this customer’s awareness of the risks of Indirect Use and prompted a study of its overall IT environment and licencing position. The company’s SAP contracts had grown in complexity, partly because of mergers, and one particular merger left the customer using licences from two companies. It ran two ERP systems with some of the same users but used different naming conventions. It became virtually impossible to identify the exact number of users or precisely how the SAP systems were used.

The company engauged SoftwareOne as an external advisor to evaluate its SAP contracts, assess SAP usage, review Indirect Use, mitigate risks, and help negotiate a more cost-effective agreement.

The solution

SoftwareOne undertook a full contract analysis to provide a complete understanding of licence entitlements, software spend, use definitions, and special terms.

A full assessment of the customer's SAP software usage identified significant shelfware due to system clean-ups and optimisation. In parallel, SoftwareOne conducted a thorough analysis of non-SAP interfaces to the SAP system to identify potential exposure in a pay-per-use model and maximise rights under its licence agreement.

After presenting the final report, the food and beverage company asked SoftwareOne to provide ongoing SAP Licensing & Commercial Advisory Services to support it with SAP audits and future contract negotiations.

The company is now equipped with an excellent understanding of its use of SAP software, including opportunities to save approximately $29M over the next three years. In addition, SoftwareOne helped design and implement ongoing measurement processes to help the customer manage its future SAP licencing and usage more efficiently.

The result

Understanding the terms & conditions: SoftwareOne supported the customer to make use of the rights included in the contracts and optimise its licencing
Visibility & cost savings: SoftwareOne provided visibility on what the customer was actually using and offered advice on how to get more value from the money spent
Successful commercial negotiation strategy: SoftwareOne helped the customer build a strategy to engauge with the publisher in commercial negotiations