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Dissecting Disruptors in the CPG and Retail Space

How can CPG and Retail companies thrive despite market pressures – and retain loyal customers – in a highly disrupted and competitive market? Listen in to find out from ISG's Sunder Pillai.

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Are you looking at digital solutions such as direct-to-consumer ecommerce, internet of things, connected smart homes, demand-driven supply chains, or innovation via customer collaboration?

ISG has performed hundreds of engagements for consumer goods companies across the globe. From your procurement to your network, software, next-gen sourcing and benchmarking needs, ISG brings deep industry, market and advisory insights and solutions to help you achieve your strategic goals.

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Client Stories

“Classic SAP” to S/4HANA: Saving a Sunk Investment

Jun 24, 2021, 13:50
ISG assists a major retail and television company in effectively leveraging its sunk investment in SAP ERP central component (ECC) to achieve $76 million in S/4 HANA savings.
Title : “Classic SAP” to S/4HANA: Saving a Sunk Investment
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A major retail and television company engaged ISG to help it in creating and executing on an SAP negotiating strategy. It wanted ISG’s help to execute on its digital transformation roadmap in 6 weeks. To support this effort, ISG deployed a team of SAP licensing and technical and audit advisors to work with the company’s various stakeholders. Together, we worked to create a negotiating strategy based on the following factors:

  • The company’s business and transformation objectives, and its license entitlement and compliance position based on its existing estate of SAP packages and engines;
  • ISG’s view of license mix optimization opportunities;
  • Conversion credits based on ISG’s mapping of ECC to S/4HANA equivalents;
  • Digital access exposure; and
  • ISG market benchmarks and ISG domain expertise in SAP S/4HANA contracting and pricing policies.

ISG strategically leveraged our reputation as a “deal advocate” to achieve the following deal attributes:

  • Pricing: ISG advised on pricing based on the company’s invest and run costs, our deep market data, conversion credits, reduced maintenance rates, phase-in of maintenance and software-as-a-service (SaaS) subscription fees.
  • Contract Flexibility: We secured value flexibility on the on-premise engines and step-in on the cloud products.
  • Risk Mitigation: ISG helped it suspend compliance audits, conform digital access based on its business model, and expand territory restrictions and affiliate use.
  • Partnership: We obtained an upfront SAP investment to ensure a successful transition from ECC to S/4HANA.

The company received a market-leading agreement to achieve each of its cost and risk mitigation goals. Under the agreement, it realized the following benefits:

  • Savings of $76 million; to achieve these savings, ISG:
    • Achieved a 94% discount on on-premise solutions and a 60% discount on cloud solutions,
    • Secured free MaxAttention for 2 years,
    • Reduced maintenance costs by transitioning from enterprise support to product support for large enterprises (PSLE),
    • Negotiated step-in on cloud engines and packages based on its deployment schedule,
    • Secured conversion credits based on the full value of the company’s ECC to S/4HANA equivalents, and 
    • Negotiated a single-use metric to address digital access license requirements;
  • Maintenance and audit holiday of 2 years; and
  • Flexibility to manage its SAP estate for a period of 3 years before crystallization of the environment.
Categories :
  • Consumer Packaged Goods
  • Retail
  • Software Advisory Services
Article flags :
  • active
  • case study
retail software sap
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