ORACLE
Six Public Clocks by Konstantin Grcic [Rimini Street Cover Story E-3 Magazine April 2015]
Six Public Clocks by Konstantin Grcic
Blog Management

E-3 Cover Story Apr 2015: Time for Change by Rimini Street

With its innovative and dynamic approach, SAP is well on the way to becoming a monolithic in-memory computing vendor. From 2025, SAP will only support Intel x86, Linux, Hana and Simplicity – not enough choice for many existing SAP customers. This is where Rimini Street comes in, offering a very strong alternative for service and support.

“Run simple” is the order of the day, and customers are urged to do their homework when it comes to their own ERP system. For existing SAP customers, this means considering alternatives to their current service and support plans. E-3 editor-in-chief Peter Färbinger spoke with Jill Harrison, Hendrik Zwart and Garrit Skrock about the service concepts that Rimini Street has in store for SAP customers.

It is essential that the value of the current maintenance is assessed. The SAP community needs alternatives to monocausal SAP concepts based solely on their proprietary in-memory computing technology. Marco Lenck, head of DSAG, demands uncompromising freedom of choice in all circumstances – something SAP will no longer be able to provide after 2025. Time for SAP customers to investigate alternatives, to ensure that their own investments are protected.

Investment protection

“Customers love their SAP software”, was Jill Harrison’s surprising opening statement in her interview with E-3 magazine. “Customers also love our comprehensive service.”

Jill Harrison is a managing director at Rimini Street and responsible for Europe and Africa. In the past she has worked for SAP, Oracle and Infosys, making her knowledge of the European ERP market second to none. When she refers to SAP today, it is with nothing but admiration and respect. Nevertheless, current developments in the SAP community have her worried: SAP’s new focus puts the all-important investment protection at risk.

SAP customers have invested in their ERP system for a long time, and optimised and consolidated it. Service and support costs have not decreased but, on the contrary, have risen. A widespread notion in the SAP community is that existing customers today pay higher maintenance fees for less service. Rimini Street strives to resolve this disparity with alternative support services.

“Our focus is on services and support, not on software development”, is how Jill Harrison explains Rimini Street’s positioning in the market.

For Harrison, the issue of investment protection is a top priority. It’s not about disruptive innovations such as in-memory computing – Jill Harrison defines Rimini Street’s core goals as “to support our customers’ business success and the guarantee that they will be able to operate their ERP systems smoothly and without any glitches for a very long, continuous period of time.”

In other words, Rimini Street is not a revolution, but a guarantee for customers that they will be able to successfully run their own SAP system, whilst retaining freedom of choice when it comes to infrastructure, operating systems and databases.

At the same time, customers will be able to ensure their own security and remain independent from an in-memory computing roadmap. Hendrik Zwart, Rimini Street Germany’s sales director, goes into more detail: “Our support for SAP licensees offers significant savings in annual costs, an outstanding level of service and the option to avoid obligatory, costly upgrades of products or support packages.”

With an experienced team of SAP experts who have an average of 15 years experience in SAP development, implementation and system management, Rimini Street provides support for R/3 4.x, ECC 5.0, ECC 6.0 and BW 3.5 and earlier releases, which are used by the majority of existing SAP customers worldwide (please refer to the following for more detailed information on the technical scope).

Holistic versus disruptive

From the perspective of the SAP community and the current SAP roadmap, it seems almost impossible to compare the services and support provided by Rimini Street with the services and costs associated with the SAP maintenance fee.

Rimini Street offers holistic support – irrespective of release status, modifications, Z-programs and licensing agreements. SAP, on the other hand, focuses on developing a disruptive roadmap heading towards 2025, with the single objective of promoting their own in-memory computing solution – an approach that many existing customers in the SAP community find unsettling.

Two years ago, Gartner analysts had already warned of this development: Gartner observed the change of licence and service contracts to the detriment of existing customers for the sole purpose of creating an ERP platform to be controlled exclusively by SAP.

It is no longer a secret that SAP is going down a disruptive path. The aim for 2025 is to offer only products running on Intel x86, Linux in one monolithic software suite with in-memory computing.

