SAP

Comparing SAP Third Party Support vs. Traditional SAP Support

Comparing SAP Third Party Support and Traditional SAP Support:

  • Traditional SAP Support:
    • Direct from SAP.
    • Standardized solutions and consistent quality.
    • Higher cost, less flexibility.
  • Third-Party SAP Support:
    • Independent providers.
    • Customized, flexible solutions.
    • Typically, it is more cost-effective.

Table of Contents

What is Traditional SAP Support

SAP Third Party Support vs. Traditional SAP Support

Traditional SAP support refers to the maintenance and technical assistance SAP provides for its suite of enterprise software solutions.

This support model is designed to help businesses ensure their SAP systems’ smooth operation, security, and efficiency.

Core Components of Traditional SAP Support

1. Software Maintenance

  • Explanation: SAP provides regular updates, patches, and upgrades to ensure the software remains secure, functional, and up-to-date with the latest technological advancements.
  • Example: The SAP software releases Enhancement and Support Packages periodically, which deliver new features and resolve existing issues.

2. Technical Support

  • Explanation: Access to SAP’s technical support team for troubleshooting and resolving issues within the SAP environment.
  • Example: When an SAP system experiences performance issues, the technical support team assists in diagnosing and fixing the problem, ensuring minimal downtime.

3. Legal and Regulatory Compliance

  • Explanation: SAP ensures that its software complies with global legal and regulatory requirements, providing updates that reflect changes in laws and regulations.
  • Example: SAP systems are regularly updated to ensure compliance with new data protection laws, such as GDPR in the European Union.

4. Security Updates

  • Explanation: SAP provides critical security updates to protect against vulnerabilities and threats.
  • Example: Issuance of security patches to address newly discovered vulnerabilities, ensuring the system remains secure against cyber-attacks.

5. Continuous Improvement and Innovation

  • Explanation: SAP’s support includes access to new features and innovations that help businesses stay competitive and efficient.
  • Example: Introduction of new functionalities in SAP S/4HANA that improve business processes and operational efficiency.

6. Knowledge Base and Documentation

  • Explanation: Access to a comprehensive knowledge base, including documentation, best practices, and user guides.
  • Example: Detailed manuals and online resources that help users understand and effectively utilize various SAP modules and features.

Types of Traditional SAP Support

1. Standard Support

  • Explanation: Basic support provides essential maintenance and limited access to SAP support services.
  • Example: Standard support might include access to software updates, patches, and limited technical support hours.

2. Enterprise Support

  • Explanation: A comprehensive support package offering extended services, including proactive monitoring, continuous improvement, and strategic guidance.
  • Example: Enterprise support might include 24/7 technical support, regular system health checks, and personalized advisory services to optimize system performance.

3. Product Support for Large Enterprises (PSLE)

  • Explanation: A premium support offering designed for large enterprises with complex SAP environments, providing dedicated support teams and customized services.
  • Example: PSLE might include a dedicated account manager, tailored support plans, and on-site assistance to address the unique needs of large organizations.

Benefits of Traditional SAP Support

  • Reliability: Ensured reliability and stability of SAP systems through regular updates and expert support.
  • Security: Protection against security threats with timely updates and patches.
  • Compliance: Continuous compliance with evolving legal and regulatory requirements.
  • Innovation: Access the latest features and innovations to keep the business competitive.

Pros and Cons of Traditional SAP Support

Pros and Cons of Traditional SAP Support

Traditional SAP support offers a structured and reliable framework for maintaining SAP systems but also has certain limitations.

Pros of Traditional SAP Support

1. Comprehensive Maintenance

  • Explanation: SAP provides regular updates, patches, and upgrades to ensure the software remains functional, secure, and up-to-date.
  • Benefit: This comprehensive maintenance helps prevent issues and keeps the system running smoothly.
  • Example: Regular security patches protect the system from vulnerabilities, ensuring data integrity and security.

2. Reliable Technical Support

  • Explanation: Access to SAP’s technical support team for troubleshooting and resolving issues.
  • Benefit: Expert assistance ensures problems are resolved quickly and efficiently, minimizing downtime.
  • Example: When a system error occurs, the technical support team can diagnose and fix the problem, restoring normal operations.

