August 3, 2016 | Michelle Wilkinson | Director of Marketing
SAP charges between 18-22 percent of the costs of its software licenses for annual support, compelling many companies to consider the benefits they actually receive from SAP. For some companies, switching to third-party software support is a viable and attractive alternative to traditional SAP support services.
How do you know if your company is a good candidate for third-party SAP software support? Here are seven things to consider:
Is your business running smoothly with your current SAP solution?
You might feel pressured by SAP to make unwarranted upgrades to your ERP software. However, there can be significant cost, instability, and risk involved with forced upgrades or SAP HANA migrations. Third-party SAP support experts learn your specific environment and business requirements to provide best-in-class ongoing support for your current software solution for as long as you want.
Are you currently getting your money’s worth for SAP support?
Examine how often you use SAP software support to care for your on premise applications. Are you using it enough to justify paying approximately 20 percent of the cost of your licenses each year? Has your support declined as your software version has aged? And are you receiving personalized fixes and advice in a timely manner rather than online links based on search queries? If you are, great! But if not, keep in mind that with third-party SAP support services from Spinnaker Support you can realize world-class support for a fraction of what you are paying SAP.
Are you using custom code?
Most companies have customized their enterprise software to some degree, from minor modifications to highly customized code. Because SAP doesn’t provide support for custom code, you may need to look elsewhere to solve custom code-related problems. Third-party SAP support providers deploy experienced software engineers who can analyze and support both core and custom code, troubleshoot problems, fix bugs; whatever you need. They also provide an array of advisory services across the entire technology stack to diagnose interoperability and security issues pertaining to either generic or custom software.
What version of SAP are you running?
With each new release, support for aging versions becomes costlier. SAP focuses forward and invests more for newer versions and the SAP HANA cloud platform. This does not mean that you have to invest in a new version every time one is released. There should be a viable business case and decisions mustn’t be made solely on cost and completeness of SAP support. Third-party SAP support providers specialize in all on premise versions of the software (older or newer), giving you control of your own destiny.
Do you like being a high priority while having an experienced SAP software engineer as your point person?
It is well documented that the software mega-vendors generate about 90% profit from annual support. They prefer developing futures, i.e., the cloud, more than new functionality for aging versions. Third-party support providers focus on support and solutions to issues on your existing version, giving you better service when you need it and for as long as you need it. The third-party SAP expert assigned to your account gets to know your business, the modules you are using, your technology architecture, and the business outcomes you need. Independent analysts have stated that customers who pay the mega-vendors for support, but not for new software licenses, are often considered dormant. It is hard to feel like a high priority when you’re categorized as dormant.
Is your contractual commitment with SAP coming to an end or is coming up for renewal?
Depending on the terms of your contract, you likely have an annual renewal of your SAP support agreement. SAP requires a 90-day notification of cancelation, otherwise your annual support agreement is automatically renewed. Generally, the timing of the renewal is December 31, whereby the cancelation notice would be due in their hands by September 30. You have the choice to end the contractual commitment each year when the renewal is up. Before committing to even 1 more year, explore your options. Renegotiate a better deal with the software vendor or save an average of 62% with a third-party. You win either way.
Are you planning to migrate on premise enterprise applications to the cloud?
The cloud is here to stay, so now IT departments are trying to figure out how to incorporate it into their business. How, when, which applications? In a recent webinar, Forrester Research talked about taking a “maintenance vacation” from SAP in order to choose a strategy and help fund the transition. More detail on this topic is coming next week.
Not all third-party SAP software support providers offer the same level of service. To discover whether Spinnaker Support is right for your business, please contact us today.