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Two interesting things happened in the last couple of weeks, that led to writing this blog:

  1. We received a new white paper from research firm ESG, analyzing the impact of SAP S/4HANA on the SAP market and on our own business – Technical SAP Consulting & Managed Cloud Services.
  2. I attended an interesting meeting with individuals from several other Hitachi Group companies, to discuss various things regarding the SAP market and our activities in the coming year.

 

One of the things I realized in that meeting, and this sometimes also happens in conversations with various people working in the SAP ecosystem, is that there’s a lack in understanding some of SAP’s newest technologies in the market. Specifically, I’m referring to the difference between HANA and S/4HANA; what each of these does; and what is the revolution taking place these days in the SAP market, due to these technologies.

 

By “lack of understanding” I don’t refer to fellow technical SAP experts, they certainly understand the above, and possibly also know the “behind the scenes” of the war that is taking place in the last few years. But do your business people, marketing experts, sales folks – all those non-technical experts in the SAP ecosystem – do they know what the difference is, and what’s going on? Or do they think, as I sometimes hear, that S/4HANA is in fact “HANA version 2.0”, or some other variant ?

 

So, today’s blog is dedicated mostly for the non-techi folks in the SAP ecosystem, but all you techi friends are also welcome to read. This will be a story full of emotion about the longtime rivalry between two of the world’s leading tech giants, and a real battle that’s taking place today around SAP customers.

 

For those who want the short version, here it is – SAP HANA is a database. SAP S/4HANA is the new business suite of SAP applications, that runs on the HANA database. That’s it, but there’s so much beyond that. So go ahead and read the full story.

 

And a word of caution – to best serve the non-technical audience for which this blog is written, it is going to be simplistic and high-level, with as little technology deep-dive as possible.

 

 

What is SAP – in 2 minutes

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When an organization has a mission-critical SAP system, it actually means they have a system that consists of various layers of software and hardware. Let’s leave the hardware aside for the moment, since it’s less relevant at this point. On the software side, an SAP system has three main layers:

  1. Operating System (OS)
  2. Database (DBMS)
  3. Applications

 

Traditionally, SAP was an applications vendor. Everyone in the industry knows these applications very well – ERP, Supply-Chain Management, Finance, HR, Logistics, Manufacturing, Retail, and many other applications that SAP has been producing over the years, for running an enterprise at all levels.

 

Also traditionally, SAP applications ran on top of third party databases (this is where the actual data is stored), as SAP did not have a database of its own. The main databases on which SAP applications run are Oracle, MS-SQL and IBM DB2, though there are additional databases that SAP runs on, such as Sybase (which SAP acquired back in 2010, for $5.8 billion; here’s an interesting article from that year, on why SAP acquired Sybase).

 

Oracle Corp plays an interesting role here. On the one hand, Oracle is a bitter competitor of SAP, because it’s application suite – Oracle Applications – is a direct competitor of the SAP application suite. On the other hand, Oracle is one of the leading databases in the world, with many SAP customers running their SAP applications on the Oracle database. In other words, the SAP market is a major revenue generator for Oracle Corp on the database side; Oracle database license revenues from SAP customers make a major percentage of Oracle Corp’s total revenues.

 

All of that synergy lived relatively well until 2012 – SAP focused mostly on the applications side and led the market in that category, with Oracle being a distant #2 (here are two Forbes’ articles covering Gartner’s analysis of the ERP market and the Supply-Chain Management market). On the database side, Oracle has been the market leader as far as license revenues; Oracle generated (and still generates) a significant portion of its revenues from SAP customers running on Oracle.

 

And then came SAP HANA.

 

 

SAP Introduces HANA – The In-Memory Database

 

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SAP officially launched SAP HANA in November 2010. HANA is an in-memory database, which is a revolutionary technology, compared to “standard” databases. In regular databases, all the information is stored on disks that “live” in enterprise storage systems. When a database gets an inquiry, it goes to the disks, searches for the information, retrieves it to the system’s memory, and then performs various operations on (or using) this data. Once it has finished with the specific piece of data, it stores it back onto the disk, until the next time it needs this data.

