SAP RISE Contract Terms and Risk Management: Advisory for IT Sourcing Leaders

SAP RISE Contract Terms and Risk Management: Advisory for IT Sourcing Leaders

RISE with SAP is a bundled cloud offering that shifts SAP’s ERP (S/4HANA) to a subscription model under a single contract.

While it promises simplified transformation and SAP-managed services, sourcing professionals and CIOs must rigorously evaluate the contract terms and inherent risks before signing.

This advisory report breaks down the key contract provisions of new SAP RISE agreements, highlights risks associated with cost overruns and exit strategies, and provides recommendations to help IT leaders negotiate favorable terms.

The goal is to ensure buyers secure flexibility and cost transparency in RISE contracts while avoiding vendor lock-in and unforeseen expenses.

Contract Terms in New SAP RISE Agreements

New RISE with SAP contracts consolidate software licenses, cloud infrastructure, and services into one agreement.

Understanding these contract terms is critical, as they determine cost commitments, service scope, and future flexibility.

Key areas include:

• Pricing Structure: All-in-One Subscription. RISE uses a subscription pricing model (OpEx) rather than perpetual licenses. Customers pay an annual fee based on usage metrics, often measured in Full User Equivalents (FUEs), for a bundle that includes S/4HANA software, underlying cloud infrastructure, and basic managed services. This single fee can obscure individual cost elements, so buyers should request a detailed breakdown (licenses, infrastructure, and services) to gauge whether any component carries a premium. Costs are typically quoted for the full bundle, with the vendor often having leeway on discounting each part. Ensure the pricing is transparent and benchmarked – for example, compare the embedded infrastructure cost to direct cloud provider rates to identify any markup.
• Minimum Contract Length: Multi-Year Commitment. RISE contracts usually require a minimum commitment of a multi-year term (commonly 3 to 5 years). During this period, the customer is locked into the subscription spend and generally cannot reduce or cancel without a significant penalty. Long terms may secure better upfront pricing but reduce flexibility if business needs change. Before committing to a longer term, verify that it aligns with your IT strategy and that you’re comfortable with the duration. No Termination for Convenience is standard – an early exit will result in forfeiting fees or incurring heavy charges. This makes the initial term length a critical decision: avoid over-committing longer than necessary, and weigh the benefits of any long-term discounts against the loss of agility.
• Service Scope and Inclusions: Bundled Services with Defined Limits. The RISE contract’s scope specifies exactly what SAP will provide under the subscription. Included components typically are: the S/4HANA Cloud software licenses (private or public edition), the cloud hosting on a hyperscaler (AWS, Azure, GCP, or SAP’s datacenter) managed by SAP, technical basis services (system monitoring, patches, backups, updates), standard support, and some SAP cloud extras. For example, RISE includes a starter package of SAP Business Technology Platform (BTP) services (cloud credits for building extensions/integrations) and a Business Network Starter Pack (limited transactions on networks like SAP Ariba). These inclusions support your initial transformation (e.g., process mining tools, limited procurement network usage). However, clarify all boundaries: How many sandbox or QA systems are included? Is disaster recovery or high availability covered, or is it an extra cost? What about support levels beyond standard? Notably, implementation and migration services are NOT included by default – the customer must separately handle or contract system integration, data migration, and configuration work. It’s crucial to document all included vs. add-on services in the contract to avoid surprise charges later for capabilities you assumed were part of RISE.
