FMCG group restructures RISE renewal to remove three year four uplifts across a $34M contract.

The opening position.

The FMCG group signed its first RISE with SAP contract twenty eight months before the engagement opened. The deal covered fourteen operating companies across thirty one countries, with a single Cloud Private Edition deployment on a named hyperscaler and a Digital Access entitlement sized at thirty four million documents annually. The original contract carried what looked at signature like a clean uplift schedule. The detail under the schedule contained three separate mechanisms that all activated in year four.

The first mechanism was a standard five percent annual price increase, with the floor tied to a regional consumer price index that had since climbed to six point four percent. The second mechanism was a Digital Access true up that activated only if document volumes exceeded the contracted threshold, with no symmetric provision for under usage. The third mechanism was an FUE consumption uplift tied to a per user metric that did not appear inside the headline pricing schedule.

The combined effect of all three mechanisms across years four through seven, modelled against the group's run rate, was a thirty seven percent step up in the SAP run rate by year five. The CFO triggered the engagement after the year three quarterly review surfaced the uplift exposure. The brief was to renegotiate the renewal window twenty months ahead of the contractual trigger, neutralise the year four uplift cliff, and rebase Digital Access against actuals.

Four phase renegotiation sequence.

What the model showed.

The Digital Access entitlement inside the original contract was sized against an estimated thirty four million documents per year. Three years of actual document counts came in at twenty point six million annually, with year on year growth at one point eight percent. The contracted threshold sat sixty five percent above actual usage and was unlikely to be reached even under the group's most aggressive expansion scenario. The true up mechanism was therefore inactive in practice, but the threshold supported a higher annual base subscription than the group's footprint justified.

The FUE consumption uplift was tied to a per user metric that depended on classification rules that had shifted twice since contract signature. A line by line review of three years of FUE consumption records showed that the classification rules in force at the time of the original signature would have produced a meaningfully different FUE count than the rules SAP intended to apply in year four. The classification drift created an inflation effect of roughly fourteen percent on FUE counts that the group had no documented basis to accept.

The third mechanism, the index linked annual increase, was the most defensible in isolation. The CPI index had run above contractual expectations, and SAP was not unreasonable in seeking to apply it. The negotiable element was the floor, the ceiling, and whether the mechanism could be exchanged for a longer term commitment with a fixed cap.

The contracted Digital Access threshold sat sixty five percent above actual usage and was unlikely to be reached. The mechanism supported a higher base subscription than the group's footprint justified.

What changed at signature.

The renewal contract closed with the group committing to a four year extension starting in what would have been the year four uplift window. Two of the three uplift mechanisms were removed entirely. The Digital Access threshold was rebased to twenty four million documents annually, sized eighteen percent above current actuals with a symmetric true up that worked in both directions. The FUE consumption uplift was removed and replaced with a documented FUE classification baseline that the group could audit against during the remainder of the term.

The third mechanism, the index linked annual increase, was retained in modified form. The floor and ceiling were both fixed at three percent, decoupled from any external index. The group accepted a slightly longer commitment in exchange for the certainty. Across years four to seven, the modelled run rate ran thirty seven percent below the original trajectory. Net savings over the remaining contract term landed at $8.9M.

The exit and termination language was also reopened during the renegotiation. The original contract carried no exit credits and a best effort transition assistance clause. The renewal added $1.4M in exit credits triggered by SAP service breach, and a twelve month transition assistance commitment with data extraction in an open format and a sixty day extraction window.