ASUG’s Strange View of How SAP Support Fees Should Be Spent

 What This Article Covers

  • Should Support Fees Not be Used for Development?
  • Pre-Emptive Support Funding
  • SAP’s Support Margin
  • SAP Articles Published Through the SAP Surrogate ASUG, Under the Pretense of Being Independent Analysis

Introduction

It is interesting to find what ASUG believes SAP support fees should be used for.

In this article, we will cover this topic as it is stated by ASUG in an article.

Support Should Not be Used for Development?

In its article, ASUG proposes something quite interesting about using support money.

“Those 22 percent maintenance fees that come with SAP licensing contracts are expected to pay for support and maintenance of currently licensed products, but SAP and other vendors also use that money to upgrade and innovate. In this case, it appears that mergers and acquisitions are also lumped into the innovation pile. That’s an interesting note for customers who are curious as to where those maintenance dollars end up.

  • Firstly, Twenty-two percent is actually the lowest level that an SAP customer can pay in support. Most customers pay more than this because a number of areas of support are taken out of the base support level. SAP even has much more expensive support levels above this, like MaxAttention that are normally used for problematic products, and are truly exorbitant. 
  • Secondly, the statement ASUG makes regarding how the support funds are to be used is simply incorrect. Support money is, in fact, to be used to continue to develop the application. But the way that ASUG states it, makes it appear as if SAP is being magnanimous by using some of the support money in this way.
  • Thirdly, why are maintenance dollars being used to make acquisitions? Newsflash, an acquired application will be “sold” to an existing customer of SAP. The customer will not get it for free. So in that case, why are support revenues used for acquisitions? ASUG (although in actually SAP) makes the case so nonchalantly. However, think through the implications. Customer’s support fees on products they currently own should be used for acquisitions, which customers will then have to buy if they want to use? Is this pre-emptive support funding?”

SAP’s Declining Support

As covered in the article, What to do About SAP’s Declining Support, in part because SAP employs many support personnel in countries where SAP pays between $25 and $35 per day per resource, SAP receives a 85% margin on its support. (And SAP’s support has been steadily growing as a percentage of its overall revenues.) SAP’s support has greatly degraded over the past 15 years, in part because the people offering support barely speak and write the language of the customers that use SAP (most of SAP’s customers are in the US and Europe).

So yes, it would be expected that SAP would use the support money to not only provide far better support than it does (and not gold plated support cost and third world nation capabilities) but also to fund its development organizations. Bill McDermott’s personal compensation, which is over $50 million per year, and the compensation of other top SAP executives is a major part of the problem. Bill McDermott’s yearly compensation alone would pay for 6,392 support personnel where SAP employs the bulk of its support employees. But does Bill McDermott do as much work as 6,392 people? If so, Bill McDermott must be a very productive fellow.

Conclusion

ASUS has a strange and SAP-centric perspective on what SAP support fees should be used for, which actually contradicts what SAP has been telling customers for many years.

This article appears to be communicating to customers that they are lucky if SAP takes any of the support money that it receives to continue to develop its applications. This is yet again evidence of how much ASUG is in SAP’s pocket.

SAP Articles Published Through the SAP Surrogate ASUG, Under the Pretense of Being Independent Analysis

SAP publishes such articles, using ASUG as a faux independent entity in order to lower the expectations of customers, hopefully without customers realizing it.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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References

https://www.asug.com/news/sap-ceo-bill-mcdermott-s-4hana-integration-is-top-r-d-priority

How to Understand The Misdirection on SAP Change Management

Executive Summary

  • SAP uses change management to pivot away from the customization required for their system. They do this to keep customers from learning.
  • SAP provides a false construct regarding change management which is directly connected to customization, best practices, process rearrangement to whatever SAP’s functionality does.

Introduction to SAP Change Management

SAP frequently uses the topic of change management to control perceptions on projects. In this article, you will learn how SAP uses the concept or accusation of the resistance to change as a cover for lack of functionality to meet customer requirements.

SAP and Customization

SAP has had a long-standing policy of trying to get customers to change their business processes to match SAP’s functionality. SAP exaggerates how much their software does and presents a false construct called best practices, which states, somewhat absurdly, that all best practices reside within SAP’s software. This absurdity is covered in the article The Basis for SAP’s Best Practice Claims.

After an SAP sales cycle completes, it is always found that SAP cannot do as much as it was proposed that it could do to meet the business requirements. In most cases, the requirements have been rigged by the consulting company supporting the software selection to select SAP no matter the requirements. As users begin to push back on having to change their business processes, SAP, along with the consulting company will trot out the argument that the company is simply being resistant to change.

Change Management + Little Customization + Best Practices + Process Rearrangement to Whatever SAP’s Functionality Does

SAP is interested in fitting whatever their customer’s business process is into their software. SAP consulting companies want to maximize their billing hours, so in fact, they are pro customization, while SAP is anti-customization.

But overall, SAP has developed a very effective strategy where they use these various concepts to cut off a customer’s options and to brand anyone who does not agree with SAP as fundamentally a problem. The options of a customer narrow even more after the software is implemented. At that point, a series of new restrictions are put into place.

