SAP Third-Party Support is:
- An alternative to direct support from SAP.
- Managed by independent companies specializing in SAP systems.
- Often more cost-effective and personalized.
- Focused on maintaining and optimizing existing SAP systems rather than upgrades.
SAP Third-Party Support
SAP Third-Party Support
Definition and Explanation of 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 to keep SAP systems running efficiently, including regular updates, troubleshooting, compliance assistance, and custom code optimization.
Unlike SAP’s support, which can be more rigid and expensive, third-party support is often more flexible and cost-effective, tailored to meet the specific needs of different businesses.
Differences Between Traditional SAP Support and Third-Party Support
Traditional SAP Support:
- Provided directly by SAP.
- Much more expensive, with annual fees typically around 20-22% of the original software license cost.
- Standardized support services, with less flexibility for customizations and unique business needs.
- Regular updates and patches to ensure compliance and security.
- Mandatory upgrades to newer versions to continue receiving full support.
Third-Party SAP Support:
- Provided by independent companies like Rimini Street and Spinnaker Support.
- Often significantly cheaper, with potential savings of up to 50% on annual support fees.
- Highly customizable support solutions tailored to specific business requirements.
- Extended support for legacy systems, allowing businesses to avoid forced upgrades.
- Comprehensive support for custom code and integrations.
- Faster response times and 24/7 support availability.
Benefits of SAP Third-Party Support
Significant Cost Savings
Explanation: Third-party support providers generally offer their services at a significantly lower rate than SAP’s traditional support, leading to substantial cost reductions.
Example: A large enterprise with a $10 million SAP license might pay $2.2 million annually for traditional SAP support. By switching to a third-party provider, they could reduce this cost by up to 50%, saving $1.1 million per year.
Avoidance of Forced Upgrades
Explanation: Third-party providers offer extended support for legacy SAP systems, allowing businesses to avoid the high costs and disruptions associated with mandatory upgrades.
Example: A manufacturing company using SAP ECC 6.0 can continue to receive support and updates without migrating to SAP S/4HANA, saving millions in upgrade costs and maintaining operational stability.
Customized Support Solutions
Explanation: Third-party providers offer tailored support services that address each business’s unique needs and challenges.
Example: A healthcare provider with specialized SAP modules for patient management can receive customized support to ensure compliance with industry regulations and optimal system performance.
Enhanced Flexibility and Control
Explanation: Third-party support offers greater flexibility and control over IT decisions, allowing businesses to make strategic choices 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.
Comprehensive Support for Custom Code
Explanation: Third-party providers include extensive support 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.
Faster Response Times
Explanation: Third-party vendors often guarantee quicker response due to their specialized focus and leaner structures.
Example: An e-commerce business experiences faster issue resolution and improved system uptime with 24/7 support from a third-party provider, reducing downtime and maintaining customer satisfaction.
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.
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.
Global Tax and Regulatory Compliance
Explanation: Third-party providers offer updates and services to ensure compliance with international tax laws and regulatory requirements, similar to traditional SAP support.
Example: An international retailer can receive updates on new VAT regulations across different countries, ensuring continuous compliance without costly upgrades.
Extensive Knowledge and Expertise
Explanation: Third-party providers often employ highly experienced SAP experts with deep knowledge and specialized skills.
Example: A technology firm leverages the expertise of third-party support engineers to optimize their SAP environment and improve system performance, benefiting from their extensive experience and insights.
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.
Example: A retail company redirects resources saved from reduced support costs towards expanding its e-commerce platform and enhancing customer experiences, allowing internal teams to concentrate on growth initiatives.
Comparison of Traditional SAP Support vs. Third-Party Support
Service Quality and Response Time
Traditional SAP Support:
- Service Quality: SAP offers standardized support services designed to cover a broad range of issues. This ensures a certain level of consistency and reliability, backed by SAP’s extensive resources and expertise.
- Example: A financial institution experiencing issues with SAP Financial Accounting can rely on SAP’s specialized support to address specific problems effectively.
- Response Time: Due to the size and scope of SAP’s customer base, response times can sometimes be slower, especially for non-critical issues. Critical issues are typically prioritized, but less urgent matters may face delays.
- Example: During peak times, a manufacturing company might experience longer wait times for non-urgent technical support requests.
Third-Party SAP Support:
- Service Quality: Third-party providers offer highly personalized services tailored to the specific needs of each business. This often includes support for custom code and bespoke solutions.
