Rimini Street has announced that it will stop supporting PeopleSoft customers, leaving many organizations in a tough spot. For years, companies often relied on Rimini Street as a third-party support option because it was cheaper and offered more flexibility than Oracle’s support.
Now, PeopleSoft customers must make big decisions about maintaining their support, keeping up with tax and regulatory (TLR) updates, and ensuring their PeopleSoft systems run smoothly.
This sudden shift affects not only the financials but also the operational plans of many companies. If you are a PeopleSoft customer impacted by this announcement, evaluating your options carefully and making an informed choice is important. The two main options that PeopleSoft customers have are:
- Return to Oracle support
- Partner with another third-party support vendor
Each option has its own set of challenges, costs, and considerations. Let’s explore all the factors involved and detail what these choices mean for you, including potential obstacles and how to choose the best path forward.
Option 1: Returning to Oracle Support
If you decide to go back to Oracle support, expect significant costs. Oracle typically charges for all the years you weren’t under their support and adds reinstatement fees. Here’s a closer look at what this entails:
Reinstatement Fees
Oracle charges a hefty 150% reinstatement fee based on the annual support fee. This is in addition to the regular support fees and can get very expensive, especially for companies that have been with Rimini Street for a long time.
Reinstatement fees can be a significant barrier, as these are penalties for when you were not using Oracle’s services. Many organizations find this extra cost a key factor in determining whether or not they can afford to return to Oracle.
Back-Support Payments
Oracle also requires you to pay for all the years you have not used their support. If you have been away from Oracle for several years, these back-support payments can add up quickly, making it very costly to return. In some cases, the combined reinstatement fees and back-support payments can make returning to Oracle completely impractical financially. It is critical to calculate these costs upfront to understand if this is a feasible route.
Mandatory PeopleSoft Upgrades
Another potential cost is upgrades. Oracle may require you to upgrade your PeopleSoft software to be eligible for their support. This could mean more expenses and complexity, involving resources and effort to bring your system up to Oracle’s standards.
For some organizations, the cost of the upgrades, combined with the necessary staff training and resource allocation, can be overwhelming. Upgrading is not just a financial cost; it also involves operational disruptions, the need for testing, and the potential rework of customizations crucial to your business.
For many organizations, returning to Oracle means a steep initial cost to get back on board, not counting the ongoing annual support fees. These costs must be weighed against the perceived benefits of having Oracle as your support partner, such as the brand’s reputation, guaranteed expertise, and ability to provide official updates directly from the source.
Option 2: Partnering with a New Third-Party Support Vendor
You can switch to another third-party support vendor if you don’t want to return to Oracle. This avoids Oracle’s reinstatement and back-support fees but also comes with challenges. Here’s what you should consider before making this move:
Tax, Legal, and Regulatory (TLR) Compliance
TLR updates are crucial to keeping your PeopleSoft system compliant with tax, legal, and regulatory requirements. These updates ensure that your software stays in line with changing laws and policies, which can vary by region and industry.
Not all third-party vendors have the expertise or resources to provide these updates consistently and on time. Verifying that your new vendor can handle TLR updates effectively is important, especially if your industry has specific compliance needs. Ensure the vendor has a dedicated team to monitor regulatory changes and provide timely updates.
Costs of TLR Support
Third-party vendors may offer TLR support, but these updates could cost extra beyond the standard support fees. Always clarify pricing structures and compare costs to understand the financial impact of switching support providers.
You must also determine if the additional costs are fixed or fluctuate based on market conditions or other factors. Some vendors might offer TLR support as an optional add-on, while others might bundle it into their standard service packages, making it crucial to understand the full scope of what you are paying for.
Service Reliability and Expertise
PeopleSoft systems are often mission-critical, meaning they are crucial for day-to-day operations. The new vendor must have the experience to deal with complex issues and provide reliable support. Make sure they have the track record to support PeopleSoft environments.
Evaluate their response times, escalation procedures, and ability to work with your existing customizations and configurations. A poorly chosen vendor can result in frequent downtimes, unmet service levels, and the inability to resolve complex issues effectively. Review testimonials, ask for case studies, and contact current clients to better understand the vendor’s capability.
Challenges with Transitioning to a New Vendor
Switching from Rimini Street to another third-party vendor can present challenges. Compatibility, service continuity, and data migration are all potential obstacles. Proper planning and assessment of the new vendor’s capabilities are essential for a smooth transition.
