Dieter SteigerDieter Steiger SAP – costs too high by up to 30%!

11/02/2010 by Dieter Steiger

Experience shows that implementing and operating SAP applications typically costs 10-30% more than it should. SAP cleverly positions new systems on a regular basis that offer questionable benefits to customers within the overall context, and do not really contribute to an SAP optimization. Examples include Accelerated SAP (ASAP), SAP Netweaver and of course the Run SAP initiative with SAP Solution Manager.

All of these systems tend to increase costs for the complete SAP solution. In many cases customers don’t even need to implement the recommended solution because they only utilize part of it, or none of it at all. This is precisely where the greatest potential lies in an SAP optimization as a whole: primarily in the SAP architecture underlying the entire system.

There were heated protests when SAP maintenance costs increased two years ago. But maintenance comprises only a small portion of the total cost. Why don’t companies and organizations systematically and consistently resist the constant, massive cost increases with SAP systems? Most customers are probably not even aware of the opportunities they have for SAP optimization. The optimization of SAP systems offers a hefty savings potential. You just need to detect and identify the pain points. It is interesting that no one seems particularly willing to tackle the subject of SAP optimization and cost management. User groups primarily share technical experience and usually focus very little on the business-related and financial optimization of SAP systems.

Interests within the SAP community ensure that the operating costs for SAP remain high, which is fine with the software producer and SAP service providers. SAP regularly delivers products and methods for SAP optimization under the guise of cost management. Unfortunately, this often achieves the exact opposite – SAP operating costs rise even faster. The main problem lies in the existence of the SAP “ecosystem.” The different players stick together in regular interaction, mutually generating new projects to secure their existence. Everyone wants to jump on the bandwagon. The more concepts and solutions SAP launches on the market, the more work there is for the ecosystem’s beneficiaries. But is that really the best thing for customers? The fact is, the investment and operating costs of SAP continue to climb all the time. In a cost analysis, SAP is compared with SAP – what else, of course. New cost drivers can be generated this way. Thanks to the complexity of SAP systems, many customers have lost their overview and become increasingly dependent on SAP. As a non-expert, recommendations from the SAP community need to be taken with a grain of salt anyway. You sometimes even encounter a certain arrogance in the SAP consulting world. Many consultants guard their expertise by not providing any specifications/documentation for their customization work. This practice seems to be standard in the SAP consulting environment, but such practices are considered simply unprofessional outside the SAP world!

The Run SAP methodology – one of SAP’s newer initiatives – is an example of a cost driver introduced by SAP. Certified consulting services usually based on SAP technologies are provided to SAP customers. SAP skillfully convinces customers to invest in and implement the Run SAP methodology. But if you take a critical look at the Run SAP methodology, you recognize fairly quickly that Run SAP primarily helps SAP – as the quintessential ERP standard software producer – retain its customer base with regard to SAP standard changes. SAP integrates new concepts for administering and managing solutions developed in-house (only ABAP, naturally) in the SAP Solution Manager. In our opinion, however, impact analyses of SAP customization would be more useful. After all, it is well known that customization comprises the lion’s share of effort in an SAP implementation.

The potential for optimization in SAP environments is enormous. A cost reduction of 10-30% is a realistic expectation for most SAP users. Members of the SAP community protect each other and are often not even interested in an optimization.

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    The Cost Drivers for SAP /// beteo:

    […] for lowering costs over the long term. Implementing and operating SAP applications ends up being more expensive than necessary in most cases. Interests within the SAP community ensure that the operating costs for SAP remain […]