 

An in-memory database operates differently. The infrastructure for this database consists of an enormous amount of memory and compute power (compared to “standard” storage), the data resides at the memory level at all time, and all actions are performed within the memory itself. Since memory is significantly faster than disk (memory access time is measured in nanoseconds, while disk access time is measured in milliseconds), HANA performance is also significantly faster when compared to that of standard databases. In addition, HANA brings other meaningful advantages – I covered HANA benefits in a blog that focused on Considerations Before Migrating to SAP HANA.

 

The launch of the SAP HANA database was like waving a red flag at a bull; the bull’s name was Oracle. Here, SAP no longer competed only on the application layer of the business; Oracle suddenly saw a direct, potential threat at its bread-and-butter – the database business and the revenues it generates. And it reacted (photo credit: Naoki Nakashima, Flickr).

 

Larry Ellison, Oracle’s Founder, Chairman and CTO (and one of the 10 richest people in the world), launched a series of fierce attacks on SAP and HANA. In a series of keynote speeches and interviews, that started almost immediately after the HANA launch in 2010 and is still ongoing, Ellison has been doing his best to bash HANA and install doubt and fear in the minds of SAP customers. Some of his speeches and recordings have become iconic in the industry, such as this 2-minute video from 2012, or his keynote speech at the 2014 Oracle OpenWorld, to name just two cases.

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The bottom line of Larry’s comments – HANA is a brand new system, not yet tested, and not proven for mission-critical workloads. SAP will never substitute their long-time, proven Oracle database, for the HANA database.

 

SAP’s reaction to these attacks was polite and respectful. Here’s an example from a Yahoo Finance 2-minute video interview with Bill McDermott, SAP’s CEO, following one of Larry’s bash attacks.

 

What actually happened in the field? Like with any new and innovative technology – not to mention mission-critical in its influence – adoption has been slow. It takes an Innovator, visionary CIO to be one of the first in the market to adopt a brand new technology for one of the organizations’ most mission-critical systems (SAP). (graphics credit: The University of Arizona).

 

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Overall, HANA adoption lagged behind SAP’s own estimates. Customers did take their time to migrate to HANA. In its FY2015 reports, SAP wrote (page 7 of the PDF) that “In just a few short years, nearly 10,000 customers and startup companies chose to innovate on SAP HANA…”, which means an adoption rate of less than 5% from SAP’s customer base. However, the quarterly reports that SAP publishes also show an acceleration in adoption, as was expected.

 

At oXya, we had the privilege to work with a few such innovative customers, and support them in their migration to SAP HANA. As of May 2016, more than 50 out of our 335 enterprise managed services customers (roughly 15% of oXya customers) are already running on SAP HANA or are in the process of migrating to HANA. We are very proud of this significantly-above-industry-average percentage, and that we are an industry leader in migrating SAP customers to SAP HANA and S/4HANA (and I’ll write on S/4HANA in the following section).

 

Since SAP saw that adoption of the HANA database has been slow, what did it do to accelerate this adoption, and to further innovate in the market? It introduced SAP S/4HANA.

 

 

SAP Introduces S/4HANA – The New Suite of Business Applications

 

In February 2015 SAP introduced SAP S/4HANA, which is “a next-generation business suite designed to provide the digital core SAP customers need to run their entire business in a digitized world.” (quote from SAP’s FY2015 annual report).

 

SAP S/4HANA is not a database. Rather, it is a new and revolutionary application suite from SAP. Research firm ESG writes that “This (SAP S/4HANA) is perhaps the single biggest shift in SAP technology for the last 25 years, since SAP R/3 was introduced in 1992”. Many SAP experts agree with this statement. SAP S/4HANA includes many innovative technologies and features, that all have one common goal – to enable organizations to run their SAP in a simpler, faster, and far more efficient way, while supporting new work processes (such as mobile). With all that, SAP S/4HANA helps customers to be more competitive in the market place, and better align with modern challenges of the digital world. We wrote in the past about some of the new features in S/4HANA, such as Fiori, the new SAP GUI (see the table and video in this blog post, for a comparison of time and efficiency between the old SAP system and the new one).

 

And the kicker about S/4HANA – as its name implies, this new suite of applications only runs on the HANA database!

 

In other words, customers who will want to upgrade to the newest and best SAP suite of applications, will have to also adopt the HANA database and run on it. They will not be able to choose any other database – it only runs on HANA.

