January 21, 2010, 4:09 PM — SAP is still planning to conduct a benchmarking program for its Enterprise Support service, despite words to the contrary from CEO Léo Apotheker last week -- sort of.
The German ERP (enterprise resource planning) giant created a KPI (key performance indicator) program along with SUGEN (SAP User Group Executive Network) after widespread outcry over the roll out of Enterprise Support in 2008. Enterprise Support offers more features than standard support, but also comes at greater cost.
The move rankled SAP users, both for its timing during a fiscal downturn, and the fact that many customers have stable, older systems that don't necessarily need a gold-plated service plan. But the richer services of Enterprise Support can actually help hold down customers' costs, according to SAP.
Still, in response to criticisms, SAP formed the KPIs and pledged to link future Enterprise Support cost increases to meeting them successfully.
But last week, SAP announced that it would restore a lower-cost Standard Support option for customers. Given this choice, the KPI program was no longer necessary and would be discontinued, although SAP will "continue to monitor" Enterprise Support's efficiency, according to Apotheker.
Apotheker's latter remark should not be construed as a throw-away comment, according to Janet Wood, SAP executive vice president of maintenance go-to-market.
Part of the problem with the initial KPI program was the time and logistical burdens placed on the 100 companies that participated in it, according to Wood.
SAP is going to work with SUGEN "to evolve" the KPI program into something that can measure Enterprise Support's value "in a way that requires less investment [on the part of customers] and is totally scalable across our entire customer base," Wood said.
Exactly what this work will produce remains to be seen. In addition, the resulting benchmark program won't be tied to support cost increases.
And a software analyst who has followed the KPI saga closely questioned whether Wood's remarks about SUGEN applied to all members of the user group's board.
"There are differences of opinions at this moment within SUGEN," said Ray Wang, a partner with Altimeter Group. "I'm not sure if she's speaking on behalf of all SUGEN."
SUGEN board members could not immediately be reached for comment.
Ultimately, despite SAP's concessions, the vendor is "trying to force everyone to Enterprise Support," Wang said. "The incentives are aligned that way."
Standard Support costs 18 percent of a customer's software license base, with adjustments made each year according to inflation, beginning in 2011.