Many companies in the mid-market sectors of the economy are reviewing their IT systems and contracts.
While this may create good opportunities for service providers, Marlon Reddy, managing executive at Business Connexion`s Combined Design Engineers (CDE) Competency, says the mid-market companies are now a lot more savvy and are demanding more from possible IT partners.
"Many companies currently have older and disparate versions of ERP software. However, service providers are having to work much harder and provide real business cases for upgrades and enhancements," comments Reddy.
Having said this, Reddy also points out that many companies are approaching the end of their service/maintenance contracts.
"The end of service contracts could mean that companies will end up paying a premium on service and support. In these instances it makes good financial sense to implement an upgrade that will deliver better operational function, but also brings the additional support with the upgrade," explains Reddy.
It is therefore important for companies to have a lifecycle strategy that can be implemented and budgeted for going forward.
"Companies need an upgrade strategy for all their systems, from the technical architecture to the ongoing support of their business systems. Some of our clients do have these strategies in place, but we often assist them with the timing and extent of upgrades - all of which have to be based on sound business plans."
Users need to consider implementing either a stepped upgrade or a once off, all-encompassing business solution. There has also been a shift from vendors, who are looking to accommodate licensing needs. Reddy says there has been a marked increase in licensing options - especially attractive to mid-tier companies.
"It is clear that a one-size-fits-all offering in the mid-market is long dead. Service providers have to look at bringing industry knowledge and best practice to the table and offerings need to be tailored to each company. Quick, efficient and cost-effective delivery is not negotiable."
Many companies in this market do not have in-house IT support which makes a remote support offering much more attractive. Reddy says the economies of scale achievable through off-site support are attractive to smaller companies as resources are shared.
"The ability to support much more than just SAP remotely has become attractive to the mid-market company. Remote support from network level up has become a viable option and we have seen a marked increase in the uptake of these services from this sector," says Reddy.
While Reddy comments that the size of the deals in this market have remained fairly small, the number of deals signed has increased, boding well for players in this arena.
"Vendors are paying a lot more attention to this market, developing and selling add-on 'packaged` solutions for stepped upgrades rather than the big-bang options available a few years ago. These choices have increased the possible business out there. Our approach of working out solid business cases for each client and supplying exactly what is required is assisting us in closing deals," Reddy concludes.
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