How Nottinghamshire County Council saved loads of money on SAP
Nottinghamshire County Council has extended its third-party SAP support contract with Rimini Street as it continues to manage the cost of its ERP Core Components (ECC) system.
The council’s enterprise resource planning (ERP) system, which went live in November 2011, provides support for back-office functions such as payroll and accounts receivable.
Describing the journey to swapping SAP maintenance and support for a third party, Sarah Stevenson, group manager of the business services centre at Nottinghamshire County Council, says austerity measures meant it needed to identify areas where it could reduce costs.
“We have had to look to deliver savings, and started with the low-hanging fruit,” she says. “We were looking to deliver savings and came across big-ticket items, support and maintenance. Our journey with third-party support began in 2015.”
At that time, says Stevenson, the organisation had not reached a high enough level of maturity in terms of knowledge to support ECC across the council, so it continued with its implementation partner, CGI, and a direct relationship with SAP.
By 2017, Stevenson and the team at Nottinghamshire County Council were confident enough in their own SAP capabilities to make it feasible to move off the SAP maintenance and support contract. The council revisited the option of third-party support. Patching the SAP system was costing £100,000 per year.
“I had a savings target,” says Stevenson. “We have our own centre of excellence for first-line support, and when looking at capabilities and savings, third-party support was the right thing to do. It has enabled us to deliver the savings we required,” she says.
Rimini Street was invited to tender for the SAP support contract. The council wanted to retain CGI for second-line support and was keen that Rimini Street and CGI would be able to work together effectively to fix any issues that may arise in Nottinghamshire County Council’s SAP ECC and Business Objects systems. The council subsequently signed a two-year contract with Rimini Street, which has now been renewed.
Justification for HANA, or not?
Standard support for SAP ECC has been extended to 2027. Extended support is available until 2030, but the ERP company is keen to migrate existing customers to its S/4HANA cloud-enabled, in-memory platform.
With an ageing SAP system, Stevenson’s team looked at S/4HANA, but the cost made it unviable. “It was one of the options for us, but there was no viable business case,” she says. “Our existing system does the job it needs to do, and financially, S/4HANA is expensive.”
Stevenson found that in dialogue with SAP, the S/4HANA sales representatives tended to present use cases from other countries which were not realistic for a local authority. She says one example SAP gave was the drainage system in San Paolo, Brazil, but “we don’t have those kinds of issues here”.
Sarah Stevenson, Nottinghamshire County Council
According to Stevenson, there is no real drive to migrate off the SAP ECC ERP platform. “I have a duty of care as a public servant,” she says. “When you have a system that does the job, the investment needs to be on the front line. How do you get a return on investment? It didn’t stack up.”
Another factor is that due to the Covid-19 pandemic, many organisations are reconsidering what they do next from an IT strategy perspective. Over the past 10 years, IT would typically have embarked on a large-scale transformation programme, centred around a fully integrated ERP. But the enterprise software market has moved and there are other options available to IT departments, such as the ability to integrate and loosely couple different enterprise systems together to support internal processes.
Stevenson says one of the benefits of Rimini Street is that it offers a 15-year support guarantee, which means Nottinghamshire County Council can continue to run SAP ECC and have it supported for many more years. “We now have support guarantees [so] the council can look at other cost-cutting programmes,” she adds.
When asked how Rimini Street works alongside CGI and the in-house support team, Stevenson says the three parties have come together well, and the way support is divided between in-house, CGI and Rimini Street is a good combination. Along with support, she said the council also receives advice from Rimini Street.
Nottinghamshire County Council no longer has a supplier relationship with SAP. Stevenson had an open dialogue with the management and the IT team at the council to evaluate the risks, the benefits of third-party support and overall savings. “I think more people should take the plunge,” she concludes.