What Do SAP Clients Need To Know About Implementation And Support Services, SAP's Cloud And On-Demand Services, And Offshoring?

Liz Herbert

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.

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CSC Sharpens Its Innovation Focus

Christopher Andrews

In my recent interviews with IT services providers on the topic of innovation, one of the key findings was the many different ways in which innovation can be categorized.  Some companies view innovation as simply an extension of their traditional R&D capabilities, others view their innovation as a way to prove their thought leadership, still others view innovation largely as a strategic marketing imperative. Sometimes, it’s a combination of these factors.

One interview that stood out was with Lem Lasher, the Chief Innovation Officer (and Global Business Services President) at CSC, who described to me a deep and holistic approach to transforming CSC’s innovation capabilities.  Three things that stood out at me about Lem’s approach:

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Wipro prepares for the Business Technology Challenge

Christopher Andrews

I just completed a day of analyst information sessions hosted by executives at Wipro Technologies. A few of my thoughts:

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Deloitte’s Two Recent Acquisitions Highlight Broader Market Changes

Christopher Andrews

Deloitte recently made two acquisitions that may not make front-page headlines, but for sourcing professionals, they are noteworthy.  In February/March Deloitte announced the acquisition of 1) dcarbon8, a carbon and sustainability consulting company that specializes in supply-chain management and carbon benchmarking and 2) Simulstrat, a company that pioneers “wargaming” and a spinoff from the department of war studies at King’s College in London. The acquisitions are small, but they highlight some interesting trends in the technology marketplace:

  • Before the recession of 2008, high oil prices pushed interest in “going green” to a peak, but the economic recession cooled some of the green fever --  and many “clean tech” companies we track started repositioning themselves more as enablers of cost savings and efficiency.  The acquisition of a sustainability consultancy like dcarbon8 highlights the fact that the interest in green continues – and companies like Deloitte view the green focus as more than a passing fad.  
  • Simulstrat offers sophisticated risk mitigation consulting to companies – all posited at a simulation or “game-like” setting. In this case, Deloitte looked to the capabilities of an academic institution to bring an innovative risk services offering with its private sector clients.  While simulations have traditionally been applied in government settings (e.g., war games) the potential for businesses (who are increasingly interested in risk mediation strategies to deal with macro-economic shifts) is strong. 

 

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Delivering on SaaS' Promise of Flexible Subscriptions

Liz Herbert

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.  

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The Superbowl's impact on Sourcing & Vendor Management professionals

Duncan Jones

As I live in UK, I tend to record major US sporting events and watch them the next day (the Superbowl doesnt start until nearly midnight).  That means I have to avoid the internet, twitter, conversations with US colleagues, etc, for the whole of the following day so I can enjoy the game without knowing the score. One client nearly spoiled it for me by talking about the game in an inquiry, but I managed to shut him up. (I think he understood why).

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Bad news for IT buyers: Oracle sues Rimini Street

Duncan Jones

January 26th, 2010 was a black day for the enterprise software business.Late yesterday, Oracle launched a lawsuit against independent support provider (ISP) Rimini Street, alleging 'massive theft' of its intellectual property. Industry analysts had been expecting something like this - Oracle is already suing Rimini Street's predecessor TomorrowNow and was clearly worried that a competitive market would force it to cut the price of its hugely profitable maintenance offering.

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SAP Brings Back 'Standard Support'

Duncan Jones

Along with its 2009 results, SAP today made another attempt to undo the damage of its clumsy attempt to hike its maintenance % up to Oracle-like levels, by announcing the reinstatement of Standard Support as an option for customers. “SAP’s new support model is a direct response to the many discussions we’ve had with our customer and user groups,” said Léo Apotheker, chief executive officer, SAP.

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Software Sales Proposal - Burn After Reading?

Duncan Jones

Software vendors like to claim that their sales proposals are highly confidential, For Your Eyes Only or even, if you prefer the Coen brothers to Bond, Burn After Reading. I help dozens of clients every year with software negotiations, but I cant do that unless they share with me the vendor’s proposal, including price details and contract terms. Many clients are reluctant to do this, worried that doing this might break confidentiality clauses in their agreement.

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When is enterprise mobility not really ENTERPRISE mobility? (hint - most of the time!)

Tim Sheedy

We often hear about how important enterprise mobility is to businesses. For years ICT events companies have been holding events about "enterprise mobility" and "the future of wireless" etc - and they have filled halls with attendees and sponsors/exhibitors.

But really - is mobility really that important to businesses? Weren't the people with "mobile" in their title the first to go when the global financial crisis hit? And point me to more than a handful of businesses whose business relies on their mobility capabilities.

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