7 Ways to Get More For Your Increased SAP Maintenance Fees
In my analysis yesterday of SAP's recent increase in maintenance fees for all of its customers, and why that pricing should actually have gone down, I might have left some of you hanging: "Well, now that you've told us we're basically stuck with SAP, then why don't you give us a solution, Mr. Bigshot Opinion."
Print
Fair enough. I'm going to turn to Forrester Research's star ERP analyst Ray Wang and his recent analysis on how companies are coping with SAP's pricey maintenance hike (from 17 percent to 22 percent) and his seven suggestions on how to deal with the unwanted costs.
Make no mistake: This is a hugely important effort for you. "Prepare to influence SAP," Wang writes, "or face the consequence of long-term lock-in."
1. Fight for Your Discount. Wang first advises his clients to take a long-term view on contracts. "While a small discount in the past was offset with 17 percent maintenance over a 10-year period, customers should seek greater discounts in licenses to offset the maintenance fee increase," he writes. Forrester recommends that customers should target an equivalent or lower total 10-year cost.
Some customers, Wang adds, have deferred their next purchase decision until after Jan. 1 2009, when the new maintenance fee kicks in. "These customers hope to gain leverage in the discounting and maintenance discussion, or on other issues such as SAP Business Information Warehouse (BW) credit toward Business Objects," Wang writes.
2. Demonstrate to SAP a Lower "Target Account Value." A time-honored tactic in vendor negotiations has been to set what's called spending expectations, which can reduce the pressure on both the salesperson and the customer. "Large customers should invest time convincing SAP that their 'target account value' is not reflective of a company’s growth rates or future SAP strategy or face a barrage of more unnecessary service offerings," Wang writes.
3. Assess Your Current Value for Support and Maintenance. This tactic may take some time but will be worth it. Wang advises business and IT folks who work with the SAP applications to conduct an internal audit to determine the number of support interactions during the past four years, support packages deployed, bug fixes deployed, and regulatory updates deployed. Then, he writes, take the total number of interactions and divide by the total amount spent on support and maintenance.
4. Quantify Unkept Promises. "Many customers chose SAP with the understanding that functionality gaps would be provided over time via enhancements that would be paid for by maintenance and support fees," Wang points out. "Customers should document a list of outstanding functional requirements and enhancements that have not been addressed, and work with other industry peers to drive a delivery commitment date from SAP."
5. Create a Long-Term SAP Containment Strategy. Historically, most SAP customers adopted a single-vendor strategy out of "fear of complicated integrations, desire for process standardization and need to expedite deployments pre-Y2K," Wang writes. "But long-term apps strategies should consider how to contain future risk in a single-sourced ERP scenario."
This option—while a bit dicey for some companies—may include a departure from a single-sourced vendor strategy, in order to prove a customer's seriousness to switch vendors, Wang notes. He adds that many SAP clients with whom Forrester spoke with for this report had begun evaluating Oracle Siebel, salesforce.com, and others for CRM as well as Siperian, Initiate Systems, and IBM for master data management (MDM).
6. Take Action in the SAP User Groups. Now is the time, Wang
Previous Post: Why SAP's ERP Maintenance Prices Should Be Going Down -- Not UpNext Post: Banks Target Troubled Borrowers Using Data-Mining Tools: Is That IT at Its...
Most Discussed Posts
Cloud computing has emerged as one of the most significant game changers to hit the technology landscape in the past 20 years. With this massive expansion of the cloud, the perception of the IT organization is shifting from a utility player to a change agent. This eBook breaks down five ways progressive organizations are using cloud-based IT Management solutions to help drive innovation and become more strategic, including: adding visibility and analytics, speeding up time-to-value, lowering costs, improving prioritization, and providing a blueprint for future cloud deployments.
Read the white paper to see how IBM helped Citigroup deliver new services and enhancements to their 200 million customers faster.
There are 3 ways to modernize legacy applications: rewrite completely, acquire packaged solutions or migrate existing code. This paper explains why it's best to migrate and how IBM® Rational® software can help.
Accommodating specific lines of business can result in a hybrid ecosystem of applications and servers. The resulting complexity of this architecture makes for an environment that is costly to maintain and difficult to change when addressing new challenges.
This whitepaper will help you to define a mobile device passcode policy. Security managers must attempt to reconcile two opposing goals. They must: 1) create a passcode policy that is strong enough to protect the device if it is lost or stolen, while: 2) not annoying users with needless length or complexity.
This whitepaper, authored by The Radicati Group, looks at the key reasons organizations should consider moving to a cloud-based archiving solution. Email archiving solutions enable organizations to store, monitor, and collect electronic data exchanged by their users to comply with internal policies and regulations.
ATERNITY will showcase a 30-minute demo on how Fortune 500 companies are leveraging its award-winning FPI Platform to deliver a user-centric approach to Proactive IT Management.
For businesses to move forward and tap into the ever-expanding universe of Internet users and network-enabled devices, it's critical to learn how to make the transition to IPv6. Learn the critical steps your organization must take to make a seamless transition-and keep your business world connected.
Learn how IT teams can protect against spear phishing tactics. Harry Sverdlove, chief technology officer of Bit9 offers a frank discussion about spear phishing - the most common technique used in today's advanced attacks.
Learn how to build a solid business case for your migration to Red Hat Enterprise Linux so you can run leaner, innovate faster, be more flexible and own the New Now.
Social media isn't about you; it's about everything around you. As you consider how your customers want to communicate with you, social media is something that can't be ignored. But what should your strategy be? Is social media "just another channel?" What kind of a plan makes sense for your contact center and for your customers? Join our experts as they share their insight and research results.
Hardware tokens were a popular method of strong authentication in past years but the cumbersome provisioning and distribution tasks, high support requirements and replacement costs have limited their growth. The additional log-in steps that hardware tokens require and the resulting user frustrations have limited adoption and make them impractical for larger scale partner and customer applications.
Sponsored Links