The Challenge of IT Change Management

In the article by ASUG which provided false information regarding a S/4HANA implementation for S/4HANA, some germane statements are made regarding how change management is most often explained and commingled with other topics to control the behavior of SAP implementations.

“The key challenge in any “vanilla” implementation is acclimating people to an environment where they are adapting their work processes to a system, rather than adapting a system to their work processes. That means a change management strategy is as important as a technology strategy.”

This has been the boilerplate statement of SAP and SAP consulting companies for decades. It is extremely difficult to find SAP implementations that don’t have moderate to extreme customization. And it is not like these previous projects did not have change management as a concept. Secondly, the issue of entirely relying upon change management does not solve the issue.

There are often processes that it does not make sense to change to SAP’s way of doing things. These may be key business requirements for the company that they can’t change. For example, ECC has always been weak in process industry manufacturing.

Adopting ECC Functionality for Process Industry?

Companies cannot simply adopt ECC’s functionality for process industry manufacturing because they simply don’t make any sense for the company. Doing so would be a force fit, that would leave the company unable to function properly. SAP is often confused, thinking that everything that the company does must be sacrificed at the altar of how SAP works. However, there is a different idea, which the software should support what the company wants to do.

“The only way you can crack that nut is by not only having change champions within the organization but by also simplifying the solution as much as possible,” says Sharma. “People will accept change only when they know that their job is going to be easier.”

Here Sharma is commingling two issues into “change management.” One is the issue of simplification and change resistance, and the other is the requirements of the company.

Process Industry Example

In the example of the process industry, it is not a question of simplification of the process. The issue is that process industry companies perform manufacturing in a way that SAP does not effectively model. Any process industry manufacturing company that uses vanilla ECC or vanilla S/4HANA will lose money if they don’t either customize ECC or S/4HANA or use other applications to perform some of the functions and then integrate back to ECC or S/4HANA. This example does not have anything to do with people resisting change simply to resist change. SAP and their consulting partners enjoy placing any resistance to SAP into the category of “resisting change,” but this is inaccurate.

Resisting change due to being set in one’s ways can occur, but it is not the majority of the resistance to SAP generally. The main reason for resisting SAP is that SAP cannot meet certain business requirements.

Conclusion

Change management is a euphemism that is used by SAP and SAP consulting companies to make customers feel bad for the fact that SAP’s applications can cover far less of the functionality than was expected during the sales process. I have personally been in multiple scenarios where SAP mislead the customer as to what certain functionality could do, and I have never seen SAP own up to this with a customer. Instead, SAP will blame some “miscommunication” that may have occurred.

In this way, the terms that SAP uses, such as “change management,” serve as terms of propaganda which allow SAP to remove itself from criticism. The problem, according to SAP, is never that they mislead the customer as to what requirements could be covered by SAP functionality.

Secondly, SAP consulting companies support this perspective of SAP change management philosophy, because they normally rig the requirements so that SAP will win the software selection. Which is why companies cannot trust consulting companies to create RFPs for them, the RFPs will invariably lead to buying maximum services from the consulting company, through the software that is selected.

Therefore, they provide the same false messaging as SAP regarding SAP change management. From this, the customer often believes they are receiving objective advice.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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  • Questions About This Area?

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References

Enterprise Software Risk Book

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Rethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

https://www.asug.com/news/sap-s4hana-customer-story-hana-s-4-rev-group-thoughtfocus

How ASUG Lost its Way and Sold Out to SAP

What This Article Covers

  • ASUG’s Low-Quality Articles
  • The Origins of ASUG
  • How ASUG Changed Over the Years
  • How ASUG Poses as a User/Customer and SAP Mediator
  • ASUG’s Conference Take Over by Consultants

Introduction

Problems with ASUG have come to my attention which is the combination of articles I have reviewed from ASUG along with the feedback I have received from many people that are ASUG members, speak with ASUG employees and attended ASUG conferences. I have critiqued ASUG in several previous articles such as ASUG’s Biased and Inaccurate Coverage of SAP Indirect Access. However, ASUG’s articles now always must be read with a grain of salt due to ASUG’s pro-SAP bias.

I spend a lot of time analyzing the media output of entities in the IT space. My observation of ASUG’s media output is the following:

  • ASUG’s material seems quite familiar, that is quite traceable to SAP’s marketing message. ASUG essentially uniformly repeats SAP’s marketing messaging.
  • ASUG appears to have no independence from SAP whatsoever.
  • ASUG writes false information about SAP.
  • ASUG does not provide authentic information to its users. The material is highly sterile and with a consistent positive slant.

All of this is strange for what is ostensibly a user group. This article will explain what has happened to ASUG.

The Origins of ASUG

ASUG was founded in 1991 as a user group. At that time SAP customers were in need of a forum to share their stories, concerns, feedback to SAP, etc… One should also remember that this was still relatively early in the development of the Internet, and nothing like the ability to share and consume information existed at that time. For many users, ASUG was the primary avenue for obtaining information about the reality of SAP implementations, and it actually added quite a lot of value.