- Example: Spinnaker Support provides healthcare providers with tailored support for their specialized SAP modules, ensuring smooth operation and compliance with industry regulations.
- Response Time: Third-party providers typically offer quicker response times due to their specialized focus and leaner structures. Many offer 24/7 support, ensuring help is available whenever needed.
- Example: A telecommunications company experiences faster issue resolution and improved system uptime with third-party support.
Customization and Flexibility
Traditional SAP Support:
- Customization Options: 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.
- Example: A global retail chain might find that SAP’s standard support does not fully address its specific needs for customized inventory management workflows.
- Flexibility: SAP’s support is less flexible, with standardized processes and policies that might not accommodate non-standard requirements or legacy systems. Vendor lock-in can also limit strategic flexibility.
- 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.
Third-Party SAP Support:
- Customization Options: Third-party providers are more likely to offer customized solutions tailored to specific business requirements, addressing unique operational needs.
- Example: Rimini Street supports a multinational corporation’s legacy SAP system, allowing them to avoid disruptive and costly upgrades while maintaining operational stability.
- Flexibility: 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
Traditional SAP Support:
- Compliance: SAP ensures compliance with global legal and regulatory requirements, providing updates that reflect changes in laws and regulations.
- Example: Regular updates to SAP systems to ensure compliance with new data protection regulations, such as GDPR.
- Security: SAP provides critical security updates to protect against vulnerabilities and threats, leveraging its extensive resources.
- Example: Issuance of security patches to address newly discovered vulnerabilities, ensuring the system remains secure against cyber-attacks.
Third-Party SAP Support:
- Compliance: Third-party providers offer tailored compliance solutions catering to specific industry standards, ensuring systems meet regulatory requirements.
- Example: A third-party provider might customize compliance solutions for a healthcare organization to meet specific HIPAA requirements.
- 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.
- Example: Quickly implementing new security measures in response to emerging threats, providing timely updates and patches tailored to specific needs.
Reasons to Consider Moving to Third-Party Support
Significant Cost Savings
Switching to third-party support can lead to substantial cost reductions. Providers typically offer their services at a lower cost than SAP’s traditional support. For instance, a large enterprise could save up to 50% on its annual support fees by switching to a provider like Rimini Street.
Avoidance of Forced Upgrades
Third-party providers offer extended support for legacy systems, allowing businesses to avoid costly and disruptive mandatory upgrades. For example, a manufacturing company using SAP ECC 6.0 can continue to receive support without migrating to SAP S/4HANA, saving millions in upgrade costs.
Customized Support Solutions
Third-party providers offer tailored support services that address each business’s unique needs and challenges. For example, a healthcare provider with specialized SAP modules for patient management can receive customized support to ensure compliance with industry regulations.
Enhanced Flexibility and Control
Third-party support offers greater flexibility and control over IT decisions, allowing businesses to make strategic choices without being constrained by SAP’s roadmap. A financial services firm can integrate best-of-breed solutions and adopt new technologies at their own pace.
Comprehensive Support for Custom Code
Third-party providers include extensive support for custom code and bespoke solutions, ensuring these modifications function optimally. For example, a logistics company with heavily customized SAP systems receives dedicated support from its third-party provider.
Faster Response Times
Due to their specialized focus and leaner structures, third-party vendors often guarantee quicker response times with 24/7 support from a third-party provider, and an e-commerce business experiences faster issue resolution and improved system uptime.
Improved Collaboration and Partnership
Third-party providers often collaborate more with their clients, acting as partners who prioritize the organization’s interests. A global logistics company benefits from regular strategic planning sessions with its third-party support provider.
Global Tax and Regulatory Compliance
Third-party providers offer updates and services to ensure compliance with international tax laws and regulatory requirements. For example, an international retailer can receive updates on new VAT regulations across different countries, ensuring continuous compliance.
Extensive Knowledge and Expertise
Third-party providers often employ highly experienced SAP experts with deep knowledge and specialized skills. A technology firm leverages the expertise of third-party support engineers to optimize its SAP environment.
Focus on Core Business Objectives
By outsourcing SAP support to third-party providers, companies can focus more on their core business activities and strategic goals. For example, a retail company can redirect resources saved from reduced support costs towards expanding its e-commerce platform.
Evaluating Third-Party SAP Support Providers
Selecting the right third-party SAP support provider is a critical decision. Here are some guidelines to help you make an informed choice:
- Criteria for Selecting a Suitable Provider:
- Experience and Expertise: Look for providers with a proven track record in supporting SAP environments similar to yours.
