How to Understand The Poor Quality of SAP Support vs 3rd Party Support
Executive Summary
- SAP outsourcing its support to low-cost countries with English as a second language has significantly degraded SAP support.
- SAP is reaping an enormous support margin but providing inferior quality support.
Introduction
SAP’s support has dramatically degenerated, with low-skilled support personnel and ever-increasing margins. SAP support resources are trained to gaslight customers, so they never admit that their sales team oversold the software’s capabilities. Furthermore, SAP starves support of resources and allocates resources instead to new sales. SAP’s OSS system is a pale imitation of what it once was. You will learn of the many problems with SAP support and how it became a poor customer value.
Our References
If you want to see our references for this article and other related Brightwork articles, see this link.
Notice of Lack of Financial Bias: We have no financial ties to SAP or any other entity mentioned in this article.
The Support Conundrum
HANA proponents can list all the positive aspects of in-memory computing, but that is not a relevant customer issue. The biggest problem that customers face is not the speed of transaction processing. It is not that business intelligence output does not run fast enough. If SAP customers’ business processes are good, they may be happy but not as much as resolving other priorities.
All this focus on HANA has little to do with what is best for customers and improves performance. HANA is far more about SAP meeting its revenue objectives. It is about expanding SAP’s database layer line of business. This is why the conversations and marketing around HANA are so deceptive. For example, the supposed performance benefit of HANA vis-a-vis other databases (like Oracle 12c, for example) is not valid. But it merely justifies making customers buy what SAP wants to sell.
Top Issues for SAP Customers
The speed of the database that SAP applications use would be far down on the list of factors that sub-optimize the SAP system’s benefits.
There are far more pressing issues that SAP customers face, such as:
- Maintaining current systems.
- Improving the uptake of the system by users.
- Configuring existing functionality that is working as desired.
- Maintaining their master data.
- SAP customer support.
This final bullet point of support is addressed in the book SAP Nation 2.0 by Vinnie Mirchandani. Vinnie is one of the few writers who write objectively about SAP:
“While Bess was observing partner booths at SAPPHIRE, customers have been complaining that SAP’s own support has progressively gotten worse, even around the core SAP product.”
This quotation is also from SAP Nation 2.0
“Another customer is TT Electronics, a $1 billion UK based electronics manufacturer, whose CIO Ed Heffernan has been quoted as saying (SAP maintenance) is effectively an added tax that I have to pay for with no value in return.”
As is this one…
“Incitec Pivot, a $3 billion Australian industrial chemical company that has been an SAP customer for over two decades, uses Rimini for its ECC 6.0 and BW support. Besides the savings, CIO Martin Janssen cites better service: “We receive very clear service levels and faster case resolution that we never had previously.”
I sometimes help customers follow up on issues, which means working with SAP support.
A Problematic Allocation of Resources
While HANA receives massive SAP marketing and sales resources, people from the outside looking in have no inkling of how degenerate SAP support has become. SAP has minimized the investment in its support resources to the degree where the value-add is tiny. Still, SAP continues to receive massive support revenues from customers. It seems as if a significant awakening is imminent. SAP allocates most of its compensation to people who sell new solutions, not those who maintain solutions. This is true even though SAP receives most of its revenues from support.
Getting Run in Circles
I have many OSS SAP support notes where SAP customers are run in circles and customers are left to fend for themselves. My experience was opening tickets with SAP. In so many cases, I needn’t have bothered.
The English skills of many of the SAP support resources are pretty poor. I have to rephrase my sentences with them. I must ask the support person to backtrack assumptions because they do not understand my writing. I have a long history as a technical writer, so that is a problem if I can’t even get issues across.
Support Requires Proficiency in the Customer’s Native Language
And let us ponder this. If SAP support resources can’t write coherent emails in English, how can they document anything? Documentation is foundational to support—it allows the leverage of using accumulated knowledge. Most SAP support resources would score a C- or D in an English proficiency exam. This is most likely because English is not their first language for almost all of them, and SAP demands the highest possible margin on support.