• Embedded Cloud Credits: Consumption Allowances (BTP and More). RISE bundles come with certain cloud credit allotments – most importantly, SAP BTP credits for extensibility and integration tasks. For instance, your contract might include a fixed amount of BTP usage (e.g., a set number of credits or runtime hours) as part of the base fee. These credits let you develop extensions or analytics on SAP’s platform without immediate extra cost. Be aware of their limits: if you consume beyond the included BTP quota, overage charges kick in on a pay-as-you-go basis (often at list prices). Similarly, the Business Network starter (e.g., a few thousand Ariba documents) covers only light usage – exceeding those transaction counts will incur additional fees or require an upgraded subscription. Treat these embedded credits as a valuable inclusion, but track usage closely. Unused credits may not be carried over, and overuse can increase costs. Buyers should negotiate for higher credit volumes upfront if they anticipate heavy usage, or seek price protections for consumption beyond the included amount.
• Renewal Terms and Price Escalation: Post-Term Pricing Protections. How your RISE contract renews after the initial term is a critical consideration. By default, SAP often reserves the right to increase pricing at renewal, potentially substantially, once you have come to depend on their service. RISE contracts do not typically lock in renewal rates; after 3-5 years, your annual fee could jump without contractual caps. Negotiating renewal protection clauses is therefore essential. Aim to include a cap on annual price increases (for example, tying any uplift to an inflation index or a single-digit percentage limit). Also, insist on advance notice of renewal terms (e.g., SAP must provide renewal pricing 6-12 months before term end) to give your team time to react. Without such terms, organizations have been surprised by last-minute high renewal quotes. Ensure the contract stipulates that any incentives or discounts given initially carry into the renewal, or at least that you have the right to renegotiate before SAP can impose new terms. The renewal clause should not be an afterthought – treat it as a top negotiation item to prevent “price creep” after the initial period.
• Limitations and Lock-In Factors: Vendor Control and Exclusivity. There are important limitations in RISE agreements that can create vendor lock-in. First, when you adopt RISE, SAP becomes your cloud provider liaison – you must host your S/4HANA on the hyperscaler through SAP’s contract. This means you cannot freely switch infrastructure providers or take direct control of the environment without leaving RISE; you’re effectively locked into SAP’s cloud arrangement (hyperscaler exclusivity through SAP). Second, you often must convert or give up existing SAP perpetual licenses when moving to RISE (trading them in for subscription credit). Once converted, you lose the option to revert to those licenses for on-premise use – new functionality for that system must be obtained via subscription only. Additionally, during the term, you are restricted to the capacity and user counts you licensed; scaling down for lower usage isn’t allowed mid-term, and scaling up may require purchasing additional blocks at set rates. Customization and integration flexibility may also be limited (especially in the public cloud edition of RISE, which enforces standardization). All these factors mean that RISE can be a one-way door: SAP’s control over infrastructure and the licensing model make it hard to reverse course or implement multi-source solutions. Buyers should recognize and address these lock-in points (via negotiated clauses or internal contingency plans) before signing.
• Service Level Agreements (SLAs): Availability and Performance Commitments. The RISE contract will include SAP’s service level agreement for uptime and system availability. Standard SLAs for RISE production systems are around 99.7% uptime (approximately <2.5 hours of downtime per month>), with slightly lower targets for non-production systems (e.g., 99.5%). While this uptime commitment is acceptable for many businesses, it is lower than typical industry-standard cloud SLAs (often 99.9% or higher). Higher availability tiers (such as 99.9% or specific disaster-recovery provisions) may be available from SAP at an additional cost or in premium editions. Evaluating whether the default 99.7% meets your business-critical needs is crucial. Additionally, scrutinize the remedies: SAP typically offers service credits (a reduction in fees) if it fails to meet the SLA, but these credits are often nominal and capped. Unlike some outsourcing contracts, RISE may not guarantee incident resolution times; only response times are guaranteed, which could lead to prolonged issues. Ensure the SLA section defines not only uptime percentage but also support response expectations for critical issues and any penalties that are meaningful enough to incentivize performance. If your operations demand higher uptime or more stringent support, negotiate those terms (or plan for supplemental arrangements) before committing.

