Instead of being forced to upgrade and abandon costly vital customizations, the company just switched to an authorized support vendor.
FP Corporation (FPCO), the largest maker of plastic food containers and related packaging materials in Japan, has reduced the cost of its annual SAP software support fees by 50%, and also deferred a costly migration to S/4HANA while the company evaluates options over time for its next-generation ERP platform.
FPCO focuses on utilizing technology to maintain its leadership position in the manufacturing and marketing of disposable food containers in Japan. In 2015, the company was recognized as a ‘Competitive IT Strategy Company’ by Japan’s Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange for successfully implementing a supply chain infrastructure network across Japan, with supply chain management enterprise software at its core.
The strategy was implemented to organically-connect and advance FPCO’s development capabilities, purchasing power, manufacturing capacity, distribution, recycling and information networks to ultimately improve its customer service levels. As part of this strategy, FPCO relies heavily on its stable and mature SAP platform, which has been highly-customized with many add-ons to meet its unique operational and business needs.
After SAP raised its annual maintenance fees, FPCO reassessed the value of SAP support costs and realized it could no longer justify the expense to remain supported by the vendor. FPCO then evaluated third-party support to optimize ERP platform expenses and maximize ROI for its SAP environment.
Said Yuuki Hashimoto, VP of IT, FPCO: “A few years ago, our SAP maintenance fees went up. This heightened the concern around our maintenance spend and when we assessed the value of our spend, the maintenance increase made the return-on-investment even less attractive internally. We had also considered moving to S/4HANA but could not support a reasonable business justification due to the huge cost to upgrade, the disruption to our business, and the many add-ons that were developed for our customized environment that we would have to leave behind.”
Instead, FPCO found a vendor that could help it circumvent the problems. By switching to Rimini Street Support in their overall IT strategy, FPCO saved on paying for the difficult system upgrades, instead channeling the resources to stabilize current operations, enhance the functionality of existing applications to improve business operations, and invest in new technologies, Hashimoto said.
Averting vendor lock-down
FPCO had performed due diligence and evaluations of actual testimonials of users before choosing their new support vendor. It has been assigned a Primary Support Engineer (PSE), backed by a team of functional and technical engineers available 24/7/365, who have an average of 15 years’ experience in the client’s enterprise software applications. Its service level agreements (SLAs) with the vendor come with a guaranteed response time of 10 minutes for critical (P1) issues.
Said Yorio Wakisaka, Regional GM Japan, Rimini Street: “Like many other SAP licensees, FPCO could see no justification to migrate to S/4HANA at this time. By switching to (us), FPCO was able to increase and maximize the ROI from its existing SAP system, and the company can now take its time to develop an ERP platform strategy and roadmap for the future that is driven by the business’ needs instead of the vendor’s. We will continue to support FPCO and help it optimize annual IT costs, which will enable it to further improve its service levels with a robust supply chain management (SCM) system at its core.”