Tuesday, September 9, 2008

Trends: What Customers Want From Maintenance And Support

One of the hottest topics this year has been maintenance and support. With many vendors contemplating another price hike, customers increasingly ask where's all that money going. The dirty secret - many vendors typically take up to 85% of the fees as profit, leaving a paltry 15% for reinvestment in support, maintenance, and upgrades. What's worse, some vendors have not only under invested in the core technology, but they have also failed to deliver basic enhancement requests that a majority of customers have asked for. Below's a top 10 wish list that customers are asking for from their vendors (in classic Letterman style):

10. Web based self service driven user support communities
9. Knowledgeable and culturally appropriate support professionals
8. Fixed pricing with no CPI or other inflationary price increases
7. Transparency into functionality and enhancement and prioritization
6. Time and materials billing for products outside of vendor stated support policies
5. 24/7 follow the sun support
4. Service level agreements for response times and quality of resolution
3. Transparency in how much of the maintenance and support dollar is reinvested versus how much is going to profit
2. Choice in support options and packages (i.e. tiered maintenance options)
1. Option for third party maintenance

Bottom line
Some major ERP vendors, especially those in the more competitive midmarket, have seen the light and are beginning to take steps towards delivering on the above wish list. It goes to prove that competition keeps everyone honest. However, those customers who are "locked in" to a vendor, need to organize and band together to create the right leverage with vendors who are hell bent on milking their customers for all their worth in the maintenance dollars. Start the movement with your user groups or other industry trade groups. If you fail to organize, well, you'll know it when you find yourself locked in.

Your turn.
Are you finding that your long term costs to keep the lights on continue to grow? Would you rather spend 80% of your budget on innovation and new projects instead of commoditized back office processes? Would you like to organize with other customers to affect change. Look forward to hearing from you! Feel free to post your comments here or send me a private email at rwang0@gmail.com.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2008 by R Wang. All rights reserved

173 comments:

Ari G. said...

Our vendors have us in this CPI + 5% mode for maintenance. At this point in time, we are spending almost 30% a year on maintenance fees. Our user groups aren't doing much to address this. Any advice on how to make an impact?

Atul V. said...

I would like my vendor to stop jacking up maintenance rates and focus on the enhancements we thought our support dollars were paying for. They need to stop charging for new modules that are "not included". There is a complete violation of trust when this happens.

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Our ERP user group (which is not run by the vendor) ran an anonymous survey of support costs that revealed some surprising results.

Annual charges varied, the highest costing 2.5 times as much as the lowest, measured on a cost-per-seat basis. We excluded the cost of supporting modifications implemented by the vendor.

You could add cost transparency to your wish list, I reckon.

The most expensive call resolution cost was a staggering £12,000 (GBP) per call, caused by a large number of seats and a small number of calls about a mature product.

Another interesting thing turned up when users examined their support contracts. Most, though not all, users had a perpetual licence to use the software. They pay for support and not for permission to use it. This opens the door to third-party support.

I fully support your advice to users to band together. It only takes one dedicated person to turn up at a user conference with a pack of business cards to start the ball rolling. Ammunition to back you up next time renewal comes around would be very handy in the current financial crisis ;-)

AbtechSupport said...

For Siebel, third-party support is still alive.

www.abtechsupport.com/Siebel-Software-Support

We are group of ex Siebel Technical Support Engineers and consultants dedicated to better service at 50% of what Oracle charges.

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love to see this discussion! It’s great to see you all working through the issues and also, it’s great to see recommendations for testing. In the end, it’s what your actual users do and prefer that should be your biggest driver in making these decisions.
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So after the censorship of photos that showed a lil skin that in my opinion should not be censored, banning +MG Siegler 's display pic for a finger, Universal's complete control over taking down content on youtube like they have with +TWiT through tools that have been given to them by google.
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This mosaic really made me smile. Helen's work is a constant inspiration for me. Thanks so much for making my G+ Experience so much more beautiful, +helen sotiriadis :) (And look, she has free calendars for you!)
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I shot this in a bus stop. Glamorous! The sun was illuminating a blue poster behind her head creating a lovely blue bokeh. I created the soft light on her face with one strobe (580EX) shot through an umbrella positioned really close to her face (about 2 ft). One other flash was positioned behind and to the right of her to add a bit of white background light.
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In our family portrait, we look pretty happy
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some great tips here to round out your plans, from the good peeps at +Radian6. It's good to have a 12-month plan, but be sure to also break into quarters. So much changes in the social media landscape; even though many of the platforms are becoming more mature, what worked last year may not work this year.
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Okay, even better: Listening to Nyan Cat and playing Diamond Dash = <3
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Oh gosh... Did I leave that picture in there with my hair messed up in the thumbnail...? Darn instant upload. lol...
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And surprise! What do they find, but, between Tuesday and today, a number of transactions that aren’t mine. Road toll payments (when we don’t have a car: amusing). Movie tickets from a Dublin-area omniplex (when we haven’t left the house since last Friday: I’m still fighting with this sinus infection and haven’t been out a lot.) And then a transaction at a point-of-sale somewhere in Ireland that emptied out the account. (There wasn’t a vast amount in there right then… but it’s all gone now.)
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Now that's a cool use for SoundCloud! I usually just see people posting music but it's nice to see people posting talks and discussions. =)
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Missing out the cracks in the pavement
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