One company, Spinnaker Support, recently announced that it acquired Versytec, which will get them into the J.D. Edwards third-party support business. Add that to Rimini Street – which does third-party support for several Oracle and SAP products – and it looks like the third-party support market is growing.
What do you think about third-party J.D. Edwards support? Should JDE shops consider it? What are the pluses and minuses?
Whenever anyone thinks of maintenance or extended warranty costs associated with buying a product, they always view it as a dark cloud they wish they could avoid. Similarly when software is purchased, those in charge of the budget want to minimize lifetime costs, especially when considering today’s high costs of annual maintenance agreements. That gives you some idea of what drives software shops – and in this instance J.D. Edwards shops – to consider alternatives when it comes to supporting the software via annual maintenance support contract and their annual fees. Using J.D. Edwards third-party support is one option.
We tend to look at maintenance costs as an “albatross around our necks” and not as a value-add asset for end users. Employees, prospective clients, customers and vendors are all touched in some way by the reach of our JDE ERP functionality. And it is typically through these entities that our recognition of the need for software enhancement is driven. And this feature is a major factor to be considered when deciding from whom to purchase maintenance.
So when picking a maintenance plan, we can:
- Pay the predetermined annual fee to Oracle
- Pay nothing and receive no services from Oracle and perform needed services in-house
- Select a JDE third-party support provider who seeks to replicate services that Oracle would otherwise provide, but at a lower cost
The primary attraction of JDE third-party support is cost. Third- party support, depending on the level purchased, can be substantially lower than that of the software vendor. Another plus is that in many instances, the third-party support provider will be willing to tailor a custom type of support program to your precise needs, such as helpdesk features. Another plus is that the third-party provider tends to offer a very high level of customer service to offset some of the features that are lost by not contracting maintenance with the software vendor, and to cushion the ride away from the vendor.
The negatives are that you typically must decide early on that you are not going to upgrade your software along the timed path of general releases. If you use the software in an “out of the box vanilla” state, this is a big minus because you lose enhanced best practices and industry functionalities, and this is a big consideration in light of the growth and expansion of software today in an ever challenging business landscape. Software obsolescence should be measured against the growth path of your organization. Software will tend to more quickly become obsolete in 2012 than it did in 1985, and this could affect your business.
Another minus is that when you encounter a software problem, it could take longer to get the fix from a third-party support provider.
Yet another negative is that you lose access to the Oracle Support site that many end users tap on a daily schedule to maintain and use the software. You also lose that direct-from-the-producer “bug fix” feature. In the case of Oracle’s management and testing of electronic software updates (ESUs) and application software updates (ASUs), this is a major factor.
Potential litigation should also be considered. Oracle could sue the third-party support provider, and while the third-party support provider may have a strong defense, the cost and time of litigation could impede services.
The bottom line is that business leaders must always consider alternatives whenever decisions are made, and based upon the unique characteristics of the business, the specific list of pluses and minuses can be created and ranked accordingly. In my opinion, once users have software vendor support, it is difficult to move off. But the cost considerations must be acknowledged and hence that is usually the major driver in almost all business choices.
Finally, you should also consider the implications – financial and otherwise – of a backward movement to Oracle in case the third-party support provider doesn’t work out. That way you have covered all your bases.
This was first published in March 2012