Support Costs Survey - Tech Community | Trends, Best ...hosteddocs.ittoolbox.com/support_costs_survey.pdf · Enhancement Packages, almost half (49%) plan to implement 2-4 packages

2009 SAP® Support Practices Survey

© Panaya Inc, 2009 www.panayainc.com

Panaya Inc.

2009 SAP® Support Practices

Benchmark Survey

Survey Results and Executive

Summary

For questions and additional information

e-mail [email protected] or visit www.panayainc.com



Table of Contents

Executive Summary ...................................................................................... 3

Respondent Demographics ............................................................................ 4

SAP System Sizing ........................................................................................ 6

SAP System Characteristics ............................................................................ 7

Support Practices and Challenges ................................................................... 9

Reaction to SAP® Enterprise Support ........................................................... 13

SAP Support Costs ...................................................................................... 15

Disclaimer and Trademark Notices................................................................ 18



Executive Summary

Survey results are based on 179 responses collected from SAP customers and system integrators through a standardized online questionnaire during April of 2009. 1 Some of survey’s key findings include:

• The average cost of SAP development and support across the surveyed organizations is $5,670 per user per year. 2

• On average, 70% of the cost goes towards in-house resources and 30% towards outsourcing.

• Overall cost is the top support-related challenge, as cited by 70% of the respondents.

• The effort involved in implementing Support Packages is quite considerable, reaching an average of 73 person days per support package, with the majority of the effort associated with testing (42 days).

• When asked about their reaction to the recent changes in SAP’s Enterprise Support policy, the majority of the respondents (68%) do not think the price increase is reasonable. At the same time, a surprising 32% is either supportive of the price increase or neutral to it.

About Panaya Established in 2006, Panaya Inc. provides software tools that save SAP customers up to 50% of their software upgrade and maintenance costs while minimizing risks and proving clear ROI. Provided as Software as a Service (SaaS), Panaya’s SAP environment simulation shows which custom SAP programs will break as a result of an upgrade, explains how to fix them, derives the most efficient test plan, and calculates the required budget and resources for the project. To learn more or apply for a free upgrade evaluation, click here: http://www.panayainc.com/Free-Upgrade-Analysis-for-your-SAP.html

1 The survey can be accessed online at http://www.surveygizmo.com/s/117894/benchmark-sap-support-costs. 2 Cost per User = (Total Internal Cost + Outsourcing Cost) / Number of SAP Users



Respondent Demographics

Eighty percent of the survey respondents represent SAP customers that run their own business on the SAP system. The remaining twenty come from SAP-partner organizations that help other companies with their upgrade projects.

Consultant/SI

20%

Customer

80%

Figure 1: Respondents’ Relationships with SAP

The survey was completed by respondents from all over the world, with the majority coming from Europe and The Americas, followed by Asia & The Pacific and Africa & The Middle East.

Africa & Midde

East

11%

Asia & Pacific

24%

Americas

31%

Europe

34%

Figure 2: Respondents by Region



Customer organizations responding to the survey come from a variety of industries, with a particularly strong representation of the manufacturing sector.

2%

3%

4%

4%

5%

6%

6%

8%

11%

11%

13%

25%

Healthcare

Professional Services

Aerospace & Defense

Communications

Retail

Financial Services

Construction

Public Sector & Education

Utilities

High Tech

Other

Manufacturing

Figure 3: Responding Customers by Industry

Responding customers represent a fairly even distribution of company size (measured by revenues), ranging from smaller companies with annual revenues of less than $0.5 billion US dollars to larger ones with revenues of over 5 billion dollars.

27%

20%

14%

21%

18%

0%

5%

10%

15%

20%

25%

30%

<$0.5B $0.5B-1B $1B-2B $2B-5B >$5B

Company Size (2008 Revenues in $US)

Figure 4: Responding Customers by Company Size (2008 in $US)



SAP System Sizing

Half of the responding customer organizations operate more than one SAP production system, with some organizations operating over fifty systems.

50%

33%

7%10%

0%

10%

20%

30%

40%

50%

60%

One Two to Five Six to Ten Over Ten

Figure 5: Number of SAP Production Systems (Customer Organizations)

The median number of users for responding customer organizations is 600 and 40% of the organizations have over 1,000 production users.

15%

45%

37%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1-100 101-1,000 1,001-10,000 Over 10,000

Figure 6: Number of SAP Production Users (Customer Organizations)



SAP System Characteristics

The vast majority of the respondents (64%) are currently using ERP 2005.

6%

16%

9%

64%

4%

0%

10%

20%

30%

40%

50%

60%

70%

4.6C 4.7 ERP2004 ERP2005 Other

Figure 7: Current Version

The modules most commonly used by survey respondents are FI (98%), CO (95%), and MM (89%). The least used modules are LE (33%), QM (51%), PS (53%), and PM (54%).

