Global Business – Manufacturing and Distribution of Beverages

$26bn revenue, 70,000 employees operating in 80 countries, SAP Contracts – Limited-un-Limited (LUL) & Unlimited During Deployment (UDD) + Fixed Contracts. All On-premise, perpetual.

Challenge

Our client had relied on the use of a Software Asset Management (SAM) tool which was incomplete, incorrectly set up, with rules which did not align with their SAP Agreements. As a consequence when they declared their usage levels at the end of the LUL/UDD contract this fell well short of the actual Licences in use and the correct Engine mix.

They had also not maintained accurate and up-to-date records of deployment both prior to and during the LUL contract and had not fully or correctly classified users. They endeavoured to negotiate an extension to re-declare after carrying out some analysis and re-classification which actually made the situation worse and led to a claim by SAP for significant non-compliant use on two occasions.

Solution

We carried out detailed evaluation of the relevant SAP agreements and re-assessed the use of both Named Users and Engines from the historical data that was available.
We were able to construct a business case around most of the elements of the LUL contract and re-present the information to unravel the previous errors in declaration and to demonstrate to SAP that this was the true and legitimate entitlement

Following this we were able to identify which of the Users and Engines related to the LUL contract and created a Business Case to support this.

Results

Due to both the Client and SAP’s short timescales to reach a resolution we were not able to complete all that was required to fully optimise the Named User classification, which given the state and number of systems would have taken up to 16 weeks more. The process took us about 6 weeks and enabled the client to agree realistic usage baselines with SAP and mitigate a claim by SAP for €170m.

A settlement was reached with our negotiation support which enabled our client to obtain addition Licence assets at their normal corporate discounts and agreement that they would remain compliant for at least the next 2 years as a consequence.

N.B. The client had, prior to our involvement sought to resolve the matter with their Corporate external Lawyer and Auditors, neither of whom or by working together, were able to gain any significant change is SAP’s position, as they lacked the detailed understanding, knowledge and experience of such situations.