This is the second part of a two-part series of articles dedicated to the maintenance practices of an SAP solution. In the first part we mentioned five practices that are critical for a good maintenance process. In this second part, we will address the most important factors to consider when contracting an outsourced maintenance service.
The SAP AMS (SAP Application Management Services) service is very well defined by the SAP company and there are even certifications for the partners that deliver it. Due to the complexity and breadth of SAP solutions, few customers can count on their own staff of specialized consultants to be self-sufficient in the support and maintenance of their solutions. Therefore, it is more convenient to contract the SAP AMS service to a specialized partner and focus internal resources on innovation and business orientation.
First, the service must have a methodology with well-defined phases. The beginning requires a transition phase, with the new supplier getting to know the new provider. Even before this phase, as in any project, there should be a preparation period, where partners, procedures, tools, contracts, etc. are specified. After the transition phase, there should be a stabilization phase, based on a diagnosis, which is a by-product of the knowledge acquisition. The longest stage of the service contract is the operation stage, during which support, enhancements, consulting, etc. are delivered according to the terms of the SLA. Ideally, the methodology should also include a close-out or handover phase, for contract termination and handover to a new provider.
Service delivery must be based on a clear, well-defined, results-oriented SLA that clearly specifies non-compliance and associated compensation. Along with this, the modalities of service consumption and pricing must be clearly determined. For example: consumption and pricing of support measured by tickets or by hours, consumption differentiated by schedule, by SAP module, etc.
Linked to the above is the element of flexibility: Is the bag of hours associated with the service unique? Can the same bag be used for any module, even for technical consulting or Basis? Can the bag be extended or reduced over time? What happens to the hours not used, etc.?
As far as service quality is concerned, how can it be predicted when dealing with a new supplier? The following elements are important here:
1) the delivery team, their specialties, certifications, and years of experience.
2) the partner’s certifications, in particular the SAP Solutions Operations certifications, including one for SAP Business Suite and one for SAP S/4HANA; and
3) the partner’s client evaluations, which can be obtained directly or through a public survey, as is the case of the ENTI survey of the CETIUC of the Catholic University, in the specific category of Application Development, Testing and Maintenance.
One controversial aspect is that of fees. They are often considered the most important criterion for the evaluation and selection of a partner. However, history shows that this is not a good criterion on its own. When the client proposes it as the most relevant for him, the partner has an incentive to submit an offer with very low rates. To support delivery at those rates, very junior consultants must be assigned, or the accounting hours must be altered to maintain revenue at lower rates. As a result, the actual rate is higher, and the resolution of the requirements takes longer and is more costly than with a vendor that was apparently more expensive.
As we said in the previous article, a service should, as far as possible, be results-oriented. In the case of functional support, after an initial period, one year for example, the partner could evolve to a fixed support fee model, regardless of the number of incidents. In this way, the partner has the right incentives to reduce the number of incidents as much as possible, by means of background solutions, training, etc. On the other hand, in the case of functional requirements, enhancements and projects, the client always has the possibility to check the evaluations and effort estimates with his own consultants or with third parties, to gauge whether his partner’s rates are realistic or not.
With these criteria it should be easier to define a simple bidding basis, and manage to select a service that, although not the cheapest, is the one that best fits the needs of your SAP solution and your business.
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Feedback/discussion with the author Glen Canessa, Novis Presales Director