Cost Overrun Risks

Even with an all-inclusive contract, companies adopting RISE with SAP must manage several financial risks that can cause total costs to exceed the budget.

Key cost overrun risks include:

• Unplanned Growth in Usage: The Costs of Capacity Expansion. If your business’s usage of SAP exceeds the contracted parameters, you may face steep additional charges. RISE contracts fix the number of users (FUEs), data volume, and performance capacity upfront. Exceeding those limits – whether by adding more users, transactions, or data – will trigger additional fees. For example, significant business growth might require more FUEs or extra hardware capacity (memory, storage) than initially subscribed. Those add-ons are typically charged at high marginal rates (often list price, unless negotiated otherwise). Moreover, “indirect” usage growth can surprise you. If external systems or partners begin interacting with SAP more (creating documents or API calls), you might unknowingly cross license thresholds (e.g., SAP’s digital access documents) and incur new costs. A lack of flexibility to scale down is another side of this risk – if your usage drops, you still incur the cost of the committed volume. To mitigate these scenarios, carefully forecast usage and negotiate scalable terms. For instance, consider predefined pricing for additional users or storage that applies if you grow, and consider an option to adjust (or at least not pay full price for) unused capacity at renewal. Without such provisions, any unplanned spike in usage translates directly into budget overruns under RISE.
• Unforeseen Migration & Implementation Costs: Outside-the-Contract Expenses. A common misconception is that RISE with SAP is a turnkey solution; in reality, customers still bear the significant costs of migration and implementation when moving to S/4HANA. These costs are often outside the scope of the RISE contract and can overrun budgets if not anticipated. They include data extraction and cleansing from legacy systems, data migration into S/4HANA, process re-engineering, re-developing custom code to fit the new cloud environment, extensive testing cycles, and training users on the new system. While SAP provides some tools (e.g., readiness check, basic migration utilities) and perhaps a one-time incentive or starter services, the bulk of the migration effort falls on your implementation partners and internal team. Consulting fees for system integrators, change management, and potential additional SAP services (like extended support or temp environments) can be substantial. Additionally, project delays or technical challenges can further increase costs. To avoid nasty surprises, treat these as part of the total cost of RISE: obtain detailed migration project estimates, ensure executive stakeholders understand that the RISE subscription is only one component of the overall cost (licensing and infrastructure), and maintain a contingency budget for extra support or extended timelines. A well-planned migration with clear ownership of tasks (between your team, SAP, and partners) will minimize overruns
  from these “hidden” costs.
• Overconsumption of Cloud Credits: Using More Than the Included Quota. As noted, RISE contracts bundle certain cloud platform resources (like BTP credits) and possibly transaction allowances (e.g., Ariba Network documents). These inclusions are valuable, but using more than the included quota can quickly drive up costs. For instance, if your team builds many extensions on SAP BTP or runs data-intensive analytics beyond the free allotment, you will be billed for overages on a consumption-based model. Such pay-as-you-go charges for platform services can escalate fast, especially since SAP’s rate for extra consumption may be at premium pricing. The challenge is that these costs might not be immediately obvious – you could exceed your credits mid-year and only realize at a true-up that you owe significant fees. Similarly, high volumes of procurement transactions or supplier integrations beyond the starter pack will result in additional subscription charges. A lack of visibility and predictability around these consumption costs poses a risk if not closely managed. Mitigation involves two tactics: first, negotiate a sufficient amount of BTP credits and other quotas upfront based on projected needs (or negotiate discounted rates for excess usage). Second, monitoring the usage of these services should be implemented from day one. Treat BTP and network usage like a metered utility – regularly track consumption so you can adjust usage or budget before overages spiral.
• Premium Surcharges for Additional Workloads: High Costs for Changes and Add-Ons. With RISE, any extra capability or change to your environment often comes at a price, and those prices can be higher than expected. For example, if you require a new non-production system (such as an additional test or training environment beyond what’s included), SAP will charge an additional subscription fee. If you need more compute power for a performance test or a temporary project, you may have to move to the next infrastructure tier (increasing your annual cost). Even upgrading to a higher availability option (like adding 99.9% SLA or disaster recovery) will mean a surcharge on the contract. These “surrounding” costs – for enhancements, higher service levels, or architectural changes – are often priced at a premium compared to doing them independently. SAP is providing a convenience service, and they may mark up cloud resources or bundle them into a more expensive package. The risk is that your needs evolve and you require something not initially included, only to find the contract change is costly. To manage this, anticipate future needs as much as possible when negotiating the original deal. If you suspect you’ll need an additional sandbox, for instance, consider negotiating its inclusion or setting a fixed price for adding it later. Benchmark these add-on rates (e.g., what would extra storage or an HA environment cost in raw cloud terms) to have a basis for negotiation. By locking in reasonable prices for foreseeable expansions up front, you avoid the sticker shock of mid-term changes priced at a premium.
• Lack of Cost Transparency: Opacity in the Bundle. The bundled nature of RISE can obscure where your money is going, making it difficult to optimize costs. SAP will provide you with a single, bundled bill that may include software, infrastructure, and services combined. This lack of granular transparency presents a risk: you might be overpaying for one component without realizing it, or you might be unable to pinpoint the cause if overall costs increase. For example, if your monthly fee increases due to additional usage, are the costs primarily infrastructure scaling or additional license costs? SAP’s invoices and contracts might not delineate each element. This opacity makes it challenging to compare RISE with alternative options (such as staying on-premises or using a different cloud hosting model) because you lack an apples-to-apples breakdown. Furthermore, limited transparency can mask inefficiencies – perhaps you’re paying for underutilized SAP-managed infrastructure or bundled tools you don’t
  use. To mitigate this, push for as much detail as possible in pricing discussions: ask SAP to separate the costs (at least internally) for software, cloud, and services. During the contract, regularly review consumption reports and billing details; request clarifications for any cost components that aren’t understood. The more insight you have, the better you can control and adjust usage to prevent unforeseen charges. And if SAP is reluctant to provide transparency, treat that as a red flag – it underscores the need to independently benchmark and monitor your spending to avoid “black box” cost overruns.

