This case study is sponsored by Rimini Street.
Color Spot Nurseries is a wholesale nursery that grows, markets and distributes a range of plants and flowers to more than 2000 retail and commercial customers in the western and southwestern United States. Color Spot specialises in the distribution of high-quality bedding plants, vegetables, herbs, shrubs, premium blooming plants, ground cover, ornamentals, and more.
Established in 2001, the company operates 12 production facilities throughout the US and ships to customers including Home Depot, Lowes, Wal-Mart, K-Mart, Rite-Aid, Kroger and Orchard Supply in 26 states.
Since 2001, the company has relied on its SAP R/3 4.7C implementation for mission-critical operations, including ﬁnance, human resources and payroll processes. The company also continues to grow aggressively through acquisitions and expand its SAP instance across all entities.
An internal audit in late 2009 showed that SAP vendor maintenance fees consumed over 20 per cent of the total IT budget. At the same time, SAP had announced that it would no longer provide support for release 4.7C, which would have forced Color Spot to undergo an upgrade to ECC 6.0, or else face de-support.
In 2010, Color Spot’s chief information ofﬁcer, Eric Robinson, made the decision to switch from SAP to Rimini Street for support of its SAP landscape.
“The number-one driver by far was the current steep cost of vendor maintenance compared to the value we were receiving,” said Robinson. “I have a ﬂat IT budget, and we went from 20 percent of the budget for SAP support to nine percent with Rimini Street Support. That’s real money I can use for other forward-looking strategic IT initiatives.”
Color Spot was immediately able to cut its maintenance budget by 50 per cent, gain support for customisations at no additional cost, and receive guaranteed support for the company’s existing SAP R/3 release for at least another decade. The switch to Rimini Street support for SAP has enabled Color Spot to avoid costly, disruptive upgrades that would have been performed for the sake of continuing support. Color Spot also utilises the Rimini Street Tax Engine for SAP Payroll, and receives regular tax, legal and regulatory updates that keep the organisation in compliance with changes taking place at the local, state and federal levels.
Expanding the SAP footprint
Since transferring support to Rimini Street, Color Spot has aggressively managed its business to optimise market opportunity and streamline internal operations, including making acquisitions to enter or consolidate markets. To enable this growth and expansion, Color Spot has expanded its use of SAP, including the purchase and deployment of new SAP licences.
“In ﬁve years we will still be running SAP R/3 4.7 but we will have built signiﬁcantly around the edges of our core ERP system. For example, we have developed, and will continue improving, a web portal that enables orders to be entered and inventories to be taken for our team out in the Home Depot stores. We plan to signiﬁcantly expand its functionality. We will have other add-ons to SAP that we have either bought off the shelf or built ourselves – for example, DRP, APO and CRM. It is likely we will have heavily modiﬁed SAP to work exactly the way our user community needs it to maximise their efﬁciency (again, for example, Order Entry needs streamlining).”
Recognition for best practice IT management
Robinson was named a winner of the 2014 CIO Impact Awards by Frost & Sullivan in the Enterprise Architecture category, for enabling Color Spot to opitmise its market opportunity, streamline internal operations and grow its SAP footprint through the innovative use of Rimini Street independent support for its SAP environment.
“I would say I am able to leverage best practices, because I consider best practices to be what is most efﬁcient for the business – not what a software vendor says is best practices. We now make the software do what we want rather than the other way around, and Rimini Street is a big part of that process. The only thing Rimini Street does is support – it is not simultaneously a software factory – so it makes sense that Rimini Street is acting as a formulator and executor of best practices in maintenance and support,” he said.
“Three years ago, we made the critical decision to switch from SAP vendor support to Rimini Street and we couldn’t be happier with the decision and the results. Their support model works as advertised and we have been able to achieve great success, including reducing our software maintenance costs from 20 per cent to only 9 per cent of my overall IT budget, and signiﬁcantly improving the level of support we receive,” said Robinson.
“Today, Rimini Street is much more than a vendor – I consider them a valued partner and extension of my IT team, especially during this important period of growth and expansion.”