51%

53%

61%

54%

89%

33%

70%

95%

77%

98%

SD

QM

PS

PP

PM

MM

LE

HR

FI

CO

Figure 8: Modules Used



The vast majority (81%) of the respondents use SAP® NetWeaver Components. Among those that use the SAP NetWeaver Components, BW/BI is the most commonly used (83%).

Using

Components

81%

No

19%

35%

19%

43%

47%

83%

Others

TREX

SAP EP

SAP XI/PI

SAP

BW/BI

Figure 9: Components Used

Over 41% of the respondents are using SAP industry solutions.

No

59%

Yes

41%

Figure 10: Use of Industry Solutions



Support Practices and Challenges

Top 3 Support

Challenges

1. Overall cost

2. Response to

service requests 3. Level of

enhancement/ new functionality

Overall cost is the clear top challenge cited by a large majority of the respondents (70%) when asked about their support-related challenges. Next in line are response to service requests (46%) and level of enhancement/new functionality (42%).

7%

12%

15%

15%

42%

46%

70%

Other

Downtime

System response time

Stability of system

Level of enhancement/new functionality

Response to service requests

Overall IT costs

Figure 11: Support Challenges (Top Two Selected)

Part of the ongoing challenge faced by most support organizations is the deployment of SAP Support Packages, which are deployed by 83% of the respondents. Almost half of the respondents (43%) deploy Support Packages as part of a Support Package stack, while 25% select only the required packages.

43%

25%

15%17%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

As part of a support

package stack

We select only the

required support

packages

As part of an

enhancement package

We don’t apply support

packages, only notes

Figure 12: SAP Corrections Implementation Policy



The vast majority (82%) of those that deploy Support Packages apply more than one package per year. More than half of these organizations (54%) deploy 2-4 support packages per year and over a quarter of the organizations (28%) deploy 5 or more packages yearly.

8%

20%

54%

18%

0%

10%

20%

30%

40%

50%

60%

One Two to Four Five to Ten Over Ten

Figure 13: Support Packages per Year

The effort involved in implementing Support Packages is quite considerable, reaching an average of 73 person days per support package, with the majority of the effort associated with testing (42 days).

Preparations

18

Installation

14

Testing

42

0 10 20 30 40 50 60 70 80

Figure 14: Average Support Package Implementation Effort (in person days)



Given these figures, it is not surprising that the primary challenge associated with Support Packages is assessing the impact on the existing solution, cited by 58% of the respondents, followed by efficient testing (39% of the respondents) and minimizing downtime (24%).

Top 3 Support Package Challenges 1. Assessing the

impact on the

existing solution 2. Efficient testing

3. Minimizing

downtime

5%

10%

15%

18%

20%

24%

39%

58%

4%Other

End-user training

Project Management

Justify budget for project/value proposition

Modification adjustment

Cost/effort estimation

Minimize downtime

Efficient testing

Assess impact on existing solution

Figure 15: Support Package Challenges

SAP Enhancement Packages are deployed by 80% of the organizations that are currently on ECC 6.0. Of the organizations that implement Enhancement Packages, almost half (49%) plan to implement 2-4 packages in the next year and 15% plan to implement 5 or more packages.

Plan on Enahncement Packages?

Yes

80%

No

20%

36%

49%

7%8%

0%

10%

20%

30%

40%

50%

60%

One Two to Four Five to Ten Over Ten

Figure 16: Enhancement Packages Planned in the Next Year



The challenges associated with Enhancement Packages are somewhat similar to those associated with Support Packages, with the added challenge of understanding the new functionality included in the enhancement package, which was cited as one of the two top challenges by over half (51%) of the respondents. Assessing the impact on the existing solution was a close second (47%), followed by understanding how to implement the new functionality (24%).

Top 3 Enhancement Package Challenges 1. Undestanding the

new functionality 2. Assessing the

impact on the existing solution

3. Understanding

how to implement

3%

6%

9%

14%

16%

18%

24%

51%

47%

3%Modification adjustment

End-user training

Project Management

Minimize downtime

Cost/effort estimation

Justify budget for project/value proposition

Efficient testing

Understand how to implement the new functionality in our system

Assess impact on existing solution

Understand the new functionality

Figure 17: Enhancement Package Challenges

Another type of system maintenance task that is practiced by most organizations on an ongoing basis is the release of transports. Most organizations (59%) release transports as often as needed, without a pre-determined release schedule. Another 24% of the organizations release transports at least once a week, while only 18% release them monthly or quarterly.