3. Legal and Regulatory Compliance

  • Explanation: SAP ensures its software complies with global legal and regulatory requirements.
  • Benefit: Helps businesses stay compliant with changing laws and avoid legal issues.
  • Example: Updates aligning with new data protection regulations, such as GDPR, ensure the business remains compliant.

4. Access to Innovations

  • Explanation: SAP continuously develops new features and functionalities.
  • Benefit: Businesses benefit from the latest innovations, which can improve efficiency and competitiveness.
  • Example: New modules in SAP S/4HANA enhance business processes and operational efficiency.

5. Extensive Documentation and Knowledge Base

  • Explanation: Access a wealth of resources, including user guides, best practices, and manuals.
  • Benefit: Provides users with the necessary information to effectively utilize SAP systems.
  • Example: Online help portals and detailed manuals assist in troubleshooting and optimizing system use.

Cons of Traditional SAP Support

1. High Cost

  • Explanation: Traditional SAP support can be expensive for enterprise-level support packages.
  • Drawback: High costs may strain budgets, especially for small to medium-sized businesses.
  • Example: Annual maintenance fees and upgrade costs can be significant, impacting the overall IT budget.

2. Rigidity and Lack of Customization

  • Explanation: Standard support packages may not offer the flexibility to address specific business needs.
  • Drawback: Limited ability to customize support services can result in unmet business requirements.
  • Example: Businesses with unique workflows may find that standard support does not fully address their specific issues.

3. Forced Upgrades

  • Explanation: SAP may require businesses to upgrade to newer versions to continue receiving full support.
  • Drawback: Upgrades can be costly and disruptive, requiring significant time and resources.
  • Example: Even if a company’s current system meets its needs, it might need to upgrade to the latest version of SAP ERP to access new features and maintain support.

4. Slower Response Times

  • Explanation: The size and scope of SAP’s customer base can lead to slower response times for support requests.
  • Drawback: Delays in receiving support can result in prolonged system issues and operational disruptions.
  • Example: During peak times, response times for non-critical issues may be longer, affecting business continuity.

5. Limited Support for Custom Code

  • Explanation: SAP’s standard support may not cover custom code and modifications.
  • Drawback: Businesses with heavily customized SAP systems may not receive the necessary support for their bespoke solutions.
  • Example: Custom integrations and modifications might require additional expertise that is not covered under standard support contracts.

Reasons Why Companies are Choosing Third-Party Support for SAP Over Traditional SAP Support

Reasons Why Companies are Choosing Third-Party Support for SAP Over Traditional SAP Support

As businesses increasingly seek cost-effective and flexible solutions for managing their SAP systems, many are turning to third-party support providers instead of relying solely on traditional SAP support.

1. Significant Cost Savings

Explanation: Third-party support providers typically offer services at a lower cost than SAP’s traditional support.

  • Benefit: Companies can achieve substantial cost reductions, freeing up the budget for other strategic initiatives.
  • Example: A large manufacturing company saved 50% on annual support costs after switching to a third-party provider like Rimini Street.

2. Avoidance of Forced Upgrades

Explanation: Third-party providers offer extended support for legacy systems, allowing businesses to avoid costly and disruptive mandatory upgrades.

  • Benefit: Companies can maintain their current systems without the pressure to upgrade, preserving stability and minimizing disruption.
  • Example: A global retail chain avoided a multimillion-dollar upgrade by using third-party support to keep its existing SAP ERP system operational and compliant.

3. Customized Support Solutions

Explanation: Third-party providers often offer tailored support services that align more closely with specific business needs and challenges.

  • Benefit: Businesses receive personalized service that addresses their unique requirements, enhancing overall system performance and efficiency.
  • Example: Spinnaker Support helped a healthcare provider optimize their custom SAP modules, ensuring smooth operation and compliance with industry regulations.

4. Enhanced Flexibility and Control

Explanation: Third-party support gives companies greater autonomy and control over their IT decisions and infrastructure.

