Rimini Street, a third-party support provider for Oracle and SAP software, highlights in its 2022 report that many SAP customers are opting for alternative support to better manage their ERP strategies and mitigate the costs and risks associated with migrating to S/4HANA.
Rimini Street is a provider of third-party support for Oracle and SAP software products and a Salesforce partner.
Background enough then, arguably, for the organisation to know a thing or two about ERP implementations.
The firm’s 2022 Valoir Research report titled “Maximizing SAP Value with Rimini Street,” claims to explain the benefits of utilizing third-party SAP support services.
Smell something fishy already?
Third-party SAP support services company report details benefits of third-party SAP support services – well, yes, exactly, so is there any meat inside?
The 2022 report is a follow-on piece to the 2020 report, “Assessing an SAP-Rimini Street Strategy.” The latest version provides an update on ERP implementation plans and drivers and acknowledges SAP’s continuous effort to improve S/4HANA.
“Our customer relationships have become more strategic over time as enterprises strive to drive value from legacy assets while planning and executing thoughtfully for the future,” said Seth Ravin, CEO and chairman of the board at Rimini Street. “Valoir confirmed discovered some interesting SAP customer types who are approaching S/4HANA differently.”
The 2020 report
Rimini reminds us that SAP continues to appear eager to replace traditional on-premises ERP with its cloud ERP product, which as we know is otherwise known as S/4HANA.
As we also know, an ERP implementation is a core suite of enterprise applications running mission-critical workloads, so it cannot be ‘ripped and replaced’ with a more modern version of software, so companies must decide whether they want to move to S/4HANA or not… and if they do, they need to decide what their migration strategy should look like.
As the 2020 report notes, “A move to S/4HANA is not simply an upgrade: it is a new implementation effort, with a new platform and database. Valoir estimates that the migration effort, beyond the business disruption, would cost customers currently paying $1 million annually in SAP support and maintenance from $15 to $30 million to migrate to and operate S/4HANA.”
Two Rimini Street customers Valoir interviewed for the 2020 report said they did not believe S/4HANA was mature enough to adopt because it lacked the breadth of features present in the on-premises ERP suite. The third said it needed to improve its processes and rationalize the move to prepare for ‘a big transformation’.
The 2022 report
Rimini says that SAP is now positioning S/4HANA as an important element of customers’ digital transformation strategies.
However, suggests the SAP third-party support company… many SAP customers don’t want the adoption time frame dictated by SAP, so many have turned to third-party support which gives them time to decide what their long-term ERP strategy should be, how it should be implemented and when.
In the meantime, they may also assess non-SAP ERP solutions – and in 2022, SAP-Rimini Street customers fell into four groups:
Early adopters of S/4HANA who use Rimini Street for its SAP expertise and service offerings, including managed and security services. They are using Rimini Street to manage their entire SAP portfolio, including cloud applications, to streamline vendor and service provider management and focus their internal resources on digital transformation and innovation.
Planners who see the benefits of S/4HANA and are willing to adapt their functional requirements to what the platform offers. In some cases, this includes a hybrid strategy in which S/4HANA is used for some critical business functions and the on-premises version which continues to support others. Many planners are using the application support cost-savings to fund their eventual S/4HANA project.
Evaluators who believe there are benefits to S/4HANA but want to take the time to prove it’s the right cloud ERP solution. They are also considering the cost and technology implications of moving from an on-premises application to a cloud application because they want to be sure they can use S/4HANA as an enabler of digital transformation, not just a replatforming effort.
Skeptics who don’t perceive the benefits of S/4HANA or who believe the cost, risk and disruption associated with a new ERP deployment outweighs any benefits.
“In 2022, SAP-Rimini Street customers have some best practices in common. They have moved to third-party support to avoid upgrade costs, increase staff productivity and retention,” said Rebecca Wettemann, principal analyst at Valoir Research. “They are also utilizing third-party support strategically so they can devote adequate time and effort to planning before the move. Many of them have decided to take advantage of additional services to simplify vendor management and reduce the time their staff spends on resolving issues that span multiple applications or go beyond the SAP footprint.”
Irrespective of approach, all SAP-Rimini Street customers tell us that they have been able to gain control of their SAP application lifecycle, reduce risks and maximize returns on their SAP investments while delivering on digital transformation and innovation.
