Over the last 50 years, SAP has become one of the largest Enterprise Resource Planning software distributors globally. What started off as finance management software has gradually evolved into a business application suite that spans more than 50 functional modules. Not only has the wide-ranging scope of SAP’s modules added to its technical complexity, but each module requires its own specialized sets of skills and knowledge to run effectively.
As companies continue to expand the scope of their SAP projects, they must choose between hiring new specialists and technicians or partnering with a knowledgeable Application Management Services (AMS) provider.
What Is Application Management Services?
Application Management Services is an outsourcing option where businesses partner with an IT service provider to manage, maintain, and provide user services for the SAP systems. IT service providers offering AMS services should have years of transferable experiences that will be invaluable for companies looking to improve and expand their SAP systems. Service providers simply access the SAP systems externally and carry out their functions as an internal IT team would.
Levels of Application Management Services
No two companies are alike. Your company’s needs are unique, and choosing the right amount of support for your business is paramount to the success of your business relationships. That’s why there are numerous different levels of Application Management Services outsourcing that companies can engage in.
If your business faces time-sensitive projects or strategic initiatives, you can partner with an AMS provider for short-term coverage of your everyday management tasks. This allows your internal teams to focus on mission-critical functions without being bogged down.
A hybrid AMS agreement is another great way for companies to cover any gaps in their support structure. So, whether you’re looking to expand your application capabilities, lose key personnel, or simply don’t have the necessary staff to keep your SAP environment running smoothly, an Application Management Service provider can provide critical assistance where it’s needed the most.
Of course, the most beneficial model is outsourcing the entirety of your application management. While all forms of AMS outsourcing can benefit an organization, letting an AMS provider handle the entirety of your functional support allows them to truly maximize your return on investment.
Benefits of Partnering with an AMS Provider
No matter how much or how little support you need, a good AMS provider can help you assess your company’s situation and craft a plan to propel your business forward. The benefits of partnering with an AMS provider should not go unstated. Whether you need to reduce your IT costs, scale your operations, or provide better response times, an AMS provider can help you achieve your strategic goals. Here are the top 5 benefits you receive by using application management services.
1. Reduced Operating Cost
One of the most significant pain points companies face today is rising costs. While many associate IT costs with tech stacks and critical infrastructure, personnel costs have begun to cut deeper into budgets than ever before.
Experienced IT professionals who understand the intricacies of SAP modules are hard to come by. Talent is so scarce that a survey conducted by Robert Half Technology found that 89% of the 2800 IT decision-makers surveyed have trouble finding skilled employees to fill openings.
Even if you can find an IT specialist who can fulfill your company’s needs, you must be ready for the high price tag of a new in-house employee. For example, an IT expert capable of managing your SAP modules can run anywhere between $125,000 and $175,00 with a complete benefits package. Depending on the number of modules you need to be managed, the cost of labor can quickly balloon into millions of dollars a year.
Partnering with an Application Management Service provider can help reduce the strain that increasing labor costs have on your company’s budget. A good AMS provider will help you find the right support plan with a TCO that makes sense for your company.
2. Scalability
Workforce instability is a constant issue facing IT leaders. LinkedIn Corporation found that IT had the highest industry turnover rate at 13%. High employee churn not only hurts your company’s bottom line. If you’re unable to retain top talent, keeping your systems maintained can become an arduous task.
If you’re having difficulty maintaining your current systems due to employee attrition, scaling your IT systems is virtually out of the question.
This is where an AMS provider can help. Outsourcing to an experienced partner allows you to increase the scale of your SAP systems without having to worry about the adverse effects of losing key employees or navigating a hyper-competitive labor market. In addition, your AMS partner will have access to top talent that can help expand your current systems and keep your end-user experience running smoothly.
3. Technological Advancement
Partnering with an AMS provider for SAP can immediately enhance existing systems. Instead of onboarding new IT specialists, or seasoned professionals who know their way around a single SAP module, AMS gives you access to an entire team of experienced professionals.
IT servicers have provided AMS to a wide range of clients for years. The teams you’ll be working with are experienced in refining SAP systems to optimize clients’ end-user experiences and push innovative solutions. These experiences help service providers optimize existing systems at the start of every new client relationship.
4. Internal Flexibility
External issues such as the small IT talent pool and workforce instability inevitably lead to time constraints on internal IT teams. If your internal IT team is constantly having to focus on ensuring things run smoothly, they won’t have the time needed to push the needle forward on the company’s strategic IT goals.
