SAP lashes out at software upgrade study

SAP AG officials on Friday blasted a study on the cost of R/3 upgrades that was released early last week by AMR Research (see Computerworld Today, 28/4/00) , calling AMR's report "incomplete" and "biased."

Eric Rubino, chief operating officer at SAP America in Newtown Square, Pennsylvania., said the study didn't look at all the facts regarding upgrades of the German vendor's business applications. For example, he claimed that AMR didn't take SAP's software pricing flexibility into account. Users can license R/3 modules on an individual basis, Rubino added.

Rubino and other SAP executives also said the vendor's customers were left with the wrong message about the upgrade process.

Calling R/3 upgrades "long (and) complex," as AMR's report did, is misleading, an SAP America spokesman said. That description doesn't depict the "wide range of (product) upgrades and opportunities" that are now available to R/3 users and more that will be announced in the next couple months, he said.

But Dave Boulanger, the AMR analyst who wrote the research firm's report, said the upgrade cost figures cited in the survey were only meant to be benchmarks for users who are planning upgrades.

In its study, Boston-based AMR surveyed 60 SAP customers that are either in the midst of R/3 upgrades or plan to do one later this year. Most of the companies questioned by AMR are moving from SAP's earlier R/3 3.X releases to the latest version, called R/3 4.6.

Companies with at least 1,000 end users expect to spend an average of $4.5 million to upgrade a full R/3 system consisting of financial, sales, inventory, logistics and manufacturing applications, according to AMR.

Boulanger said AMR made the assumption that the end users would already be trained on how to use R/3. If new users need to be trained, the upgrade costs expected by the surveyed companies could rise, he added.

Ben Vettese, director of SAP applications at Elf Atochem North America, said he views the study as being accurate regarding upgrade pricing structures. The Philadelphia-based chemical maker is getting ready to move to R/3 4.6 this year, and Vettese said he plans to use the survey results to help secure additional funding for the move.

But three other SAP customers disagreed, saying the AMR study didn't look at all the factors involved in an upgrade or the long-term benefits users can get by upgrading their R/3 systems, such as lower cost of ownership and additional functionality.

Peter Burrows, chief technology officer at Reebok International, said he expects to spend approximately 10% of the AMR average for a major software upgrade that includes R/3. The move for the Stoughton, Massachusetts-based footwear company will include at least 1,000 users in 10 countries, with two SAP consultants advising.

"There's pain involved in waiting too long to upgrade," and R/3 upgrades are a "significant thing, not trivial," Burrows said. But he added that AMR's report doesn't reflect an actual situation with end users and a real-world software configuration. The survey appears to have been aimed at "attention-grabbing headlines," Burrows said.

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