- Customer Reviews and Testimonials: Assess customer feedback to gauge the provider’s reliability and service quality.
- Support Coverage: Ensure they offer the specific services you need, such as 24/7 support, security measures, and compliance assistance.
- Understanding the Scope and Limitations of Services Offered:
- Service Inclusions: Clearly understand what is included in the support package. Are there any additional costs for certain services?
- Limitations: Be aware of any limitations in the service, such as restrictions on the number of support tickets or exclusions of certain SAP modules.
- Ensuring Alignment with Long-Term IT and Business Strategies:
- Strategic Fit: The provider’s capabilities should align with your long-term IT strategy and business goals.
- Flexibility and Scalability: Consider whether the provider can scale their services to match your evolving business needs.
By focusing on these features and evaluation criteria, you can ensure that your choice of a third-party SAP support provider will bring substantial value to your organization, enhancing your SAP environment while aligning with your business objectives.
Companies Specializing in Third-Party SAP Support
- Rimini Street:
- Known for its extensive expertise in navigating complex ERP ecosystems.
- Offers cost-effective alternatives to traditional vendor-provided maintenance.
- It specializes in providing dedicated assistance to SAP systems.
- Spinnaker Support:
Provides comprehensive third-party support for various SAP Business Suite & Apps.
Tailors its services to individual business needs, offering flexibility and scalability. - N’ware Technologies:
- Focuses on offering solutions catering to specific industry requirements.
- Known for updating its knowledge base to keep up with the latest SAP advancements.
- Provides timely patches, fixes, and upgrades, offering adaptable service agreements.
How to Start the Process of Moving to SAP Third-Party Support
Transitioning to SAP third-party support involves a series of strategic steps to ensure compliance, mitigate risks, and maximize benefits. Here’s a detailed guide on how to start this process:
1. Understand Your Licensing
Before making the move to third-party support, it’s crucial to understand your current SAP licensing agreements. Ensure you remain compliant with SAP’s terms and conditions to avoid legal or operational issues.
- Action: Conduct a thorough review of your SAP licenses.
- Example: Verify the scope of your licenses, usage rights, and any limitations to ensure full compliance with SAP’s requirements.
2. Review Your Contracts
Carefully review your existing SAP support contracts to identify potential pitfalls, such as termination clauses, notice periods, or penalties for early termination. Understanding these details is essential for a smooth transition.
- Action: Examine all terms and conditions in your support contracts.
- Example: Look for automatic renewal clauses that could lock you into another term if not addressed in time.
3. Make a List of SAP Support Providers
Research and identify third-party SAP support providers that meet your specific requirements. Evaluate their services, expertise, and customer reviews to find the best fit for your organization. Start negotiations to understand their offerings and pricing.
- Action: Compile a list of potential third-party support providers.
- Example: Contact providers like Rimini Street and Spinnaker Support to discuss your needs and request proposals.
4. Negotiate with the Providers
Negotiate with the shortlisted providers to finalize terms that align with your business objectives and budget. Ensure that the negotiated terms cover all your critical support needs and offer the best value.
- Action: Discuss and negotiate contract terms, pricing, and service levels.
- Example: Negotiate for customized support solutions with 24/7 availability and specific compliance requirements.
5. Make the Move to Third-Party Support
Once you have selected a third-party support provider and finalized the contract, plan and execute the transition. This step involves detailed planning to ensure minimal disruption to your operations. The cost savings from third-party support can be significant, ranging from 50% to 70%.
- Action: Develop a transition plan that includes timelines, resource allocation, and risk management.
- Example: Coordinate with your internal IT team and the third-party provider to ensure a seamless transition with clear roles and responsibilities.
6. Work with an Advisor
Consider working with an advisor who specializes in SAP third-party support transitions. An advisor can help you manage the transition process, provide expert insights, and negotiate the best possible deal.
- Action: Engage an experienced advisor or consultant.
- Example: An advisor can assist with understanding licensing implications, reviewing contracts, and ensuring a smooth transition to third-party support.
Summary
Moving to SAP third-party support involves understanding your current licensing, reviewing existing contracts, researching and negotiating with support providers, and planning a detailed transition. Engaging an advisor can further streamline the process and help secure the best terms.
FAQs
What is SAP third-party support?
SAP third-party support involves maintenance and technical assistance provided by independent service providers rather than SAP. These providers offer services to maintain and optimize SAP systems, 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 assistance for custom code and integrations. Traditional SAP support often does not cover this, making third-party providers 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 that 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.