I find it amusing that we like to discuss the importance of literacy in the US. While these people may be literate in their native language, they are not at any reasonable English level. SAP could have 100% literacy in its support organization, but it prefers not to due to cost. The official position on literacy should be adjusted. Large multinationals are for literacy in their support organizations if it is cheap. They don’t value it if it costs them money (that is the definition of “valuing” something”).
Who Pays the Price for English Communication Limitations of SAP Support?
For SAP, mistranslations are their customers’ problem. Let the customers bear the costs of working with support resources who are still trying to master both the system and English.
This travesty is not found in some small, inexpensive software vendors. It exists in some of the world’s largest and most affluent software companies. HP, IBM, SAP, and Microsoft have all spoken on this topic through their actions.
SAP Support: Better in Content Knowledge than (English) Literacy?
And regarding content knowledge, the story is not good there either. Too often, support personnel come to the issue wholly fresh and inexperienced.
If you bring up an issue with me in my subject area in SAP, I will have often tested it or run into it before. I usually have it documented at Brightwork Research & Analysis, and I don’t work in support. I do not see OSS notes or SCN (two of the primary sources of SAP support) documented to the level I have documented issues at Brightwork Research & Analysis. Here is an article on parallel processing in SNP and another on the fair share logic in SNP. SAP is a $23 billion corporation and the 4rth largest software company in the world. I am one person. How small must SAP’s priority for support be?
Of course, I can also write that specific functionality does not work or as intended. SAP support hides this from customers as long as possible and will not own up to it. They might say it is not working in “your system.” But they know full well that the functionality is completely broken. One of the best quotes I heard from SAP is a comment on this article where SAP blamed the cloud. I recall one go around with SAP, where they pulled people from consulting to look at the issue. They just said it seemed to be set up as it should be, but they could not explain why it was not working.
The Issues with the OSS Note System
In OSS or SCN, if the functionality does not work, it is papered over, or the thread of discussion stops. As was explained by the editors at SAP Press, when I wrote a book for them, my job in providing information in the book was to “make SAP look good.” Not to write what is true, but instead, write what made SAP look good. You don’t bring something up in the book if something does not work. That way, SAP “looks good,” but users stumble over it later.
Problems with support are magnified by SAP’s lack of specialization among its support personnel. This is one of the most fundamental support efficiency concepts, and SAP cannot get it right.
Domain Specialization
I do not know how SAP support is internally configured, but I don’t see many specializations. If a person is focused on one area, they can quickly provide value because they don’t have to research each ticket anew. And of course, the more they specialize, the more they will know in that area.
This brings up the topic of the unqualified personnel in SAP support. Often, I open tickets because the customer wants me to. That is, I usually don’t expect support to provide any resolution. What tickets often do is burn my time while we go back and forth on opening ports so they can test the system. SAP consumes a lot of its customers’ time because their support investment is inadequate.
A recent Nucleus Research report titled “6 out of 10 SAP Customers Wouldn’t Buy Again” a quotation gave SAP a grade of B in their support. And that SAP partner received a D, with the comment:
“There’s no support. It seems like they get the account and they shove you under the rug.” (regarding the partners that is).
Going through my support experiences with SAP, “B” just does not come to mind.
How Does SAP’s Support Compare to Best of Breed Vendors?
If I compare this to many best-of-breed vendors, SAP looks quite bad. With the best-breed vendors I work with, I can get detailed answers from actual subject matter experts in just a few hours. The difference is stark. And the prices these best-of-breed vendors charge for this support are much lower than what SAP charges.
I own software myself that I use for prototyping, and I pay a yearly support contract. And the vendor I use offers excellent support. Gartner’s weighing of software vendors by size is so uninteresting. Support is inversely related to vendor size. The prominent vendors Gartner likes to promote (and make so much money from) provide worse customer service than smaller ones. If you look at Gartner’s criteria for the Magic Quadrant, more prominent vendors receive a boost in the ratings, which increases their “Ability to Execute.” This affects the vendor regardless of the actual support capabilities. I cover Gartner and Magic Quadrant: A Guide for Buyers, Vendors, and Investors. This appears to have been specifically designed to increase the more prominent vendors’ ratings versus the smaller vendors.
The Joys of “International” Support?
