The hidden cost of enterprise software renewals
What CFOs aren't being told before signing the next three-year SAP renewal.
Large renewals are presented as continuity decisions. They are capital allocation decisions, and they are usually made with an incomplete picture.
The items that go unmentioned tend to be structural: indexation clauses, licence metrics that change as your architecture changes, entitlement you cannot downgrade mid-term, and support levels priced as a percentage of list rather than of what you actually paid.
A CFO should be able to see, on one page, the committed five-year cash position, the portion tied to capability in active use, and the cost of exit at each anniversary. If nobody in the organisation can produce that page, the renewal is not ready to sign.
Independence matters here. Advice from a party that also resells the software being renewed is not advice — it is a quote with commentary.