Customers have good reason not to like SAP's Enterprise Support offering, a new Forrester Research report concludes,...
but the key now is to understand the long-term costs, get used to the new features, and "fight" for more bang for their buck.
For example, customers should leverage user groups to get a firm commitment from SAP to deliver new product functionality with the extra maintenance money, according to Sharyn Leaver, vice president, research director at Cambridge, Mass.-based Forrester Research. Customers should also seek license discounts on new software purchases.
"I would say, fight it in a way of making sure they get value out of it," said Leaver, who co-authored "Coping with SAP's Pricey Maintenance Hike" along with Forrester's Ray Wang and Meghan Donnelly. "The question of whether they can make it go away is probably moot at this point."
The report describes the reaction that has so far greeted the debut of SAP Enterprise Support -- customers don't think it's worth it. A total of 85% of the 203 customers surveyed said they're minimally using their existing Basic Support package. SAP charges Basic Support at 17% of net licensing fees. All customers will be moved to Enterprise Support , which will increase customer SAP maintenance fees to 22% of net licensing fees over the next four years.
Customers agree with SAP's premise behind the introduction of Enterprise Support -- that the complexity of the technology landscape necessitates a better support offering. But many of them are skipping an upgrade to ERP 6.0 and waiting for SAP's next major release. Only about 20% have made the move to SAP ERP 6.0, according to the report. They also think SAP hasn't used their maintenance money to fill key gaps in functionality.
In an email, SAP spokesman Andy Kendzie responded to the report as follows:
"We believe this much-enhanced Enterprise Support offering meets the needs of our customers and offers increased value, such as end-to-end support across the enterprise 24 hours a day, seven days a week, as well as a one-hour initial reaction time for the highest-priority support issues. We are seeing good adoption rates and will continue to roll out Enterprise Support, of course working with user groups and our customers, and listening to their issues and concerns."
Getting a handle on long-term costs is the first step to getting value from the new offering, Leaver said. Take the total number of interactions with SAP support and divide it by the total amount spent on support and maintenance.
"The key here is to understand how it's going to impact you from a cost perspective," she said.
Once customers have a handle on the costs, they should press SAP to put a percentage of the additional maintenance dollars into developing new functionality.
"Get specific about these," Leaver said. "Make sure that you're identifying those, and make sure there's a commitment date on when [it will be] delivered."
User groups are the best way to pressure SAP into adding that functionality, according to the report. So far, user groups have expressed their discontent with the new support structure. Some, like Americas' SAP Users' Group (ASUG), have made efforts to help customers understand it. But focusing on a deliverable, such as a predefined percentage of support dollars that should be going into new functionality, will help ensure that customers get more for their money, Leaver said.
"The key here is, it's not about adding more fuel to the fire," she said. "Come up with real specific things you want."
Customers should also fight for more discounts in licenses in software purchases. Some customers have even taken the step of deferring a purchasing decision until after the price increase takes effect in January, the report says. Also, give SAP your budget -- demonstrate a lower target account value, and be more upfront with how much you're planning to spend.
A long-term cost-containment strategy is to look at other vendors, the report says. A lot of customers have adopted a single-vendor strategy, in large part because of fear around integration issues, Leaver said. But customers should start evaluating other vendors for add-ons, to prove they're serious about switching vendors.
"Many SAP clients with whom we spoke have begun the process of evaluating Oracle, Siebel, salesforce.com, and others for customer relationship management, as well as Siperian, Initiate Systems and IBM for master data management," the report reads.
In turn, look into third-party maintenance options, like Las Vegas-based Rimini Street, which will begin rolling out support for R/3 customers in January.
Getting added value in SAP Enterprise Support will also depend on taking advantage of what's in the new offering, Leaver said. For customers moving off Basic Support, the new offering is going to be a pretty dramatic shift, she said, and it will take some getting used to.
It includes a technical upgrade commitment and the tools to manage it. It also includes end-to-end process support, such as a central test plan for core processes, a quality manager that will validate test execution and completeness, and a central transport mechanism and change control system. Those services can free up some resources and allow companies to focus them in other areas, Leaver said. There's also 24/7 support advisory and root-cause analysis.
"Really understand what this means in terms of new offerings and new value and how [to] take advantage of that," Leaver said.