Considering a typical extensive vendor support system, they will rely on offshore support in almost all cases. These are support centers that are barely part of the software vendor. I would debate whether SAP’s support technicians based in Bangalore are even part of SAP. This is because they are so poorly paid, and the turnover is so high. This may as well be an outsourced operation providing support services to SAP. They would not know any of the US resources that know.
I never have to deal with this when I work with smaller software vendors. The support people are genuinely part of the company. They know the other people in the enterprise as they are actual employees.
How Much is SAP Charging for Support?
The official SAP support is 22% of the initial license cost in support per year. Many companies, for various reasons, end up paying more than this. One example is support for unique things such as the SNP optimizer. In addition to overpaying, customers get wrong information from the group supporting the SAP SNP optimizer. And there are plenty of other examples of this. This group offers incorrect information. I tested it six years ago and found it to be false. SAP support cannot provide accurate information on this because it undermines the need to use the functionality. To add insult to injury, the standard SAP support does not cover this component.
The price SAP charges for its support has nothing to do with SAP costs. Oracle moved to 22% maintenance several years ago, and SAP has patrolled this percentage.
SAP attempted to go to 22% support in 2008 but backed off due to user pushback. The support hike was pushed to 2016.
Support is “cleaning up” after the party. However, SAP’s heart isn’t in it. Sometimes, SAP will send specialists to address why applications are not working as intended, and customers will get pitched new applications rather than fixing the old ones. The emphasis and the compensation at SAP go to those who can sell and introduce new solutions. Why this is not more broadly discussed, I do not know.
Support Failings Covered up by ASUG US
Entities like ASUG US, that one would think, would focus on this issue, giving it no coverage. I checked their website for “support problem” and found no single article. ASUG US’s perspective can be neatly summarized as the following:
“Oh give me a home where the buffalo roam,
Where the deer and the antelope play,
Where seldom is heard a discouraging word,
And the skies are not cloudy all day.”
It works best if you sing this little ditty. Holding hands with a group in a school play is even better. Oh yes, it is all good in the mind of ASUG US. (If ASUG US had a mascot, it would be an ostrich or a lap dog.)
How can this be?
- Is ASUG paying attention to SAP’s customers’ concerns, or does SAP censor them?
- Does ASUG have even the tiniest percentage of independence from SAP?
ASUG US spends most of its time getting SAP customers all bubbly on new SAP applications. They are so censored on anything negative about SAP that they are a user group in name only. I have coined a new term for ASUG US. It is “SAP Marketing Apparatus Part Deux.” Any ASUG events or reading of ASUG articles should be framed regarding ASUG simply being another marketing arm of SAP. SAP does not need another marketing arm to get its message across and censor all criticism.
Breaking in SAP Support?
There are examples from a project that had already been live for 18 months. When I tell people how long it takes to get APO “dialed in,” many people who don’t work in it can’t believe it. However, even after this time, there are still many issues with the system, some severe. The following applies to this support example:
Professionally Managed Teams?
There appears to be a lack of professional management of the team. Rather than presenting the façade of a large established company that is very experienced in support, the support team seems more like it is a loose affiliation of individuals who provide little visibility into what they are working on. The client could only hire four people in a different country, allow them to work from home, and end up with the same level of organization provided by this company currently.
Support as a Black Box
The support is perceived as a black box by the client resources working closely with them. After over a year, the company is still unsure about who is on the support team and who is working on what. Whether the support resource is full-time on this account, etc. In such a situation, there is an incentive to assign resources to multiple clients to maximize revenues. There may, in fact, only be 2 FTEs assigned to the account or 1.5 FTEs. It merely seems to be an unknown.
Issues with Transparency
There is a lack of transparency to the jobs and necessary loading and cleanup activities in APO.
Documentation Problems
There are no detailed explanations or documentation of the changes made by the outsourced support. The examples of what was done to fix issues are provided by support in short emails with cryptic descriptions such as “I have run the consistency check for the live cache to iron out the problem….Please try now.” This does not improve the client’s understanding of the system, leads to reappearing issues, and is symptomatic of a group that lacks time to investigate matters thoroughly.
Data Integrity of the System
Data integrity in the system is getting worse, even after over a year of practice managing and controlling it.
