Phase 1: Maintenance Schedule Audit (Months 1–2)
The foundational phase. Audit every line item in your SAP maintenance agreement against your current operational systems. This is forensic work and generates the evidence base for all downstream negotiations.
| Action Item | Owner | Priority | Timeline |
|---|---|---|---|
| Extract full SAP Maintenance Schedule from all Order Forms and amendments | Procurement / Legal | Critical | Week 1 |
| Map every line item to currently operational systems (cross-reference with IT asset inventory) | ITAM / Infrastructure | Critical | Weeks 1–2 |
| Identify products decommissioned since last renewal — calculate maintenance overpayment | Finance / ITAM | Critical | Week 2 |
| Audit Named User counts: contracted users vs active USMM output | Finance / SAP Admin | Critical | Week 2 |
| Identify user type misclassifications: Professional vs Limited Professional vs Employee | Finance / SAP Admin | High | Week 3 |
| Check for duplicate entries (consolidation M&A events, system landscape changes) | Procurement | High | Week 3 |
| Validate NLV calculation against original purchase documentation | Finance | High | Week 4 |
| Document total identified overpayment with supporting evidence | Finance / Procurement | Critical | Week 4 |
Success Criteria: Documented overpayment amount with line-item evidence (decommissioned products, excess users, etc.). Typical finding: 12–18% of maintenance base.
Phase 2: Strategic Options Assessment (Months 2–3)
Evaluate your full range of cost reduction paths: S/4HANA migration, third-party maintenance, GROW with SAP, rate negotiation, or hybrid approach. Build the business case for each option.
| Action Item | Owner | Priority | Timeline |
|---|---|---|---|
| Confirm S/4HANA or cloud migration timeline: credible roadmap vs aspirational | CIO / IT Strategy | Critical | Week 5 |
| If migration within 24 months: focus on double-maintenance elimination and transition timing | Finance / IT Strategy | High | Week 6 |
| If migration beyond 36 months: initiate third-party maintenance evaluation | Procurement / IT | High | Week 6 |
| Request formal proposals from Rimini Street and Spinnaker Support (creates negotiation evidence) | Procurement | High | Weeks 6–7 |
| Calculate 5-year NPV of third-party maintenance vs continued SAP maintenance | Finance | High | Week 8 |
| Assess regulatory and tax update coverage requirements by country | Compliance / Finance | Medium | Week 7 |
| Evaluate security patch gap risk using independent assessment | IT Security | Medium | Week 8 |
| Document migration timeline scenarios (optimistic, base, conservative) with financial implications for each | Finance / IT Strategy | High | Week 8 |
Success Criteria: Documented NPV comparison of each option (stay with SAP vs 3PM vs S/4HANA). Clear decision on primary negotiation path and credible alternatives for leverage.
Phase 3: SAP Renewal Negotiation (Months 3–12 before renewal)
Begin formal renewal preparation 12 months before contract expiry. This is your negotiation window. SAP's account managers need time to build business cases internally for rate concessions.
| Action Item | Owner | Priority | Timeline |
|---|---|---|---|
| Schedule renewal discussion with SAP account team 12 months in advance | Procurement / CIO | Critical | Month 3 |
| Prepare maintenance schedule correction evidence (Phase 1 findings) | Finance / Procurement | Critical | Month 3 |
| Prepare 3PM business case with documented proposals as supporting evidence | Procurement / Finance | Critical | Month 4 |
| Identify internal sponsor (CFO or CIO) for negotiation authority | Procurement / Finance | Critical | Month 3 |
| Draft maintenance holiday language for migration components | Legal / Procurement | High | Month 4 |
| Prepare multi-year commitment scenarios (what you'd accept in exchange for rate reduction) | Finance / Procurement | High | Month 5 |
| Document competitive scenarios: migration acceleration, alternative ERP evaluation | Procurement / IT Strategy | High | Month 5 |
| Set walk-away position: if SAP won't reduce to X%, proceed with 3PM | CFO / CIO | Critical | Month 6 |
Success Criteria: Written SAP counter-proposal incorporating rate reduction, maintenance holiday language, and multi-year terms. SAP's initial response to your offer (months 8–10) establishes negotiation baseline.
Phase 4: Execution and Contract Amendment (Months 10–12)
Final negotiation, signature, and transition planning. Whether you're staying with SAP (at reduced rates) or switching to third-party maintenance, this phase locks in terms.
| Action Item | Owner | Priority | Timeline |
|---|---|---|---|
| If staying with SAP: document all agreed rate reductions, base corrections, and holiday provisions in signed amendment | Legal / Procurement | Critical | Month 10–11 |
| If switching to 3PM: serve contractual notice to SAP (check notice period in your agreement — typically 30 days) | Procurement / Legal | Critical | Month 10 |
| If switching to 3PM: initiate 3PM provider onboarding (60–90 day transition) | IT / Procurement | Critical | Month 11 |
| Archive all SAP documentation (OSS notes, patches, support history) before transition | IT / SAP Admin | High | Month 11 |
| Establish new incident management workflow with 3PM provider | IT / SAP Admin | High | Month 11 |
| Validate regulatory update delivery process before first compliance event | Compliance / IT | High | Month 12 |
| Update internal ITAM system with new maintenance details and renewal dates | ITAM | Medium | Month 12 |
| Schedule 12-month review of achieved savings vs projected savings | Finance | Medium | Month 12 |
Success Criteria: Signed contract or amendment (SAP) or fully transitioned support (3PM). No gap in support coverage at transition.
Phase 5: Ongoing Optimisation (Months 13+)
Cost reduction is not a one-time exercise. Lock in ongoing governance to sustain savings and capture additional opportunities.
| Action Item | Owner | Priority | Frequency |
|---|---|---|---|
| Quarterly review of maintenance schedule against active landscape | ITAM / Finance | High | Quarterly |
| Annual user count validation against USMM output | Finance / SAP Admin | High | Annually |
| Annual 3PM vs SAP maintenance assessment | Procurement / Finance | High | Annually |
| Pre-renewal preparation cycle: start Phase 1 audit 18 months before next renewal | Procurement / Finance | High | 18 months before renewal |
Implementation Timeline: Complete Example
Here's a realistic end-to-end example for an enterprise with a September renewal date:
- January–February (Year 1): Start Phase 1 audit. ITAM provides current systems inventory. Finance extracts Order Forms.
- March–April (Year 1): Complete Phase 2 evaluation. Request TPM proposals. Calculate NPV for each scenario.
- May–June (Year 1): Contact SAP account team. "We're beginning renewal preparation for September. We've identified some maintenance schedule corrections. Let's schedule a formal discussion."
- July–August (Year 1): Formal negotiation begins. Present corrected base. Present TPM alternative. Signal rate expectations.
- September–October (Year 1): SAP responds with counter-proposal. You respond. Iterate 2–3 times. Most deals close by October.
- November–December (Year 1): Legal reviews final language. Both parties sign. If 3PM selected, 60-day transition begins.
- January (Year 2): Transition complete. New maintenance bill hits your ledger (20–30% lower than Year 1 original terms).
Case Study: APAC Pharmaceutical — $14M Maintenance Reduction Over 3 Years
Scenario
Mid-cap pharmaceutical company (APAC region) operating €52M annual SAP spend. SAP maintenance: €18.5M/year. S/4HANA migration planned for 3–5 years out. Finance team tasked procurement with "reduce SAP costs by 10% within 12 months."
Execution: Phase 1 (Months 1–2)
Finance and ITAM worked together. Extracted 8 years of SAP Order Forms. Mapped against current IT asset database. Found:
- €2.1M in maintenance on 3 decommissioned ECC production systems (migrated to cloud 2 years prior)
- €890K in maintenance on an obsolete HR add-on module (unused since 2019)
- 1,200 Named Users still on Professional tier despite inactive USMM data (should be Limited Professional)
Total identified overpayment: €4.3M/year (23% of €18.5M maintenance bill).
Execution: Phase 2 (Months 2–3)
Strategic options assessment. The company had no credible S/4HANA migration date (3–5 years is speculative). Instead:
- Requested TPM proposals from Rimini Street and Spinnaker. Both came in at 9–10% of NLV (vs SAP's 22%).
- 5-year NPV: SAP at 22% = €92.5M in maintenance. 3PM at 10% = €42.5M. Savings = €50M over 5 years.
- Risk assessment: No active S/4HANA development, stable ECC landscape, strong security posture. TPM risk: low.
Execution: Phase 3 (Months 3–12)
Began formal renewal negotiation in month 3 (9 months before September renewal). Presented Phase 1 findings: €4.3M overpayment. Proposed correction and rate negotiation on corrected base (€14.2M, not €18.5M).
SAP's response (Month 6): "We'll correct the decommissioned products and obsolete module (€2.99M). We'll offer 19% rate on the corrected base as a loyalty gesture."
Procurement's counter: "Correcting the base is table-stakes, not a concession. User reclassification should also apply. We have a Rimini Street proposal at 10%. Bring the rate to 15% and we stay with SAP."
SAP's final offer (Month 9): "We'll do 17% on the corrected, reclassified base (€13.5M). Plus a €200K RISE adoption credit if you commit to migration evaluation in 18 months."
The company accepted. Final contract: €13.5M × 17% = €2.295M annual maintenance (down from €18.5M × 22% = €4.07M). Annual savings: €1.775M. 3-year impact: €5.325M.
Lessons
The €4.3M overpayment was never going to be "saved" — it was contract correctness. But that correction created the leverage to negotiate rate reductions on the remaining, corrected base. Without Phase 1 evidence, SAP would have held at 22% and claimed "standard terms." With evidence, the conversation became: "Your base is smaller, your alternatives are documented, what's your best rate?" Result: 17% instead of 22%, a 5 percentage point reduction.
The S/4HANA migration timeline (3–5 years) was never executed. The company is still on ECC with 3PM support. The decision to switch to TPM was not made because SAP's final offer was credible enough to hold them. But the credible TPM alternative was the mechanism that unlocked SAP's rate reduction.
Frequently Asked Questions
Best case: 6 months (if you start with a renewal date 12+ months away). Typical case: 12 months. This includes Phase 1 audit (2 months), Phase 2 evaluation (2 months), Phase 3 negotiation (6–8 months), and Phase 4 closing (1 month). Don't try to compress below 6 months — SAP needs time internally to build business cases for rate concessions.
You've lost negotiating time, but not leverage. Execute Phase 1 immediately (4–6 weeks). You'll identify overpayments and base corrections that SAP must concede. Then negotiate aggressively on rate using those findings. You won't get 20% off, but 5–10% is still attainable. And you'll lock in maintenance holiday language for any migration. Start now; don't wait.
You can execute Phases 1 and 2 internally. Phase 1 (audit) and Phase 2 (options evaluation) are structured, data-driven work. Phase 3 (negotiation) and Phase 4 (legal execution) benefit from external advisors who have negotiated 50+ SAP renewals and know SAP's decision authority structures, discount triggers, and typical offer patterns. If budget allows, engage advisors for negotiation strategy in Month 5–6; they'll pay for themselves in the first 1–2 years of savings.
On a €50M SAP estate with €11M annual maintenance: Phase 1 audit typically finds €1.3–2M in immediate corrections (no negotiation required). Phase 2 + 3 + 4 typically unlock an additional €0.5–2M in rate reductions (5–15% off the base). Total: €1.8–4M annual savings, or 16–36% of your original maintenance bill. Program cost (internal + external): €150–300K. Payback: less than 1 month. And the savings repeat every year for the life of the contract.
Yes, and you should. RISE evaluation is a separate workstream, but SAP's account team sees it as part of a broader strategic conversation. Execute Phase 1 + 2 in parallel with RISE financial modeling. By Month 6, you have both: corrected maintenance base + RISE economic analysis. If RISE is financially superior, pursue that. If not, use the RISE evaluation and your TPM proposal as leverage for traditional ECC rate negotiation. Either way, you're optimizing your position.
Related Articles in This Series
This article is part of SAP Licensing Experts' comprehensive support cost reduction guide:
- The Complete Enterprise Guide for 2026 — Overview of the entire cost reduction landscape
- Practical Enterprise Guide — Step-by-step implementation from assessment to execution
- Cost Reduction Strategies — Deep dive on eight specific strategies ranked by impact
- Key Risks and How to Mitigate — Governance, legal, and operational risks in cost reduction programs
- Rimini Street vs Spinnaker vs SAP Support — Third-party maintenance provider comparison
Newsletter: SAP Cost Reduction Insights
Start Your Programme Today
Execute Your SAP Support Cost Reduction Program
SAP Licensing Experts guides enterprises through the complete cost reduction programme: forensic audits, strategic evaluation, negotiation execution, and ongoing governance. Average savings: 18–28% in Year 1.
Schedule Consultation