Calculating ROI for SAP Managed Hosting: Vendor Management

This is the second post in our series on calculating return on investment (ROI) for SAP outsourcing. The first post described how we created a list of cost components, and how our list can help prospective SAP Managed Services customers gauge their actual or potential ROI.

That first post also discussed employee expenses related to operating / support costs. Now let’s address vendor management, a cost factor that often goes unnoticed, perhaps more so than any other item on our list.

Many larger companies have their own in-house vendor-management offices. These offices manage vendor relationships and contracts, and monitor vendor performance as defined by service-level agreements (SLAs). This work can become quite substantial when you consider all the different vendors involved with servicing a data center, from network and hardware to air conditioning and electric.

For small to midsized businesses (SMBs) that may not have formalized vendor-management offices, the varied vendor expenses are more likely to slip through the cracks. SMBs in such a situation stand to miss out on warranties and penalties stipulated for vendor performance and warrantees. This illustrates one key advantage of outsourcing SAP IT support to a reputable partner like itelligence: Vendor performance is far easier to track when you only have to manage a single vendor / partner who takes responsibility for the entire SAP Support Service.

The one-vendor model also presents an operational edge. Documentation, such as invoice verification, becomes much simpler. Also, when it comes to purchasing components for on-premise data centers or planning for larger enhancements to SAP, companies usually have to undergo a formal RFI / RFP process. With itelligence as a dedicated SAP Full Managed Hosting provider, this step can be removed as the trusted partnership leads to the right resources at the right time.

If you’d like to receive our full, completely free SAP Managed Hosting ROI Calculator reference tool, just email us at We will also discuss the full spectrum of Managed Services cost components at this week’s Outsourcing In Your SAP Environment 2011 conference. Our session is titled, “How to achieve quick ROI and maximum value when using hosted applications or technical services.” You can also visit us at booth #510.

Be sure to subscribe to this blog to receive updates for the remaining posts in our series on calculating ROI for SAP Full Managed Hosting. For more information on our SAP Full Managed Hosting services, click here.

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