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SAP Users Challenge Enterprise Support Program
As first reported in ERP software headlines and Computerworld and commented on in countless blogs, SAP users are uniting and challenging SAP to support its claims that its new Enterprise Support program delivers significant advantages over the prior less-expensive offerings the German giant has taken away. The world's largest business software application company announced in July that it will require SAP users to replace their Standard and Premium Support programs with a new and more costly Enterprise Support program.
Some critical users claim this is nothing more than a transparent attempt to milk increased annuity revenue streams from a captive customer base. According to Michael Davidson, CIO at Apotex Inc., a Weston, Ontario-based pharmaceutical company, "Supposedly, we're going to get more value. I haven't seen it because I haven't been shown it."
ASUG - the Americas' SAP Users' Group - intends to evaluate the Enterprise Support offering to determine "what works and what needs correction and thus leverage our considerable member base to influence SAP to either change the costs or change the offerings as appropriate." ASUG has also launched a series of Webinars in order to provide its membership with information on the new support program. ASUG CEO Steve Strout indicated that the SAP user group has so far convinced SAP to more gradually phase in the new program's increased fees. Similarly, the SAP UK & Ireland User Group, filed a strong initial protest against the SAP's plan and "is continually engaging with SAP regarding the support issue," a spokesperson said.
The German-speaking SAP user group - Deutschsprachige SAP Anwendergruppe e.V. (DSAG) - posted a written statement indicating that it "cannot support the compulsory replacement of Standard Support with Enterprise Support at this time." The DSAG's membership includes 2,100 companies in Germany, Switzerland and Austria. DSAG board member Andreas Oczko claimed in an interview that feedback from the group's members, "especially from small-to-medium-[size] businesses, is that they have very simple landscapes and are familiar with their systems. They don't see at the moment why they should need enterprise support."
SAP officials have claimed that the ERP software company is implementing the new customer support policy to help smooth users' migrate to the next generation of SAP ERP software applications, which will incorporate its SOA-based NetWeaver middleware technology. The company has begun the phased program implementation for current customers and the program will accelerate in early 2009.
The price escalations will reach 22% of a user's software license fees by 2012. The older support packages were priced at up to about 17% of the ERP software license fees. New customers can only select the higher-priced option with the 22% maintenance fee.
Introduced in May 2008, the Enterprise Support package includes the installation of SAP's Solution Manager portal at client sites. The web portal will supply SAP service staff with a real-time information systems view. The maintenance package also gives clients access to the Run SAP methodology, which was created to better accommodate service-oriented architectures (SOA).
SAP has thus far given no indication that it plans to soften the support program plan. Contrary to much user sentiment, according to SAP spokesman Bill Wohl, "While customers are saying they never like to pay more money, they see the additional value". He reiterated the company's position that the price escalations were implemented to help the company deal with increasingly complex client implementations and not simply to drive increased revenue. Hmmm....
Forrester Research analyst Ray Wang, suggested that SAP users work together to determine the value of the new support program. Wang commented that there is a "broad consensus" among Forrester clients that they may have to offer "some concessions" to SAP, "but it's also important to understand what value they may receive."
I am certain we haven't heard the last of this program.
Posted by: Jeffrey on 08.20.2008
Posted in: SAP
Comments (2) | Jeffrey[at]erpblogger.com
Trackback | http://www.erpblogger.com/sap-support.htm
Alberto Chicon says:
August 27, 2008 at 7:45 pm
As an SAP user for a midsize distribution company, I'm taken aback by the clear revenue oriented support program. This is one more item in the increasing costs of software ownership that we didn't expect when we procured this ERP software solution two years ago.
August 30, 2008 at 10:42 pm
We're far more pleased with our SAP software than we are with our relationship with the German giant. If the enterprise support program were truly based on value, SAP could have continued the lesser priced maintenance programs and still have been successful with the new program. When a customer support program is being sold as the "only" program, it is no longer based on value.