An open and holistic approach looks somewhat different: as far back as autumn 2013, Gartner recommended that the SAP community should guard any old SAP agreements like treasure. They still contain extensive rights of use for users and engines which are subject to separate, expensive fees under newer contracts. Gartner’s recommendations can be regarded as investment protection for existing SAP customers.

The same goes for “our holistic approach”, emphasises Jill Harrison. She explains that Rimini Street’s support does not distinguish between SAP code and in-house customisations. “When a customer calls us, we provide assistance – without asking whether the problem lies in the SAP core code or elsewhere”, says Harrison, with obvious pride in her company’s support services.

Dealing with customers provided her with enough material for numerous anecdotes which she is only too happy to share: once, following an in-depth analysis by Rimini Street, an error which was initially suspected to have originated in the SAP system turned out to be an incorrectly configured firewall. No problem for Rimini Street, emphasises Jill Harrison in her interview with E-3, because “our approach to service is always holistic.”

Rimini Street enables existing SAP customers to run their current, stable release for a minimum of ten years without needing to upgrade. Compared to the SAP maintenance fee, Rimini Street customers can save up to 50 per cent in annual support costs. In addition to the reduction in annual support costs combined with avoiding obligatory upgrades, the cost savings may exceed 90 per cent of the total cost of continuous annual SAP support.

So how does that work? “As a Rimini Street customer, you will be assigned a primary support engineer (PSE) who will respond to all mission-critical support requests within 30 minutes”, explains Garrit Skrock, SAP global product marketing director at Rimini Street. “Our PSEs work closely with a team of SAP experts in order to provide, if necessary, application fixes and updates for mission-critical SAP applications and customised software.”

Less is more

Rimini Street focuses on retaining the value of, and maintaining, existing SAP systems. “We support our customers’ entire ERP systems, including any modifications”, stresses Jill Harrison in her E-3 interview. Experience has shown how important this approach is, as only 15 per cent of support requests relate to the SAP code itself, while the remaining 85 per cent are to do with modifications on the part of the existing SAP customer. Many satisfied SAP users have optimised, harmonised and consolidated their systems over the years.

SAP has launched an initiative to reintroduce many Z-programs as standard. Although these efforts do make sense, standard functions must be weighed up with the intellectual property of SAP users. Many business processes reflect a unique selling proposition and competitive advantage, making a reintroduction to the standard potentially counterproductive.

In such cases, ensuring ongoing maintenance and running statutory updates are much more crucial. Rimini Street support allows SAP customers to avoid costly upgrades of products and support packages with thousands of irrelevant fixes. As a result, the SAP system remains agile without the additional expense of evaluating unnecessary enhancement packages.

A survey carried out last year investigated how members of DSAG (the German-speaking SAP User Group) rate the value of the maintenance service provided in relation to the associated maintenance fees. The conclusion was that DSAG members are sceptical. And what’s more, their scepticism is stronger than their satisfaction levels.

Concerns are growing that SAP is primarily investing in innovation, while established SAP products such as ERP/ECC 6.0 are only moderately improved or not at all. This results, in part, to dissatisfaction among users. Naturally, SAP is looking into the future, with a focus on launching a homogeneous Intel-Linux in-memory computing platform in 2025. However, existing SAP customers have an established relationship with the company and are concerned about protecting their investments.

Thus the dissatisfaction among DSAG members and the SAP community, who demand affordable support for existing environments and are less keen on pre-financing a future monolithic system. When it comes to changes in the law, which, according to the maintenance agreement, SAP is required to include as standard without any additional costs, the DSAG survey paints a positive picture. 154 respondents are of the opinion that SAP is attending to its duty when it comes to changes to legal requirements. 60 are somewhat dissatisfied, 66 are neutral. A third of respondents did not comment on this issue at all.

DSAG remains committed to ensuring that software maintenance under the standard maintenance service, including the implementation of any legal requirements where required, is guaranteed for all releases as part of the mainstream maintenance service.

Rimini Street also offers the latest tax, legal and regulatory changes to ensure that SAP applications are always up to date. “We provide custom updates to our customers for up to 200 countries, and we consistently deliver them before the manufacturer’s update date”, says Rimini Street’s Hendrik Zwart.

