With budgets tightening for many CIOs, continuing to spend large amounts of money on software support and maintenance is not something to be taken lightly. The Australian CIO of environmental services company Veolia, Brett Stapleton, says he was reluctant to sink “millions” into an SAP upgrade and ongoing support for the platform.
Veolia is a global company that handles waste collection and disposal, waste water and drinking water treatment, and energy supply and management services. In Australia, waste management accounts for 80 per cent of revenue, and more than 800 SAP users that rely on the company’s software for this part of the business.
Stapleton said there is not only pressure globally to cut costs in the organisation, but also to find money for innovation and investment in more mission-critical IT for the business.
That’s why he turned to support provider Rimini Street, which helped him save about $750,000 a year in software support and maintenance costs. This included cost savings in the different vendor partners that Veolia had put in place for payroll upgrades, which occurred twice a year in Australia and New Zealand.
“Reinvesting in continued maintenance in an SAP platform to keep the lights on in the business is not really a good use of money,” he said today at the Gartner Symposium on the Gold Coast.
“Spending lots of money, taking an SAP platform that looks like this today, making it look newer tomorrow, as an enabler for additional functionality is not really where our organisation wants to spend money.”
He added that the company was still emotionally recovering from a highly troublesome SAP implementation, so there was no appetite for another SAP upgrade in order to receive continued support.
Also, the transition from SAP to Rimini Street support only took three months, which is “reasonably short”, according to Stapleton.
He said as Rimini Street’s profit margins are much lower than SAP’s, the provider was able to offer services at a much lower price, but still be able to pay its technical support staff salaries of US$150,000-200,000 to ensure quality doesn’t falter.
“Rimini Street are a service organisation, not a software organisation. So the quality of the service outcome doesn’t depend on having a discussion about licensing, which we found was often the case when dealing with the guys at SAP.”
Being able to receive support for “thousands” of software customisations was also attractive to Stapleton.
“We implemented an industry module not that long ago with thousands of customisations, which is incredibly difficult for us to support. And as it happens, it’s an industry module which [is] really only supported out of Germany by a third party organisation, which is not SAP. So it’s something that SAP find extremely difficult to support as well,” he said.
Veolia is also undergoing a continuous global consolidation program, integrating the IT for its different lines of business – water, waste and energy.
“We are starting at the infrastructure with network and desktop, and then working our way to our applications. And the last thing we need as we go through that process is to overlay on top of that a complicated application convergence program.”
With the money saved in software support costs, Stapleton plans to invest that back into not only technology platform simplification, but also customer relationship management systems to improve the organisation’s service.
Rebecca Merrett flew to the Gartner Symposium as a guest of Gartner.