Exit Strategy Risks

One of the greatest challenges of an RISE with SAP engagement is ensuring a viable exit strategy. Moving onto RISE is easy; moving off can be difficult and costly.

Buyers must proactively manage these exit-related risks:

• Data Extraction and Handover Limitations: Accessing and Migrating Your Data. At the end of the contract (or upon early termination), your organization needs a way to retrieve all its data from SAP’s cloud. RISE contracts often lack detailed assurances about data extraction support, which poses a risk to your continuity. Without careful planning, you might face technical or timing challenges in getting a full export of your S/4HANA data, customizations, and integrations. Large data volumes may require significant effort to extract in a usable format, and SAP’s standard practice might be only to make a basic dump available. There may also be time limits (e.g., data accessible for 30 days after termination) and costs: if you require SAP’s assistance beyond the basics, it may incur an additional fee. The risk is that you have limited time to migrate data under pressure from a contract end, potentially leading to incomplete data transfer or business downtime. To mitigate this, negotiate data exit provisions in the contract. Ensure it states your right to obtain all your data (master data, transaction records, custom table configurations, etc.) in a usable format and that SAP will reasonably assist in the process. Ideally, include a clause for a transition period at the end of the term, where systems remain accessible for a few months if needed to support migration. Internally, maintain up-to-date backups or utilize any data replication tools available during the contract, so you’re not wholly reliant on a last-minute extraction by SAP.
• Dependency on SAP-Managed Infrastructure: Loss of Direct Control. With RISE, SAP controls your ERP’s infrastructure and technical management. Over time, your IT team may lose hands-on expertise or infrastructure assets used in on-premise systems. This dependency creates risk when exiting: if you decide to leave RISE, you might not have readily available infrastructure or the necessary skills to take over operations immediately. Also, any changes or issues in the environment during the contract are funneled through SAP’s processes – customers have reported slower response and rigid procedures when they need custom tasks done (because SAP’s teams operate in silos). Upon exit, you could face a steep learning curve to set up your environment or coordinate another provider to take over.
  Additionally, if SAP’s operating procedures do not align with yours, you may
  Find gaps or configuration differences once you transition. Mitigation involves maintaining some in-house knowledge and parallel readiness: keep your architects and BASIS experts engaged enough to understand the RISE environment. As part of an exit plan, identify and test a target infrastructure (whether bringing it back on-premise or moving to a preferred cloud under your control) well before the contract ends. Essentially, don’t let your organization forget how to run SAP independently
  ; preserve documentation and skills during the RISE term so you remain self-sufficient if needed. Insist on SAP’s transparency about how the system is set up and managed, which will help later if you need to replicate that setup outside.
• Vendor Lock-In (SAP & Hyperscaler): Difficulties in Switching. RISE with SAP intentionally bundles software and hosting for convenience, but that convenience comes with a strong lock-in to SAP’s ecosystem. Once on RISE, switching to an alternative is not as simple as flipping a switch – it often entails a reimplementation or major migration. Suppose you consider moving your S/4HANA to a different cloud or returning to on-prem. In that case, you’ll effectively undertake another migration project (with associated costs and risks similar to your initial move to RISE). Moreover, since SAP owns the cloud contract in RISE, you cannot simply take over the cloud infrastructure; you would need to establish a new infrastructure under your account and migrate the entire system. There’s also dual lock-in: you’re tied to SAP’s software subscription model and the specific hyperscaler environment SAP set you up on. While you do choose the provider at the start (AWS, Azure, etc.), post-contract, you can’t take that exact environment with you – it’s part of SAP’s arrangement. This vendor lock-in yields SAP a strategic advantage: they know that moving off RISE is painful and expensive, which can be used as leverage (for instance, in renewal negotiations or for cross-selling additional SAP products). Buyers must approach