  • Benefit: Businesses can make strategic decisions without being tied to SAP’s roadmap, choosing best-of-breed solutions that best meet their needs.
  • Example: A financial services firm gained more control over its IT strategy, enabling it to integrate new technologies and innovations more seamlessly.

5. Comprehensive Support for Custom Code

Explanation: Unlike traditional SAP support, which may not cover custom code, third-party providers typically offer extensive support for bespoke solutions.

  • Benefit: Ensures that customizations and unique business processes continue to function optimally.
  • Example: A logistics company with heavily customized SAP systems received specialized support from their third-party provider, enhancing the performance and reliability of their custom code.

6. Faster Response Times

Explanation: Third-party vendors often guarantee quicker response due to their specialized focus and leaner structures.

  • Benefit: Reduced downtime and more efficient problem resolution improve business continuity.
  • Example: A telecommunications company experienced faster issue resolution and improved system uptime after switching to third-party support.

7. Improved Collaboration and Partnership

Explanation: Third-party providers often work more collaboratively with their clients, acting as true partners who prioritize the organization’s interests.

  • Benefit: This collaborative approach fosters stronger relationships and more effective support.
  • Example: A global logistics company benefited from regular strategic planning sessions with its third-party support provider, which ensured that support services aligned with its business objectives.

8. Global Tax and Regulatory Compliance

Explanation: Third-party providers help businesses comply with global tax laws and regulatory requirements without requiring frequent system upgrades.

  • Benefit: Ensures legal compliance and avoids the risk of penalties while maintaining current systems.
  • Example: An international retailer used third-party support to navigate complex regulatory changes across multiple countries, ensuring ongoing compliance.

9. Extensive Knowledge and Expertise

Explanation: Third-party providers often employ highly experienced SAP experts with deep knowledge and specialized skills.

  • Benefit: Access to a pool of seasoned professionals can enhance the overall support quality.
  • Example: A technology firm leveraged the expertise of third-party support engineers to optimize their SAP environment and improve system performance.

10. Focus on Core Business Objectives

Explanation: By outsourcing SAP support to third-party providers, companies can focus more on their core business activities and strategic goals.

  • Benefit: Frees up internal resources to concentrate on innovation and growth initiatives.
  • Example: A retail company redirected resources saved from reduced support costs towards expanding its e-commerce platform and enhancing customer experiences.

What is SAP Third-Party Support

What is SAP Third-Party Support

SAP third-party support refers to maintenance and technical assistance provided by independent service providers rather than directly from SAP.

These third-party providers offer services designed to ensure the smooth operation, security, and optimization of SAP systems, often at a lower cost and with greater flexibility than traditional SAP support.

Key Features of SAP Third-Party Support

1. Cost Savings

  • Explanation: Third-party support providers generally offer their services at a significantly lower rate than SAP’s traditional support.
  • Benefit: This can lead to substantial cost reductions, freeing up the budget for other critical business initiatives.
  • Example: A large corporation might save up to 50% on annual support fees by switching to a third-party provider like Rimini Street or Spinnaker Support.

2. Extended Support for Legacy Systems

  • Explanation: Unlike SAP, which may require businesses to upgrade to newer versions to continue receiving support, third-party providers often specialize in maintaining older SAP versions.
  • Benefit: This allows businesses to extend the lifespan of their existing SAP systems without needing costly and disruptive upgrades.
  • Example: A company using SAP ECC 6.0 can continue to receive necessary updates and support without migrating to SAP S/4HANA.

3. Customized Support Solutions

  • Explanation: Third-party providers tailor their services to meet individual businesses’ specific needs and challenges.
  • Benefit: Customized support addresses unique business requirements, improving system performance and operational efficiency.
  • Example: A healthcare provider with specialized SAP modules for patient management can receive targeted support that addresses their unique operational needs.

4. Comprehensive Support for Custom Code

  • Explanation: Third-party providers often offer extensive support for custom code and modifications, which are typically not covered under standard SAP support.
  • Benefit: Ensures that bespoke solutions and customizations continue to function optimally.
  • Example: A manufacturing company with custom SAP integrations for their production processes can rely on third-party support to maintain and optimize these customizations.

