SAP Support: What’s Behind the Painful Perceptions
A majority of surveyed SAP users find no compelling need to migrate to S/4 HANA. At the same time, almost half expressed dissatisfaction with the value of SAP support. That unease is only likely to increase as businesses try to run and maintain their existing ERP systems while SAP shifts investments to build a new, as yet unproven platform. Over time, support and maintenance fees will become even more painful as perceived value decreases.
There’s no question that enterprise resource planning (ERP) systems remain a critical component of the business computing infrastructure. But the indications are that users are more than happy with the stability of the systems they’ve been investing in for years, and see little need for new bells and whistles.
According to a Gartner announcement at its annual symposium, ERP remains a significant investment, but a survey of 2,500 CIOs worldwide reveals that among top performers just 8% say it falls within their top three technology priorities. The reason, according to Gartner, is they have “likely invested enough to modernize ERP and shifted that investment to higher return activities.”
Fees outstripping value provided
That’s a strong indication that enterprises are tiring of the rising costs for support of a relatively stable product, with only marginal improvements in the software. These systems for the most part have been built out over many years, are stable, and provide a central nervous system that businesses would just as soon not disrupt with new upgrades.
In the case of SAP, a survey of more than 200 SAP licensees conducted earlier this year found that only 8% believe the fees they paid for SAP support were “well worth the value they receive,” while 47% expressed dissatisfaction and said they were “paying too much” and/or “support costs are way out of control.”
In the survey, released by Rimini Street, 57% indicated they find no compelling business case to move to S/4HANA. More than half indicated that the cost of reimplementation over multiple years would be between $10 million and $100 million.
Nucleus Research has also found upgrade resistance among SAP customers, along with buyer’s remorse.
“Six out of 10 customers said they would not buy SAP again,” write Nucleus CEO Ian Campbell. “This was consistent across most products including CRM, ecommerce, HCM, collaboration, and analytics. Even more telling, nine out of 10 ERP customers said they are not considering a future investment in S/4HANA. In all fairness, the majority is satisfied with the current ERP solution from SAP, but expressed reluctance to move to HANA.”
Like other providers of legacy software systems, SAP has been aggressive in auditing licensees to gain fees for violation of often-obscure licensing terms.
“If you agree to SAP’s standard license terms and use the software in a way not expressly permitted by the license, it could cost you tens of millions of dollars in completely unexpected incremental license and maintenance fees,” Barry Sookman wrote in The Register, after a UK judge sided with SAP in its bid to capture an additional £54,503,578 in fees from a customer that integrated the mySAP Business Suite with software from Salesforce.
Given the limp support for S/4HANA migration, one can only wonder what other strategies SAP may pursue in a bid to squeeze revenue out of its customers. Third-party support for existing implementations makes it easier to resist.
For more information, see Rimini Street’s survey.