RISE assuming that switching costs will be high once on board. To reduce this risk, you should negotiate any exit-related concessions possible (e.g., an option to extend on a short-term basis while transitioning off, or assistance in migrating to SAP S/4HANA on-premise). Also, keep documentation of your system configuration and custom developments – treat it as if you’ll need to rebuild elsewhere one day. While you may not eliminate lock-in, being conscious will inform better decisions (for example, avoiding proprietary extensions that only work in SAP’s cloud). Keeping alternative options (such as a standby on-premises license or at least evaluating other vendors for the future) is a smart strategy to remind you and SAP that you have not given them exclusive control over your destiny.
• Contract Termination Clauses and Penalties: Limited Exit Rights. Standard RISE contracts permit termination only under strict conditions (e.g., material breach). Otherwise, you are expected to fulfill the full term. If you want to terminate early for convenience, be prepared to pay all remaining subscription fees as a penalty (essentially, no cost relief). Additionally, suppose you choose not to renew at the end of the term. In that case, you must plan the timing carefully: SAP will shut down the service when the contract expires, potentially disrupting business if your new solution isn’t ready. Some contracts might auto-renew if notice isn’t given by a certain deadline, so missing that window could unintentionally lock you in for another term. Carefully review and negotiate the termination and notice clauses. Aim to insert an explicit exit clause – even if you cannot get a no-penalty early exit, try to secure a defined process for end-of-term transition. For example, SAP should be required to support read-only access for audit or data retrieval for a short period after termination. Alternatively, allow a brief extension month-to-month if you are close to migrating off but need a little more time. Also, consider related clauses, such as transition assistance: Will SAP provide any assistance in transitioning to a new environment (perhaps at a cost) if you choose to exit? Knowing the worst-case scenario (if the relationship with SAP deteriorates) is vital. Don’t rely on goodwill; if smooth offboarding is important, get obligations spelled out in the contract. Finally, be mindful of any co-termination of linked contracts – if you purchased other SAP cloud services in separate contracts, try to align their end dates or include terms that let you exit those if you exit RISE, to avoid being stuck with orphaned services.
• Lack of Portability of Licenses and Customizations: Continuity Challenges after Exit. When moving to RISE’s subscription model, customers often convert their prior SAP licenses into the RISE contract. Consequently, you no longer hold a perpetual license for S/4HANA, which you can fall back on. If you leave RISE, you cannot legally operate the equivalent S/4HANA system unless you make a new purchase or have a fallback agreement in place. This lack of license portability is a significant risk – it means that after investing years in RISE fees, you may have to repurchase licenses to set up an on-premises or alternative cloud instance of SAP. Additionally, consider any custom developments or integrations done during the RISE term, especially if built on SAP BTP. Will those carry over? You might need to re-platform those integrations if they rely on SAP-specific services. Your data and configurations can be migrated, but the operational architecture might not port seamlessly. It’s also possible that certain third-party components or add-ons used in RISE might not have equivalent rights outside that environment without new agreements. To address this, discuss portability upfront: Can you negotiate a right-to-use or purchase-perpetual-license clause for S/4HANA when RISE ends, at a predetermined price? In some cases, savvy customers request the option to transition from RISE back to a traditional license model if needed (although SAP doesn’t readily offer this, persistent negotiation can open the door). Also, keep an inventory of everything you deploy within RISE (custom code, integrations, and partner solutions) and assess how you would redeploy them if you were to move
  to another platform. By understanding these continuity gaps early, you can seek to plug them (contractually or via internal planning) rather than discovering the issue only when you’re ready to exit.

Recommendations for Buyers Before Signing a RISE Contract

Diligence and strategic negotiation are crucial for CIOs, IT leaders, and sourcing professionals when considering a new SAP RISE contract.

