Oh SAP Valentine, Where Art Thou?


SAP Valentine

Much attention in recent press has been on SAP’s plans to migrate more of its customers from ECC to S/4HANA, especially pending their supposed end of ECC support in 2025.  And even though SAP has continued to speak about the pending change, three questions have yet to be answered:

  • When will SAP really end ECC support?
  • How many customers will still be on ECC in 2026?
  • How many customers intend to move to S/4HANA before 2025?

SAP tried to answer the first two questions during the 2019 Capital Markets Day last week.  CEO Bill McDermott shared his thoughts on ECC support end-of-life in 2025:

“In the highly unlikely event that we have 1 or 2 stragglers out there, we are never going to leave anybody behind, but it would be obviously an unattractive solution at that time and an also unattractive cost choice to make, and therefore you should stick with the 2025 mark.  We’re going to stick to it.” 

You Do Not Love Me?

Moving to SAP was probably a good move for your company many years ago.  Chances are you’ve invested millions of dollars in enhancements and integrations with other SAP and non-SAP applications.  Breaking up with ECC may be hard to do, but after paying a few maintenance fees, you may not feel the current maintenance support costs are attractive, or anything less than expensive.

You should be seriously making time to consider aggressively managing your unattractive and expensive support maintenance – either by moving to S/4HANA or by taking a different path if you think you might still be on ECC in 2025.

You are an Expensive Date!

Managing technology for your company has its challenges, especially if you are under pressure to reduce your OpEx budget.  It can be tough balancing technical debt issues, while attempting to lower your IT TCO (Total Cost of Ownership).  The struggle can get heated when trying to address the challenges of meeting the functional expectations of your internal business partners.

Unattractive annual SAP maintenance can be negatively impacting your IT TCO, especially if it is increasing every year.  You could dramatically reduce this cost by at least 50% when moving to a third-party support partner (e.g., Rimini Street or Spinnaker Support).

Using a third-party support provider, savings can quickly be realized from:

  • Discounted annual vendor maintenance fees
  • Elimination of vendor required upgrades
  • Reduction of localized support costs associated with upgrades and patches

But the risk and potential hidden costs need to be recognized and managed, including:

  • Delayed or postponed functional innovation, including SAP’s product portfolio
  • Agility and expense of maintaining connectivity with suppliers and customers as their tech requirements change
  • Dependency on the third-party’s ability to solve problems, including cyber security vulnerability
  • Third-parties are always at risk of litigation by software vendors
  • Implications (now and future) on your SAP commercial relationship

Will YOU be my Valentine?

As the technology advisor and a business leader for your company, you need to weigh these factors and make the best decision, but do not make this decision alone — create a governance process team of technical and functional stakeholders.  A properly designed and defined governance process team accomplishes many objectives including:

  • Improved decisions through expanded inclusion and diversity of thought
  • Informed and invested stakeholders, a key to successful organization change management
  • Stronger teams through their direct involvement in significant decision-making processes

You will also want to conduct external benchmarking on third-party support.  Talk to a diverse set of tech leaders on the topic of support as input to your decision process (effective tech leaders are usually open to sharing their stories of success).  Ensure you speak with:

  • Enterprises who are currently using third-party service providers
  • Leaders who gave serious consideration but decided against using third-party service providers
  • Tech leaders who previously operated in a third-party support environment, and they migrated to SAP S/4HANA support

How you conduct your benchmarking activity will be specific to your situation.  Success and failure of your benchmarking will be impacted by your ability to eliminate presuppositions and prejudices during your data collection and analysis process.

Even if your evaluation is pointing to a third-party provider, your analysis is still not complete.  Before a customer goes to third-party support, they need to understand the implications on their SAP commercial relationship, such as:

  • SAP’s requirements to pay back maintenance if you return to them for support
  • SAP’s approach to pricing new users and metrics that exceed your agreed to license levels
  • SAP’s approach to conducting audits

Pressure test your assumed benefits – qualitatively and quantitatively — as well as your risks.  Keep an open mind and allow the capacity to capture and identify relevant new knowledge.

After analyzing this data from your external benchmarking and understanding the risks associated with potential SAP commercial implications, you should have a data framework to present to your governance process team.  It is critical that the data and analysis presented will include an equal balance of risks and merits of deciding for or against the selection of third-party ECC support.

Looking for Love in All the Wrong Places – Maybe, but Maybe Not

Many third-party support customers find “great” to “acceptable” levels of support.  I have considered this path in former roles mainly because of the annual SAP maintenance fee and the resulting question, “What is my ROI for this annual maintenance?”

Although many third-party support customers find acceptable levels of support at a lower annual cost, I do not know of anyone who views this move as an accomplishment, other than hitting a cost target by lowering their TCO.  You will not have eliminated your SAP ECC support problem, and you have chosen to defer the time to move to SAP S/4HANA or to a different solution.  There is a difference between deferring your migration and being done.

Before you go in the third-party support direction, it is critical you thoroughly understand what your moving from, what you are moving to, the risk you are accepting, and how and when you will exit.

Comment below, follow me, Ted Rogers, on Twitter @UpperEdgeTed find my other UpperEdge blogs and follow UpperEdge on Twitter and LinkedIn.

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Ted Rogers

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