 

 

So what does it all mean?

 

There are a few interesting questions to ask, in the aspect of S/4HANA:

  1. What will the adoption of S/4HANA look like?
  2. Which SAP customers will migrate to S/4HANA?
  3. How will this migration cycle affect the IT industry?

 

Let’s answer these, one by one.

 

How will the adoption of S/4HANA look?

Like with any new technology, it will be in stages, exactly like in the adoption cycle graph shown earlier. First come the Innovators, and we already see enterprises who have migrated to S/4HANA, or new SAP customers who performed greenfield installations of SAP S/4HANA. oXya has a few such customers, including in North America – we hope to share their stories in the future. After the Innovators will come the Early Adopters, and then the Majority – Early and Late.

 

ESG estimates, in its paper, that “This (SAP S/4HANA) will become the mandatory standard for SAP customers in the near future, assuming they wish to stay current on SAP product enhancements. At some point, support of older versions will start to become increasingly difficult.”

 

My own estimate is that the “near future” that ESG is referring to will take some time. We are still at the Innovators stage. It will probably take a few good years to cover the percentages “needed” until the market reaches the stage of Majority adoption, but it will come. The reason for that is explained in the next paragraph.

 

Which SAP customers will migrate to S/4HANA?

In my estimate – everyone, eventually, or at least the majority of customers. After all, it is exactly like ESG says – any customer that wishes to stay current with SAP technology, and maintain a competitive place in the market. SAP customers cannot afford to stay behind with old, dated systems, that are less efficient.

 

Customers will want to keep current with their competition, and will eventually be “forced” to move to S/4HANA (which, of course, will continue to evolve and improve). I suspect it’s still 4-5 years away (and possibly a bit more) before we see the large mass of SAP customers migrating to S/4HANA (and to HANA, as a result), but I have no doubt that it’s coming.

 

How will this migration cycle affect the IT industry?

In a huge way. The move from “regular/current” SAP systems to HANA and to S/4HANA affects many facets of the IT industry:

  • Infrastructure for SAP: First, HANA requires different infrastructure than current SAP systems. There are already various infrastructure vendors who are playing in this field, with more who will probably enter the market. Hitachi Data Systems, with which we closely cooperate, is a leading player in the SAP HANA market, with its Hitachi Unified Compute Platform (UCP). And second, as customers choose new infrastructure, they will often want to avoid the high Capex costs that are associated with the HANA hardware; instead, many customers will prefer to move to a cloud system with an opex-based consumption of hardware, such as the one oXya offers.
  • Functional/Design for SAP: The system integrators’ (SI) community will also have its hand full with the transition to S/4HANA; while SAP recommends using the standard applications and creating minimal adjustments, many organizations will probably want to adjust the new applications to their specific needs. Hitachi Consulting (HCC), our sister company, is a leader in this area, and we’re closely cooperating with them.
  • Technical Services for SAP: Companies such as oXya will certainly have their hands full. Most SAP customers do not have the necessary in-house knowledge and expertise in order to migrate to HANA and S/4HANA; They will require external help, from the likes of oXya, who have already done that numerous times, and can help assure a fast and painless transition.
  • Managed Services for SAP: This is another market in which oXya is a major player. As SAP customers adopt these new technologies, they will require skilled personnel to run the new SAP systems around the clock, to make sure the new SAP provides peak performance and generates a great ROI for the organization. This may mean choosing an SAP partner that you can count on, a partner that provides you with a dedicated team that is an extension of your own IT organization, and various other unique features. As you can read in the new white paper from ESG, there is a shortage of skilled technical IT people in the market, across multiple areas. Many of these areas are covered by oXya’s dedicated support teams, once a customer chooses our services for running their SAP – so working with oXya as a partner can immediately solve multiple recruiting challenges, of the following expertise areas:
    • SAP Basis (not in the ESG table, but huge shortage in the market)
    • Server virtualization/private cloud infrastructure
    • Compliance management, monitoring and reporting
    • IT architecture/planning
    • Data protection
    • Database administration
    • Storage administration
    • Server administration
    • Network administration

 

Of course, there’s another potential effect on specific industry players – the database vendors. The main one to get hurt is probably Oracle, which presumably has the largest share of database revenues from current SAP customers. I wouldn’t go out on a limb in estimating that we can expect the level of bashing and attacks from Oracle to increase in the coming years, or at least stay at current (pretty high) level. Oracle Corp have very smart people, and no doubt they analyze the marketplace in a similar way to what I did above – some of Oracle’s core customer base is about to disappear, and migrate off Oracle in the coming years.