For example, data migration may involve transforming data formats or adjusting custom configurations to align with the new vendor’s standards. This process could require downtime, staff retraining, and workflow adjustments, potentially disrupting daily operations.
Furthermore, continuity of support is a concern. During the transition, there may be a period when neither Rimini Street nor the new vendor is fully responsible for the system. This can lead to a temporary lapse in support, which might be risky if critical issues arise. To minimize risks, it is advisable to have clear agreements in place for overlapping responsibilities during this time.
Key Challenges for PeopleSoft Customers After Rimini Street
No matter which path you choose, there are some common challenges that PeopleSoft customers will face:
- Cost Management: Oracle’s reinstatement and back-support fees can be prohibitive, while the costs of TLR support from third-party vendors vary widely. Proper budgeting is key. Consider all direct and indirect costs, including the potential need for consultants or additional internal resources.
- TLR Compliance: Maintaining TLR compliance is critical, particularly in highly regulated industries such as finance, healthcare, or energy. Evaluate the ability of Oracle or third-party vendors to meet your compliance needs and ensure they can keep up with frequent changes in regulations that affect your business.
- Service Quality and Continuity: Ensure your chosen support provider can deliver the required service. PeopleSoft is often a backbone of operations, and disruptions can be costly. Define Service Level Agreements (SLAs) clearly and ensure they are realistic and enforceable.
- Upgrades and Customizations: If you return to Oracle, upgrades may be necessary. Third-party vendors must ensure they can manage existing customizations to avoid interruptions. Customizations are often tailored to meet specific business requirements, and a new support vendor must be capable of understanding and working with them without causing system conflicts or downtime.
Recommended Actions for PeopleSoft Customers
If you are a PeopleSoft customer affected by Rimini Street’s exit, here’s a roadmap to help you navigate your next steps effectively:
1. Assess Both Options Thoroughly
- Understand Oracle’s reinstatement fees, back-support payments, and any necessary upgrades. This will help you understand the upfront costs and ongoing commitments involved.
- Ask third-party vendors for detailed pricing and information about TLR support. Make sure to ask for all potential hidden fees and costs related to customization support, TLR updates, and escalated support situations.
2. Evaluate the Total Cost of Ownership (TCO)
- Calculate all costs, including reinstatement fees, ongoing support fees, TLR compliance, and upgrade expenses. Compare these costs with the operational benefits you will gain. Understanding the TCO will help you make an informed financial decision that aligns with your long-term business goals.
3. Negotiate the Best Possible Deal
- With Oracle, try negotiating to reduce or waive some of the reinstatement fees. Be prepared to demonstrate why reducing these fees would benefit both parties in the long run.
- Negotiate fixed rates for critical services, such as TLR updates, with third-party vendors to avoid unexpected price hikes. Also, consider asking for contractual protections like capped increases for yearly support fees.
4. Vet Third-Party Vendors Carefully
- Review their track record, particularly in providing PeopleSoft support. Check how well they can handle systems of your scale and complexity.
- Ask for references and case studies to see how they have handled similar environments. Speak with existing clients about their satisfaction with the support quality, responsiveness, and technical expertise.
5. Plan for the Transition
- Whether moving to Oracle or another third-party vendor, ensure you have a solid transition plan, including timelines, backup steps, and detailed support continuity plans. Involve your internal IT team in planning to ensure nothing is overlooked, especially during data migration and customization realignment.
- Test all key processes with the new vendor before fully transitioning to ensure they understand your needs and the system works as expected under their support.
How Redress Compliance Can Help
If you are currently a PeopleSoft customer supported by Rimini Street, you don’t have to go through these challenges alone.
Redress Compliance provides advisory services to help you understand your options, negotiate favorable terms, and ensure continuity for your PeopleSoft systems. We have years of experience helping clients navigate complex support transitions and optimize their support arrangements to meet financial and operational goals.
Our team can assist you with:
- Evaluating your options between Oracle and third-party vendors.
- Conducting a detailed cost-benefit analysis to help make informed decisions.
- Negotiating with Oracle to minimize reinstatement and back-support fees.
- Vetting potential third-party vendors to ensure they have the expertise to support your PeopleSoft environment.
Contact us today to discuss how we can help you secure the best deal tailored to your needs.