Language Skills
None of the support resources speak English as a first language. It is a grave error to place a non-native English speaker as the lead and main communication conduit to support. Any future contract with any support organization should stipulate that the lead should be a native English speaker. They must also be accomplished in English writing, as this is the primary communication method for support. As is well known, writing in a language is a higher standard and requires more skills than speaking a language. If this is not stated in the contract, the client will not get this, and the client will again have one of its resources converted into the translator between client resources and support personnel.
The Reality of International IT Support Outsourcing
The outcomes of outsourcing are much different than the concept. Firstly, even if outsourcing were successful, it would mean reduced employment in the US. It generally reduces employment, but there is also reduced employment in the skilled sector, and many would argue that it is the strategic sector of the economy. As with most matters relating to employment-oriented considerations, this issue is papered over by the company and the press. Fundamentally, it has been paying universities and their economics and business departments for decades to write facile papers that propose eliminating US jobs is good for the economy because it means more efficiency. Not surprisingly, this job elimination never applies to truly politically connected professions such as executives, lawyers, doctors, etc. These have powerful anti-market restrictions on competition within their professions and do not allow foreign competition. Secondly, it turns out that outsourcing, in my observations with multiple clients, does not work and is incredibly destructive to the competitiveness and effectiveness of US companies.
It continues because it shows short-term and illusory cost savings, which executives can use to make a case for increased personal compensation. Whether the executives who make these decisions know they are undermining their company’s capabilities is unknown. Yet the fact is that it is, and if they don’t know or have not figured it out, they have not made any effort to ask their representatives what level of IT support they are getting from these outsourcing agreements.
SaaS vs. Outsourced IT Support
While outsourcing is almost entirely negative, SaaS is, in my view, a genuine opportunity. SaaS is different from outsourcing in many ways, and a few are listed below.
- SaaS is based less on scanning the globe for low-cost labor and more on assigning workload to those best able to manage it (i.e., vendors who design and implement their software are put in charge of maintaining it). This is appropriate for complex applications such as planning software and applies to more straightforward but highly collaborative software such as sales force automation.
- SaaS is not based upon removing the US’s jobs and taking them to a country where English is not spoken well or driven based upon lowering wages to the absolute minimum.
- SaaS does not have middlemen. The software vendor is contracted directly. There are fewer opportunities for professional rip-off firms like Accenture, Deloitte, and IBM or Indian mediators to take the lion’s share of the consulting contract.
So, while outsourcing is based upon pure country’s lowest common denominator, de-skilling, SaaS is an actual value add. Strangely, outsourcing has become extremely popular, while SaaS is only moderately popular. This I attribute to the fact that consulting firms are more influential than software companies, making money from outsourcing. At the same time, they would likely lose money from SaaS (they would lose many lengthy enterprise implementations, and their power would be reduced vis-a-vis the software vendor). So, large consulting companies very rarely recommend SaaS solutions.
Outsourcing Rules
We are not against outsourcing under all circumstances. However, outsourcing driven by a desire to obtain cost savings rather than outsourcing to an external party with extra capabilities typically does not work well. Strategy consultants tend to have strict and fast rules about what should be outsourced and what should not. However, whether outsourcing is performed is much less important than how it is performed. IT support is an example of outsourcing that has been driven by costs and reduced quality. This is interesting because IT was supposed to be a significant enabler for the business. It is confusing why a company would allow its disablement through outsourcing to low-cost and quality providers. And some of the largest companies with the most significant profit margins that have oligopolistic power in their markets make little sense. In all the companies I have worked in, I have yet to see one where outsourcing was used. IT was able to match the quality of the internal IT organization.
Cost Savings Versus Gaining Value From Previous Implementations
While strategy consultants tell companies to outsource IT, some areas are not outsourced, which can benefit from outsourcing. We are on record saying that outsourced supply chain planning can be an excellent choice for companies (and we have created our service around it). However, this is based on comparative advantage, quality improvement, and cost reduction. This is the same rule of outsourcing that individuals typically apply. For instance, a dry cleaner can clean and press a shirt at a lower cost and higher quality than an individual. Therefore it is a perfect candidate for outsourcing. Companies often waste vast amounts of money on supply chain planning implementations, and even large companies have problems mastering supply chain planning applications and concepts. A third party that concentrates on planning can, we believe, do a better job than those that “dabble” in planning. Most companies are just dabbling in planning and are not serious about becoming very accomplished in it.