Added value, innovation and IT budget

As for the added value discussion, which has been going on for some time now, SAP still has a lot of convincing to do – although the figures have improved slightly, according to the DSAG. A survey carried out last year found that almost one fifth of respondents have a favourable or neutral approach to the “more expensive” support model. A total of 42 per cent of respondents, however, consider it to offer little or no added value. What’s interesting to note is that almost 40 per cent chose not to comment on this issue.

Nevertheless, a positive trend is emerging. In a similar survey last year, almost three quarters of respondents were of the opinion that the enterprise support offers little to no added value. It is also interesting to identify the release statuses from which existing SAP customers derived their added value.

In addition to maintenance-related questions, DSAG also obtained information on the status of the software systems. About two-thirds of responding support professionals had installed an enhancement package for their ERP/ECC 6.0. When it comes to business functions through which SAP provides functional innovations or extensions, most users rely on free functions, and only a small percentage on fee-based ones. For most, the business function model lacks transparency. As a result, the business functions are hardly ever activated.

For Rimini Street, the added value lies in adaptation, interoperability and performance tuning. “Rimini Street understands that many companies modify their SAP applications, and offers valuable customisation support”, emphasises Garrit Skrock, referring to the numerous highly innovative Z-programs implemented by users, which are often subject to IP regulations.

Rimini Street’s interoperability support includes strategic guidelines to prepare for potential changes in the infrastructure, as well as assisting existing SAP customers with reviewing new platform certificates and resolving interoperability conflicts.

Furthermore, Rimini Street offers proactive guidelines and reactive support to ensure acceptable response times and performance levels. Consequently, Rimini Street supplies the added value of alternative software support with a focus on personal service.

The latest IT trend study by Capgemini states that: “CIOs have various tools at their disposal to increase efficiency. They consider the best cost-benefit ratio to come from standardisation, followed by automation. While the CIOs have barely changed the level of automation in infrastructure and application management compared to the previous year, it has increased by five per cent in business process management, and by ten per cent in application management.”

In part, this is down to the increased use of agile methods, which has grown in all areas from development to operations, support and project management, compared to the previous year – from an average of 25.3 per cent for all projects to 27.9 per cent. At one company in five, agile methods are now deployed in almost half of all projects, and almost 80 per cent of respondents expect this figure to increase further.”

Rimini Street has the ability to play a key role in this process: introducing a more affordable standardised maintenance fee for the SAP system creates room for innovation. Automating operations together with an experienced service partner could generate huge potential for innovation. From many conversations with customers, Garrit Skrock knows that, to a large extent, any decision in favour of Rimini Street involves the CFO as well as the CIO.

The latest Capgemini study also shows how important affordable maintenance fees can become: around 60 per cent of the respondent CIOs’ IT budgets is dedicated to software, and almost 40 per cent to hardware.

Specifically, 40.5 per cent is spent on operation, maintenance and upkeep, and 20.9 per cent on updates, upgrades and enhancements. The same share of the budget goes into replacement and redesign. This leaves only 9.1 per cent of the budget for evaluating innovations, according to the Capgemini study authors – at least that’s 2.6 percentage points more than in 2014. As a result, Rimini Street takes the unambiguous view that with any change to the service and support strategy, the CFO is responsible for the financial benefits, and the CIO for innovation and IT growth.

Freedom of choice

Freedom of choice and the aforementioned investment protection, however, are paramount. “Cost savings are only one dimension”, says Jill Harrison in her E-3 interview. Retaining the freedom to choose what is to be implemented, creating space for innovation, and safeguarding successful growth are the order of the day for her. The DSAG Board has also called for retaining freedom of choice in reference to the latest SAP roadmap.

Rimini Street provides secure support with no restriction on the release status, giving existing SAP customers the necessary investment protection and the required freedom of choice. “SAP is a great product and we want to keep it alive!” concludes Rimini Street manager Jill Harrison in her E-3 interview.

Source:
Rimini Street and E-3 Magazine (German) Cover Story April 2015

About the author

Peter M. Färbinger, Editor-in-Chief

Peter M. Färbinger is Editor-in-Chief and Publisher at E-3 Magazine, B4Bmedia.net AG, Munich, Germany. He can be reached at [email protected]

Add Comment

Click here to post a comment

Push

ad_banner

Our Authors