Top 7 Hidden SAP Support Expenses 

Part 1: Intro

The SAP lifecycle consists of three phases- Implementation, Support, and Upgrades. While you cannot eliminate all the expenses associated with SAP, there are ways to reduce the overall cost; with one area that many companies overlook is ongoing support.

Basic Nature of SAP Implementation

Implementation costs are fairly straightforward. The company mobilizes for a herculean effort to prepare people, systems, and organizations for the change necessary to implement an SAP project.  In most cases you hired a consulting firm that brought with them a large number of programmers and consultants,  internal resources were assigned to the project, and in about a year’s time (maybe more) the company has a new integrated platform for managing sales orders, manufacturing, customer lists, inventories, finances, etc… 

Because of the visibility of the project, costs are managed carefully and waste is hopefully minimized (this is always left up to external and internal opinions of how the project was really managed).

SAP Upgrades are Often a Snap

Upgrades are fairly straightforward as well—think of a PC operating system upgrade with a 100-fold complexity increase.  Of course, the benefits of the new upgrade can include feature and functionality that you cannot live without and the ultimate cost savings justified the expense. However, in most upgrades, it is just a technical upgrade of the software to stay current with patch management and to not fall behind in the software companies’ maintenance schedules.

Potentially, consultants are again hired to help you upgrade from one version of an SAP system to the latest and greatest version.  Again, technical upgrade projects should be efficient and relatively inexpensive if managed correctly.

SAP Support: Where the Money Really Goes

Meanwhile, the one area where most firms fall short of minimizing costs is in operational support.  There may be a two or three year period between an implementation and an upgrade (or between successive upgrades) where the SAP environment needs to be supported, help and assistance provided to internal and external users, issues resolved , business changes and other anomalies addressed in order to keep your SAP system running and operational while minimizing the overhead. 

In our experience of working with hundreds of companies that have deployed SAP, we have found seven hidden issues that drive support costs up.  Addressing these issues could save hundreds of thousands of dollars in annual SAP support costs thus freeing up resources and providing more funding for other higher-priority projects that improve your company’s bottom line.

Hidden Expense #1 & #2 Coming Soon

Stay tuned for our multi-blog series on the Top 7 Hidden SAP Support Expenses. We highly welcome your comments and thoughts regarding other hidden SAP support expenses we may have not addressed!

- by Mike Kerrigan, Managing Principle, ERP Services