Robotic Outsourcing Decisions
Unfortunately, companies use overly simple rules to determine what should be outsourced. Both outsource areas that often should not be outsourced and keep things that could be outsourced in-house. This “advice” is nearly content-free and displays inept thought processes presented by some of the most prominent strategy consulting firms. Interestingly, although the experience with IT outsourcing has been relatively poor, it continues. Many CIOs have a deaf ear to the user community and continue to present horrendous outsourced experiences as significant successes they could enact under their watch. They will present the cost savings to other executives without mentioning the steep decline in service level. They have no way for all the strategy consultants they hire — aside from the slightly fictitious metric of tickets opened and closed, to measure if their outsourcing decision helped the company.
SAP Partners as Email Forwarders
Nucleus Research brings up an interesting point that I have also seen. This is because SAP partners are often little more than email forwarders to SAP. SAP partners frequently skimp on the resources to make the highest possible margin.
I recall one partner who signed a support contract for HANA. Unfortunately for their client, they did not have a single HANA resource that worked for them. Instead, they had a support individual who spent time forwarding the customer’s emails to SAP. This support person from the partner brought no value to the scenario. The support person was awkward as they did not know how to answer any of the customer’s questions. This became increasingly apparent to the client. This consulting company eventually lost this support contract.
Implementation Partners as Support Entities?
It raises the question of whether there is ever a good reason to use an SAP consulting partner for support. I can’t think of a single SAP consulting company with a reputation for support.
The businesses that provide SAP support as a primary line of business are not SAP partners. SAP would never refer its customers to an actual professional service organization. This is because these third-party support organizations don’t intermediate between the client and SAP. Instead, they take the entire support contract from SAP.
As SAP and their partners view support contracts as nothing more than areas to get high margins, it is more logical to find companies focusing on SAP support rather than considering it an afterthought.
How to Understand The ROI Analysis Failure of Outsourcing
When reviewing Brightwork Research & Analysis analyses, software vendors typically respond that the internal support amount should be lower. They often only estimate their support costs, and when they acknowledge the internal support costs, they will only assess the internal IT resources required to support their application. While that approach was never accurate, it is even less reliable because companies are responsible for more “self-support” today than ever before. And this is, in part, due to the IT outsourcing trend. Outsourcing makes CIOs look great from the perspective of costs. However, in most cases we have reviewed, outsourced IT support means a reduced IT support level.
Outsourcing Media Coverage
Some journalists will state that the main issue is offshoring—outsourcing to low-cost countries—but outsourcing is viable. If we look at SaaS, this is “outsourcing” much of the IT support for an application. Although it is different as the software vendor has a comparative advantage in their application, they host and control it. However, as practiced, outsourcing refers to a large consulting company offering resources from countries with meager wages. The consulting company then bills out these resources much more than they pay them. This is the predominant method of outsourcing, which I am referring to in this section. There seem to be many apologists for outsourcing in the IT press. All the major consulting companies are advertisers in these outlets. And they will interview their advertisers on various issues to determine the editorial approach they should take. Articles that don’t gel with advertisers don’t get covered. The evidence of the advertising’s impact on media content is very well established and is from multiple sources.
One of the best-known research is the investigation into the coverage of tobacco’s health issues with media outlets. This study compared those media outlets that took advertising money from cigarette companies with those that did not. Those media outlets that took cigarette advertising did not report information on tobacco’s connection to cancer. Advertising’s influence on the media output in enterprise software is covered in Gartner and the Magic Quadrant: A Guide for Buyers, Vendors, Investors.
The Warner Brothers Example
One well-known media company provides a perfect example of how improper TCO estimation can make a poor decision. Warner Brothers decided to outsource its IT department back in 2008. Warner Brothers did not want to outsource but was forced by their parent company, Time Warner. Leading up to this decision, no studies were undertaken, and indeed, no true TCO was performed to inform this decision. Instead, Cap Gemini’s estimates were used to justify the change and explain the expected cost savings. Of course, Cap Gemini would take over part of the outsourced workforce, so they had a powerful bias in proposing that outsourcing would save Time Warner a great deal of money. These cost savings were believed (by Time Warner at least, if not Warner Brothers), and the program
was announced to the media in January 2009. Eight hundred employees, or ten percent of the Warner Brothers workforce at the time, would be outsourced.