5. Faster Response Times

  • Explanation: Third-party support providers often guarantee quicker response due to their leaner structures and specialized focus.
  • Benefit: Reduced downtime and more efficient problem resolution improve overall business continuity.
  • Example: An organization experiencing a critical SAP issue outside regular business hours can expect prompt assistance from their third-party provider, minimizing operational disruptions.

6. Global Tax and Regulatory Compliance

  • Explanation: Third-party providers offer updates and services to ensure compliance with international tax laws and regulatory requirements.
  • Benefit: Businesses operating in multiple jurisdictions can stay compliant without frequent system upgrades.
  • Example: An international retailer can receive updates on new VAT regulations across different countries, ensuring continuous compliance.

7. Proactive Account Management

  • Explanation: Third-party support often includes proactive account management, regular reviews and performance assessments.
  • Benefit: Helps businesses optimize their SAP environments and ensure alignment with strategic goals.
  • Example: Regular account reviews with a third-party provider can identify areas for improvement and help plan for future needs.

How SAP Third-Party Support Works

Initial Assessment and Transition:

  • Explanation: The process begins with a thorough assessment of the existing SAP environment, identifying the specific support needs and areas for improvement.
  • Example: A detailed review of current SAP systems, customizations, and integration points to develop a tailored support plan.

Ongoing Maintenance and Updates:

  • Explanation: Third-party providers offer continuous maintenance, including regular updates, patches, and performance optimizations.
  • Example: Scheduled updates to ensure the system remains secure and efficient.

Technical Support and Troubleshooting:

  • Explanation: Access expert technical support for troubleshooting and resolving any issues in the SAP environment.
  • Example: A dedicated support team is available 24/7 to address critical issues and minimize downtime.

Strategic Advisory Services:

Example: Advisory sessions to plan for future upgrades, integrations, and optimizations that support long-term business objectives.

Explanation: Many third-party providers offer strategic advisory services to help businesses align their SAP systems with broader business goals.

Cost Analysis: SAP Third-Party Support vs. Traditional SAP Support

Cost Analysis SAP Third-Party Support vs. Traditional SAP Support

Various factors must be considered when evaluating the costs associated with SAP third-party support compared to traditional SAP support.

This detailed analysis examines direct costs, indirect costs, and long-term financial impacts, using real-world examples to highlight the potential savings and benefits.

Direct Costs

1. Annual Support Fees

  • Traditional SAP Support: Typically, SAP charges 20-22% of the original license fee annually for support. For large enterprises, this can amount to millions of dollars each year.
    • Example: A company with a $10 million SAP license might pay $2.2 million annually for traditional SAP support.
  • Third-Party Support: Third-party providers, such as Rimini Street or Spinnaker Support, generally offer their services at a significantly reduced rate, often around 50% less than SAP’s fees.
    • Example: The same company could pay approximately $1.1 million annually for third-party support, resulting in direct savings of $1.1 million annually.

Indirect Costs

2. Upgrade and Maintenance Costs

  • Traditional SAP Support: SAP often requires customers to upgrade to newer versions to continue receiving full support. These upgrades can be costly and time-consuming.
    • Example: An upgrade to SAP S/4HANA might cost a large organization $5-10 million in software, hardware, and consulting fees, plus months of business disruption during the transition.
  • Third-Party Support: Third-party providers specialize in extending the life of existing SAP systems, allowing businesses to avoid unnecessary upgrades.
    • Example: By deferring an upgrade, a company could avoid the $5-10 million cost and maintain operational stability.

3. Custom Code and Integration Support

  • Traditional SAP Support: SAP’s standard support often does not cover custom code and integrations, necessitating additional costs for consulting and maintenance.
    • Example: A business might spend an additional $200,000 annually on external consultants to maintain custom code not covered by SAP support.
  • Third-Party Support: These providers typically include support for custom code and integrations within their standard offerings, eliminating the need for additional consulting fees.
    • Example: The same business could save $200,000 annually by receiving comprehensive custom code support from a third-party provider.

