Welch's CIO finds $1M savings with new software support vendor

Dive Brief:

National Grape Cooperative subsidiary Welch's is using Rimini Street to support its Oracle E-Business Suite (EBS) application and Oracle database software, according to an announcement Wednesday.
The move to Rimini Street services allowed Welch's to avoid committing to another contract with Oracle Support.
Welch's was able to redirect cost savings on Rimini Street in IT, which led to the hiring of an additional security analyst and new security software. The savings also benefited other co-op departments, like Welch's product development, adding sparkling Rosé to its portfolio.

Dive Insight:

CIOs have to abide by the requests set by their CEO and board of directors. Satisfying both is a difficult task when more often than not, one is asking for cost reductions. But Welch's CIO says he was able to do both, delivering savings and improved security.

Support and maintenance on Oracle Support for enterprise software maintenance accounted for 12-15% of Welch's overall IT budget, which represented the largest spend, according to the announcement.

Before the move to Rimini Street, Welch's tried negotiating support and maintenance costs with Oracle, namely a reduction in fees associated with unused modules on its current ERP, according to the announcement. The only solution was a software upgrade. Oracle declined to comment.

The software management market is worth about $250 billion, according to a Campaign for Clear Licensing report, and companies often spend a large sum of IT budgets on software maintenance support.

Maintenance issues are one of the most common reasons businesses sever ties with vendors, but unlike Welch's, most companies aren't fully aware of the quality or volume of support the vendor provides, according to the report.

Often the lifecycle of support and maintenance software cycles through purchase, option to upgrade or moving on to another provider. Rimini Street is among other third-party support vendor like SAP, Terix and CedarCrestone.

The grape juice manufacturer considered the upgrade and moving various applications to the cloud but concluded it would result in a lackluster business value delivery. "One of the crowning achievements of my career as CIO was to break the hamster wheel of Oracle Support," said Dave Jackson, Welch's CIO, in an interview with CIO Dive.

Maintaining reliance on Oracle Support and giving into the upgrade could have taken nine to 12 months, said Jackson. Upgrading all systems attached to Oracle would have cost the co-op not only time, but the "diversion" of resources across co-op departments.

The move is yielding the co-op a savings upward of $1 million annually, he said.

While those savings have been dispersed across internal organizations, it allowed the co-op to reinvest in security without having to increase the overall IT budget. The decision to invest in security was "just coincidental" in accordance with the industry's current climate.