Traditional application management services (AMS) models, if analyzed closely, can appear to be zero sum. There is a winner and a loser. If IT leaders asked themselves, “Is our organization the winner or the loser in our AMS arrangement,” what would the honest answer be?
As a general rule of thumb, if you are struggling to pay for innovation while buried under backlogs of cases that remain unresolved, then you are probably paying way too much to your AMS provider.
Determining the root cause of software application issues requires a high degree of expertise, yet not all application management services are sufficiently resourced or structured to include that expertise. Traditional AMS support models can, for example, feature inexperienced, junior-level talent tasked with solving the IT problems of global enterprises. The practice can lead to inefficiency, rework when the same things keep breaking, and clients overspending for AMS while providers seemingly have no incentive or impetus to change their models. Introducing penalties isn’t the answer; that just means more SLA oversight.
This situation is good for the providers if they can retain the business but very bad for client satisfaction and client budgets. Win/lose. For many clients, it’s time to switch to a new, win/win AMS approach.
Traditional AMS support models tend to benefit providers
In addition to the talent mismatch, the structure of traditional AMS approaches benefits the provider rather than the client. Some models can stimulate more open tickets, inefficient business processes, and ongoing billable hours rather than driving issue resolution.
Some models reward hours worked rather than service quality or efficiency of the actual resolutions. Cases are closed more quickly, but more things break. Ironically, and to a client’s detriment, this can lead to a need for more hours if the assigned talent cannot resolve issues within the contracted timeframe. Requisite client oversight further diminishes the appeal of these models.
Other models feature a fixed team for a fixed price. Backlogs can occur if the contracted resources cannot resolve the IT problems that are occurring. Neither accuracy nor solution permanency are factored into compensation. Often, too many things break, and more than once.
Any of these traditional approaches appear to be a win for the provider, but a loss for the client.
An innovative AMS support model benefits clients and providers
A service provider who can create a win/win paradigm shift with its AMS structure — by benefiting both clients’ businesses and its own business — can realize growth potential. The AMS market is worth an estimated $85.1 billion, and it’s growing.1 This gives clients the leverage in the AMS provider selection process. They don’t have to settle for a broken model that drains their budget and the time of staff while repeatedly “fixing” symptoms without fixing causes.
Managed service providers who listen to customer needs, understand their challenges, innovate, and deliver value can create market disruption. Innovation can come in various forms including the IT service technology itself, the efficient combination of services, the level of expertise, and the way the service is delivered.
The client-centric AMS support model
Designing an AMS structure that is client-centric rather than provider-centric is itself an innovation. What are characteristics of a client-centric AMS approach? It solves problems instead of just alleviating symptoms; it has a fixed and predictable price; and it includes unlimited use of a catalog of services. Issues are resolved once and for all — at a known cost — through root-cause analysis. Critical processes are monitored to proactively identify and prevent risk.
Primary support engineers lead the way, backed by a global team of IT experts with extensive professional experience resolving complex enterprise software issues. They are in the client’s time zone, speak the client’s language, and understand the critically time-sensitive relationship between uptime and revenue.
Ideally in this model, AMS are integrated with ERP support through the seamless delivery of comprehensive Level 2 through Level 4 support with no escalations. In all, a client-centric AMS approach delivers responsive expertise, value, efficiency, cost predictability, measurable outcomes, and peace of mind.
Win/win.
Take Rimini Street to a win/win AMS support model
The Rimini Street philosophy is simple: The best case in AMS is the one that is never opened. We focus on addressing business processes and problems proactively while keeping things from breaking in the first place.
The client-centric AMS approach above describes the Rimini Street application management services model. Rimini Street offers a full range of integrated AMS and ERP support services for SAP, Oracle, and Salesforce® with a guaranteed SLA response time of 10 minutes or less for critical, Priority 1 issues. (Figure 1)
Rimini Street Integrated AMS and ERP Support Services
Rimini Street has analyzed thousands of tickets for our clients’ AMS case backlogs. In one example,2 an Oracle JD Edwards client’s existing AMS vendor’s problem-solving skills and root cause methodologies were all but absent. There was a considerable increase in tickets from 2018 to 2020. In fact, the number of tickets for a six-month period in 2020 was twice the number of tickets opened for a seven-month period in 2018. While the COVID-19 pandemic impacted 2020, performance targets were already falling because issues were bounced among lower-skilled, outsourced AMS resources, requiring repeated explanations. (Figure 2)
Annual Open Ticket Growth Rimini Street AMS for Oracle JDE Client
For a Rimini Street AMS for Salesforce client,3 Salesforce user adoption had stalled, and sales productivity was stifled. We discovered that 57% of IT service time was being spent on user administration. The IT resources were buried in a queue of enhancements, with no time to be proactive. The money being spent to get new leads and customers was at risk. (Figure 3)
Managed Services Analysis for IT Time of Staff
Rimini Street AMS for Salesforce Client
A Rimini Street AMS for Oracle EBS and AMS for Salesforce Client truly believed that it had a good model in place with its previous AMS vendor. Before moving to our unified application management and product support model, the client had paid its previous AMS provider a flat fee for access to a pool of 20 generally lower-skilled, fixed resources to run its Oracle EBS environment.
The client had full control, dictating what projects, system administration, or tasks the provider worked on. This included running financial jobs, enhancements to sales invoices, enhancements to Oracle purchase orders, and reports in Oracle Discover. Everything was predictable. Except when it wasn’t.
Whatever the AMS vendor broke, Rimini Street engineers fixed. We were providing Level 4 support in a two-provider model where the AMS vendor did not have the skills to resolve incidents in a timely manner. Queues of AMS service requests were ongoing.
The client chose to consolidate Level 2-4 service layers, with Rimini Street as the single source provider. Why? The strategy was shifting to preventative maintenance and increased consultative problem solving — two major strengths of Rimini Street.
The consolidation paid off. In the first five months of delivering managed services in 2020, Rimini Street attained the following operational improvements compared to the previous AMS vendor:4
- 57% reduction in hours to close security access requests
- 82% reduction in the number of Incidents open for more than 30 days
- 99% Salesforce case closure rate — taking performance targets to new highs
A Rimini Street AMS for SAP client gained the following year-over-year success metrics:5
- 99% average incident close rate over a 6-month period, non-batch
- 99% average security task close rate over a 6-month period
- 90% average change request close rate over a 6-month period
If you’d like to get to win/win with your AMS and ERP support models, let’s discuss how to get there together. Learn more about Rimini Street application management services.
1 Gartner Market Share Analysis: Application Managed Services, Worldwide, 2019, published 29 May 2020 – ID G00718021
2 Rimini Street Confidential Operational Performance Client Executive Readout AMS for Oracle JDE November 2020.
3 Rimini Street Confidential Operational Performance Client Executive Readout AMS for Salesforce 2019.
4 Rimini Street Confidential Operational Performance Client Executive Readout AMS for Oracle EBS 5/30/20 – 11/9/20.
Rimini Street Confidential Operational Performance Client Executive Readout AMS for Salesforce November 16, 2020.
5 Rimini Street Confidential Operational Performance Client Executive Readout AMS for SAP 3/1/20 – 8/31/20.