Long-Term Financial Impacts

4. Strategic Flexibility and Control

  • Traditional SAP Support: Companies may experience vendor lock-in, which can limit their ability to make independent IT decisions and integrate best-of-breed solutions.
    • Example: A company might miss opportunities to adopt more cost-effective or innovative technologies due to strict SAP upgrade paths and compatibility requirements.
  • Third-Party Support: Increased flexibility and control over IT infrastructure allow companies to choose and integrate the best technologies for their needs, often leading to further cost savings and improved efficiency.
    • Example: An organization that integrates a non-SAP analytics tool could enhance its business intelligence capabilities at a lower cost without being constrained by SAP’s ecosystem.

5. Compliance and Risk Management

  • Traditional SAP Support: Ensuring compliance with global tax laws and regulations can incur additional costs, especially with frequent changes requiring system updates.
    • Example: A multinational company might spend $300,000 annually on compliance-related updates and adjustments within SAP’s framework.
  • Third-Party Support: Providers often include comprehensive compliance services, ensuring systems meet regulatory requirements without additional charges.
    • Example: The same company could save $300,000 annually by utilizing third-party support’s inclusive compliance updates.

Total Cost of Ownership (TCO) Comparison

  • Traditional SAP Support: Higher annual fees, mandatory upgrade costs, additional consulting for custom code, and limited strategic flexibility contribute to a higher TCO.
    • Example: Over five years, a company might spend $15 million on traditional SAP support, including $11 million in support fees and $4 million in upgrade and consulting costs.
  • Third-Party Support: Lower annual fees, avoidance of unnecessary upgrades, inclusive custom code support, and greater flexibility contribute to a lower TCO.
    • Example: Over five years, the same company might spend $6.5 million on third-party support, including $5.5 million in support fees and $1 million in avoided upgrade and consulting costs.

Service Quality and Response Time

Service Quality and Response Time

Service quality and response times are critical factors that significantly impact business operations when comparing SAP third-party support to traditional SAP support.

Traditional SAP Support

Service Quality

  • Standardized Support: Traditional SAP support offers standardized services to cover various issues across various industries. This ensures a certain level of consistency and reliability.
    • Example: A large enterprise can expect thorough documentation and standardized processes, providing a reliable framework for resolving common issues.
  • Expertise: SAP’s technical support teams are highly knowledgeable about their products and offer expert guidance and solutions for complex technical issues.
    • Example: A financial institution experiencing issues with SAP Financial Accounting can rely on SAP’s specialized support to effectively address specific problems.

Response Time

  • Response Speed: Due to the size and scope of SAP’s customer base, response times can sometimes be slower, especially for non-critical issues.
    • Example: During peak times, a manufacturing company might experience longer wait times for non-urgent technical support requests.
  • Prioritization: Critical issues are typically prioritized, but less urgent matters may face delays.
    • Example: A retail business facing a system outage may receive prompt assistance, while a minor performance query might take longer to address.

SAP Third-Party Support

Service Quality

  • Customized Support: Third-party providers offer highly personalized services tailored to each business’s needs. This often includes support for custom code and bespoke solutions.
    • Example: A healthcare provider with customized SAP modules for patient management receives tailored support that addresses their unique requirements.
  • Proactive Management: Third-party support often includes proactive account management, regular reviews, and performance assessments to address potential issues preemptively.
    • Example: A logistics company benefits from quarterly health checks and strategic planning sessions, ensuring optimal system performance.

Response Time

  • Faster Response Times: Third-party providers typically offer quicker responses due to their specialized focus and leaner organizational structures.
    • Example: A telecommunications company experiences faster issue resolution and improved system uptime with third-party support.
  • 24/7 Availability: Many third-party support models include round-the-clock assistance, ensuring help is available whenever needed.
    • Example: An e-commerce business can rely on 24/7 support to address critical issues outside regular business hours, minimizing operational disruptions.

Comparison summary

Traditional SAP Support:

  • Strengths: Standardized, reliable service with expert technical knowledge of SAP products.
  • Weaknesses: Potentially slower response times for non-critical issues and less flexibility for customized solutions.

