As we enter into an unprecedented global pandemic, it has become a key priority for organisations to make cost savings immediately. Not only are cost savings important, but minimising the long-term damage caused by any crucial cost savings has become the main goal. Here’s exactly how…
Your original destination: ERP upgrade
It’s unsurprising that many organisations will have had an ERP upgrade on their list of current/upcoming critical IT projects. Many see ERP upgrades as an essential element of modernising IT and staying at the ‘front of the pack.’ But is this really true?
Upgrades (especially reimplementations to the Cloud) are big, time intensive, and expensive projects that can involve lots of change management. For these reasons, you probably don’t have the resources available given current market conditions during the pandemic.
That is why it is vital right now to ask the question: are you upgrading because it will add value to your organisation, or because you feel forced to by vendor pressure and support deadlines?
It is in your vendor’s best interests to get you to upgrade as soon as possible.
Oracle and SAP will always try, with the help of their business partners, to upgrade you. Even if an upgrade adds little additional value to your current setup, even if an upgrade right now is not in your best interests, and even if you need to be making cost savings in a global pandemic – they will try.
That’s because Oracle and SAP have their own sales targets to hit, as well as their goals of being major Cloud players. This is why they are always trying to force customers to upgrade to their latest Cloud products, often by using questionable sales tactics, such as audits and contract auto-renewals.
Oracle and SAP will not consider what an upgrade means for you.
Some organisations are already starting to realise this. They are wondering what they can do to not only save money, but delay these unnecessary projects.
Pandemic redirect: Make critical IT cost savings
Our view is that organisations need to focus on making immediate savings, not investing in multi-year innovation projects, especially on stable solutions like ERP and databases.
Because of current market environments, it has become a priority for organisations to stop unnecessary spending and do what they need to survive.
We advise focusing on three things to make critical IT savings:
- Delay unnecessary projects like an ERP upgrade: Evaluate what added value the project will bring to your organisation and the time frame of these results – is it worth it?
- Renegotiate with vendors: Speak to your IT vendors and see where you can make savings, freeze price increases, or renegotiate terms given your current situation and needs.
- Rightsize your IT estate: Identify what your current needs are and remove any unnecessary licences and subscriptions (surprisingly, this can be one of the largest areas of IT cost).
Oracle/SAP customers: Switch to third-party support
While our above three tips will help you prioritise and cut costs from some of your budget, they will not help when dealing with a mega-vendor like Oracle and SAP.
Oracle and SAP will not reduce their costs, they will not stop charging you for shelfware, and they will still insist that you upgrade to their latest products (otherwise they increase support costs).
Luckily, there is a solution to tackling Oracle and SAP: third-party support.
By moving your support from Oracle/SAP to Support Revolution, you can:
- Immediately cut your support bill in half
- Stop paying for shelfware
- Delay ERP upgrades for as long as you need
Unsurprisingly, we have seen a sharp rise in demand for third-party support, as documented by Gartner. Organisations across the world are looking for efficient ways to cut their largest IT costs. They need to free up much needed resources to invest in other critical projects.
“Now more than ever, organisations need to prioritise cash flow, and Support Revolution can help you. It is vital that all companies investigate all the cost-saving options available to them. Many are spending millions on SAP and Oracle legacy support models that most of them can’t use or don’t need.”Mark Smith, CEO of Support Revolution
Delay non-essential upgrades, not essential savings
As a recent example, we’ve been speaking to an organisation working in the travel industry. The organisation had, as part of its IT roadmap, an intention of upgrading to S/4HANA.
However, given the current pandemic, it has had to put its upgrade on hold. Like many other organisations, it understands that an S/4HANA upgrade will only bring a marginal return on investment. This is at a time when cost saving is the utmost priority.
But, by switching to Support Revolution, it has been able to make a 50% in-year saving on its support costs. The airline has also gained the freedom to continue using its current systems. It has ignored SAP’s 2027 deadline and will move at a time which suits the organisation’s plans.
“We’re delaying our S/4HANA migration for the foreseeable future with the help of Support Revolution. Our current systems are stable and do what we want them to do. The savings right now are huge and obviously needed given the current market conditions.”Leading global airline
Our support model doesn’t mean the organisation can’t make that upgrade. It just means that its roadmap and timeline are back in its control, not SAP’s. When it decides that it is ready to make the S/4HANA upgrade, we’ll still help during that process. In the meantime, the organisation is making huge cost savings during a pandemic.
Switching to Support Revolution is a way of saving now, to invest in what matters now.