I have not performed a detailed review of people that attended ASUG events or consumed its media at that time, and this time also preceded by involvement in SAP by about 6 years. Yet, what I can ascertain from interviewing various people who have participated with ASUG for some time is that ASUG actually did a good job of meeting the needs of its user community and that it also did serve as a mechanism to provide feedback to SAP.

How ASUG Changed Over the Years

It is difficult to pinpoint the exact time when it happened, but ASUG over time in some shape or form became captured by SAP. SAP has powerful ways of corrupting any entity if it wants to, and ASUG has been no exception. Changes at ASUG have demonstrated a nearly continuous encroachment into ASUG’s agenda to meet with SAP’s needs. Examples include the following:

Changes at ASUG have demonstrated a nearly continuous encroachment into ASUG’s agenda to meet with SAP’s needs. Examples include the following:

  • SAP Sales Influence on Presentations: Frequent presentations that are ostensibly designed to keep customers up to date on what is new and coming down the pike from SAP have turned into sales presentations. However, ASUG events did not start out that way, but as time passed, sales presentations have become much more prominent. SAP always had SAPPHIRE and other events to present their new products, or to promote current products, but now SAP performs what are clearly product pitches disguised as “updates” at all the events, with ASUG being no exception. Consulting companies are also thick on the presentation docket at ASUG events.
  • False Testimonials: It is interesting to see users/customers at ASUG events presenting things they accomplished that are not possible to accomplish. This includes SAP applications being implemented that could not support the workflow that the user states it supported or entirely unrealistic implementation timelines. This is something I faced in particular while performing research into S/4HANA implementations. ASUG has several false testimonials about S/4HANA at their website. However, the false testimonials have become so extreme that I have developed a term that I hope catches on called conference monkeys. Conference monkeys will say anything at conferences and mislead other users in order to improve their career or their relationship to SAP. SAP has a way of making it “worth their while” to exaggerate or otherwise mislead on what was actually accomplished.
  • Censored Presentations: In addition to the presentations being strangely positive in their outcomes, cost, and timelines, ASUG is now actively censoring presentations that are given by users that did not get the memo that they are only supposed to present positive information. All issues with SAP software must be framed as “challenges” rather than problems or things that simply did not work. For example, apparently, Johnsonville Sausage broke the rules and presented on their S/4HANA implementation experience, which turned out to be quite problematic. ASUG did not put this particular presentation on their website. (Surprise surprise.) However, if ASUG is truly a user group, why would it censor negative information about SAP? Wouldn’t it want its user community to know about problems so that other users could learn from them? And this is the problem ASUG faces. If they are responsive to users, then they upset SAP. And SAP can apply pressure on ASUG behind closed doors to keep the ASUG events “upbeat.”
  • Infested with Consultants and Sales People: The ASUG events were originally for users/customers. And in the early years, they tended to be limited to those people. But today, ASUG events have become infested with consultants and sales people. As an SAP consultant, I have frequently been told to attend ASUG events and even try to present at ASUG events. One sales person I know was frequently made to go to ASUG events by their boss. The idea being that ASUG events are a good place to get business. Yet, again, that is not what ASUG was originally intended to be. This means that users that are interested in getting information from other users will spend more time in the company of consultants and salespeople than other users. All while these salespeople and consultants are trying to fill their quota at a “user conference.” At a recent event that was attended by a contact of mine, they estimated that 90% of the attendees were either salespeople or consultants.

Many of the How ASUG Poses as a User/Customer and SAP Mediator

ASUG does not criticize SAP, or state things that SAP should change, but when topics, such as indirect access arise, ASUG promptly papers over any conflict by discussing coming to amicable resolutions, but invariably these resolutions are on SAP’s terms. ASUG also understates the frequency with which problematic issues actually arise on SAP implementations.

In this way, ASUG is actually working against the interests of its users because it is posing as something it is not, which is either an independent entity (which it is not) or an advocate for the user/customer (which it is certainly not!). What this means is that ASUG is lying to its members, and strangely, the members actually have to pay to be an ASUG member. So how strange that even if you pay ASUG, you can’t rely upon ASUG taking your side.

For example, on the topic of indirect access ASUG has published articles that promote users to reach out to ASUG to gain access to their indirect access “expertise.” However, by doing so, the customer may be exposing themselves to SAP. ASUG is not under any obligation to not simply share the information that is shared with ASUG with SAP and given where ASUG’s loyalties lie, that seems actually like a likely scenario. If I were a customer, I would be concerned about sharing any type of information with ASUG. ASUG can’t help users with something like indirect access because it is opposed to the interests of SAP. And ASUG’s first loyalty is to SAP.

If I were a customer, I would be concerned about sharing any type of information with ASUG.

Conclusion

What began as a user group, isn’t really a user group anymore. Sure, ASUG user members do meet at ASUG events, but the entire focus of the event has shifted away from users and their concerns and onto how to help SAP meet its sales objectives. ASUG members pay for membership, but ASUG no longer represents their interests versus SAP.

SAP has capture ASUG to the degree that ASUG is primarily about “making SAP” look good. This is pure and simple corruption. ASUG is misleading its members by presenting itself as a user group. And that is the reality of what ASUG has become.

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References