Partnering with an AMS provider takes the responsibility of day-to-day application management off your CIO and other key professionals so they can focus on strategic initiatives like digitalization and modernization. Considering these initiatives are essential to continue long-term success, freeing up your key IT personnel to focus on them is paramount.
5. Faster Response Time
ERP systems like SAP have reached such a level of depth and complexity that even seasoned experts cannot master every module. So, unless you have a team of well-versed employees for every SAP application your business runs, responding to end-user issues or outages can take a long time.
Since time is money, resolving issues quickly is critical to maximizing your company’s ROI. AMS providers have professionals experienced in every area of SAP. So, when a problem arises, your strategic partners will be able to deliver swift and consistent responses to any issues that arise.
AMS Models to Consider
When choosing an AMS provider, there are three different support models that businesses should be aware of: the “One Region for All” model, the “In Region, for Region” model, and the “Follow the Sun” model. Each has its own advantages and drawbacks. Not all models are a good fit for every company, so choosing a provider that offers a model that suits your business’s needs is imperative for a successful AMS partnership.
1. One Region for All
As the name suggests, this model relies on providing support services for a single geographical region. So, if an IT service provider is headquartered in the U.S., all their clients will be serviced during standard U.S. working hours.
Advantages
The “One Region for All” model is one of the most popular support models on the market for a reason. Since all support is provided from a single region, communication is streamlined, and requests tend to be taken care of quickly and at a low cost. Seamless documentation processes, cost transparency, and a single point of contact make this an attractive option for many small and medium-sized businesses.
Disadvantages
The main disadvantage that clients will have to deal with is the time offset. Of course, if your business is in the same region as the service provider, then you’ll have a much easier time. But even so, restricting your support team to a single region means that you likely won’t be able to get assistance during non-standard work hours.
2. In Region, for Region
Service providers offer this specific model with support teams across various regions. So, instead of servicing all clients from a single region, clients will work besides support teams in their own region. This is especially useful for larger companies with locations around the globe.
Advantages
This support model ensures cultural and linguistic unity between the client and support teams. And since these support teams are in the same regions as their clients, their standard work hours will be the same. As a result, businesses also won’t have to contend with software localization issues.
Disadvantages
The most significant drawback associated with this model is the high level of collaboration needed to make the model successful. There needs to be constant communication between the service provider’s central office, regional offices, and the client to ensure that will require much work for managerial staff.
3. Follow the Sun
The “follow the sun” model is essentially an around-the-clock service model. Support is available on every continent during local working hours.
Advantages
The advantages of this model are essentially the same as the ‘in region, for region” model. However, this model allows additional support during non-peak hours should a significant issue arise. Major support tickets will be passed on to the next working region if needed.
Disadvantages
This support model only makes sense for international corporations with workers tending to customers around the clock. The level of coordination necessary is higher than any of the other models discussed, and central control is paramount to the model’s success. The “in region, for region” model will better serve most companies.
Partnering with the Right AMS Service Provider
Choosing the right AMS provider is not a small task. Businesses need to seriously consider whether or not a servicer is the right fit. When choosing the right partner for AMS, you should consider the size, experience, and location.
When assessing a service provider, make sure that they are large enough to provide the support you need but not so large that you’re likely to be neglected in order to tend to larger clients.
The experience level of an AMS provider is also critical. You want to ensure that your partner has a wide range of employees specializing in different areas of SAP. You should also ensure the provider’s employees have any relevant certifications. This ensures that they have the relevant skillset to assist your IT teams and means they comply with specific standards.
Lastly, make sure that the AMS provider has support teams available in the areas where your business has a physical presence. This will ensure that your teams work with experts who understand their culture, language, and work in the same time zone. If you’re an international company with a presence in dozens of counties, you should look for a service provider that has support teams in those counties.
Syntax for AMS
Having a dedicated support partner to help maintain your mission-critical applications is necessary for your business’s long-term success. Having the right Application Management Services partner can make all the difference.
For more than 50 years, Syntax has been providing technology solutions to businesses of all sizes. We are an SAP Gold partner and the first IT servicer to gain certification for providing AMS services to SAP S/4HANA users.
We utilize a nearshore support model, so your tickets are always handled in-region. Our customers have found this model to be more effective than our competition’s traditional far-shore India support model.
If you’re ready to take your SAP systems to the next level by partnering with Syntax for Application Management Services, contact us today. Our SAP experts are prepared to help your business take advantage of all the benefits that AMS for SAP has to offer.