How we supported a multinational retail organization to review their SAP contracts after merging with another company

Choosing what’s best for your business without the pressure of an audit

Company: organization with 236,000 employees in the retail industry

Case: Post-merger contract advisory and compliance overview

Support: Remediation and optimization actions to clean up the SAP environment

Two retail companies merged, and, as a result, all the licensing agreements needed to be shifted to the new entity. Our customer engaged us for a contract advisory and compliance check prior to signing a new deal with SAP. Of the two companies, only one was using SAP software programs at the time. Thus, all the license quantities were matching the needs of solely one company.

Their main concern was related to the programs licensed on enterprise metrics (revenue, number of employees) and how they can sort out whose revenue and number of employees needed to be declared (the former entity that ceased to exist or the new entity that had double the revenue and number of employees).

Our solution

B-lay performed an internal audit to create a complete license, deployment and compliance overview. The engagement consisted of:

– License entitlement overview, resulting in a listing of the different license quantities, metrics, definitions, terms and conditions
– Contractual advisory, displaying the different terms, conditions, metric definitions and license quantities that need to be changed Deployment overview (screening of the installed SAP software programs)
– Usage overview (details regarding the software programs in used)
– Compliance overview (mapping of license entitlements to the installed and used software programs and highlighting the risk areas as well as cost saving opportunities)
– Remediation and optimization advisory (highlighting the improvement solutions for the risk areas as well as highlighting the cost reduction potential)
– Audit support

To create the license entitlement overview, we performed a thorough analysis of their current contractual agreement with SAP. As such, the overview served as a basis for the contractual
advisory step.

During the contractual advisory phase, we supported our customer in declaring the enterprise figures split per the former entities, supported by the contractual clauses. Moreover, we highlighted what needs to be modified in their contracts in order to bring more clarity on the different metric definitions, license quantities and clauses. All these updates were made to protect the customer from misinterpretations and confusion during audits.

During the deployment and usage overview, we highlighted the installed software and used software and we included all these details in the compliance overview. This step included the risk areas as well as the cost saving opportunities.

In the end, we supported our customer to perform the remediation and optimization actions to clean up the SAP environment and remove the false positive measurement results. Also, we highlighted
all the licenses that were not in use, so that the customer can swap them for different licenses

Business impact and results

By the time the official audit from SAP began, our customer knew what their needs were, what could be re-used, and which licenses could be swapped for different ones.

From a contract advisory perspective, our customer signed new agreements taking into consideration the advice we offered.

Evaluating their environment and contracts gave our customer the advantage of consciously choosing what to acquire, based on actual and future consumption.

“Having the time to look into your compliance situation before an audit is a luxury that many companies afford, but tend to overlook.”.