Below are recommendations to ensure you secure favorable terms and mitigate risks:

• Perform Rigorous Pre-Signature Due Diligence: Examine every term and assumption in the RISE proposal before signing. Don’t take SAP’s standard contract at face value. Have your team map out what is included and what is not (environments, services, support scope, etc.), and cross-check it against your business requirements. If the contract language is ambiguous on any point (for example, how “system availability” is measured, or what constitutes allowed usage), flag it for clarification or revision. Look for hidden “gotchas” such as automatic uplifts, usage reporting obligations, or audit clauses. It is wise to simulate different scenarios – e.g., what if your user count grows 50%? What if you need to exit after the term? – and see how the contract handles them. This thorough understanding up front will prepare you to negotiate protections for those scenarios. Additionally, stakeholders across IT, finance, and legal departments should be involved in reviewing the contract early, as they may identify issues relevant to their respective domains (such as data privacy terms or accounting treatment) that require attention.
• Identify Red Flags and Clarify Them: Be on the lookout for contract red flags – provisions that could seriously disadvantage you – and address them in negotiations. Examples of red flags include: unbounded renewal price increases (no cap or mention of what happens after initial term), one-sided termination clauses (you pay full fees if you cancel, but SAP can terminate for minor breaches), unclear service scope (e.g., vague wording on what “managed services” include, which can lead to finger-pointing later), stringent audit/compliance terms (if SAP can audit and charge overages without clear process), and lack of data ownership language (the contract should state your data is your property). If you spot any of these, do not assume “SAP probably won’t enforce that” – get them resolved or documented. Clarify ambiguities in writing: for instance, if the contract says “SAP provides maintenance” but doesn’t define responsibilities for custom code support, have it explicitly detailed. Any promises made by SAP sales or solution engineers (e.g., “yes, you can have a second test system at no charge” or “we will include X amount of BTP”) must be reflected in the contract text or an addendum. If it’s not written, it’s not guaranteed. Treat the negotiation as an opportunity to eliminate gray areas that could become costly disputes in the future.
• Structure Protective Clauses into the Contract: Leverage the negotiation period to incorporate safeguards that benefit your organization. Key clauses to negotiate include:
  • Price Protections: Insert limits on annual price increases (e.g., cap the renewal uplift or lock in a discount level for the next term). Also, ensure that any additional purchases (such as extra users or modules later) are priced at the same discount percentage as the initial purchase – this prevents paying the full price for expansions.
  • Flexibility Provisions: Include rights to make adjustments. For example, negotiate the ability to do an annual true-up/true-down where you can increase or decrease user counts to match actual needs (or at least carry forward unused capacity as a credit). If SAP won’t allow a mid-term reduction, focus on flexibility at renewal (such as the option to resize your contract without penalty).
  • Exit and Transition Assistance: As discussed, push for an exit clause. While a pure “termination for convenience” without cost may not be achievable, you can still add terms for end-of-term transition support – e.g., SAP will assist in data extraction and provide access to the environment for X weeks post-contract. Also, if feasible, negotiate a right to purchase a perpetual S/4HANA license at the end of the contract at a predetermined (fair) price so you have a contingency to continue operations.
  • Service Level and Remedy Enhancements: If your uptime requirements are higher, negotiate a higher SLA or an SLA credit structure that meaningfully compensates downtime (service credits proportional to impact or the right to terminate if SLAs are consistently missed). Obtain response and resolution time commitments for critical issues if your operations require them.
  • Governance and Notice: Incorporate clauses that favor you in ongoing management. For example, SAP should provide usage reports and alerts if you are nearing any contract limits (so overages do not blindside you). Set a requirement for SAP to give written notice of renewal terms well in advance. Include a governance mechanism, such as quarterly service reviews, to formally address any performance or billing issues.
    In essence, don’t shy away from editing SAP’s boilerplate. Many of these contracts initially favor SAP but are negotiable. By inserting protective language, you legally safeguard your organization’s interests and reduce risk exposure over the deal’s life.
• Benchmark Costs and Explore Alternatives: Enter negotiations armed with data. Benchmark the proposed RISE costs against other options: what would it cost to run S/4HANA on a cloud provider directly (infrastructure + licenses + third-party support)? What are other vendors (or SAP partners) offering for similar managed services? Understanding the Total Cost of Ownership over 5-10 years for RISE versus staying on-premise or using a different cloud approach will give you leverage. If your analysis shows RISE is 30% more expensive, you can press SAP to justify the premium or match a lower cost. Conversely, if SAP claims RISE will save money, they must demonstrate that math. Use competitive pressure: let SAP know you are evaluating all options (even if you ultimately prefer RISE) – this will motivate them to make concessions.
