In anticipation of future negotiations with SAP, many of UpperEdge’s customers are proactively conducting a baseline assessment of their SAP relationship. A critical part of the baseline assessment is an optimization assessment, which proves to be extremely valuable in uncovering costly underutilization in the SAP environment and building a plan to reduce the expense of future SAP licensing events.
How Does Underutilization Occur?
Based on our experience, a majority of SAP customers are underutilized. In some cases, we have found customers to be significantly underutilized by as much as 50% of their investment. Our experience indicates underutilization is primarily attributable to customers not being able to fully deploy well-intended roadmaps because of dynamic strategic and organizational changes. Another common scenario is unnecessary enterprise level agreements or large, upfront SAP bills of material for an overly broad base of users, applications and products that are unlikely to be deployed. This pattern of overbuying is always driven by SAP’s sales tactic of luring customers into larger volume transactions with higher discount levels and more competitive commercial terms.