 

I hope to see many of you at SAP SAPPHIRE – stop by the Hitachi booth, look for me and the rest of the oXya team, and feel free to discuss your SAP challenges with us. You can also email me at any time, to mduboullay@oxya.com.

 

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Melchior du Boullay is Managing Director, Americas at oXya, responsible for all of oXya’s operations across North, Central and South America since 2007, when oXya started operating in the Americas. Melchior has nearly 15 years of experience as an SAP Basis admin and technical consultant, SAP project manager, SAP account management, and business development.

 

oXya, a Hitachi Group company, is a technical SAP consulting company, established in 1998. oXya provides ongoing managed services (outsourcing) for enterprises around the world. In addition, oXya helps customers that run SAP with various projects, including upgrades and migrations, including to SAP HANA. oXya currently employs more than 600 SAP experts, who service more than 330 enterprise customers with more than 300,000 SAP users around the world.

Over the last several months, ESG Research has been performing a research project on oXya’s managed services for SAP. We hired ESG—a reputable IT research firm—to validate our services and unique offerings, including a dedicated team that is assigned to each customer, and our ‘all inclusive’ offering for a fixed monthly fee.

 

The end result can be seen in the below brand new video, but it wasn’t a fast nor easy process to get there. For those who think “OK, oXya paid them so they’ll say anything asks them to”, my answer is – no, it doesn’t work this way. As a reliable research company, ESG won’t say anything we ask them to, just because oXya hired them. We needed to prove to ESG, every step of the way, that we indeed deliver everything we claim. In fact, it’s similar to how we needed to pass multiple tests by SAP Corp over the past year, in order to get SAP’s GLOBAL certifications for SAP HANA® Operations Services, Cloud Services, Hosting Services, and of course – an SAP Global Partner certification. We just recently received all these global certifications (we already had certain certifications for many years, but not globally), and are very proud of that. See our SAP certification logos in this blog and in the video.

 

(oops, not sure I’m supposed to talk about the certifications… I may have just revealed something that we planned to release next month, before SAPPHIRE Orlando, to attract more people to come visit us at the large and amazing Hitachi booth; marketing won’t be happy…)

 

 

Let me tell you a little about the “behind the scenes” that led to this video; we worked really hard to prove to ESG that oXya does deliver on what we claim.

 

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Nik Rouda, Senior Analyst with ESG Research, was skeptical about two main things:

  1. Personal Touch & Dedicated Team. Our commitment is to assign a dedicated team with all relevant expertise (Basis, DB, OS, HW, etc.) to each of our customers. This is what we’ve been doing since oXya was founded, back in 1998. Nik was especially skeptical about our ability to grow globally and continue with that approach. After all, none of our global competitors operates this way; when you call them with an issue, you get a different support person each time, from somewhere around the world; often they don’t know you nor your SAP systems, and your ticket circulates between various silo teams, until your issue was resolved. This kind of service significantly delays the time to resolution, and make customers unhappy (I wrote last month about the oXya unique delivery model, versus the standard model).
  2. ‘All Inclusive’ Service. Another thing that Nik was doubtful about is our commitment for an ‘all inclusive’ service for a fixed monthly fee. Many people believe this sounds insane from a financial perspective, and especially since we don’t suggest multiple change management ideas to customers, like many of our competitors do (and they also charge you and arm and a leg for that, of course). For oXya, having long-term customers who are happy and renew their service with us, time and time again, is worth all this. First, it’s our company values of Commitment, Trust, and Service that are driving us. But even more so, if you think of the acquisition cost for a new customer, or the cost of customer churn, you’ll understand why our approach also makes perfect sense from a financial perspective.

