Oracle ERP Support for Manufacturing: Is Third-Party the Better Fit?

Introduction

Global manufacturing enterprises running Oracle ERP platforms, such as E-Business Suite (EBS), JD Edwards, and PeopleSoft, face critical support and maintenance decisions. Oracle’s support model can be costly and comes with strict timelines for upgrades, which may not align with the needs of a manufacturing business. In recent years, third-party support has emerged as a viable alternative. Gartner research notes a sharp rise in companies using independent support providers, with nearly half of enterprises exploring third-party support contracts by 2021. This trend is driven by promises of lower costs, more flexible services, and extended life for stable systems.

Determining whether third-party support might better fit their Oracle ERP environments is crucial for manufacturing CIOs and procurement leaders. Manufacturing operations have unique considerations – from the need for 24/7 plant uptime to heavy system customizations and regulatory compliance. This article provides a Gartner-style advisory analysis of Oracle’s support versus third-party support, focusing on manufacturing industry needs. We will examine the key industry-specific considerations, compare Oracle’s Premier/Extended/Sustaining support to third-party offerings, and outline strategic benefits such as lower total cost of ownership (TCO), risk mitigation, longer software lifespans, and improved support for customizations. We’ll also discuss how third-party support can help regulated manufacturers (like pharmaceutical, aerospace/defense, and automotive companies) and how it can buy time for modernization (e.g., preparing for cloud ERP). Finally, we outline what manufacturing CIOs and procurement teams should do as next steps.

Manufacturing ERP Considerations and Challenges

Manufacturers rely on their ERP systems to run mission-critical processes – from supply chain and production scheduling to finance and quality management. This reliance means that support requirements for ERP in manufacturing are especially stringent. Key considerations include:

• Maximizing Plant Uptime: Any system downtime can halt production lines in manufacturing, causing costly delays. Support must be highly responsive and available 24/7 to quickly resolve issues and prevent or minimize outages. Fast resolution of ERP problems is directly tied to maintaining high plant uptime and meeting production targets.
• Stable System Lifecycles: Manufacturing plants often run on proven, stable software versions for years. Unlike some industries that push frequent upgrades, manufacturers value long-term stability and predictability in their ERP environment. They prefer to avoid disruptive upgrades unless there is a compelling business benefit. This means an older Oracle ERP release might still be in use well past Oracle’s official support window, creating a challenge when the vendor expects customers to upgrade to stay supported.
• Heavy Customization and Integration: It’s common for Oracle ERP systems in manufacturing to be heavily customized to fit specialized processes (for example, custom modules for shop floor scheduling, quality control, or maintenance). These ERPs are also deeply integrated with shop floor systems like Manufacturing Execution Systems (MES), Supervisory Control and Data Acquisition (SCADA) systems, PLC interfaces, and other operational technology. Such customizations and integrations are essential for day-to-day operations, but complicate support; vendor support policies typically don’t cover custom code or third-party integration issues.
• Regulatory Compliance Requirements: Many manufacturers operate in regulated sectors. Pharmaceutical and biotech companies must comply with FDA guidelines (e.g., GxP and 21 CFR Part 11), requiring validated systems and strict change control. Aerospace and defense manufacturers face compliance standards for quality and security (such as FAA regulations or ITAR export controls). Automotive suppliers adhere to standards like IATF 16949 for quality. In all these cases, changes to ERP software (like patches or upgrades) can trigger costly re-validation, re-certification, or disruption to compliant processes. Support must accommodate the need for stability and documented fixes that meet regulatory scrutiny.

In summary, manufacturing firms need support that prioritizes system reliability, supports highly customized environments, and aligns with long-term operational cycles. With these needs in mind, let’s compare Oracle’s standard support offerings with third-party support and evaluate which better serves manufacturing organizations.

Oracle’s Support Model: Premier, Extended, and Sustaining Support

Oracle’s Lifetime Support Policy for its enterprise software is structured in tiers, which affects how long and how well your ERP is supported:

