Taxation has become a hot subject in technology circles. No, it's not government-related forms of taxation we're talking about here. The taxation discussion in technology has to do with costs companies must bear in such activities as integration projects and to upgrade systems, costs that many believe prevent companies from spending technology funds more effectively.
The subject of the "IT tax," as it has become known, is one that the membership of the Americas' SAP Users' Group (ASUG), the independent 2,000-member SAP user group, has been spending a considerable amount of time dealing with, particularly in regard to software upgrades. In a recent conversation, ASUG president Rod Masney said that there are three key issues with regard to upgrades: establishing the business case for them, minimizing downtime during an upgrade, and reducing the testing cycle.
"Some members are also doing consolidations," Masney says. "The question is, How do you manage total cost of ownership [TCO] and get more bang for the buck?"
Masney, whose full-time job is global director of IT infrastructure at packaging manufacturer Owens Illinois, which is engaged in a global rollout of SAP software, says that this year is shaping up to be a time in which many ASUG members will be upgrading their systems. For example, he says that about 75% of the companies that attended a recent ASUG symposium on upgrades are planning to undertake the activity this year.
At its Sapphire conference in April of last year, SAP announced formal availability of the newest release of its keystone product, mySAP ERP 2005. At that time, SAP officials said they expected a more rapid customer transition to the 2005 release than they saw with the 2004 release.
But Masney says there had been some confusion among ASUG members over which release was the "go-to release," a problem that was cleared up in September by SAP executive board member Shai Agassi. As a result, Masney says, more ASUG members are planning to upgrade in 2007.
ASUG has conducted what he calls "voice of the customer" surveys and has met with Agassi to communicate the results. Surveys have addressed such subjects as service and support, upgrades, and even globalization, which involves how companies can better deal with multiple markets, languages, and legal requirements with TCO in mind, Masney says.
"Shai has challenged ASUG with identifying the IT tax, where TCO can be bettered," Masney adds, noting that the reports are confidential. "Some of the data is an awareness of customer perceptions. Some things Shai will take away and act upon, but we can't tell him what to act on."
Masney will conclude his one-year term as ASUG president this month. A successor is expected to be elected at the ASUG meeting held in conjunction with Sapphire in Atlanta April 22-25.
This article originally appeared in the April 2007 issue of Managing Automation.