Enterprise IT spending is a very sensitive subject these days. Cost control is top of mind from the C‑suite to the front lines. But it’s hard to control your IT costs if you can’t predict them. And if you’re running SAP, predicting your costs may be very difficult indeed.
The challenges lie in the inherently variable pricing model that SAP employs. Multiple pricing engines tied to variable business metrics or KPIs can make it difficult to predict on-going costs. Licensing costs can fluctuate with dimensions as wide-ranging as the size of the operating budget, tonnage produced, or average processed transactions/trips per day, often elements that are not taken into account when IT budgets are set for the year.
This issue is confirmed in Gartners Vendor Evaluation Report, that specifically refers to how SAP’s complex pricing structure obfuscates costs and can lead to unexpected expenditures.
SAP’s customers agree – in a 2012 study by SAP’s UK and Ireland User Group, an overwhelming 95% of respondents felt that SAP’s licensing model was overly complicated. A majority of SAP customers responding to that survey echo this issue and call out that they find it difficult to keep track of their license usage citing instances of paying for modules that are installed automatically—even when they’re not being used.
Customers and analysts have shown that Microsoft Dynamics AX offers lower cost of ownership than SAP, but equally important, better control of the ERP solution costs. With Microsoft Dynamics AX all functionality is included in the initial license, so customers only need to add user and server licenses as they grow or extend their implementation, this transparent approach leads to predictable and more manageable IT spend year after year.
Today more than ever, uncertainty equals risk, how much can you afford to gamble with SAP?