SAP’s attempt to convince users that its Enterprise Support service provides enough value to justify a higher price tag may drag on well into 2010.
The matter stems from SAP’s decision last year to transition customers to Enterprise Support, which has additional features but would impose a significant cost increase, phased in over a number of years.
Following widespread outcry from users, SAP announced in April that it would work with SUGEN (SAP User Group Executive Network) on a set of KPIs (key performance indicators) meant to prove the service’s benefits.
The KPI project suffered a public setback recently, with the Nov. 18 resignation of its project leader, German-speaking SAP Users Group (DSAG) board member Andreas Oczko, and sponsor Otto Schell, another DSAG member and vice chairman of SUGEN.
Meanwhile, SAP said Tuesday it has postponed a support price hike scheduled for the beginning of 2010, while it “intensifies engagement” with customers and user groups. However, the KPI project has “made significant progress” and confirmed that Enterprise Support provides value for customers, SAP added.
But the outstanding question is whether it will for every SAP user.
In an interview Thursday, Oczko and Schell said they had grown unconvinced that the initial KPI results were concrete and comprehensive enough to prove Enterprise Support could have value for SAP’s overall customer base, versus the 100 companies participating in the benchmarking project.
Benchmarking efforts always present “a huge challenge,” and trying to accomplish the work from scratch in such a short time frame required too many compromises, Oczko said.
SUGEN is planning to hold a meeting in Boston next week to discuss the “lessons learned” from the initial process and determine who will lead the KPI project moving forward, Schell said.
DSAG remains “highly interested” in and supportive of the KPI program in general, and simply wants “bulletproof results,” Schell said.
The KPIs are grouped into several categories, including “business continuity” and “business process improvement,” according to a SAP document. The first category includes targets such as “reduce overall incidents” and “increase days without an outage,” and the second contains metrics like “number of failed changes” and “number of emergency changes.”
The KPI measurements are being presented as an aggregated index, versus individually, the document states. The project’s goal is 30 percent improvement in the KPI index over four years, according to the document.
Of the 100 customers participating in the KPI project, 45 are in Europe, the Middle East and Africa; 32 are in the Americas; and 23 are located in Asia-Pacific. Forty-two overall are using ERP 6.0, with 25 and 33 on ERP 2004 and R/3, respectively.
There’s little question the KPIs could use some fine-tuning, said Abbe Mulders, chairperson of the Americas’ SAP Users’ Group.
While ASUG is hearing good things about the program from SAP customers, “it is very young,” she said. “There are probably improvements to be made. It’s young enough that continued development and focus is critical.”
ASUG is also hoping to convince more of its members to get involved with the effort, said CEO Bridgette Chambers.
User groups may be convinced of Enterprise Support’s value if they see a full year’s worth of data backing SAP’s position, said Ray Wang, partner with the analyst firm Altimeter Group.
The KPI program is “a great idea, but it’s hard to implement,” he added.