There’s no doubt that third party maintenance for ERP systems is a growing trend, with an increasing number of users going down this path. That’s because CIOs and businesses around the world are taking control of their IT systems, and are unwilling to pay high maintenance prices anymore.
The reasons for doing so are clear. By using a third-party maintenance provider, businesses can manage their costs and reinvest their savings in those areas of business that are of strategic importance.
Rimini Street is a global provider of independent third party support services for ERP software including SAP and Oracle, and is expanding its presence in the region following an increase in demand for third party support in Australia and New Zealand.
Increased interest in Rimini Street’s services and support indicates a significant shift in the market away from ERP vendors to third party providers.
According to Rimini Street, organisations using third party maintenance can save at least fifty per cent of fees they are currently paying to SAP or Oracle, with the ability to realise significant savings on related support costs. This includes having no required upgrades and support for customer code included at zero cost. When those aspects are factored in, a organisation can look at realising savings of up to ninety per cent in related support costs.
First opening its Sydney headquarters in 2008, today Rimini Street supports over 90 global organisations with operations in Australia and New Zealand, including ASX Top 50 companies as well as some government organisations.
The growing popularity of the independent third party support firm stems from consistent budget restraints placed on IT leaders, with Gartner finding 89% of IT spend is currently dedicated to keeping the lights on — a considerable chunk of which goes towards vendor maintenance fees.
Independent support allows the shift to hybrid models to occur by helping clients shift IT budgets from being focussed on maintaining current, mission-critical transaction systems to funding innovative new cloud projects.
“As the market matures and organisations become increasingly canny about their IT spend, we find that many CIOs are simply not willing to pay high vendor maintenance fees anymore,” says Andrew Powell, managing director, Rimini Street APAC and Middle East.
“By switching to Rimini Street support, these businesses can save up to 90% on support fees and reinvest their savings in areas of strategic importance to grow or improve the business, instead of continuing to spend needlessly on ongoing operations.”
Standstills don’t warrant high fees
Speaking at the Gartner Symposium on the Gold Coast last October, Powell noted that there had been a marked imbalance in the ratio of vendor maintenance fees and the real benefits delivered as part of a natural stall in the evolution of ERP software.
“In the late 90s and early 2000s, the product itself was still evolving with customers paying annual maintenance fees of around 17% on their ERP investments to get upgrades,” Powell said. “Somewhere along the line, the equation changed.
“The maintenance model became less relevant because customers were customising their ERP systems. They were paying standard maintenance and support fees but not receiving the support they need. Today 65% of all the tickets that we support are customisations, which are not supported by the vendor,” Powell said.
“Overall, I believe successful IT landscapes will transform from large, integrated single-vendor product suites to a hybrid IT landscape combining on premise and cloud application delivery models. Third party maintenance is perfectly positioned to allow this landscape shift to occur,” he said.
Over 1,750 global, Fortune 500, midmarket, and public sector organisations from a broad range of industries have selected Rimini Street as their trusted, independent support provider.
For more information on how leading organisations across the globe saved on IT dollars and received better customised support, visit https://www.riministreet.com/client-success.