• Premier Support: Oracle’s full support offering is typically provided for five years from a product’s general availability. Premier Support includes regular patches, bug fixes, security updates, and even minor feature enhancements. It also allows customers to log support tickets for issues and get one-off fixes when possible. Premier Support is comprehensive – an “all-access pass” to updates and technical assistance. However, it comes at a high price: about 22% of the software license value per year in maintenance fees (and Oracle often increases this cost annually for inflation). For example, if a company spent $10 million on Oracle ERP licenses, yearly Premier Support might cost around $2.2 million. Most Oracle customers start on Premier Support during the initial years of their ERP version.
• Extended Support: When the Premier period ends, Oracle may offer Extended Support for certain product releases for an additional three years (though Oracle sometimes skips or limits Extended Support for some products). Extended Support comes at an additional premium over the standard support fee, often 10-20% higher than Premier. In exchange, Oracle continues to deliver new patches and fixes for a few more years. Extended Support prolongs the full support period but at a rising cost. Manufacturers running an older release (for example, Oracle EBS 12.1 in 2021) might pay for Extended Support to get critical fixes for a bit longer instead of immediately upgrading. It’s worth noting that Oracle can choose whether or not to offer Extended Support for each version. In some cases, Oracle has surprised customers by ending Premier Support and not offering much Extended Support, leaving only the next tier…
• Sustaining Support: After Premier (and any Extended period) ends, Oracle offers Sustaining Support indefinitely for as long as you continue paying support fees. Sustaining Support is essentially “maintenance lite.” You still have access to Oracle’s online knowledge base, existing patches and fixes released during the Premier/Extended phases, and the ability to contact Oracle support for help. However, no new updates, patches, or bug fixes are created under Sustaining Support. In other words, once your product is in Sustaining Support, Oracle will not develop new code corrections or security updates for it – you only get assistance with known issues and workarounds. Despite this greatly reduced service, the cost remains the same, 22% (or more) of license fees, meaning you could be paying a very high price purely to have Oracle “on call” without any guarantee of future fixes. For a mission-critical system, being on Sustaining Support is risky in the long run, as Oracle will not address new emerging bugs or vulnerabilities. Many manufacturing CIOs consider Sustaining Support “paying more for less,” since after a certain point, you’re funding Oracle annually but not receiving any new value or updates.

To illustrate, Oracle E-Business Suite 12.1.3 entered Sustaining Support after December 2021. Companies that had not upgraded to EBS 12.2 by then were left paying full price for Sustaining Support, with no new patches (Oracle even chose not to offer the typical Extended Support period in that case). This situation is far from ideal for a manufacturer still on EBS 12.1.3: they either must undertake a disruptive upgrade to 12.2 (to get back on Premier Support through the 2030s), run unpatched on Sustaining Support, or seek an alternative support arrangement.

In summary, Oracle’s support model pressures customers to continually upgrade. Every few years, you face an expensive upgrade or escalating support fees for diminishing support returns. Oracle’s interests are in selling new licenses or cloud subscriptions, so its support timelines often serve to nudge customers toward new products. Standard Oracle support also has limitations in scope – notably, Oracle does not support issues caused by customizations or modifications. Suppose your ERP issue is traced to custom code or a non-standard integration. In that case, Oracle Support will likely ask you to reproduce the problem on an uncustomized environment or simply say it’s outside their support scope.

Third-Party Support for Oracle ERP: An Overview

Third-party support refers to support and maintenance services for Oracle software provided by an independent company rather than Oracle itself. These third-party providers (examples include Rimini Street, Spinnaker Support, Support Revolution, and others) hire experienced Oracle engineers to offer support for Oracle products under their model. Customers who switch to third-party support generally stop paying Oracle for support. Instead, they pay the third-party vendor a fee (typically significantly lower) to take over supporting their ERP system.

Key characteristics of third-party support offerings include:

• Cost Savings: Third-party support fees are usually 50% (or more) lower than Oracle’s annual support fees. For instance, instead of 22% of license cost, a third-party might charge around 10-12% of license cost per year, or simply promise “50% off your current Oracle support bill.” These savings can be substantial – often millions of dollars annually for large enterprises – directly reducing the TCO of your ERP landscape. Lower cost is often the initial attraction of third-party support, especially for CIOs under pressure to optimize IT budgets.
• Support Beyond Oracle’s Timeline: A hallmark of third-party providers is that they will support older versions indefinitely. There is no forced upgrade cycle imposed by the support ending because the third party commits to supporting your current software version for as long as you need. They create their own bug fixes, patches, and workarounds to solve issues on older releases even after Oracle has long ceased issuing updates. This means a manufacturer can comfortably run a stable Oracle EBS 11i or JD Edwards World system that Oracle no longer supports, and still receive prompt assistance and even custom code fixes from the third-party provider. The software’s useful life is extended beyond Oracle’s official “end of support” date. Companies can avoid “end-of-support” fire drills and upgrade only when it makes business sense, not just because the calendar forces it.
• Customized and Personalized Support: Third-party support is often praised for its flexibility and customer-centric approach. Unlike Oracle, which has a one-size-fits-all support process and large call centers, third-party vendors tend to offer more personalized service. Clients typically get assigned a dedicated support team or account manager familiar with their environment. When an issue arises, you often get to speak directly to a senior engineer who can start working on the problem immediately, rather than navigating Oracle’s multi-tier ticket escalation bureaucracy. Service Level Agreements can be tailored – for example, 24/7 support coverage, or specific response time guarantees that matter to your operations. For manufacturing firms that might have global operations and odd hours, having a truly responsive support partner is a huge benefit.
• Support for Customizations and Integrations: Importantly, third-party support will help with issues related to your custom code or integrations, which Oracle’s support would decline. These providers understand that many Oracle ERP customers have significant custom modifications. They typically agree to troubleshoot and even create fixes for customization problems. For instance, if a custom extension in EBS fails after a database update, a third-party support engineer will investigate and code a fix or recommend changes, effectively supporting your entire application, customizations included. This is a critical advantage for heavily customized manufacturing environments; you don’t have to sacrifice your unique processes or rewrite custom code just to get vendor support. Third-party providers become a one-stop support shop for the whole system “stack” as you run it, rather than only the vanilla software.
• Independent Security Patches and Regulatory Updates: Although third-party providers cannot use Oracle’s proprietary patches directly, they develop their solutions to address security and compliance needs. They issue security advisories and custom patches to fix vulnerabilities (for example, if a new security flaw is discovered in Oracle Database or WebLogic server, the third-party can create a code fix or provide configuration guidance to mitigate it). They also often provide tax and regulatory updates for ERP modules like payroll, finance, or supply chain – e.g., new tax laws, changes in financial regulations, or HR compliance, which keep the system legally up-to-date. This is particularly relevant for global manufacturers dealing with changing tariffs, VAT/GST rates, payroll tax rules, or electronic reporting mandated by governments. Third-party support ensures you remain compliant even without Oracle’s updates, by delivering their own updated script or documentation solutions.