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BTW, as part of the background work preparing for interviews with Nik, we wanted to learn what is our real customer churn, and how happy our customers are with oXya’s services. Here are the results:

  • As of this month, March 2016, oXya has ~335 enterprise customers around the world.
  • Over the last 5 years, oXya lost 2 customers who did not renew their services with us (yes, that’s not a mistake – just 2 customers in 5 years!). That’s a churn rate of 1% in five years!
    • One of these two customers, BTW, did not renew its service contract with us since they were acquired, and the acquiring company worked with a different SAP managed services provider. That loss of a customer felt bad, but it had nothing to do with our service, and there was nothing we could have done to keep that customer.

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Let’s back to the “behind the scenes” story. In order to prove our service commitments and claims, Nik asked to meet with our customers, and he did. He held long interviews with customers, and heard from them exactly what we tell the market and what every prospect hear from us – about our great and committed service, which includes a dedicated team that knows the customer very well and the customer knows all team members; the 'all inclusive' service and the fact that we don’t look for ways to overcharge our customers; and much more.

 

We also proved to Nik how, nearly a decade ago, oXya expanded its services beyond the EMEA market, and built successful service and hosting centers—with local teams—in Americas and APAC (our Americas operations will celebrate 10 years next year). Over the last year, since Hitachi acquired oXya, we’ve been expanding more rapidly, yet we are still passionate about maintaining our service levels, personal touch and dedicated team, which are what brought us thus far and have been the basis of our amazing success and happy customers.

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At the end of the process, Nik acknowledged that we indeed managed to grow and expand significantly, on a global basis, while still maintaining our unique service offerings. Still, he was a bit hesitant and skeptical whether we will be able to continue growing at this fast pace, and still maintain the same type of services and levels of service. You can hear that in the video, when he talks about our future growth, and that’s understandable – he is an analyst, so he needs to be cautious.

 

For us at oXya, on the other hand, there’s no question that we’re moving forward exactly like we operated thus far, and that we’re not going to let anything harm or change our amazing service, not even continued fast growth. Customer satisfaction is in our core DNA, and we’ve proven that time and time again. We also have a unique, internal model for how we train new SAP experts and build our teams for fast growth, but that’s something for a different blog.

 

So enjoy this video, and I hope to see many of you at SAPPHIRE – stop by the Hitachi booth, look for the oXya team, and feel free to discuss your SAP challenges with us. You can also email me at any time, to mduboullay@oxya.com.

 

Yours,

 

Melchior du Boullay

Managing Director, Americas

oXya, a Hitachi Group Company

 

 

 

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Melchior du Boullay is Managing Director, Americas at oXya, responsible for all of oXya’s operations across North, Central and South America since 2007, when oXya started operating in the Americas. Melchior has nearly 15 years of experience as an SAP Basis admin and technical consultant, SAP project manager, SAP account management, and business development.

 

oXya, a Hitachi Group Company, is a technical SAP consulting company, established in 1998. oXya provides ongoing managed services (outsourcing) for enterprises around the world. In addition, oXya helps customers that run SAP with various projects, including upgrades and migrations, including to SAP HANA. oXya currently employs ~600 SAP experts, who service 335 enterprise customers and hundreds of thousands of users around the world.

This blog was co-written with Dominik Herzig, VP of Delivery for US & Canada at oXya. It is the second blog in the “Outsourcing SAP” series. Please ask us any questions you have on the subject of “Outsourcing SAP”, either by posting questions in the Comments below, or sending us an email to Melchior du Boullay <mduboullay@oxya.com> or to Dominik Herzig <dherzig@oxya.com>.

 

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Last week’s blog, Outsourcing SAP: Should We Outsource Our SAP Environment?, was the first in a series of blog posts that focus on the subject of “Outsourcing SAP”. That blog covered various questions and concerns that customers ask about and examine, when they face a decision of whether to manage their SAP environment in-house, or use a partner that will provide SAP managed services for them.

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We discussed in length the security concern, that each and every customer considers when thinking of outsourcing. The conclusion: security threats are similar, whether your IT is in-house or you manage it through an external managed services partner. We also discussed the responsibility aspect, and showed that using an outsourcing partner for your SAP systems did not mean that you, the customer, didn’t have any responsibility left; you still needed to manage the relationship, review reports, and more.

