SAP TCO Webinar – summary

by Dennis Howlett on October 22, 2009

Thanks to the 50+ people who turned up to hear Frank, Vinnie, Ray and myself talk about managing SAP TCO with emphasis on the maintenance issue. While on the call, we were pleased to see challenging questions, some of which are reproduced below, along with a summary of the answers given.

Above you’ll find a quick synopsis of the main points. We are preparing the full presentation, along with selected speaker notes, Q&A and some further expansion on this important topic.

If you’d like to see what was said in the accompanying Twitterstream then check out #EAcall

Q: Moving to a 3rd party maint model sounds good for a mature implementation, would you recommend it for an new installation?

A: No. Early cycle customers and especially those who are implementing ECC6 will need a good amount of support for which it is only fair that SAP is properly compensated. However, in considering your maintenance strategy, endeavor to work through a ‘bell curve’ of requirements where maintenance kicks in at or around the go live time, ramps up as you discover issues not apparent in the implementation phase and then tails off as you gain experience and maturity. That later point might be the trigger for considering a 3PM option.

Q: Any known issues/concerns with consolidating contracts in the US?  Comments relayed from SAP France that support will not be as good if contract is US-based.

A: The general advice is not to consolidate contracts because that will give you less flexibility in future negotiations. It also means that if you need to hive off, an unbundled contract ’set’ is far easier to work than if you are bundled up. In this particular instance, it sounds like there’s a touch of a ‘turf war’ going on among SAP support centers but don’t let that fool you into believing you need to change tack if you’re already unbundled. [There is more to say on this at a later time.]

Q: Can you really return licenses in order to reduce maintenance?

A: That depends on the territory you are in and the terms under which you acquired the licenses. It is easier in Europe than the US. It is not always a good idea to return licenses but you might usefully consider parking unused licenses for support purposes, especially if you have some thought those licenses will come in useful in the future. If not then it is always worth negotiating.

Q: Looking at market and maturity of SAP product portfolio..do you think most companies should be look at it as a “Cost Center” or “Strategic Asset” for business?

A: That depends on many factors, including the company’s general business strategy, IT strategy and so on. It’s clear for instance that order input is mission critical. Would you say the same about financials? Given SAP is putting more focus on business process (check the BPX Community at SCN) then it might be better to think in terms of business processes rather than functional modules. (An example might be order to cash.)

Note: after the webinar, David Dobrin wrote a thoughtful piece on Solution Manager (SolMan as we usually call it.) The webinar didn’t give SolMan a lot of attention except to say the general view is ‘5 miles wide, 1 inch deep.’ More research and inquiry is needed in this area.

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