SAP Third-Party Support:

  • Strengths: Customized, proactive support with faster response times and 24/7 availability.
  • Weaknesses: It may require initial effort to align with the specific configurations and needs of the business.

Customization and Flexibility

sap vs sap third party suppor Customization and Flexibility

Customization and flexibility in support services are where significant differences between traditional and third-party SAP support can be observed.

Customization Options

Traditional SAP Support

  • Standardized Solutions: Traditional SAP support offers standardized solutions designed to cover the needs of a broad customer base. These solutions might not always cater to unique business requirements.
    • For example, a global retail chain might find that SAP’s standard support does not fully address its specific needs for customized inventory management workflows.
  • Limited Custom Code Support: Standard SAP support often excludes custom code and modifications, necessitating additional resources for maintaining bespoke solutions.
    • Example: A manufacturing company with custom integrations for its production processes may need external consultants to maintain these customizations.

Third-Party SAP Support

  • Tailored Solutions: Third-party providers are more likely to offer customized solutions tailored to specific business requirements, addressing unique operational needs.
    • Example: Spinnaker Support provides healthcare providers tailored support for their specialized SAP modules, ensuring smooth operation and compliance with industry regulations.
  • Comprehensive Custom Code Support: Third-party support typically includes extensive assistance for custom code and bespoke solutions, ensuring these modifications function optimally.
    • Example: A logistics company with heavily customized SAP systems receives dedicated support from its third-party provider, enhancing the performance and reliability of its custom code.

Flexibility

Traditional SAP Support

  • Rigid Framework: Traditional SAP support tends to be less flexible, with standardized processes and policies that might not accommodate non-standard requirements or legacy systems.
    • Example: An energy company using an older version of SAP might struggle with forced upgrades and limited flexibility in retaining legacy systems under SAP’s traditional support.
  • Vendor Lock-In: Traditional support often entails a more rigid adherence to SAP’s upgrade paths and product lifecycle, limiting strategic flexibility.
    • For example, a financial services firm may be compelled to follow SAP’s upgrade schedule even if its current system meets its needs.

Third-Party SAP Support

  • Greater Flexibility: Third-party providers typically offer greater flexibility, adapting to diverse and evolving business needs. They can accommodate unique requirements and legacy systems without forcing upgrades.
    • Example: Rimini Street supports a multinational corporation’s legacy SAP system, allowing them to avoid disruptive and costly upgrades while maintaining operational stability.
  • Adaptable Support Models: Third-party support models are often more adaptable, enabling businesses to make independent IT decisions and integrate best-of-breed solutions.
    • Example: A technology firm leverages third-party support to integrate a non-SAP analytics tool with its SAP system, enhancing its business intelligence capabilities without being constrained by SAP’s ecosystem.

Compliance and Security

sap vs sap third party support Compliance and Security

Handling compliance and security is a critical aspect of any SAP support model.

Here’s a detailed comparison of how traditional SAP support and third-party SAP support address these crucial areas:

Compliance and Security in Traditional SAP Support

In-House Expertise

  • Robust Measures: Leveraging its extensive resources, SAP typically provides robust compliance and security measures.
    • Example: SAP’s dedicated security teams continuously monitor and update their systems to protect against vulnerabilities and ensure compliance with global standards.

Regular Updates

  • Compliance Assurance: Ensures compliance with the latest regulations through regular updates and patches.
    • Example: SAP issues regular security patches and compliance updates to meet new regulatory requirements, such as GDPR or SOX, helping businesses stay compliant without additional effort.

Compliance and Security in Third-Party Support

Custom Compliance Solutions

  • Tailored Solutions: More tailored compliance solutions catering to specific industry standards are offered.
    • Example: A third-party provider might customize compliance solutions for a healthcare organization to meet specific HIPAA requirements and ensure all data handling processes adhere to strict industry standards.

Security Adaptability

  • Agile Response: Often agile in adapting to new security threats and regulatory changes.
    • Example: Third-party providers can quickly implement new security measures in response to emerging threats, providing timely updates and patches tailored to the business’s needs.

