“We are convinced that SAP Enterprise Support delivers unparalleled value to all customers and, as a demonstration of our commitment, we will provide tangible reductions in their operational costs on a defined schedule,” said Léo Apotheker, co-CEO, SAP AG. “SAP is now the role model for the evolution of software support offering an industry game-changing standard for transparency, accountability and the clear measurement of value. We remain strongly committed to helping our customers both protect their investments and closely manage costs.”
No price increases without measurable success
“SAP’s goal to provide a rating of application support via key performance indicators is innovative and challenging,” said Peter Wesche, research director at Gartner, a leading IT consultancy.
A joint SAP–SUGEN task force has established the SUGEN Key Performance Indicator Index (SUGEN KPI Index), which is aimed at measuring the ongoing value of SAP Enterprise Support. SAP has vowed not to raise prices until the benchmarks targeted by the SUGEN KPI Index are met. SAP and SUGEN anticipate this to happen within a four-year time period, at the end of which customers are expected to benefit from significant cost savings.
“SUGEN and SAP have formed a strong partnership based on a common goal of ensuring that current and future SAP customers fully realize the value of SAP Enterprise Support,” said Mike Stoko, the chairman of SUGEN. “Our collaborative efforts are resulting in the first program of its kind for the IT industry, providing transparent, measurable ways for customers to truly see how valuable SAP Enterprise Support is for their organizations.”
The SUGEN KPI Index aggregates key performance indicators from four major categories; they represent key customer business value-drivers defined after discussions with customers. The four major categories for the SUGEN KPI Index are:
- Business Continuity
- Business Process Improvement
- Protection of Investment
- Total Cost of Operations
Benchmark study compares selected SAP customers
The key performance indicators within the SUGEN KPI Index will be measured as part of a formal benchmarking program implemented with a representative customer group selected by SUGEN and SAP. An independent third party will provide the benchmark program’s quality assurance and track its results. The program has the full and unanimous support of all SUGEN members and the SAP Executive Board.
“In collaboration with SAP, we achieved an important milestone by setting up this long-term benchmark program and tying the added value to further price increases,” said Andreas Oczko, board member of the German-speaking SAP user group DSAG and SUGEN SAP Enterprise Support lead. “With this effort, companies will gain insight into the SAP Enterprise Support value that SAP promises its customers.”
Prices to be adjusted to new maintenance cycle
In consideration of the current economic climate and discussions with SUGEN, SAP has also decided to extend by three years the four-step price increase program announced in July 2008 for customers that were migrated to SAP Enterprise Support at that time.
Originally scheduled to run until 2012, the program will now conclude in 2015, coinciding with the recently introduced 7-2 maintenance strategy. Starting in 2010, the price of SAP Enterprise Support for existing customers will continue to increase based on individual contract terms but will not be higher than a yearly fixed upper cap. This translates to an increase average of no more than 3.1 percent per year from 2010 onwards. The price of SAP Enterprise Support will be capped at 22 percent through 2015.