SAP SuccessFactors Case Study – French Consumer Goods Firm Cuts SaaS Costs by 20%
Background
A leading consumer goods company in France, producing popular household and personal care products, embarked on an HR modernization initiative with SAP SuccessFactors.
The company has over 15,000 employees across Europe and Asia, and it implemented SuccessFactors for core HR, talent management, and recruiting. While the cloud-based system improved HR processes, the ongoing subscription costs became a growing concern.
As the initial subscription term neared its end, the renewal quote for SuccessFactors, especially with additional modules the HR team wanted to add, signaled a steep increase.
The CIO and HR IT team knew they needed to optimize the SAP cloud contract to keep costs sustainable.
Challenges
Several pain points surfaced around the SuccessFactors licensing:
- Per-Employee Pricing Pressure: SuccessFactors is typically priced per employee. The company’s headcount had grown by 10% since the last contract, which directly translated into higher fees. Moreover, SAP’s standard terms would charge for every employee in the system, even seasonal staff and interns, which would inflate the bill.
- Module Expansion Costs: The HR department wanted to roll out two new modules: Learning and Succession Planning. However, adding these at the list price would increase the subscription cost dramatically. The initial quote treated each new module’s users as an additional cost, without package discounting for being an existing customer.
- Underutilized Features: Upon review, the IT team found that some SuccessFactors functionalities (like certain analytics and advanced workforce planning tools) were barely being used. Essentially, they were paying for capabilities that the HR team hadn’t fully adopted.
- Budget Constraints: The finance team had set strict budget growth limits for IT SaaS spending – no more than single-digit percent increases year-over-year. The proposed renewal and expansion for SuccessFactors was coming in around 25% higher than the previous term, far above what budget owners would approve.
Solution (How SAP Licensing Experts Helped)
- User Count Optimization: SAP Licensing Experts analyzed the company’s employee data and SuccessFactors usage logs. They identified that a significant number of accounts in SuccessFactors belonged to temporary staff or contractors who no longer needed access. By cleansing these and negotiating a model where only active full-time employees counted toward licensing, they immediately reduced the licensable user count. The team also negotiated provisions to exclude interns and short-term contractors from the count or to license them at a lower cost tier.
- Bundle Discount Negotiation: Recognizing the company’s expansion into two new modules, the experts saw this as an opportunity for SAP to deepen its relationship and thus deserved better pricing. They negotiated a bundle deal for SuccessFactors, where the customer would commit to the full suite (existing modules plus Learning and Succession) in exchange for a substantial overall discount. SAP’s initial stance was separate pricing for each module, but the negotiation led to a unified subscription fee that was about 20% lower than the sum of the parts.
- Remove Unused Features: The team advocated for flexibility to drop or swap underutilized components. For example, they convinced SAP to allow the company to remove an analytics add-on from the renewal, which the customer wasn’t leveraging, crediting its value against the new modules. This prevented paying for shelfware in the new term.
- Multi-Year Price Lock: To address the budget constraint, SAP Licensing Experts secured a 3-year renewal term with a price lock – no annual escalation in per-employee rates. This was crucial for the finance team’s long-term planning. It essentially guaranteed the SAP contract would deliver the new functionality within a predictable cost envelope, aligning with the company’s budgeting guidelines.
Outcome and Savings
The negotiation yielded approximately a 20% reduction in SuccessFactors subscription costs relative to what the renewal would have been without intervention.
In real figures, this French firm saved around €800,000 over the next term. The savings came from a combination of the bundle discount and paying only for truly needed active users.
Equally important, the company was able to add the Learning and Succession Planning modules without blowing the budget. HR leaders got the tools they wanted, while IT and finance were satisfied that costs were under control.
The multi-year price lock gave everyone confidence that there would be no surprises in the SaaS spend.
This case demonstrated that even in cloud agreements, diligent SAP license negotiation can drive significant savings. The French consumer goods company renewed its SuccessFactors contract as an empowered customer, achieving better value and a tailored agreement rather than accepting a one-size-fits-all quote.
“Our HR team’s wish list was growing, but so were SAP’s prices. We didn’t want to say no to new tools, yet we had to contain costs. The experts helped us get the best of both worlds – more SuccessFactors functionality at a lower cost per user. A 20% savings on a major SaaS contract is huge for us,” — IT Director, French Consumer Goods Company
Read about our SAP Negotiation Services.
