In order to cope with poor financial results, SAP has increased the price of its support contracts. According to a survey published by Ray Wang, Forrester Vice President, SAP has now cancelled the opportunity for its clients to choose between the basic support contract and the premium one.
Among 200 clients surveyed, 80% declared having minimum use of the basic contract. On average, clients are using their support services less than 6 times a year – to use this service they must obtain the full subscription to premium support even though it is not used very often.
To overcome this cost issue, some clients subscribe to external SAP support companies such as K5 ERP Solutions.
Your Support Could Be Better. And Cheaper.
It’s not uncommon to come across companies that are being taken advantage of with regards to SAP services – The shocking thing is that usually these companies don’t really mind. Don’t be mistaken – they pretend to mind. They complain bitterly about all sorts of downfalls: the terrible support, massively over-zealous quotations for small jobs, lack of flexibility, lack of skills, lack of knowledge transfer, bad communication, and it goes on… Even though they complain so much, when it comes to contract renewal, they stick with the same SAP service partner. Why is that? Rather the devil you know than the devil you don’t, right? With all due respect, that is a terrible mentality to become victim of – Don’t let it happen to your company!
Many SAP service partners muscle their way into tenders by promising amazing solutions at premium rates that are very well motivated; fixed pricing is used to eliminate the risk on the client side; clients like big names because that should mean that the job will be done right. Once these support partners have won the tender, they implement the project by cutting corners wherever they can in order to increase profit margins and meet deadlines. They often play the blame game with their consultants when things go wrong, and project managers don’t take responsibility for much – This causes contention and the very consultants that are supporting you no longer want to be there. This has a huge effect on the quality of service provided.
Disturbingly, it has become more common for us to provide resources to other support partners out there. The question is, why? Well simply put, we have excellent consultants at very reasonable prices. We make our clients happy and they always come back for more. Very often, other support partners call us in to help them clean up the mess that their internal consultants have left behind after a project implementation. Of course they need to make a profit, so they add on an extra 20%-60% to the hourly rates of sub-contracted consultants.
The obvious problem with this model is that companies are paying a lot more for their SAP services than they need to. If you are not happy with your current SAP support or services, contact us – We will gladly provide an obligation free proposal.