 

Then, we had a discussion on various types of outsourcing partners, and brought various examples regarding what you should be careful from (multiple outsourcing partners handling the same SAP systems, something that would slow the resolution processes), and what you should prefer (a specialized SAP outsourcing partner, with responsibility over your entire SAP landscape).

 

We also mentioned additional considerations that were relevant to outsourcing your SAP systems, such as infrastructure and headcount. We will expand on these two considerations, and possibly a few more, in next week’s blog.

 

Today’s blog deals with HOW to choose a partner for your SAP environment, once you’ve decided that this is the route you prefer. In today’s blog we’ll suggest some important criteria regarding what you should look for when interviewing partners and comparing between them; this will ensure that you select the best possible partner for you, to which you will outsource your SAP environment.

 

So how do you select your SAP outsourcing partner? What are some important criteria to check?

 

Here are a few things you need to look for when searching for an outsourcing partners. These criteria are important for any situation, but are especially critical with regards to the SAP domain.

 

SAP-specific SLAs

 

When dealing with SAP outsourcing, you must have specific SLAs regarding SAP response time, server uptime, frequency of backup, and so forth. General SLAs are not enough; for example, everyone that provides outsourcing services will give you some type of a guarantee for server uptime, such as 99% or 99.9%—depending on what you ask for an are willing to pay (uptime, at the end of the day, is based on the infrastructure on which the service is offered, including redundancy and DR systems, and the same for other SLAs).

 

However, a general uptime is not enough in the case of SAP. What you should be looking for are SAP-specific SLAs for server uptime. For example, a server may be up and running, but its performance is slow to a level which SAP determines as “bad” (and which would make the users’ experience miserable). SAP has clear guidelines regarding performance, running backups properly, and so forth – all that should be in the contract with your outsourcer.

 

At oXya, we typically guarantee our customer an average response time of under 1 second, across all dialog steps in the system (dialog steps are generated when a user interacts with SAP through the GUI). This is a measure of the system’s responsiveness to a user’s actions. SAP users will be frustrated if they click on something, and it takes the system 5 seconds to respond. The rule of thumb for SAP is that any response time below 1 second is good, and anything above 1 second is bad.

 

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Furthermore, on top of the general system performance SLA, we also have an additional SLA on the top 10 transactions, meaning the 10 most important transactions for the customer’s business. These transactions are defined by the customer at the beginning of the contract, and can be changed if the customer’s behavior changes.

 

Once these “top 10 transactions” are defined, their performance is being monitored and reviewed every month; we commit to the average performance of these transactions, that are highly important to the customer. Remember that we already provide an SLA of sub-one-second average across the entire SAP environment, as we mentioned above. By applying the same sub-one-second average performance to these 10 most important transactions to the customer, we actually commit to providing an even better response time and performance for these specific transactions.

 

Backups is another highly important SAP SLA. There’s a specific daily backup for our customers, and if we miss a backup we get penalized for it. Furthermore, our contracts are built in a way that the penalties for us increase. For example, if we missed a daily backup then the penalty is X, but if we missed 3 daily backups in a row, then the penalty increases exponentially. This ensures the customer that we will do anything, above and beyond, to meet the SLAs, provide a great service, and avoid the penalties.

 

As a general recommendation, it’s always good to have an SLA with an associated penalty to the outsourcer for these type of things. It will guarantee that you have some recourse if something goes wrong, plus the outsourcer will do everything possible to meet those SLAs and avoid the penalties. If there are no penalties associated with the SLAs, then the contract is not as constraining for the outsourcer, which is why you really want to have these penalties built into the contract. At oXya, we are so certain of the service level we provide our customers, that we suggest these penalties ourselves, sometimes to customers amazement.

 

And just for a full disclaimer, this penalty system unfortunately doesn’t work the other way around; meaning the outsourcer does not get a bonus for outstanding service (or at least we don’t have that in oXya contracts).

 

Reporting

 

Another SAP specific thing that is of high importance is the reporting prepared for you by the outsourcing partner. What kind of information do you get from your SAP outsourcer on a daily, monthly, and yearly basis?

