Clients of Rimini Street’s support for SAP have the freedom to make independent decisions about S/4HANA – but that doesn’t necessarily mean they reject SAP’s reinvention of its ERP software.
Some are moving forward with S/4HANA, while continuing to rely on Rimini Street for high quality and cost effective support of their existing SAP Business Suite implementations. Others have left Rimini Street (for now) and seamlessly returned to SAP maintenance.
Rimini Street clients continuing to do business with SAP include CF Industries, a manufacturer and distributor of fertilizer and nitrogen products, which decided S/4HANA Cloud would allow them to make a fresh start on their enterprise architecture. Rimini Street is supporting them through that transition.
A few clients also rely on us for support of their completed S/4HANA implementations. Cameco Corporation, the world’s largest publicly traded uranium company, is in that category.
These examples ought to reassure those who worry SAP will hold a grudge against them for seeking an alternative source of support. We spoke with industry analysts and IT contract negotiation specialists that agree: much as SAP might prefer that its customers pay for high-priced maintenance contracts on all their software, the reality is they will work very hard to earn your future business.
Rimini Street clients aren’t compelled to upgrade mature and stable products solely because SAP no longer wants to support them. That is particularly important for those organizations who are not ready to migrate their core ERP to S/4HANA – a challenging rip and replace project because the system architecture is different enough to be more like a new implementation than an upgrade.
For that reason, many Rimini Street clients are in the “wait and see” camp. They may move to S/4HANA eventually or adopt it selectively, within divisions or subsidiaries. Or maybe not.
Choice or No Choice
In contrast with Rimini Street clients, SAP customers who stay on SAP maintenance may not feel they have much choice but to adopt S/4HANA, ready or not. SAP has announced a deadline, after which it says it will no longer support the ECC 6 version of its Business Suite software.
In other words, those customers who have not moved to S/4HANA may not be able to count on SAP support at all. That is worrying for large organizations with complex implementations, given that the conversion to S/4HANA could take years.
For them, switching to third party support is an opportunity to make their own implementation decisions at their own pace – while saving a lot of money in the process.
Many Roads to S/4HANA
Our ebook, SAP Customers Taking Rimini Street To S/4HANA, profiles 33 clients of Rimini Street’s support for SAP, the application roadmaps they are charting. Their estimated savings over 7 years are as high as $94 million for every $1 million currently spent on annual support fees. Here are some highlights.
Rimini Street Clients Returning To SAP
Rimini Street clients continue to work with SAP when it makes sense to do so. None report having been charged “back maintenance” or other penalties when SAP wants their business.
While CF Industries is beginning a rollout of S/4HANA Cloud, CIO Tom Grooms says working with Rimini Street “serves as at least a three-year bridge, during which time we can evaluate things and select the right path.”
Projected 7-year savings: $25 million.
Global geotextile manufacturer Propex signed up with Rimini Street in 2010, went back on SAP maintenance in 2013 as part of a global expansion initiative, and then came back to Rimini Street again. “The decision to return to Rimini Street support from SAP was an easy one to make because we had grown accustomed to Rimini Street’s significantly more responsive support model,” says IT Director David Eady.
So far, Propex does not see a compelling reason to reimplement its ERP on S/4HANA. But having already made one seamless transition back to SAP, Eady can be confident Propex has that option.
Projected 7-year savings: $51 million.
Incitec Pivot Ltd. has relied on its SAP applications for more than 20 years. When this Australian chemical manufacturing and mining services firm became a Rimini Street client, CIO Martin Janssen said, “It’s not being cheap. It’s getting the best value-that’s why we’re with Rimini Street.” Incitec Pivot treats SAP as its core system but has surrounded it with other applications for CRM, E-commerce, HCM, and logistics – projects “funded through savings we’ve achieved through Rimini Street,” according to Janssen.
Incitec Pivot is planning a controlled rollout and evaluation of S/4HANA, which it will run in parallel with its ECC applications for the foreseeable future.
Projected 7-year savings: $9.3 million.
Running S/4HANA With Rimini Street Support
Although most SAP customers will defer S/4HANA due to the perceived high cost and risk, those who implement S/4HANA can get services from Rimini Street when ready – an attractive option for those who appreciate the speed and quality of our support.
Cameco Corporation will continue to run ECC 6 in parallel with S/4HANA – considering expansion of S/4HANA down the line, as the business case is established.
Projected 7-year savings: $50 million
A metal processing equipment and machinery manufacturer is using a “greenfield” implementation of S/4HANA to enable reengineering and process simplification. It will maintain an existing ECC 6 system in parallel, using the savings from Rimini Street support to fund innovation and expansion.
Projected 7-year savings: $210 million.
Wait and See – With Big Savings
The highest projected 7-year savings we cite in the ebook, $395 million, belongs to a mining and construction company. For this firm, SAP is a strategic system of record, but S/4HANA would be far too costly for them to deploy given the customizations to its ECC 6 implementation. They plan to take another look at S/4HANA, as well as emerging next-generation ERP offerings, in 5 to 7 years.
Most Rimini Street clients for SAP support are in this “wait and see” camp.
Pall Corporation is a long-time SAP customer with two primary challenges: first, the company needed to reduce its operational spending to maximize profitability, and second, Pall Corporation needed to redefine its next-generation ERP strategy to better support its business initiatives.
“We weren’t realizing value for our maintenance dollars,” says Paul Wilner, vice president of IT and CIO for Pall Corporation. “SAP didn’t appear to be investing any further in the core ECC product. Everything seemed to be invested in their cloud services, including S/4HANA.” His evaluation of S/4HANA: “too expensive, with an unclear roadmap.”
Projected 7-year savings: $15 million.
The government of Multnomah County, Oregon, runs a highly customized version of SAP ECC 6 with Oracle databases. The county found SAP’s vendor support inefficient and expensive. “There was a tremendous amount of inefficiency built into that support model because we would have to continuously repeat the context of the case, even though it had often been recorded into the ticket,” says Bob Leek, CIO. “Plus, we were experiencing the push many ECC 6 customers face with SAP trying to move everyone to the S/4HANA platform.”
Seeing that many large SAP customers were balking, the county decided S/4HANA was too immature and expensive an option to consider at this time. “We seriously evaluate every taxpayer dollar we spend; optimizing costs is of paramount importance,” Leek says.
Projected 7-year savings: $57 million.
Superior Uniform Group runs SAP with a customized version of the Apparel and Footwear Solution (AFS) module that meets its business needs. Seasoned internal developers handled most of the company’s support needs, yet cost of its SAP maintenance contract was high and rising. “The upgrades and enhancement packs weren’t meaningful to us, and we certainly weren’t getting any applicable new functionality,” says CIO Mark Decker. “ECC 6 is at the end of the road in terms of new features and capabilities,” he says.
“Our ECC 6 release more than meets business requirements,” Decker says. “There is no need for us to migrate to S/4HANA because it does not offer the comparable functionality that we customized into the current AFS system.”
Projected 7-year savings: $35 million.
More Where This Came From
This has been just a sampling of the stories told with many more details in our ebook, SAP Customers Taking Rimini Street To S/4HANA, which profiles 33 companies who are saving millions – in most cases, tens to hundreds of millions – of dollars with Rimini Street support. In the process, they reduce risk, while keeping ALL their future options open.
On February 4, 2020, SAP had announced mainstream support for SAP Business Suite 7 until 2027