As the role of IT evolves from keeping the lights on to helping shape business strategy, technology leaders are challenged to find room for those strategic projects in their schedules and in their budgets. In a recent poll by CIO, 72 percent of those surveyed admitted they are struggling to balance business innovation and operational excellence.
How can you balance your traditional IT responsibilities with today's new transformational challenges? To keep pace, you need a solid platform for core business functions that you can count on for at least the next 10-15 years, coupled with a forward-looking approach to quickly driving innovation.
The Stakes Are High
Your ERP system is the foundation for your business. It must reliably deliver on essential functions like financial management, everywhere you operate. Even a brief outage caused by an upgrade or an unexpected issue can have a massive impact on your operations, according to a survey by ITIC:
- 98% of organizations say a single hour of downtime costs over $100k
- 81% of respondents indicated 60 minutes of downtime costs more than $300k
- A third of enterprises say one hour of downtime costs them $1-5 million or more
The good news is that most of today's leading ERP apps have at least twenty to thirty years of development behind them. They're extremely robust, but it's up to IT to keep them humming.
A Dependable yet Agile Foundation
An optimal business platform is key not only for avoiding risk, but for seizing new market opportunities. Over half of the companies in the Fortune 500 have disappeared since the year 2000 and been replaced with more nimble competitors. In this dynamic landscape, your business platform must be not only stable and dependable, but highly agile. It should be cost-effective, enabling you to not only meet traditional IT service imperatives, but free up budget to support innovation as well.
You'll also want a platform that's tested and proven, so you can be assured it will deliver the performance and dependability you require. Major ERP vendors are promoting new platforms that are not yet mature. Even if they do eventually reach maturity, you'll want to understand the ROI they will deliver before adopting an emerging solution.
Above all, your focus should be on supporting innovation throughout your business and getting the most out of your technology investment — and not on re-platforming your core ERP apps and processes while world speeds ahead.
How Will You Respond When an Issue Flares Up?
No matter how robust your business platform is, you'll encounter a support issue sooner or later. When an issue does occur, you need responsive support in place to restore full service fast. Support from your ERP vendor isn't always the smartest choice. In fact, according to Gartner, defaulting to the highest level of contracted support can cost up to 30 percent more than alternative maintenance plans.
A third-party support solution can provide an effective alternative to vendor-based support contracts. It can provide the robust support you need to keep your essential business processes running dependably, while freeing up budget to power innovation and business growth.
For example, Kumagai Gumi, a leading Japanese construction firm, employs a proven third-party support solution to minimize maintenance costs, avoid upgrade disruptions, and stabilize its SAP apps for years. Its existing SAP system was facing end of support, but the company decided it didn't make sense to continue with technical upgrades that offered few or no benefits to the end user. Its third-party support solution enabled this construction giant to:
- Reduce ERP maintenance (50%) and upgrade to free funds for strategic IT initiatives
- Employ higher quality support services with guaranteed response time of 30 minutes or less for critical issues
- Continue to use its existing SAP implementation for 15 years
Choosing the right support vendor is important, but you'll also want to step back and build a support strategy and communications processes to ensure that your organization can respond to issues fast, maintain consistent compliance, and mitigate potential issues before they impact the business. Many organizations consider employing heterogeneous environments with ERP solutions from a variety of vendors. Putting a cross and/or multi-vendor support program in place can help ensure that these mixed solutions will receive the support they need, while streamlining IT management responsibilities and reducing finger-pointing.
It's also important to ensure that your strategy considers support coverage for your organization's full landscape of apps, including industry-specific, custom-developed applications, as well as packaged software that you've customized in-house.
In a marketplace that's re-inventing itself on a regular basis, it's more important than ever to ensure that your essential operations remain stable, and ready to support nonstop innovation. The right business platform can provide the essential foundation that you need.
Evaluating the Potential of Third-Party Support in Reducing IT Costs
Gartner offers best-practice techniques to help you learn how you can significantly reduce software maintenance and support costs for both on-premises and SaaS software environments.
David Rowe, SVP & CMO
Mr. Rowe is a 29-year veteran of the enterprise software industry with proven experience formulating, building and marketing technology solutions for both large international software firms and high-growth technology start-ups. He has been a featured speaker at technology and marketing conferences and was named as one of the Top Chief Marketing Officers of 2010 by the CMO Institute. Mr. Rowe oversees all global marketing for Rimini Street.