 

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We recommend you ask the outsourcer for sample, standard reports that are being delivered to the customer, and ask about the frequency of these reports. At oXya, we have:

  • Daily reports that are sent in the morning and summarize the SAP system’s activity on the previous day; any incident, syslog, alert or error message that happened on the previous day would appear on that report. Also, any escalation, meaning any call to the administrator during off-hours, will be there. It’s really a status on the health of the system, on a daily basis.
  • Monthly report, which is more high-level. This report summarizes all the SLAs that we discussed previously, and shows if any of them were out of sync, compared to what we were supposed to provide. This report also includes capacity planning, meaning size of the database, growth of the database, how much space is left on the disks, whether we need to increase the size of the disk, and that type of info.

 

You want to make sure you get all the information you need, to feel comfortable with your SAP outsourcer. This is why at oXya, we build these daily and monthly reports together with the customer; we can add any metric the customer is asking for, to make the customer feel comfortable with our service.

 

The delivery model of your ‘standard’ SAP outsourcing partner

 

Another critical component for customers, and something you should examine in detail, is the delivery model of the SAP outsourcer you choose. You must be comfortable with the delivery model you’ll receive, and it’s not something trivial.

 

How does it usually work? Everyone working in IT have had the case where we needed to call for a specific issue, say a hardware issue. You call the number of a call center, and get someone who answers that call (that person can be located in Americas, EMEA or in the Far East). That person doesn’t really understand about the issue, it’s not her role to resolve it. She answers the call, writes down the issue, gives you a ticket number, and promises that someone will call you back. Then, you sit and wait for someone to call you back…

 

And you wait… and wait…

 

Sometimes, they even call you back. But quite often, no one calls back. And as you know from your experience, if they don’t call you back soon enough, you need to call them again, and ‘remind’ them of your issue, and that you need it resolved.

 

Standard Delivery Model.jpgHere’s what happens in the background with these standard outsourcers, and you can also see a graphical representation on the right-hand side of the slide:

  • You call the service number you have (a call center), and open a ticket with the issue you have.
  • Once you opened a ticket with the call center, the ticket goes to one team, that specializes in a specific area. That team determines whether it’s their issue or not. In the SAP world, let’s say you created a ticket because you have an issue with SAPyour Production is running slowly. That ticket gets sent to the SAP Basis team.
  • When that first team gets the ticket, they examine the issue. If it’s an SAP issue then they may fix it. However, quite often the SAP Basis team may say (internally, you don’t know about it!) “you know what, this doesn’t look like it’s our issue, we believe it’s a database issue”, and so the ticket gets forwarded to the database team.
  • Next, the database team looks at the ticket. Again, it may be a database issue, in which case they’ll fix it; but they may determine that it doesn’t look like a database issue, they think it’s a hardware issue, so they forward the ticket to the hardware team.
  • Now it’s the hardware team’s turn to take a look at the issue, and decide if they can fix it, or move it forward to the next team in line.

 

And so your ticket circles, between various teams (SAP, database, hardware, operating system, and more). Often, the ticket will move between teams located in different countries, and even different time zones.

 

The good news: at the end, the issue does get resolved.

 

The bad news (for you, the customer): every time your ticket hops between teams, you lose precious resolution time. Of course, there is no direct contact between you (the customer) and these teams, these are all internal hops. Unfortunately for customers, this is how things work among many of the SAP outsourcers (the huge outsourcers employ this model—the big and famous names that you know very well).

 

oXya unique delivery model: an extension of your IT team

 

The previous section described how service usually gets delivered in our industry. The way oXya works is completely different. We are unique, since we’re actually working as a real extension of your IT team.

 

First, we’re working on-shore or near-shore, as opposed to many other SAP outsourcers who provide off-shore services. When you call from the US to get support, you will speak with people located in either our Jersey City or our Denver support centers. For Canada, you will speak with people in our Montreal support center.

 

Not only is oXya working on-shore, but you have direct access to the people actually working on your systems. When you call, you will speak with the team leader, who leads the team working on your systems; that leader is an SAP expert, with many years of experience. You will not speak with a call center, simply because we don’t have such a thing. You always call directly to the team that is doing the work, and that team will identify the issue and solve it.