In essence, third-party support aims to replicate all the useful parts of vendor support (answering questions, fixing bugs, providing updates for legal changes) minus the parts customers dislike (high fees, forced upgrades, refusal to handle customizations). However, it’s important to note what you don’t get with third-party support: you won’t receive new Oracle-released features or major product version upgrades from the third party. If Oracle releases a brand-new module or an enhanced version, the third-party cannot give you that (you’d have to license that from Oracle if desired). In practice, many manufacturing companies with mature ERP systems aren’t seeking new Oracle features – they just want their existing system to run reliably, so this limitation is often acceptable.

Now, with an understanding of both Oracle and third-party support models, let’s dive into why third-party support can be strategically advantageous for manufacturing ERP environments. Below, we outline the key benefits and how they align to manufacturing needs.

Key Benefits of Third-Party Support for Manufacturing ERP

Third-party support can address manufacturers’ pain points with Oracle’s support. Here are the major strategic benefits, explained in a manufacturing context:

1. Dramatically Lower Total Cost of Ownership: Budget reduction is the most immediate benefit. Switching to a third-party support provider typically slashes annual fees by 50% or more. Instead of paying Oracle’s high maintenance fees year after year, manufacturers can cut that bill in half and save millions. This directly improves the IT cost structure and frees funds that can be reinvested into other priorities (such as factory automation, IoT projects, or new product development). Lower support cost also means a lower overall TCO for the ERP system over its life. For companies with tight margins or under pressure to do “more with less,” these savings are a compelling reason to consider third-party support. Procurement leaders especially appreciate the ability to introduce competition and reduce what was once a fixed vendor expense.
2. Extended Software Lifespan (No Forced Upgrades): Manufacturers can keep using their stable, tried-and-tested ERP version for as long as it continues to meet business needs, without Oracle’s end-of-support deadline hanging over their heads. Third-party support providers will continue fully supporting older releases like Oracle EBS 11.5.10 or JD Edwards World well beyond the dates Oracle labels them “unsupported.” This allows IT leaders to avoid costly and disruptive upgrades that don’t add immediate value. In a manufacturing scenario, avoiding an unnecessary ERP upgrade means avoiding months of project effort, retesting integrations, retraining users, and potential downtime – a huge win. One real-world example is a large manufacturing company that relied on an older version of Oracle JD Edwards: when Oracle announced the end of official support for that version, the company chose third-party support. It could run its business-critical system smoothly for years longer without an upgrade. By deferring upgrades, manufacturers save on upgrade project costs and avoid the risks that come with major system changes. Third-party support aligns the software lifespan with the plant and product lifecycle, rather than the vendor’s sales cycle.
3. Support for Customizations and Shop-Floor Integrations: Third-party providers will support the environment as-is, which means your custom extensions, reports, and integrations are covered. This is crucial for manufacturing, where Oracle ERP might be heavily tailored to unique production processes or linked with MES/SCADA systems, barcode trackers, PLC controllers, etc. Suppose a custom interface between EBS and a factory machine data system breaks. In that case, a third-party support engineer familiar with your setup will work to resolve it, whereas Oracle would likely say, “Not our code, can’t help.” With third-party support, you no longer need to fear that your many years of ERP custom development will be orphaned. Instead, you gain a partner who understands the standard Oracle software and your customizations. They can troubleshoot issues holistically. This results in better support for the way your manufacturing business runs. You can also confidently add or adjust customizations to improve operations, knowing that support will continue for them (as opposed to worrying that customizations void your support with Oracle). Ultimately, this benefit lets manufacturers continue to innovate in their ERP (tailoring it to evolving shop-floor needs) without being penalized by the support provider.
4. Faster, More Responsive Issue Resolution: Many organizations report that third-party support offers faster response and fix times for issues than Oracle’s support. Instead of filing a ticket and waiting in a queue, you often get immediate engagement from a skilled engineer. For a manufacturer with 24/7 operations, this responsiveness can greatly reduce downtime. For example, suppose a critical production transaction in JD Edwards is failing, and shipments are being halted. In that case, a third-party support team can often jump on a screen-share, diagnose the bug, and implement a workaround or patch in hours, even at night. Oracle’s support process, by contrast, might involve waiting overnight for an escalation and perhaps days for a patch (or a suggestion to upgrade to a later release that has the fix). The leaner structure of third-party firms and their focus on customer satisfaction means high-priority issues get the attention they deserve. Over time, faster problem resolution translates to higher ERP uptime, more reliable production schedules, and less firefighting by your IT staff. Many CIOs also note that their internal IT team’s productivity improves – they spend less time chasing Oracle for answers and more time working alongside the third-party engineers to solve problems and optimize systems.
