A baseline reset, $8.6M of conversion cost recovered.

The client brief

The CPG group operated an ECC estate across nine country deployments — North America, UK, France, Germany, Italy, Spain, Brazil, Japan, and Australia — with 9,400 Named Users plus seven engine charges covering MM, SD, PP, FI/CO, HCM, BW and Solution Manager. The entitlement structure had grown unevenly across the country deployments with significant shelfware in three of the nine markets.

The board had approved an S/4HANA Public Cloud Edition conversion with a phased country-by-country rollout scheduled across the next twenty-four months. SAP's account team had quoted the conversion at $33.4M of incremental licence value across the 36-month conversion window.

The Group SAP Programme Director engaged us with a brief reflecting the CPG group's typical SAM maturity — the conversion needed to clean up the existing entitlement before crystallising it into the new contract. The team had visibility on the shelfware but lacked the documentation discipline to defend a reduction without external support.

SAP's opening position

SAP's opening proposal carried a country-by-country FUE allocation that summed to 11,200 FUEs across the nine markets. The allocation was built from the existing Named User and engine entitlements at SAP's published one-to-one conversion ratios, with no adjustment for the documented shelfware in the three under-utilised markets.

The headline figure included approximately $24M of FUE conversion value, $5.4M of HANA database extension across the country deployments, and $4M of new module add-ons including SAP IBP for supply-chain planning, SAP Concur for expense management, and an SAP Analytics Cloud subscription that had been proposed across the group during the prior fiscal year.

The framing positioned the country-by-country allocation as a contractual reconciliation of the existing fragmented estate. The implication was that the conversion would consolidate the entitlement into a cleaner structure — an implication that was directionally correct but commercially inflated against the actual usage population.

The defence tactics

We worked the conversion as a country-by-country rebuild. Four reconstructions carried most of the reduction across the nine markets.

Per-country Named User audit

We rebuilt the Named User population against twelve months of transaction evidence in each country. The cumulative chargeable population was 7,800 against the reported 9,400. The three under-utilised markets — Italy, Spain, and Australia — carried the largest reductions, with combined shelfware of approximately 950 Named Users across the three.

Engine measurement reconciliation

The seven engine measurements were reconciled against country-specific usage. The MM engine was over-reported by approximately fifteen per cent against actual purchase-order volume. The HCM engine carried an active-employee count that included long-term inactive contractors. The combined engine reduction removed approximately 1,400 FUEs from the conversion baseline.

HANA footprint per-country measurement

The HANA database extension was quoted on a country-by-country projection that assumed full-scope production deployment in each market. We rebuilt the projection against measured database footprint and reduced the extension cost by approximately thirty-eight per cent.

Module add-on rationalisation

The proposed module add-ons were reviewed against deployment scope. SAP IBP was retained at a reduced subscription tied to the three markets where supply-chain planning was scoped. SAP Concur was retired — the group operated an existing expense system. SAP Analytics Cloud was retained at a reduced subscription matching the actual analyst population.

The settled position

The S/4HANA Cloud conversion closed at $24.8M against the opening $33.4M, a twenty-six per cent reduction. The country-by-country FUE allocation was rebuilt against the reclassified populations, with each country carrying its own measurement schedule.

Contractually, we secured per-country FUE allocations with annual reconciliation rights, a HANA database extension priced on measured footprint per country, and a module add-on schedule tied to deployment scope rather than group-wide entitlement.

The group's SAM function adopted a per-country measurement cadence with quarterly reconciliation against the contractual baselines. The country-level governance is now the standing operating model rather than the previous group-wide aggregation.

Five takeaways

1. Multi-country CPG estates routinely carry uneven shelfware across the country deployments. The per-country rebuild reveals the variance that group-wide aggregation conceals.
2. Engine measurements in MM and HCM are particularly susceptible to over-reporting through master-data drift. The country-level reconciliation removes one to two per cent of conversion value in most CPG estates.
3. HANA footprint projections in country-by-country conversions assume full-scope production. The measured-footprint rebuild reduces the extension by thirty to fifty per cent.
4. Module add-ons in CPG conversion proposals tend to assume group-wide deployment. The scope review typically retires one to two of the proposed add-ons entirely.
5. Per-country contractual structures are negotiable. The country-level governance survives the conversion and provides ongoing reconciliation discipline.