SAP.info: In late April the SAP ecosystem saw the agreement between SAP AG and SUGEN on SAP Enterprise Support. Is it satisfied with the result?
Mike Stoko: In general, the SAP user groups responded favorably to the agreement – but there is still a lot of skepticism as to how it can be implemented.
SAP.info: When SAP initially communicated SAP Enterprise Support as the new maintenance mode, there was a lot of criticism. How did the U.S.-based customers react?
Stoko: I guess the Americans think that a price increase is a price increase, so there wasn’t a big negative reaction. But what really did trigger anger was SAP’s announcement that Germany and Austria would be treated differently.
SAP.info: At times discussion among the user groups became very emotional. How did you manage to consider their varying points of concern?
Stoko: Six core people from 12 user groups were involved in crafting the message. Tonie van der Horst from the Netherlands took the draft, and then the SUGEN members worked on it from their different user group perspectives. What they wanted upfront was to dismiss it and just keep the status quo. So it took a while to get people to the point where they got over their emotions and said, OK, let’s see what we can influence.
SAP.info: What factors led to the agreement?
Stoko: One was that we had the opportunity to educate 12 user groups. They all got the same information. There were groups that wanted to do nothing and groups that wanted to have a win-win agreement.
When you’re in SUGEN, you’re committed to doing the best for the user community globally. So when you have one user group saying, I think I can market the agreement SUGEN made with SAP, then people see the value of belonging to that local group. That’s something they probably wouldn’t have seen if SUGEN hadn’t been there.
SAP.info: Did all SUGEN members agree to the final proposal?
Stoko: It was a 60:40 decision. But we kept driving home the principle of what’s best for the whole SAP user community.
SAP.info: An agreement like this is always a compromise. Where did SAP give in and where did SUGEN make adjustments to its original position?
Stoko: When SUGEN started negotiations with SAP, some customers assumed that the increased maintenance fees were being used to build the next generation of Business Suite. So consequently they felt they shouldn’t have to pay any additional licenses for that new suite. SUGEN gave up on that one. The other concession was accepting that the price of SAP Enterprise Support would be capped at 22% through 2015 rather than through 2020.
As for SAP? It gave up on having a modified schedule to the 2008 pricing program for SAP Enterprise Support, which was initially scheduled to run until 2012. Now it will conclude in 2015, coinciding with the 7-2 maintenance strategy. Also SAP agreed to tie the next price increase to the validation of KPIs.
SAP.info: You announced a benchmarking program to verify the value of SAP Enterprise Support according to the SUGEN KPI index. How is it coming along?
Stoko: We put together a qualification sheet for customers – about 100 worldwide will be part of the benchmark study. We asked companies using release SAP 4.7 or higher, including different platforms. And we broke it out by geography and by size. So we got a view of large, midsize, and small companies in each region of the world. If the program shows that companies save money, SAP Enterprise Support could be part of a business case for other customers.
SAP.info: How do you intend to measure of SAP Enterprise Support services according to the KPIs you established?
Stoko: By looking at business continuity, for example. Your system is in bad shape if you have to spend all your time fixing post go-live changes that disrupt business. Part of SAP Enterprise Support is to improve the quality of code, which means that customers then spend less time installing programs.
SAP.info: The discussion on SAP Enterprise Support was a challenge for SUGEN. What did you learn from this?
Stoko: When SAP Enterprise Support came out, it was for new customers only. A month later, it was for all customers. And a couple of months after that, SAP announced changes for Germany and Austria. If all that had been communicated upfront, we could have said ok, how do we handle that? If something big is coming down the road, let’s talk about it upfront – because we can give feedback on how it would be received. We should help craft the message in advance. This is the key learning.
SAP.info: SAP sees its new maintenance offering as being a sensible investment. What’s your take on that?
Stoko: If you want to replace SAP software today with a suite from another vendor, you will pay a 22% maintenance fee – and you’ll only get upgrades for that investment. So with SAP you get more bang for your buck. And in addition, I don’t know any other software vendor that ties price increases to performance.
SUGEN and SAP have agreed on key performance indicators to measure the added value of SAP Enterprise Support:
- Business continuity
- Business process improvement
- Protection of investment
- Total cost of operations
A four-year benchmarking program will evaluate the benefits of SAP Enterprise Support.