5. Improved Service Quality and Partnership: Third-party support vendors often strive to become a proactive partner rather than just a break-fix help desk. They may provide your Oracle ERP systems with regular health checks, performance tuning, and usage reports. They often schedule periodic calls to review open issues and ensure your needs are being met. This collaborative approach can feel more like having an extension of your IT team. Manufacturing companies benefit from this because the support provider develops a deep understanding of their business cycles (for instance, knowing that quarter-end or annual shutdown periods are critical, or that certain plants run 24/7). The support team can adjust to your calendar – for example, planning preventive maintenance or patching during planned downtime. Such partnership-driven support is rarely the case with Oracle directly, where you’re one of thousands of clients in a queue. A closer support relationship means fewer surprises and more tailored guidance. Some third-party providers even assign former Oracle product developers or veteran consultants to your account, bringing in experts who have seen many manufacturing ERP scenarios. The result is a higher quality of support that can boost confidence in system stability across the organization.
6. Regulatory Compliance and Risk Mitigation: For regulated manufacturers (like those in pharma, medical devices, aerospace, etc.), third-party support can help mitigate certain compliance risks. How? This allows you to maintain a validated system state longer without forced changes. In an FDA-regulated plant, an Oracle ERP system is typically subject to computer system validation – every time you upgrade or apply a new patch, you must re-validate and document that the system meets requirements, which is expensive and time-consuming. Third-party support lets you stay on a known, validated version without introducing unneeded changes, while still receiving fixes for critical issues. This means you remain compliant and avoid the risk of validation lapses that could halt production or invite regulatory action.
   Additionally, third-party providers deliver necessary regulatory updates (for example, changes in pharmaceutical lot traceability requirements or updated financial reporting standards) in a controlled way, so you can apply them selectively and validate as needed, rather than taking a full Oracle patch bundle. From a risk perspective, third-party support diversifies your operational risk – you no longer rely solely on Oracle’s support policies. If Oracle decides to increase fees or drop support for a product, it’s no longer an existential threat to your operations because you have an independent support mechanism. Security risks can also be managed: while Oracle might argue you won’t get their official security patches, third-party vendors often rapidly address vulnerabilities with their fixes or guide you to apply network/database-level controls that mitigate threats. With third-party support, many CIOs feel more in control of risk because they can choose what changes to implement and when, rather than scrambling on Oracle’s schedule.
7. Flexibility for Modernization (Breathing Room for ERP Transformation): One strategic benefit of third-party support is that it buys you time to plan and execute a modernization of your ERP landscape on your own terms. Many manufacturing CIOs have a vision for the future, such as migrating to a cloud-based ERP or consolidating systems, but they aren’t ready to do it immediately. Perhaps the business isn’t ready for the disruption, the cloud solutions need to mature to handle complex manufacturing, or a major plant expansion is in progress. By moving to third-party support, organizations can stabilize their current ERP for several years while redirecting funds and focusing on transformation projects. For example, a global automotive supplier might use third-party support for its Oracle EBS and Database for the next 5 years, saving money that is then invested into a multi-year project to implement a new cloud ERP or modern Manufacturing Execution System. During those 5 years, they don’t have to perform any major upgrades on the old system, because the third-party keeps it running. When they are finally ready to cut over to the new platform, the old system has been fully supported and can serve as a reliable bridge. This “strategic pause” enabled by third-party support is incredibly valuable: IT can time the modernization with business readiness, rather than rushing because Oracle’s support was running out. Essentially, third-party support can act as a bridge to the cloud. It allows manufacturers to achieve cloud readiness comfortably – for instance, cleaning up data, rationalizing customizations, and evaluating cloud options – without the ticking clock of an end-of-support deadline. By the time you move to the modern ERP, you may even skip an entire generation of upgrades (for instance, jumping from an old on-prem system straight to cloud SaaS, bypassing an interim upgrade that would have been needed just to stay supported by Oracle). This flexibility ensures that modernizing is driven by innovation and business value, not vendor pressure.
8. Vendor Independence and Negotiation Leverage: Adopting third-party support shifts the power dynamic between customers and big software vendors. It signals to Oracle that you have alternatives and are not locked into their services. In many cases, evaluating or threatening to move to third-party support can leverage procurement teams in negotiations. Fearing the loss of ongoing maintenance revenue, Oracle sales reps might offer more favorable terms, such as discounts on support fees, license concessions, or flexible cloud subscription deals, to entice you to stay. Some companies have used third-party support quotes as a bargaining chip to renegotiate their Oracle contracts and achieved substantial savings even without switching. If you do switch, you demonstrate a willingness to optimize costs aggressively, which can also benefit negotiations with other software vendors. Beyond cost, vendor independence also means you mitigate the risk of being subject to Oracle’s future policies. For example, if Oracle changes its support policies or focuses only on cloud products, your operations won’t be at their mercy since you have an independent support solution. From a sourcing perspective, having a viable third-party support provider in the mix introduces competition into an area previously a sole-source spend. The best procurement practice is to avoid single-source dependencies, and third-party support achieves exactly that for Oracle maintenance. Over the long term, this leverage can keep Oracle more customer-friendly when dealing with you and ensure you always have option B. In highly regulated or security-conscious organizations, spreading risk by not being tied 100% to one vendor can also be a governance benefit.