  Additionally, examine alternative commercial models SAP might have (for instance, splitting licenses and cloud hosting). Sometimes, just the credible intent to pursue a different path (like running S/4HANA on AWS yourself or postponing the move) can result in SAP improving the RISE offer. Remember, SAP is keen to win RISE customers, so use that to your advantage by comparing and asking for the best possible deal.
• Engage Independent Licensing Experts: It is highly recommended that a third-party SAP licensing and contract advisor (such as Redress Compliance) be involved early in the process. Independent experts bring deep knowledge of SAP’s pricing tactics, typical contract pitfalls, and benchmarks from other clients – expertise that your internal team might not have. They can perform a contract risk assessment, identify unfavorable terms a layperson might miss, and suggest specific changes based on industry best practices. For example, an independent advisor can tell you if the discount SAP offered is truly competitive, or if other customers have secured better exit terms or larger BTP bundles. They act as your advocate, free from SAP’s influence, and can often devise creative negotiation strategies that leverage SAP’s policies or sales incentives. Moreover, having an expert involved signals to SAP that you are well-prepared and informed, which can lead to a more reasonable stance from their side. When selecting an advisor, ensure they have SAP-specific licensing experience; general IT procurement consultants may not have the nuanced insight into SAP’s contract language or indirect usage rules. In summary, don’t go it alone on a RISE deal – a small investment in independent advisory services can yield a significantly better contract and cost savings that far exceed their fees.
• Employ Key Negotiation Tactics: Finally, approach the SAP RISE negotiation as strategically as you would any major vendor deal. Some effective tactics include:
  • Timing and Quarter-End Leverage: SAP has sales targets and is often more flexible at the end of quarters or years. Plan your negotiation timeline to coincide with these periods – you may secure additional discounts or concessions if SAP needs your deal to hit a quota.
  • Leverage Existing Investments: If you are an existing SAP customer, utilize your current maintenance spend or past investments as a basis for leveraging additional benefits. SAP may offer credits for unused licenses or conversion incentives – push for maximum value on those. Ensure you can stay on your current system (and even third-party support) if RISE terms aren’t favorable.
  • Keep Alternatives Viable: Even during negotiations, continue developing your “Plan B”. Whether evaluating a competitor’s ERP or planning an S/4HANA project without RISE, let SAP know you have alternatives. This not only provides leverage on price, but also positions you to walk away if needed.
  • Request a Detailed BOM: Request a Bill of Materials or an itemized quote that shows each RISE solution element (software, infrastructure sizing, and added tools). Review this in detail and question any item that seems oversized or unnecessary. For instance, if SAP sized your environment for peak load, perhaps negotiate a smaller size with the ability to burst or upgrade later, rather than overpaying from day one.
  • Negotiate Future Flexibility: As part of the deal, request a mid-term checkpoint (e.g., after 18 months) to reassess the contract if necessary. It could be a formal addendum that you can adjust the contract if certain business changes happen (like an acquisition or divestiture). While SAP may not grant an open-ended renegotiation clause, even a clause to discuss in good faith or a pre-defined adjustment mechanism can be valuable.
  • Document All Commitments: Ensure the final contract and its appendices accurately capture all negotiated elements – including pricing, credits, timelines, and responsibilities. Do not rely on side emails or verbal assurances. If, for example, SAP agrees to include a free additional test system or a training credit, get it written into the contract or an official quote. Leave nothing ambiguous for later.
    By using these tactics, you can drive the negotiation toward terms that are balanced and aligned with your organization’s interests. Remember that SAP’s representatives are experienced negotiators – staying firm, informed, and patient is key. It may take multiple rounds, but securing the right terms now will pay off through the life of the RISE contract.

Conclusion:
A RISE with SAP contract can deliver value by simplifying your path to a cloud-based S/4HANA and offloading infrastructure management to SAP. However, it also introduces new forms of dependency and cost structures that demand careful navigation.

By fully understanding the contract terms, actively managing cost and exit risks, and negotiating with expert insight, you can enter a RISE agreement with eyes open and safeguards in place.

The result should be a partnership with SAP that enables your digital transformation on your terms—with controlled costs, clear vendor commitments, and a viable plan for the future, whether you stay on RISE or eventually choose a different path.