Jones Packaging, which specializes in the manufacture of folding cartons and pressure sensitive labels, the supply of packaging components for prescription medication dispensing and the supply of contract packaging services, is a long term SAP customer. While looking to upgrade hardware for its stable 4.6C system, the company discovered that getting the right equipment to support a 32 bit environment was likely to be difficult. In the alternative, the company considered an SAP upgrade so it could transition to a 64 bit environment where hardware was more readily available. Caught between the devil and the deep blue sea, Rick Jankura, CFO Jones Packaging revisited past conversations with Rimini Street.
We had spoken with Rimini Street from time to time but in light of a possible SAP upgrade, we were not ready to use them as a third party support provider. But when we discussed the need to upgrade, Rimini Street told us that they could guarantee stable 4.6C operations for 15 years at lower cost. That got my attention.
Regular diginomica readers will know that any potential upgrade is a fraught time and especially where there are extensive customizations. That was the case with Jones Packaging.
Rimini Street appealed to me because I was investing resources into maintaining and supporting a stable system and an SAP upgrade was not really going to provide value for the end users. But we were very slow in making the decision, because we understood that by turning our support over to Rimini Street, we had to conclude that big changes or an upgrade were unlikely to be on our radar for at least the next five years.
To give an indication of the potential disruption, Jones Packaging spent a year using a sandbox environment proving that the company could move existing customizations and the existing configuration tool over to the SAP ECC6 environment without losing any functionality. Those factors aside, Jankura could see additional upside in a switch to Rimini Street:
I avoided the risk of disruption, human resource allocation and the costs associated with an ERP upgrade that really wasn’t going to deliver any new features or functionality that our businesses were demanding. I was really worried about that because I don’t know of any major transition involving SAP that goes smoothly.
Having these advantages, along with Rimini Street’s promise to halve maintenance costs, is only any good if the support offered is delivered in practice. Jankura explains the experience this way:
Our environment’s pretty stable but every once in a while we would run into a problem and of course if you’re in a highly customized environment the question becomes if the root cause is customization or basic SAP? You go through this whole song and dance routine trying to figure out where the true problem lies.
We don’t have that anymore, with one call we find that, I think in all but one instance, the subject matter expert was on the call in the first call. It’s a whole different experience than dealing with the vendor. I’ve been able to free up capital to hire talent to build the tools our businesses need to be more efficient in our highly competitive markets and to create greater value for our customers.
An example of the savings impact comes in the form of the company accelerating an overhaul of its network infrastructure. This would not have been possible within the set budget constraints if it completed the SAP upgrade and continued to pay vendor maintenance and surrounding costs. Another example is a project to explore where Jones Packaging can automate more processes from within its existing system. And while the company plans to remain on its SAP R/3 4.6 version, it isn’t stranded.
Rimini Street made the transition really easy. They gave us a long runway to the support cut over date as well as a high level of support leading up to that date. They provided support concurrently with the vendor and they also helped us in creating an archive of the new version of SAP we were entitled to, in case we did want to upgrade at some point in the future. That allows us to upgrade our ERP environment when it makes business sense for us to do so.
We frequently hear that despite the change in the manner by which maintenance is undertaken, that SAP customers continue to enjoy benefit. In this context, Jankura is excited about the future.
SAP is a fantastic data repository and data source and of course, in today’s world, it is all about the data. So yes, we love what SAP does for us, it’s just the way in which it is done has changed.
The question then comes, is Rimini Street the right call for anyone with an SAP system?
It’s certainly not a one size fits all and you have to do your homework. We spent a long time making sure we made the right decision and as it happens, all the stars aligned in the way we needed.
IT also needs convincing and while Jankura has a lot of influence, he was keen to ensure that IT was on board while at the same time ensuring he had a complete grasp of the risks. As expected,
Their initial reactions was – ‘No way.’ Despite initial skepticism, the customer references that Rimini Street provided persuaded IT and once they were on board, they were fully supportive of the decision. We also had an external consultant who I specifically wanted involved in assessing the decisions because he saw all the potential risks in ways I am not familiar. That allowed me to evaluate the risks from the business standpoint and come out of the process confident we’d done as much as possible to ensure the right decision. And no, we have no regrets.
Image credit - via free images
Disclosure - SAP and Rimini Street are premier partners at time of writing