 

The way oXya is structured to provide service is the following. We have teams of 8-12 people in each team, and team members are located in the same support center, sitting together and collaborating continuously. Each such team is dedicated to a specific pool of customers. Each team only handles these specific customers, and are entirely dedicated to these customers. Furthermore, each team already has all the necessary skills and knowledge within the team—SAP Basis, databases, operating systems, hardware, networking, and more.

 

When a customer calls, the customer always calls and speaks with the same people on that team. Very quickly, the customer knows not only the name of the team leader, but also the names of all members of the oXya team that handle that customer; furthermore, all members of the oXya team know the people on the customer’s side.

 

Even more important, the oXya team will very quickly know everything about the various systems that the customer has, the criticality of the various systems, and all the complexities behind the various systems. This knowledge, and the intimate understanding of the customer’s systems, help to significantly reduce the time to resolution for each issue, and also help the team to proactively perform various activities that prevent potential issues.

 

This is why at oXya, we proudly say that we are always as close as possible to the customer, and that we really do work as an extension of the customer’s internal team. This is what we’ve been doing for many years, and for hundreds of customers.

 

oXya Delivery Model.jpg

Now let’s take the same example we brought in the previous section (with all the bullets), and assume that the exact same issue happens to an oXya customer. Let’s say that you, the customer, have an SAP issue, and you call oXya (see a graphical representation on the left side of the slide):

  • When you call oXya, you call directly to the team that you know, speak with someone whom you already know (let’s say John), and you tell John that you have an issue with the Production environment, and that it is running slow. Without further information, John already knows exactly which environment you refer to, and what is the criticality of that system. John also knows things like the exact built of this environment, in order to start working on a resolution. John is able to immediately connect to the system—while you (the customer) are still on the phone—in order to experience/replicate the issue by himself (slowness, in this example).
  • Then, the entire team handles the issue together, simultaneously checking it from all possible angles (SAP, database, OS, hardware, etc.), significantly reducing the time to resolution, compared to the 'standard' delivery model described in the previous section.

 

It’s really important, when you decide which outsourcer you want, to keep in mind that for some of the BIG and famous outsourcers out there, you don’t really know who will answer your phone calls, and what type of service you’ll get.

 

The experience that we’ve heard from numerous customers, who transferred to oXya from other BIG and famous outsourcers, is something like the following:

  • You call the call center, get someone offshore who sometimes understands what you want (and sometimes they don’t understand…); also, sometimes you will actually manage to understand what they are telling you; you may or may not get along with that person on the phone (language issues is a recurring complaint about some competitors).
  • Then, the person who answers the call may or may not know about your specific systems (usually not), and so begins the 'standard' support cycle we described in the previous section.

 

We are very proud of our delivery model, and see it as a key differentiator in providing service to our customers. Furthermore, we believe that this is something you should pay careful attention to when selecting an outsourcer, as this is one of the most critical things aspects of the service, and will affect the entire service levels you get, on a daily basis.

 

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Our next blog in the “Outsourcing SAP” series will discuss the questions of infrastructure & headcount – two subjects that all customers ponder when considering outsourcing their SAP systems.

 

And please remember to send us your questions about any aspect of “Outsourcing SAP”, and we will answer them in one of the upcoming blogs in this series. Please post your questions to the Comments below, or send them directly to us, Melchior du Boullay <mduboullay@oxya.com> or Dominik Herzig <dherzig@oxya.com>.

 

 

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oXya_HDS_logo_300dpi (Custom) (2).pngMelchior du Boullay is General Manager, Americas at oXya, responsible for all of oXya’s operations across North, Central and South America since 2007, when oXya started operating in the Americas. Melchior has nearly 15 years of experience as an SAP Basis admin and technical consultant, SAP project manager, SAP account management, and business development.

 

Dominik Herzig is VP of Delivery for US & Canada at oXya. Dominik has 10 years of SAP experience, starting as a Basis Admin, and then moving to SAP project management and to account management. Dominik was one of the first few people to open oXya’s US offices back in 2007.

 

oXya, a Hitachi Data Systems company, is a technical SAP consulting company, established in 1998. oXya provides ongoing managed services (outsourcing) for enterprises around the world. In addition, oXya helps customers that run SAP with various projects, including upgrades and migrations, including to SAP HANA. oXya currently employs ~600 SAP experts, who service more than 260 enterprise customers with more than 250,000 SAP users around the world.