59%

24%

8%10%

0%

10%

20%

30%

40%

50%

60%

As Needed Weekly or More Often Monthly Quarterly

Figure 18: Transport Release Policy



Reaction to SAP® Enterprise Support

68% do not think the price increase

that comes with the new SAP® Enterprise Support offer is reasonable.

As of January 2009, SAP launched SAP® Enterprise Support, which offers a broader scope of services at an increased price. 3 While the majority of the respondents (68%) do not think the price increase is reasonable, a surprising 32% is either supportive of the price increase or neutral to it.

40%

28%

23%

6%3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Strongly Disagree Disagree Neutral Agree Strongly Agree

Figure 19: Is the Price Increase Reasonable?

Close to half of the

respondents do not appreciate

the value of the new SAP® Enterprise Support offer.

Respondents showed a slightly more positive attitude when asked about the value they see in the new enterprise support offer. Still, close to half of the respondents (49%) either disagree or strongly disagree when asked if they appreciate the value of the offer.

29%

20%

31%

12%

9%

0%

5%

10%

15%

20%

25%

30%

35%


Figure 20: Appreciate the Value of the New Enterprise Support Offer

3 The survey was conducted prior to modifications to the offer later introduced by SAP.



Overall, 30% of the respondents believe that the new support offer will have an impact on their organizations.

16%14%

34%

14%

22%

0%

5%

10%

15%

20%

25%

30%

35%

40%


Figure 21: Little or No Impact from the New Enterprise Support Offer



SAP Support Costs

The average cost of SAP development and support is $5,670 per user per year.

SAP customers allocate a considerable amount of resources to the ongoing support of their applications. The average cost of SAP development and support across the surveyed organizations is $5,670 per user per year (the cost of internal and outsourced resources divided by the number of SAP users). Costs are higher in Europe and the Americas compared to the rest of the world.

$6,789

$5,537

$3,957

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Europe Americas ROW

Figure 22: Average Annual Support Costs per User

Almost all the organizations surveyed outsource some of their SAP development and support work. On average, 30% of the spending is used for outsourcing.

Outsourcing

Costs ($US)

30%

In-house Costs

($US)

70%

Figure 23: Outsourcing vs. In-house Costs



Staffing of in-house resources is primarily skewed towards application support (32%) and development/programming (27%).

General/Admin

14%

Application

Support

32%Development/

Programming

27%

Basis

16%

Other

11%

Figure 24: Distribution of In-House Resources



Table of Figures

Figure 1: Respondents’ Relationships with SAP ............................................... 4 Figure 2: Respondents by Region .................................................................. 4 Figure 3: Responding Customers by Industry .................................................. 5 Figure 4: Responding Customers by Company Size (2008 in $US) ..................... 5 Figure 5: Number of SAP Production Systems (Customer Organizations) ............ 6 Figure 6: Number of SAP Production Users (Customer Organizations) ................ 6 Figure 7: Current Version ............................................................................. 7 Figure 8: Modules Used ................................................................................ 7 Figure 9: Components Used .......................................................................... 8 Figure 10: Use of Industry Solutions .............................................................. 8 Figure 11: Support Challenges (Top Two Selected) ......................................... 9 Figure 12: SAP Corrections Implementation Policy ........................................... 9 Figure 13: Support Packages per Year ......................................................... 10 Figure 14: Average Support Package Implementation Effort (in person days) ... 10 Figure 15: Support Package Challenges ....................................................... 11 Figure 16: Enhancement Packages Planned in the Next Year .......................... 11 Figure 17: Enhancement Package Challenges ............................................... 12 Figure 18: Transport Release Policy ............................................................. 12 Figure 19: Is the Price Increase Reasonable? ................................................ 13 Figure 20: Appreciate the Value of the New Enterprise Support Offer .............. 13 Figure 21: Little or No Impact from the New Enterprise Support Offer ............. 14 Figure 22: Average Annual Support Costs per User ........................................ 15 Figure 23: Outsourcing vs. In-house Costs ................................................... 15 Figure 24: Distribution of In-House Resources .............................................. 16



Disclaimer and Trademark Notices

This report is provided by Panaya Inc. It is completely independent of and not affiliated

with SAP AG.

SAP is a registered trademark of SAP AG. SAP and other SAP products and services

mentioned herein as well as their respective logos are trademarks or registered trademarks

of SAP AG in Germany and in several other countries. All other product and service names

mentioned are the trademarks of their respective companies.

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respect to anything in this document, and shall not be liable for any implied warranties of

merchantability or fitness for a particular purpose or for any indirect special or

consequential damages.

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publication is subject to change without notice.

Copyright © Panaya Inc. All rights reserved.

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Support Costs Survey - Tech Community | Trends, Best ...hosteddocs.ittoolbox.com/support_costs_survey.pdf · Enhancement Packages, almost half (49%) plan to implement 2-4 packages