The ROI discussion for Software Support
Exciting discussions about mobility platforms, tablets, apps and cloud are drowning out the discussion about the value of investment in bread and butter software support. However, I believe that at no point in time has software support and maintenance been as critical as it is today.
Software Support could be the game-changer for IT
IT organizations continue to be charged with increased business complexities, dramatically changing business environments and increased scrutiny by boards, while they still have a limited IT budget and in many cases, inadequate support from business. So, it is no wonder that a recent 2011 Gartner survey of 344 CFOs at North American companies discovered that only a quarter of CFOs had confidence in their own IT organizations. (Read a summary of the survey at NetworkWorld)
In addition, the survey found the following
- Only about a quarter said their IT department “has the organizational and technical flexibility to respond to changing business priorities,” or “is able to deliver against the enterprise/business unit strategy.”
- Less than a quarter said IT “delivers the technology innovation needed by the business,” or that it “has the right mix of skilled people to meet business needs.”
- Only 18 percent said they thought “our IT service levels meet or exceed business expectations.”
Hence, the need for a clear ROI discussion regarding software support – the discussion can facilitate a better understanding of business priorities and leverage the SAP investment to better support those priorities. I have also seen from my experience with customers that the ROI discussion results in a better understanding and collaboration between IT and business owners such as CFOs and Line managers.
What constitutes Software Support ROI?
Software Support ROI can be simplified down to a handful of benefits achieved across following value buckets
- Improved Business Continuity, typically estimated as reduced number of downtime hours x average cost of a downtime hour.
- Reduced Total Cost of Ownership – this can range from
- reduced support costs using service desks/better documentation,
- reduced implementation costs by avoiding unnecessary customizations/modifications, reducing testing efforts using SAP Solution Manager documentation, etc
- reduced spending on 3rd party tools and consultants through SAP Solution Manager and other SAP Enterprise Support services such as BPPO
- Reduced hardware costs by optimizing data volumes and business process performances
- Improved Business Process Performance and Innovation using SAP Enterprise Support services, Continuous Quality Checks and use of SAP’s experts.
Several studies have been done to support the value potential from different support elements. This IDC Report builds a case for ROI from the use of SAP Solution Manager. Also read SAP Insider Article that talks about various value levers of SAP Enterprise Support “Capitalize on the Value of SAP Enterprise Support” .
Is Software Support ROI rocket science?
I see reluctance from some customers in developing ROI estimates from support. Many factors drive this – a perceived inability to track the necessary KPIs, assumption that the analysis is too complex and a preconceived notion that there is no value other than minimizing downtime. However, based on our experience with customers that do asses value, we see that the ROI analysis leads to better utilization of support offerings that benefit business and IT.
With many estimation tools, case studies and benchmarks available, estimating the ROI of software support does not have to be rocket science. Even ballpark estimates of metrics can point to areas of opportunity.
SAP’s Maintenance Go-to-Market team has developed a Xcelsius-based Value Calculator for SAP Enterprise Support that can be used to pick some metrics and track potential improvements across those metrics. Enough customer references and proof points exist to back up most of the potential improvements. The proof points may be adjusted to account for your unique situations.
Estimating and achieving value-based metrics in support does not have to be a painful task. IT departments can pick top 5 metrics that have the most significant impact on their business and set goals for achieving improvements in those metrics. The SAP Support Advisory can assist in the achievement of these goals.
The SAP Enterprise Support Value Calculator is available to all customers through a SAP Maintenance expert. Please feel free to contact me if you are interested in seeing/using it.
Deepa Bhaskaran Salem