Also, Scavo suggests assessing what you have and what actually gets used -- for both support options and application modules -- since some customers inevitably wind up paying for more than they ultimately put into practice.
"With Oracle, the way the license is negotiated you get the kitchen sink. There are definitely features in there that we pay for but don't use just because the package is so big," says John Mayes, associate vice president and chief procurement officer of Yale University.
Scavo also recommends that IT look hard at how many user license seats you initially purchased and how many are currently being utilized because while the vendor will tell you if you've exceeded the original number, they're not as likely to let you know about the surplus you're still paying to use, support, and maintain.
[ If you skip the fine print, you may not get your money's worth. Read "Are you paying too much for software licenses?" ]
Yet another option for cutting costs is to consider a lower tier of support. "A lot of CIOs and CEOs are rethinking the level of support and what they're getting for it. People are cutting costs where they can," says Laura DiDio, a research fellow with Yankee Group. "But there's a sense among CEOs and CIOs of 'let's not be pennywise but pound foolish,' so they at least get phone support."
SAP, for instance, offers Enterprise Support at the high end. According to an April 2008 IDC report entitled "The Evolution of SAP Support Services," software upgrades, updates, and patches are the chief reasons customers purchase premium support. Older, more mature applications that run with relatively few problems could be ripe for a lower level of support, such as SAP Standard Support or even the project-level SAP Safeguarding.
Somebody, anybody other than the vendor
When the vendors either won't budge on price or simply cannot provide the level of service that you require, there are third-party providers to consider -- but the vendors will fight tooth and nail to keep you from going to one.
That's what happened when Rusty Gaston, CIO of Santa Fe Natural Tobacco, called her Oracle rep to explain that the company was considering going with a third-party support provider for PeopleSoft 8.8 instead of renewing with Oracle.
"Our maintenance costs were incredibly high," Gaston explained. "We were not getting a return on the dollar for maintenance fees."
But Oracle did not surrender pleasantly. "It was immediately about telling me how stupid I was. It was all about what's around the corner for Oracle, rather than a negotiation," she added. "This was like me asking somebody what time it is and them saying 'we don't use the sundial anymore.'"
So Gaston turned to a third-party provider of support for Oracle applications. After evaluating both Rimini Street and rival TomorrowNow, she ultimately elected Rimini Street because it was willing to engage in a unique relationship with Santa Fe Natural Tobacco that calls for what Gaston referred to as aggregate staff, or support folks dedicated to her so that Gaston would not have to carry an extra 2.5 full-time IT professionals.