Differences in Approaches

SAP Support: Standardized Approach

  • Broad Compliance: A more standardized approach ensures broad compliance across various industries and regulatory environments.
    • Example: SAP’s compliance updates cover many regulations, ensuring that most clients meet general compliance requirements.

Third-Party Support: Flexible and Adaptable Approach

  • Tailored Compliance: Flexible and adaptable approach tailored to business needs and industry standards.
    • Example: A financial services firm might benefit from third-party support that offers specialized compliance solutions for financial regulations, such as PCI DSS or Basel III, providing a more focused compliance strategy.

Reasons Why You Should Consider Moving to Third-Party Support for Your SAP

Reasons Why You Should Consider Moving to Third-Party Support for Your SAP

Switching to third-party support for your SAP systems can offer numerous advantages over traditional SAP support.

1. Significant Cost Savings

Explanation: Third-party support providers typically offer their services at a fraction of the cost of traditional SAP support.

  • Benefit: This can lead to substantial cost reductions, freeing up the budget for other strategic initiatives.
  • Example: A large corporation could save up to 50% on annual support fees by switching to a provider like Rimini Street, saving millions of dollars over time.

2. Avoidance of Forced Upgrades

Explanation: Third-party providers offer extended support for legacy systems, allowing businesses to avoid mandatory upgrades.

  • Benefit: Maintains system stability and avoids the high costs and disruptions associated with upgrading.
  • Example: A manufacturing company can continue using its SAP ECC 6.0 system without being forced to migrate to SAP S/4HANA, saving significant upgrade costs and minimizing operational disruption.

3. Customized Support Solutions

Explanation: Third-party providers offer tailored support services that address specific business needs and challenges.

  • Benefit: Ensures support services align with unique business processes and requirements.
  • For example, healthcare providers can receive specialized support for their custom SAP modules, ensuring compliance with industry regulations and optimal performance.

4. Enhanced Flexibility and Control

Explanation: Third-party support offers greater flexibility and control over IT decisions and infrastructure.

  • Benefit: Allows businesses to make strategic decisions without being constrained by SAP’s roadmap.
  • Example: A financial services firm can integrate best-of-breed solutions and adopt new technologies at their own pace without being limited by SAP’s upgrade cycles.

5. Comprehensive Support for Custom Code

Explanation: Third-party providers include support for custom code and bespoke solutions within their standard offerings.

  • Benefit: Ensures that customizations function optimally, reducing the need for additional consulting services.
  • Example: A logistics company with heavily customized SAP systems can rely on third-party support to maintain and optimize their custom code, improving system performance and reliability.

6. Faster Response Times

Explanation: Third-party vendors often guarantee quicker response due to their specialized focus and leaner structures.

  • Benefit: Reduces downtime and enhances business continuity by resolving issues promptly.
  • Example: With 24/7 support from a third-party provider, an e-commerce business can resolve issues faster and improve system uptime.

7. Improved Collaboration and Partnership

Explanation: Third-party providers often work more collaboratively with their clients, acting as true partners.

  • Benefit: Fosters stronger relationships and more effective support tailored to the organization’s needs.
  • Example: A global logistics company benefits from regular strategic planning sessions with its third-party support provider, ensuring that support services align with its business objectives.

8. Global Tax and Regulatory Compliance

Explanation: Third-party providers offer updates and services to ensure compliance with international tax laws and regulatory requirements.

  • Benefit: Helps businesses stay compliant without frequent system upgrades.
  • Example: An international retailer can receive updates on new VAT regulations across different countries, ensuring continuous compliance without costly upgrades.

9. Extensive Knowledge and Expertise

Explanation: Third-party providers often employ highly experienced SAP experts with deep knowledge and specialized skills.

  • Benefit: Access to a pool of seasoned professionals can enhance the overall support quality.
  • Example: A technology firm leverages the expertise of third-party support engineers to optimize its SAP environment and improve system performance.

