Exploring the advantages of focussed SAP Support providers.
Scale versus Specialisation?
For years, large global SAP customers have chosen to deal with large global SAP service providers. The reasons for doing so usually start with scale – a large IT estate needs a diverse team of people to provide skills across the many domains, products and functional areas that SAP offers. In addition, peripheral software applications, IT architecture and infrastructure are often subsumed into the same contract – the rationale being that combined support can be delivered at a lower cost through economies of scale. But as technology evolves, and as system complexity grows, can these all-encompassing contracts continue to provide the responsiveness and expertise that delivers best value? Or in trying to be ‘all things to all people’ is buying scale over quality becoming a sacrifice too far?
An article in CIO Magazine a few weeks ago reveals there is a growing shift from tier one outsourcing providers to midsize IT services players. Scale and price, they say, are no longer the sole interest of customers seeking these services. Instead, customers now value traits such as agility, flexibility, vertical alignment, responsiveness and trust — all of which are more likely to be found in smaller, more focused providers.
Commenting in the article, Hansa Iyengar, a sourcing and vendor management analyst with Forrester Research said “As deals get smaller, scale as a major differentiator is losing sheen. The cost arbitrage argument played in favour of larger vendors based on the economies of scale principle. But the tables are turning now, and skills are being valued more than cost.”
Benefits of Focussed Service Providers
Specialisation, in particular, is viewed as a major benefit of breaking down these large-scale contracts into specific components. Today, no large-scale service provider can afford to focus solely on SAP if they are to maintain margins and grow market share. Instead, they must offer an extended set of solutions and services, from many different vendors. This dilution of focus can impact quality. SAP technologies evolve and adapt at an incredible pace and, without significant and continuous investment in education and new skills, quality suffers. The relentless pursuit of growth can also compound this problem. Investment decisions are usually based on areas which offer the greatest profit opportunities. This means that traditional offerings like ERP can be neglected in favour of new product and service categories. So by adopting specialist partners, SAP customers can not only tap into the very specific skills needed to support today’s SAP landscape, but they can access the focussed expertise that will help plan and support their future SAP development road map.
Responsiveness and trust are other key factors that companies prioritise today in choosing suppliers. Responsiveness, to an extent can be captured and analysed in most Service Level Agreements, but trust is a factor that cannot be directly measured. Bhavesh Godhania, IT Director at life sciences firm AMCo benchmarked several large IT providers when seeking a new SAP support partner. He said: “[support] needs to be very responsive. One of the issues that I faced when looking at large-scale companies was that they weren’t able to give me the same level of attention as a small or medium company”. AMCo have been supported by Invenio for some years now and, of the trust that has built up over the years he says: “For me, it’s important that the relationship is strong and open. Anyone can offer SAP support. They’re all SAP consultants. They’re all certified. But the relationship you build, the bond you build and the trust you build is what counts”.
“One Neck to Choke”
Another advantage of implementing smaller, focussed contracts is that the transition from one supplier to another becomes easier. In an article appearing in PC Advisor earlier this month, Thomas Young, a Partner at outsourcing consultancy firm ISG said: “Back in the day, with the big ‘one-neck-to-choke’ model, when you switched providers you had to switch everything. But as the services supply chain continues to fragment all the way down to out-tasking and implementing point solutions, customers are much more likely to switch out those components. It’s the difference between switching out the stereo in your car and switching out the whole car”.
One more benefit to be found in mid-size service providers is good old-fashioned customer service. Forrester estimate that about 95% of [mid-sized firms] engagements are less than $5 million in value. This means that they must differentiate from scale in order to win (and retain) business. Factors that include specialisation, flexibility, agility and attentiveness become key when differentiating from large scale providers. These attributes are what customers today look for – making firms like Invenio, an ideal partner for those looking for a better SAP support service.
At Invenio we have an important and unbreakable rule “Customer First”. It’s true to say that no organisation will say that they are not customer focused – but this is much easier to implement when you don’t need to worry about external shareholders or service delivery across a multiplicity of other vendor product lines. Focus and autonomy gives us the freedom to put our customers at the heart of any business or investment decision we make. We are also careful to hire people not just for their technical expertise but also for their attitude. Our low attrition rate and considered growth strategy also means we are not under constant pressure to sacrifice quality over quantity when it comes to our new recruits. These and many other small actions that we perform on a daily basis means that the “Customer First” ethos is firmly ingrained into our culture, allowing our customers to experience a service that cannot be easily replicated by a large firm, with so many other interests to take care of.
In our next blog post, we’ll be sharing our thoughts on how the new measures by which SAP Support providers should be judged. In the meantime, if you’d like to learn more about how we can provide you with a better SAP Support service contact us.