The SAP services market is undergoing significant change: provider consolidation, changes in pricing models, new delivery options, and cloud-based deployment. At the same time, firms are entering 2010 with an eye to growth and business strategy enablement, after significant focus on cost-cutting during the recession. Firms struggle with finding the best services provider for their SAP project and the best delivery, pricing, and deployment models to ensure value, ROI, and success in achieving business goals,. Increasingly, firms are also considering Cloud and SaaS delivery models.
SAP users wondering about the latest trends in SAP services – from pricing models to multi-sourcing to cloud – are welcome to join us for an interactive session next Thursday March 25th. Moderated by Forrester’s George Lawrie, Bill Martorelli, Euan Davis, Stefan Ried and I will lead an interactive discussion around:
- SAP services provider landscape. The market has undergone significant consolidation, with major acquisitions by firms like PwC (BearingPoint), Xerox(ACS), and Dell(Perot) as well as numerous smaller acquisitions. Leading India-based firms have rapidly built their strategy consulting capabilities and now challenge the MNCs in higher value project work.
- Offshore delivery. Offshore ratios have grown extremely high. Implementation and project work is commonly 60% or more offshore; support and maintenance work surpasses 90%. Firms’ offshore strategy is broadening beyond India into geographies such as Latin America, China, and Philippines.
- Outsourcing and AMS work. Firms weigh the trade-offs between single-sourcing their project across implementation, AMS, and hosting versus using multiple providers. Firms also struggle with pricing models and SLAs, with many firms exploring outcome-based pricing models that shift risk to their provide. Outcome-based pricing also provides a potential foundation for innovation and savings beyond labor arbitrage.
SaaS has long promised the concept of usage-based pricing, elimination of shelfware, and long-term commitment to value and total cost of ownership (TCO). But some clients have questioned how true this is in practice. With more and more clients signing longer deals of 3-5 years in length and sometimes struggling to get an exit clause, clients question whether they can truly pay for what they use – and eliminate or redeploy unused subscriptions.