10. Focus on Core Business Objectives

Explanation: By outsourcing SAP support to third-party providers, companies can focus more on their core business activities and strategic goals.

  • Benefit: Frees up internal resources to concentrate on innovation and growth initiatives.
  • Example: A retail company redirects resources saved from reduced support costs towards expanding its e-commerce platform and enhancing customer experiences.

FAQs

What is SAP third-party support?

SAP third-party support involves maintenance and technical assistance provided by independent service providers instead of SAP itself. These providers offer services to keep SAP systems running smoothly, often at a lower cost and with more flexibility than traditional SAP support.

Why do companies choose third-party support over traditional SAP support?

Companies often choose third-party support for cost savings, tailored support solutions, avoidance of forced upgrades, greater flexibility, and improved response times. These factors can make third-party support more appealing, especially for businesses with specific needs or budget constraints.

How much can companies save by switching to third-party support?

Switching to third-party support can save companies up to 50% on annual support fees compared to traditional SAP support. These savings can be significant, particularly for large enterprises.

Does third-party support cover custom code and integrations?

Yes, third-party support typically includes extensive custom code and integrations assistance, which traditional SAP support often does not cover. Thus, third-party providers are a better option for businesses with customized SAP solutions.

Can third-party support help avoid forced upgrades?

Third-party providers offer extended support for legacy SAP systems, allowing businesses to avoid costly and disruptive mandatory upgrades. This can help maintain system stability and control upgrade schedules based on business needs.

How do third-party providers ensure compliance with regulations?

Third-party providers offer tailored compliance solutions and regular updates to meet industry-specific regulatory requirements. Similar to traditional SAP support, they work to keep systems compliant with international tax laws and regulations.

Is third-party support as reliable as traditional SAP support?

Third-party support can be as reliable as traditional SAP support. Providers often employ highly experienced SAP experts and offer proactive account management to ensure high-quality service and system reliability.

What kind of response times can I expect from third-party support?

Due to their specialized focus and leaner structures, third-party providers often guarantee faster response times. Many offer 24/7 support, ensuring that help is available whenever needed, which can reduce downtime and improve business continuity.

Are there any risks associated with switching to third-party support?

While third-party support can offer many benefits, choosing a reputable provider with a proven track record is essential. It’s crucial to ensure the provider understands your specific SAP environment and compliance requirements to mitigate risks.

Can third-party support be tailored to my business needs?

Yes, third-party support is often tailored to meet each business’s unique requirements. This includes support for custom code, specific industry regulations, and particular business processes, providing a more personalized service than traditional SAP support.

How do third-party providers handle security?

Third-party providers offer robust security measures, including regular updates and patches to address new threats. They often have the agility to adapt quickly to new security challenges, similar to the security provided by traditional SAP support.

What is the difference between traditional SAP and third-party support regarding approach to compliance?

Traditional SAP support offers a standardized approach to compliance, ensuring broad regulatory adherence. In contrast, third-party support provides more flexible, tailored compliance solutions that cater to specific industry standards and regulatory requirements.

Can third-party support help with strategic IT planning?

Many third-party providers offer strategic advisory services, helping businesses align their SAP systems with broader business goals. This can include planning for future upgrades, integrations, and optimizations.

How do third-party providers manage global tax and regulatory compliance?

Third-party providers offer services to ensure compliance with global tax laws and regulatory requirements without requiring frequent system upgrades. They provide updates and support to navigate complex international regulations, similar to traditional SAP support.

Is it difficult to transition from traditional SAP support to third-party support?

Transitioning to third-party support involves careful planning and execution. A comprehensive transition plan, including stakeholder involvement, phased implementation, and thorough compatibility checks, can help ensure a smooth and successful transition.

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  • Fredrik Filipsson has 20 years of experience in Oracle license management, including nine years working at Oracle and 11 years as a consultant, assisting major global clients with complex Oracle licensing issues. Before his work in Oracle licensing, he gained valuable expertise in IBM, SAP, and Salesforce licensing through his time at IBM. In addition, Fredrik has played a leading role in AI initiatives and is a successful entrepreneur, co-founding Redress Compliance and several other companies.

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