In summary, third-party support for Oracle ERP brings numerous advantages that align well with manufacturing companies’ priorities: it cuts costs significantly, keeps legacy systems reliable and up-to-date, supports the customizations and integrations that make your operations unique, and provides flexibility for future changes – all with a high-touch service model. It essentially allows manufacturing CIOs to get off the treadmill of forced upgrades and high fees, and instead focus their IT resources on initiatives that directly improve plant operations and business outcomes.

Considerations for Regulated Manufacturers (Pharma, Aerospace & Defense, Automotive)

Organizations in tightly regulated manufacturing sectors have some extra factors to weigh, and third-party support can address many of their needs:

• Pharmaceutical and Life Sciences: In FDA-regulated manufacturing (pharmaceutical, biotech, medical devices), any change to a critical system like ERP requires validation to comply with regulations (ensuring the system does what it’s supposed to do consistently). This makes companies cautious about applying vendor patches or upgrades – each update triggers documentation, testing, and potential FDA audit scrutiny. Third-party support is attractive here because it minimizes unnecessary change. A pharma company can remain on a validated Oracle EBS version and still get support and even necessary updates (e.g., updated compliance reports or security fixes) in a controlled way. The third-party provider will typically document fixes thoroughly, which helps in the validation package. Additionally, third-party vendors can often support GxP compliance efforts by ensuring changes meet the required standards and signing agreements that uphold data integrity and security (many have ISO 9001 and 27001 certifications to satisfy quality and security expectations). The result is a lower compliance burden – the system stays stable and validated over a longer period, and when changes are needed, they are targeted and well-tested.
• Aerospace and Defense: These manufacturers are often concerned with product quality, safety, and meeting government or defense contracting requirements. They may also operate in secure environments where software updates require certification (for example, an ERP system used in making aircraft components might need FAA certification if changed, or defense suppliers might need to follow DoD cybersecurity frameworks). Third-party support can help A&D firms by ensuring the continuity of proven systems that have passed all required certifications. If Oracle ends support for a version accredited for use in a defense project, moving to third-party support allows the company to keep using that version without re-accreditation, saving enormous effort. Moreover, third-party providers are usually willing to comply with specific security protocols, such as using U.S.-citizen support staff for ITAR-controlled environments or following strict incident reporting rules, in ways Oracle might not accommodate for individual customers. This makes third-party support a customizable fit for defense contractors. Also, similar to pharma, avoiding forced upgrades means avoiding the risk of production issues that could impact contractual delivery schedules for critical aerospace projects.
• Automotive and Industrial Manufacturing: While not regulated by a single agency like the FDA, these manufacturers have high standards for quality (ISO/TS standards) and often work in tightly synchronized supply chains. An ERP disruption could shut down an assembly line or cause parts delivery failures, which are penalties. Third-party support’s focus on preventative support and quick fixes is valuable here. It helps automotive manufacturers maintain the uptime and reliability needed for just-in-time production. Additionally, automotive companies often run older, stable systems in plants because they have been fine-tuned over the years (for example, an automotive supplier might still run Oracle JDE on an older release that perfectly fits its plant processes). Third-party support enables them to keep that institutional knowledge embedded in systems running without being forced onto a new version that might require re-tuning or carry unknown bugs. For compliance in automotive, there are also evolving regulatory requirements (like new environmental reporting or safety standards) – third-party support can assist by delivering updates or custom solutions for those requirements, even if the base ERP is old.

In all these regulated or high-requirement industries, a common theme is that third-party support offers stability, control, and customization that align with the careful, risk-managed approach these companies must take. Of course, these organizations will also do extra due diligence on the third-party provider (ensuring the provider has a strong reputation, perhaps references in the same industry, and no legal barriers). Notably, thousands of customers, including many Fortune 500 firms in regulated industries, have successfully used third-party support, indicating that it meets compliance and quality standards at the enterprise level with proper planning.

Using Third-Party Support to Enable Modernization and Transformation

Most manufacturing CIOs must balance “keeping the lights on” for core systems and “building the future” with new capabilities. Third-party support can be a strategic tool to help balance these dual priorities by stabilizing the core and freeing up resources for innovation. Here’s how leveraging third-party support can aid an ERP modernization strategy:

• Freeing Up Budget and Resources: By cutting the annual support costs dramatically (as discussed, often by 50%+), third-party support frees capital that can be redirected to modernization initiatives. Those savings might fund preliminary work like business process re-engineering, data cleaning, or module implementations that prepare the company for a future ERP or digital platform. For example, one global manufacturer redirected the savings from third-party support into a pilot of a cloud Manufacturing Execution System and IoT sensors on the shop floor – projects that were previously deferred due to budget constraints. Thus, third-party support can self-fund some of your innovation.
• Avoiding Interim Upgrades in Favor of Strategic Leap: Often, companies need to do an interim upgrade just to stay supported by Oracle, even though a few years later, they plan to replace the system entirely. This interim upgrade (say from Oracle EBS 12.1 to 12.2) would consume significant time and money, only to migrate to a new cloud ERP afterwards – essentially doing two major projects back-to-back. Third-party support provides an alternative: skip the interim upgrade. You can run on the older version with full support from the third party while planning and implementing the new solution. Then you jump directly to the new platform when ready. This approach was taken by a large industrial manufacturer who knew they eventually wanted to transition from Oracle EBS on-premise to Oracle Fusion Cloud ERP (or a competitor’s ERP). They chose third-party support for their on-premise EBS for a few years, during which they conducted a thorough cloud vendor evaluation and began a phased implementation. They successfully went live on a new cloud ERP after 3 years, and during those 3 years, they avoided doing an EBS upgrade that Oracle was pushing. Ultimately, they saved costs, and their IT team could focus on the future system rather than being tied up with an obsolete upgrade. This highlights how third-party support can act as a strategic enabler for transformation rather than a hindrance.
• Cloud Readiness and Assessment: While on third-party support, you can pause and assess the market for modern solutions. Oracle’s strong push is towards its Oracle Cloud SaaS applications, which may or may not yet have all the functionality a complex manufacturer needs. Some manufacturers might consider other options like SAP S/4HANA, Microsoft Dynamics, or industry-specific ERPs. With the current system stable under third-party maintenance, the IT and procurement teams can do proper due diligence on these options, run proof-of-concepts, and even incrementally adopt cloud modules (for example, adding a cloud CRM or analytics tool alongside the legacy ERP). All of this can be done without rushing, because there’s no hard deadline forcing a move. Third-party support gives breathing room to modernize on a timeline that aligns with business strategy.
• Smooth Transition Planning: When it does come time to cut over from the legacy Oracle ERP to the new solution, third-party support can assist even then. They will continue supporting the legacy environment in parallel during a migration, ensuring any issues don’t derail the project. And if the new implementation timeline slips (which often happens), you’re not in a panic because support on the old system is still solid. Some third-party providers even have experience helping with data extraction or interfacing between old and new systems during migrations. In effect, they can partner throughout the transformation, keeping the lights on and ensuring the old system gracefully winds down when the new one takes over. This reduces the risk of modernization projects, which otherwise can be “big bang” and nerve-wracking events.

In summary, third-party support is not about avoiding modernization – it’s about doing it smartly. It prevents the scenario of “spend a fortune to upgrade just to remain supported, then spend another fortune to replace the system anyway.” Instead, it lets you direct your investments toward the future while keeping the current state running reliably. Manufacturing CIOs with long-term vision (like moving to smart factory platforms or cloud ERPs) can leverage third-party support as a tactical move to bridge the present and the future.

Sourcing and Contract Negotiation Implications

From a sourcing and procurement standpoint, introducing third-party support into the equation brings significant advantages and some considerations:

• Negotiation Leverage: As mentioned in the benefits, having an alternative to Oracle Support gives you bargaining power. Procurement leaders should use this to drive better deals with Oracle. It becomes more flexible when Oracle knows a customer is evaluating third-party support. This could mean Oracle offering discounts on support renewals, bundling services, or even granting a year of Extended Support for free – concessions to retain your business. Even if the decision is ultimately to switch to a third party, engaging Oracle in negotiations can yield last-minute offers. Thus, it’s wise to get quotes from reputable third-party providers and share (tactfully) those plans with Oracle account reps during renewal discussions. The competitive tension can result in substantial savings.
• Contract Terms and Exit Planning: Oracle’s support contracts are typically annual and auto-renewing. To move to third-party support, timing is important – you don’t want to accidentally renew Oracle support and then switch (since Oracle generally doesn’t give pro-rated refunds). Procurement should review the Oracle support renewal dates and any notice periods. Plan to terminate Oracle support at the end of your contract term, and have the third-party contract start immediately. Also, ensure all necessary Oracle patches or downloads you are entitled to are obtained before ending Oracle support (once-off support, you may lose access to Oracle’s support portal). Many companies download a repository of the latest patches/updates while still a customer, so they and the third-party have them available for reference. These steps should be part of the contract transition planning.
• Service Level Agreements and Scope: When negotiating with a third-party support vendor, it’s critical to spell out the scope of support and performance expectations. Unlike Oracle’s standardized policy, third-party contracts can be tailored. Procurement should ensure the agreement covers all the Oracle products in use (ERP modules, database, middleware, etc., as needed), including customization support in writing. Define SLAs such as response times for critical severity issues, support hours coverage (especially if you have global plants that might require follow-the-sun support), and key deliverables like regulatory updates. Also discuss how the third-party will handle any Oracle-provided updates you might still need (for example, if you’re in the middle of an Oracle upgrade when switching, will they support that? Or if Oracle releases a tax update just before you leave, will the third-party apply it?). A well-negotiated contract will protect you and ensure you get the promised value.
• Due Diligence and Risk Management: Introduce rigor in evaluating third-party support providers. This includes checking references, especially those of other manufacturing companies of similar size or in similar industries that use their services. Investigate the provider’s track record: uptime statistics, client retention, any legal issues (there have been highly publicized legal battles between Oracle and some third-party providers like Rimini Street over intellectual property – ensure the provider’s processes are compliant so that your company is not put in a legal gray area). Many providers have refined their methods to comply with licenses (for example, not using Oracle’s code improperly). Have your legal and compliance teams review the contract and the provider’s warranties that they will not violate Oracle’s IP. Treat the sourcing process with the same due diligence as you would for any critical outsourcing partner. This mitigates risk and helps convince internal stakeholders (like the security team or compliance officer) that switching support is safe and beneficial.
• Long-Term Vendor Management: Once under third-party support, maintain an active vendor management approach. At the same time, these providers aim to please you, but you should still hold them accountable with regular performance reviews. Also, keep an eye on Oracle’s product roadmap. For instance, if Oracle announces something that could affect your plans (like a new version or a policy change), you’ll want to evaluate if it changes your strategy. In some cases, companies eventually return to Oracle support (for example, if they decide not to run the software anymore and want to upgrade just to transition to the cloud). Keeping relations with Oracle cordial (even if not current on support) can help if you need licenses or decide to resubscribe for a future project. Thus, procurement might also consider negotiating clauses that allow an easy exit from third-party support if needed (e.g., annual contract flexibility), giving you maximum agility.

From a holistic view, introducing third-party support is a classic strategic sourcing move: it introduces competition, reduces cost, and addresses a supplier lock-in situation. It’s aligned with the procurement goals to get the best value for the company. CIOs and CPOs (Chief Procurement Officers) should work hand-in-hand on this – CIOs provide the vision and technical requirements, and procurement ensures the contractual and commercial solidity. Together, they can leverage third-party support to save money, influence Oracle, and shape a more favorable long-term strategy for the company’s enterprise software investments.

What Manufacturing CIOs and Procurement Should Do

If you are a manufacturing-sector CIO or procurement leader considering third-party support for Oracle ERP, here are actionable steps to take:

1. Assess Your Current State and Needs: Thoroughly evaluate your Oracle ERP landscape. Identify which applications (EBS, JD Edwards, PeopleSoft, Oracle Database, etc.) you have and their versions, and note any upcoming support deadlines from Oracle (e.g., “Premier Support ends next year for Module X”). Document the level of customizations and integrations in each – the more customized, the more value third-party support might offer. Also, quantify your support costs and the pain points you have experienced with Oracle support (such as slow response or pressure to upgrade). This baseline assessment will help build the business case.
2. Research Third-Party Support Providers: Investigate the leading third-party support vendors, especially those with experience supporting manufacturing companies. Look for providers that support all the Oracle products you need. Key players include Rimini Street, Spinnaker Support, Support Revolution, and others – each may have specialties or a stronger presence in certain regions or industries. Leverage resources like Gartner or other advisory reports for reviews and recommendations. Ensure any provider you consider has a solid reputation for quality and compliance. Request information on how they handle security patches, how many clients they have in similar industries, and their staffing model for Oracle ERP support.
3. Quantify the Benefits (Business Case): Build a business case that quantifies the savings and benefits of switching to third-party support. This should include the direct cost savings (e.g., “50% reduction of annual fees saves us $X per year”), plus avoidance of any imminent upgrade costs (if you can avoid a big upgrade project by switching, estimate that project cost as saved). Also factor in “soft” benefits like improved support SLAs (which might reduce downtime costs – if you have data on production downtime costs per hour, even a small reduction in incidents can be monetized). If relevant, quantify compliance savings (e.g., “we avoid re-validation costs for the next 3 years, saving $Y”). This business case will be important to get executive buy-in. CIOs should align this with IT strategy (e.g., “this move funds our digital transformation”), and procurement should validate the cost numbers.
4. Engage Stakeholders Early: Talk to all major stakeholders about possibly moving away from Oracle support. This includes the IT operations team (who might be concerned about how life will change under a new support vendor), the applications/business owners (who want assurance that their systems will remain reliable), the security and compliance teams (who will want to ensure no rules are broken and data stays safe), and finance (since it’s a financial decision too). Educate them on the concept – many might not know that third-party support exists or is a proven approach. Share success stories or case studies of similar companies (for instance, “Company XYZ in our industry did this and saved millions with no issues”). Address concerns transparently: for example, the security team might ask how patches are handled – get answers from the vendor to provide them. Building internal consensus is key; you don’t want surprise objections late in the process. Often, resistance is due to the inertia of “we’ve always renewed Oracle, is this risky?” – provide data and expert opinions (Gartner’s endorsement of third-party support can be cited) to show it’s an established practice now.
5. Run a Formal Evaluation and RFP: Treat the switch as a strategic sourcing project. Develop an RFP (Request for Proposal) or requirements for third-party support and solicit proposals from one or more providers. Have them detail their service offerings, SLAs, transition plan, and pricing. Compare the proposals not just on cost but on the depth of support (for example, how do they handle a new regulatory requirement in your industry? Can they support your database and middleware too, or only the application?). If possible, arrange reference calls or site visits with some of their existing clients – hearing from another manufacturing CIO about their experience can greatly increase confidence. Also, evaluate each provider’s transition plan: a good partner will have a clear method to transition knowledge from Oracle (and your internal team) to their team, ideally starting well before your Oracle support expires so that the cut-over is seamless. Ensure the provider has a plan for taking over without disruption (typically, they will shadow Oracle support for a period or do a thorough knowledge transfer of your configurations).
6. Consider a Pilot or Phased Approach (if applicable): Depending on your comfort level, you might pilot third-party support with a smaller, less critical environment first – for example, move a non-production system or a less critical Oracle system (like a development instance or a smaller subsidiary’s ERP) to third-party support as a trial. This can demonstrate the provider’s capabilities and ease concerns before committing your crown jewels. However, many companies do switch their mission-critical support in one go after a thorough evaluation. If you have multiple Oracle technologies (e.g., database, middleware, applications), you could also phase the switch by product. Develop a phased roadmap that makes sense for your situation.
7. Negotiate Exit Terms with Oracle and Entry with the Provider: When you’ve chosen a third-party support route, work with procurement and legal to gracefully exit the Oracle support agreement. This means sending Oracle a notice of non-renewal (if required) within the specified timeframe. Be prepared for Oracle to reach out and attempt to persuade you to stay – have your resolved stance or final negotiation ask ready. At the same time, finalize the contract with your new support provider. Ensure it includes all agreed-upon service levels, pricing (watch out for any yearly increases and negotiate caps if possible), and legal safeguards. Pay attention to any clauses about intellectual property or Oracle interactions – for example, some providers ask that you not download new Oracle patches after a certain date to avoid license issues, which is standard. Clarify roles: if an issue requires Oracle’s involvement (very rare, but e.g., a license key or something only Oracle can provide), how will that be handled? Once contracts are signed, communicate internally about the change so everyone knows where to call for support going forward.
8. Manage the Transition Carefully: The cut-over from Oracle to third-party support should be a managed project. Coordinate closely with the new provider to transfer knowledge of your systems. Provide them with documentation of your configurations, customizations, integration points, and any open issues or recurring problems. Many providers will conduct on-site workshops or interviews with your IT staff to soak up as much information as possible. It’s a good practice to schedule the transition at a relatively low-activity period if possible (avoid year-end close or peak production season). Also, ensure your support channels are updated – for instance, update any internal helpdesk references or vendor contact lists to point users to the new provider. After the switch date, monitor the support quality closely. Regular check-ins with the provider in the first few months to address hiccups. Typically, a well-planned transition will be smooth, and users might not notice any difference except for better service!
9. Continuously Evaluate and Optimize: After moving to third-party support, continuously evaluate the arrangement. Track metrics like support response times, issue resolution rates, system uptime, and compare them to your previous Oracle support experience. If areas need improvement, work with the provider, since you are now a paying client, they will be motivated to keep you happy (their business relies on long-term retention). Also, periodically revisit your IT strategy: the world of technology doesn’t stand still. If, after a few years, your company’s direction changes (say, a decision to migrate to Oracle Cloud or to acquire a new business with different systems), you may need to adjust support strategies again. The beauty of third-party support is you have flexibility – you could even decide to go back to Oracle support or another vendor if it made sense (though most find little reason to return to Oracle’s high fees). Keep an eye on Oracle’s moves as well. For example, if Oracle decides to make a certain update available only to supported customers, consider if it impacts you (usually not for stable core ERP, but maybe for peripheral services). By staying proactive, CIOs can ensure the support model continues to serve the business’s best interests year after year.
10. Leverage Savings and Plan for the Future: Finally, ensure the savings and strategic benefits gained are used well. As a CIO, you should have a plan for the reallocated budget – whether it’s funding the cloud ERP roadmap, upgrading plant-floor technology, or investing in analytics and AI for manufacturing optimization. Communicate these wins to the C-suite: for example, “By switching support, we saved $X, which is allowing us to undertake Y initiative.” This reinforces the value of the decision. From a procurement perspective, document the success as well – it can serve as a case study for other areas where third-party or alternative sourcing could deliver value. In essence, third-party support can be used as a catalyst to drive modernization and innovation, fulfilling the promise that it’s not just a cost-cutting move but a strategic pivot.

By following these steps, manufacturing CIOs and procurement leaders can make an informed decision about third-party support and execute the transition effectively if they choose to proceed. The result can be a more cost-effective, stable, and flexible support setup for Oracle ERP that aligns with the realities of running a manufacturing enterprise.