“The 800 positions break down as follows: 200 open positions around the world; 300 outsourced (with a third being offered employment opportunities with Cap Gemini and continue to be based in Burbank), and 300 lay-offs.” — Warner Bros. Announces 800 Layoffs
This initiative was, in part, a PR stunt intended to boost the stock price. Warner Brothers had experienced some down quarters, and it needed to do something to increase the stock price. Outsourcing communicated to the financial markets that Warner Brothers was “doing something” to reduce costs. The information inside Warner Brothers indicates that the outsourcing program was a failure. Warner Brothers has since brought many of these jobs back in-house because the quality of IT support was poor. However, Warner Brothers did not announce this because it had no PR value. Wall Street wants to hear about outsourcing stories—not insourcing. Warner Brothers would, in effect, be admitting that their program had failed. And Wall Street analysts—who know less than nothing about running a business and do not consider the impact of the quality of IT support on a company’s operations—merely view various announcements through a conformist lens: outsourcing good, insourcing bad.
The Effect on the Stock Price
Analysts would have penalized Warner Brothers because, after all, “insourcing simply increases costs.” Again, all information released must positively impact the stock price because, to no small extent, the executives are compensated in stock. Responsiveness to the financial markets is a big reason initiatives are taken and have little to do with improving the company’s condition. In part, companies implement systems like ERP and initiatives like outsourcing not because there is any evidence that they benefit the company but because the company needs to demonstrate to outsiders that they are doing “all the right things.” The financial analysts who evaluate stocks have no experience with ERP and have never participated in IT outsourcing, so they do not know whether these things have any inherent value either way. Still, they know what is trendy and topical. These “right things” change depending on what happens to be trendy at the time.
When I discussed this book with a colleague who is exceptionally experienced in these matters, he questioned whether the service to provide TCO analysis would have a market. He stated:
“Who would be the market? It’s not the consulting companies, because any company that offered honest TCO evaluation services would be their enemy. It’s also not the purchasing companies, because this type of information would interfere with their stock options and their ability to get rich.”
Conclusion
The international outsourcing of IT support is not working for US businesses. The support I am witnessing from outsourced IT organizations has degraded significantly since this trend began. In many cases, the business feels they have no support, and they start hiring their IT people to develop workarounds for them. Because outsourcing does not work, it essentially breaks down the company’s labor specialization because now the business has to be its IT support. This is why spreadsheets and offline Access databases are not decreasing after implementing enterprise systems. The business is finding they have to develop offline tools because the essential maintenance of enterprise systems is not performed correctly. Outsourcing is one reason for this, although there are certainly others. If companies expect to have competent IT support, they must be willing to pay for it. Spending $250 million on a fancy SAP implementation makes little sense if the company decides to outsource these systems’ support to the lowest cost bidder. Unfortunately, this is precisely what is happening.
The simple fact is that many support companies are not adding value by performing the same hiring that any company could do in a foreign country. Communication issues increase drastically with outsourced support, and communication is one of the most critical support requirements. IT outsourcing seems driven by cost reduction rather than a search for comparative advantage and increased quality. In general, it’s hard to see the benefit of outsourcing SAP support.
There is no way around it. SAP’s support is both expensive and of poor quality. It is of poor quality universally and is not a competitive offering.
Top Issues for SAP Support
- SAP invests little in support. It is seen as another way to charge customers for doing almost no work. It is known that SAP reaps roughly a 90% margin on its support. SAP wants the margin rather than having any interest in investing in the support that is so lauded during the sales presentation.
- SAP and SAP partners push for customers to get on the latest versions and install enhancement packs. This is a cost treadmill that often does not lead to more functionality being put into the field.
- SAP’s ticket component of support is of such low quality that it can be replaced by hiring spot consulting to follow up on issues. And that is only one of some options which, of course, includes outsourced support.
- In most cases, SAP customers are not analyzing what they get from SAP to justify this support. In increasing cases, it is not worth what SAP wants for it.