SAP users wait for vital support announcement

SAP users world wide are anxiously awaiting an imminent announcement from the company and the SUGEN global user group organisation about a programme to prove the value of a rise in support fees proposed last year.

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SAP users world wide are anxiously awaiting an imminent announcement from the company and the SUGEN global user group organisation about a programme to prove the value of a rise in support fees proposed last year.

Concern at the outcome of the review of SAP’s Enterprise Support price rises has been heightened by the continuing mystery surrounding the abrupt departure of two key members of the project, which was agreeing and monitoring key performance indicators to demonstrate the value of the price rises.

Neither the user groups nor SAP are commenting ahead of the announcement.

The KPI study was agreed after a substantial backlash among SAP customers at its plans to raise support fees to more closely reflect those charged by its enterprise software rival Oracle.

The stakes for all parties are high. SAP has to balance long term customer satisfaction with its need to continue earning substantial revenue from its support operations, which have been one of the few bright spots in its financial performance in recent quarters. It is also under pressure from customers threatening to move to third party support.

For SUGEN, the global confederation of user groups, and for its constituent country-based groups, the issue is credibility among its members.

It was the user groups that gave focus to SAP users’ frustration over the rise in support prices and whose pressure convinced SAP to make a unique offer among IT suppliers: to hold back price rises until value could be demonstrated.

Ray Wang, partner with analyst group Altimeter, speculated on why Andreas Oczko, the benchmarking project leader, and Otto Schell, the project sponsor from SUGEN resigned from their roles. He suggested they may have been concerned about the methodology used to assess value and possible pressure from SAP for a speedy announcement.

Wang suggested that the SUGEN representatives might have concerns over the methodology used by Gartner, which is auditing the KPI study. He also suggested that end users may feel that they had not accumulated sufficient data to reveal underlying trends and not have had enough time to review the data for statistical errors and anomalies.

It is also not clear whether all the KPIs have been measured, or just an initial subset.

In April SAP and SUGEN announced 11 KPIs to be measured, around business continuity, business process improvement, innovation and protection of investment and total cost of ownership.

Praising SAP for agreeing this “huge endeavour”, Wang suggested that benchmarking 100 global customers against the KPI’s created potential data consistency challenges.

He also suggested that SAP may be eager to get out a positive announcement on the KPIS ahead of its financial Q4, when “90 percent plus of its maintenance renewal occurs”.

As SAP customers world wide await the outcome of the KPI study, Wang urged IT departments to work with their user groups to understand the methodology used and gain access to the underlying data with these 100 customers.

“The selection of the 100 customers by the user groups will significantly impact the outcome. Users should see how their situation fares compared to the benchmarks to gauge their own potential value achieved from SAP’s Enterprise Support,” he said.

Wang reminded end users that SAP’s Value Academy has benchmarking data for a broader set of customers than those used in the SUGEN study.

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