Key Takeaways

  • The 6-step benchmarking process takes 4-6 weeks and requires gathering data from 3-4 sources (user groups, peer polling, independent advisors, public case studies)
  • Establish your baseline: Calculate current effective discount rate (% off list), normalize to €/NLV, and compare against tier benchmarks
  • Identify comparable companies: Match on revenue size, SAP NLV, industry vertical, and geography to create a valid peer group (10-15 minimum)
  • Gather peer data through user groups (DSAG, ASUG), informal peer polling (confidential discussions with peers), and independent advisor reports (most reliable source)
  • Model your target position: Set benchmark-based targets for license discount, support tier, and special terms; then deploy in negotiations with SAP

The 6-Step Benchmarking Process

Step 1: Establish Your Baseline Position (Week 1)

Before gathering peer data, know where you stand today. Calculate three metrics:

A. Current Effective Discount Rate (% off SAP list)

Formula:

Example:

B. Normalized Cost (€/NLV)

SAP pricing is easiest to compare when normalized to a per-€1M-NLV basis:

C. Support Tier (% of NLV)

Separately calculate your support cost as a percentage of NLV:

Document these three metrics. You'll compare them against peer data.

Expert Insight

I worked with a global manufacturing company that thought they had negotiated a "good deal" at 45% discount. When we normalized their position (€18M license NLV + €4.2M support = €22.2M total annual spend on €40M technical footprint), we discovered they were paying €22K per €1M NLV with support at 21% of NLV. Compared to peers (€20K/€1M, 21% support), they looked average. But their large NLV (€40M) meant they had massive negotiating leverage they weren't using. By positioning as a "Tier 4" customer and threatening RISE migration, they brought the rate down to €18.5K/€1M and support to 20%—saving €6.8M over their 3-year renewal term. The benchmark anchored the conversation at realistic market rates, not SAP's opening position.

Step 2: Identify Your Comparable Peer Profile (Week 1-2)

Create a peer profile to guide your benchmarking search:

Profile Dimension Why It Matters Tolerance Range
Revenue Size Larger companies get bigger discounts due to negotiating leverage ±30% of your revenue
SAP NLV Primary driver of your tier and discount rate ±25% of your NLV
Industry Vertical Different verticals have different SAP leverage (manufacturing stronger than services) Same or closely related
Geography European vs Americas vs APAC pricing can vary slightly Same region preferred; ±1 region acceptable
Complexity Multi-instance, global, or single-instance affects support needs Similar profile

Example peer profile:

Step 3: Gather Peer Benchmark Data from Multiple Sources (Week 2-4)

Use 3-4 data sources to triangulate real market pricing:

Source 1: User Groups (Free, Limited Value)

DSAG (German SAP Users)

ASUG (Americas SAP Users)

Source 2: Peer Polling (Confidential, High Value)

Directly contact 5-10 peer companies in your network and ask them to share their support tier % of NLV (anonymously if they prefer):

Source 3: Independent Advisor Benchmark Report (Paid, Highest Value)

Commission a focused benchmark report from a SAP licensing advisor (€3-8K, 2-4 week turnaround):

Source 4: Public Case Studies (Free, Low-Medium Value)

Search for published case studies and press releases from peers that disclose SAP contract terms:

Step 4: Build Your Benchmarking Worksheet (Week 3-4)

Aggregate all data into a worksheet to identify patterns:

Peer Company Revenue SAP NLV (Est.) Support % NLV €/NLV License Discount % Data Source
Your Company (Today) €1.2B €75M 22% €22K 42% Current contract
Peer A (Mfg) €950M €68M 21% €21K 48% Advisor report
Peer B (Mfg) €1.35B €82M 21.5% €21.5K 46% Informal peer
Peer C (Mfg) €1.1B €71M 22% €22K 44% DSAG survey
PEER MEDIAN:
– €1.1B €72.5M 21.25% €21.25K 46% –

What the worksheet tells you:

Step 5: Model Your Target Position (Week 4)

Based on your benchmark data, define what "good" looks like:

Target A: Support Tier (Conservative)

Target B: Support Tier (Aggressive)

Target C: License Discount

Target D: Special Terms

Document these targets clearly. You'll present them to SAP in negotiation.

Rule of thumb: Set a conservative target (peer median + 0.25-0.5%), a stretch target (top-tier median - 0.5%), and fallback position (current + 0.25%). This gives you flexibility in negotiation without low-balling SAP.

Step 6: Deploy Benchmarks in Negotiation (Week 5-6)

When SAP presents their renewal proposal, deploy your benchmark analysis:

Opening Position (Week 5)

Present SAP with a professional position paper:

"We've completed a comprehensive benchmark of our SAP renewal position against peer enterprises comparable in size, industry, and complexity. The results show a 1-2% opportunity to align our support costs with market rates. Specifically: Current Position: 22% of NLV Enterprise Support Peer Median: 21.25% of NLV Enterprise Support Requested Position: 21% of NLV Enterprise Support We've attached an anonymized benchmark summary (from [Advisor/DSAG/Peer Group]) supporting these rates. We request alignment to market pricing effective Year 1 of our renewal."

SAP Response & Counter (Week 5-6)

SAP will respond with one of three positions:

Response 1: Accept Benchmark ("You're right, we'll match 21%")

Response 2: Acknowledge but Hold ("Benchmark is interesting, but your complexity justifies 22%")

Response 3: Refuse Benchmark ("List price is our standard; discounts are case-by-case")

Benchmarking Worksheet Template (Use This)

Download or recreate this worksheet to track your benchmarking process:

Benchmark Dimension Your Current Position Peer Median / Benchmark Your Target Gap (Opportunity)
License Discount % off List 42% 46% 46% 4% (€3M on next tranche)
Enterprise Support % NLV 22% 21.25% 21% 1% (€750K annual)
MaxAttention Credit Carryover 1-year (resets) 3-year standard 3-year carryover €500-750K value
Named Engineer Continuity 1-2 years (rotation) 3+ years committed 3-year lockdown Relationship stability
TOTAL 3-YEAR RENEWAL OPPORTUNITY: €6-8M

Common Benchmarking Mistakes to Avoid

Timeline: 4-6 Weeks Start to Finish

Plan benchmarking to complete 2-4 weeks before your SAP renewal negotiation. This gives you time to gather data and build confidence before engaging SAP's sales team.

Related Articles

For broader context on SAP benchmarking and negotiation strategy, see our pillar guide and the BoM management series: