SAP Concur Case Study – UK Engineering Firm Cuts Costs by 40%
Background
A UK-based engineering and construction services firm, with projects across Europe and the Middle East, relied on SAP Concur for managing employee travel and expense reports.
At its peak, the company had thousands of engineers and project managers flying frequently to job sites, making Concur a vital tool.
However, in recent years, travel volume declined due to project changes and increased use of virtual meetings. Despite the reduced usage, the firm was still paying for a large Concur subscription as if nothing had changed.
As the renewal date approached, the company’s finance and procurement teams saw an opportunity to realign the contract with actual usage and cut unnecessary costs.
Challenges
Key issues in the Concur contract included:
- Overallocation of Licenses: The firm had originally contracted Concur for up to 5,000 active users, anticipating growth that never fully materialized. At renewal, analysis showed only about 3,000 employees used Concur regularly for expenses. This overallocation meant paying for 2,000 extra user seats every year.
- Lower Travel Volume: Expense report volumes had dropped by nearly 50% compared to when the contract was first signed. Yet, the contract pricing (which included volume bands for transactions) hadn’t adjusted. The company was effectively in a higher pricing tier than its current spend warranted.
- Bundle of Modules: The Concur package included Travel Booking, Expense, and an Intelligence reporting module. The Intelligence add-on, while nice to have, was seldom used by the team (they extracted data to their own BI tools instead). It was an area of potential cost savings if it could be removed.
- Renegotiation Resistance: SAP’s initial stance for renewal was simply renewing at the same terms (with a standard annual increase). They did not proactively offer reductions for decreased usage. The onus was on the customer to push for changes, which the firm recognized would require strong data and SAP contract negotiation expertise.
Solution (How SAP Licensing Experts Helped)
- Usage Audit: SAP Licensing Experts performed a comprehensive audit of Concur usage. They gathered metrics on active users per month, the number of expense reports submitted, and the usage of each module. This data clearly illustrated the gap between the contracted capacity and actual usage (e.g., 40% fewer active users than paid for, and significantly fewer transactions).
- Custom Renewal Proposal: Using the data, the experts helped the company craft a renewal proposal aligned to current needs. They approached SAP with a request to downsize the contract: reduce the user count entitlement to 3,000, adjust the transaction tier to a lower band, and remove the underused Intelligence module from the package.
- Alternative Options Leverage: The team also researched alternative expense management solutions and costs. While the company preferred to stay on Concur, they made it known that if SAP couldn’t come to a reasonable arrangement, switching to an alternative (or even using basic ERP expense functionality) was on the table. This leverage was communicated professionally but firmly, underscoring that the status quo price was not acceptable.
- Negotiating Savings: In discussions with SAP, SAP Licensing Experts highlighted the long-term partnership and the discrepancy between what was paid vs. what was used. By presenting a well-substantiated case, they negotiated a contract reduction rather than an increase. SAP agreed to eliminate the Intelligence module fees entirely and re-price the contract for 3,000 named users. Furthermore, they secured a lower per-report cost in the new tier, ensuring that if travel picked up slightly, the costs wouldn’t spike linearly.
- Contract Flexibility: Another win was adding flexibility for the future. The renewed contract included a clause allowing the firm to further adjust user counts or modules annually if usage continued to change. This meant the company wouldn’t be locked into overpaying if travel remained low, providing ongoing protection.
Outcome and Savings
The renegotiated Concur agreement led to a dramatic 40% cost reduction on the firm’s SAP Concur spend. In concrete terms, the company saved roughly £600,000 per year compared to the prior contract, funds that could be redirected to other operational needs. The new contract accurately reflected the company’s scale and travel reality: they paid only for the users and volume they actually have, with no fluff.
Employee expense management continued seamlessly, and the finance team reported that the cost-per-expense report was now in line with industry benchmarks, whereas before it had been significantly higher. The removal of unused services had zero negative impact on users, who didn’t even notice a change, except perhaps an improved focus on the tools they actually use.
By taking a proactive stance and leveraging expert SAP license negotiation, the UK engineering firm turned an overpriced contract into a lean, value-based agreement.
The case serves as a reminder that cloud subscriptions should not be a set-and-forget – they can and should be revisited to ensure you’re not paying for ghost users or bygone usage patterns.
“We had been overspending on Concur for years without realizing it. Once we dug into the numbers, it was obvious we needed a change. The negotiation got us a leaner contract with savings beyond our expectations – about 40% off. It feels like we’re paying the right amount now, not a penny more,” — Head of IT Procurement, UK Engineering Services Company
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