Andy Scott, an IT group leader at Suburu of Indiana Automotive Inc., says his company is fortunate enough not to have had to use its standard support plan for its SAP R/3 Enterprise system.
With company-wide budget tightening, there's only room for general maintenance for the SAP system in 2006, he said.
"We've really had no budget for SAP and thankfully we haven't had any major problems," Scott said.
Like dozens of other companies that purchased licenses for SAP R/3 and mySAP ERP, Suburu of Indiana didn't have much choice when it signed a support contract for the software. At the time, SAP offered only two options, a standard level of support and MaxAttention, the highest level of support, aimed primarily at SAP's largest enterprise customers who could afford it.
But SAP Premium Support, launched this week, adds a guaranteed service level agreement on response time and corrective action and gives customers access to a point of contact for support issues. The support package is offered at 22% of the net license fee.
Much the way Oracle Corp. has revamped its support package, SAP is hoping its new options will boost support revenue and stave off a rush to third party support vendors by customers running older versions of SAP's ERP application. Analysts say a vast majority of SAP's customer base is currently using older versions and, with standard support set to expire at the end of 2006, many could flock to third party support providers.
"Customers for a while have been asking for a higher level of engagement with SAP from a support perspective," said Greg Pike, senior vice president of Active Global Support America, SAP America Inc. "What we've come up with is a premium level of support that balances reactive support with proactive and preventative steps by linking customers with our support advisors."
Pike said the guaranteed service level agreement, which is part of Premium Support, will focus on high priority messages. The SLA will cover "a major outage or something that creates significant risk to the customer's business," Pike said.
"It really has come from the customer base requiring a premium level of service around mission critical support and that's going to be a major part of our focus," he said.
Companies not interested in product upgrades are generally lured to third party support providers because they're seeking lower maintenance costs. In addition, companies get personalized service and can avoid hiring new IT employees with SAP expertise, said Christopher Carter, founder and CEO of Wisconsin-based SAP consultancy CCI SAP.
"It appears that SAP is promoting a more in-depth help desk service," Carter said. "We're different in that we're proactive and we monitor and support the SAP system before support issues become a factor."
Vendor support has less value if a company is running mature applications or if the applications are too customized to apply upgrades, Paul Hamerman, vice president of enterprise applications at Cambridge, Mass.-based Forrester Research Inc. said in his research brief, "Third party application support promises lower costs, with tradeoffs." Hamerman recommends customers drop vendor support unless there are definite plans to upgrade to a newer release.
SAP's Premium Support includes an annual assessment by an SAP support advisor that lists areas for improvements to the implementation and core business processes.
"There will be a designated person that will have the opportunity to become familiar with the customer's system," said Mark Cordrey, vice president of active global support.
Support advisors will be staffed through SAP's support branch and consulting ranks, he said. In addition, SAP is keeping open the possibility of augmenting support staff through partnerships in the future.