SAP customers pledge support, but want more product innovation

SAP's price increase for Enterprise Support is still on the mind of many customers

Customers at an SAP event for press and analysts in Boston on Wednesday expressed strong commitment to the vendor's platform, but also voiced concerns about the cost of support and called for faster product innovation in some areas.

The event was the first in a possible series by SAP, which is trying to show the market it is closely engaged with customers large and small during the worldwide recession.

[ Also on InfoWorld: "SAP agrees to delay full Enterprise Support price rise" | Discover what's new in business applications with InfoWorld's Technology: Applications newsletter and Killer Apps blog. ]

Boston University is in the process of a major rollout of SAP applications, which will supersede legacy systems dating back to the mid-1980s, said Peter Smokowski, associate vice president for administration.

BU is now the country's fourth-largest private university, and given the scope and complexity of its operations, it made sense for the school "to look at an all-in-one solution," he said.

The school believes SAP's applications will essentially meet its needs "out of the box," although Smokowski anticipates some customization will be needed.

Meanwhile, Day & Zimmermann's IT infrastructure is already "93 percent pure SAP," said Anthony Bosco Jr., CIO at the $2.4 billion services provider. The Philadelphia company is turning to third-party applications for only the most specialized circumstances, he said.

Raytheon, the giant government contractor, is staying the course on a multiyear project to consolidate its financial and manufacturing systems on a limited number of SAP instances, said Lesley Dickie, director of corporate IT in Raytheon's SAP Competency Center.

The move was necessary due to a tangle of legacy applications Raytheon had accumulated. Various divisions "could not speak the same language," Dickie said.

Smaller SAP customers were also represented Wednesday. GT Solar went live on SAP's Business All-in-One product for the midmarket last year, said Thomas Doyle, director of information technology. The implementation took 16 weeks and replaced a mishmash of Microsoft Dynamics GP software, spreadsheets and Access databases, he said.

The Merrimack, N.H., company, which sells products and services to manufacturers of solar-power products, has experienced rapid growth during the past couple of years and simply outgrew its homegrown system, he said.

Other conversations focused on customers' future IT investment plans. Most present voiced interest in or had already purchased SAP's BusinessObjects BI (business intelligence) software.

However, with the exception of BU, customers said they expected their IT budgets to remain flat in calendar 2010.

Also, while espousing the benefits of standardizing on SAP, customers said the company could be nimbler.

Raytheon would like to see faster turnarounds on product development aimed at its core industries, Dickie said. "We still end up customizing."

Bosco of Day & Zimmermann said he is looking for "more complex and robust workforce planning capabilities," given the company's large pool of permanent and temporary staff.

Customers are also looking for greater return on their substantial investments in SAP product support.

SAP rankled many users last year when it announced plans to transition customers to a fuller-featured but more expensive Enterprise Support service, which costs 22 percent of license fees annually.

In a move seen both as an embarrassing retreat and an unprecedented concession to customer needs, SAP subsequently agreed to roll out the price hike over a longer period of time and is working with users on a set of KPIs (key performance indicators) meant to show the service's value.

Raytheon isn't affected by the Enterprise Support situation, because it is currently paying 17 percent for SAP's Product Support for Large Enterprises plan, Dickie said. But SAP has been trying to upsell Raytheon on its high-end MaxAttention support service, she said.

"We believe we should get that level of support without paying for MaxAttention," she said.

However, Dickie gave her SAP sales contacts high marks overall, saying the account director "knows the pressure I'm under" given the need to hold down costs in the recession, "knows when to back off," and is a strong advocate for Raytheon's needs within SAP.

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