increase SAP ROI

I only have a couple more posts in my series on overcoming vendor sales tactics, so I wanted to provide a brief distraction and look at a few key areas for SAP organizations to move to excellence. This post focuses on some of the considerations for SAP Total Cost of Ownership (TCO) and SAP Return on Investment (ROI).

One key to achieving SAP ROI is through convergence or integration of the SAP staff into the business. I have started down this path as part of a follow-up to the recent ASUG Atlanta conference presentation I did on “Beyond Business to IT Alignment – Creating Convergence in the SAP Enterprise.” Those materials are now available online. The first part consists of a two-piece resource kit and Roadmap Builder, which can help to transform your enterprise and business prospects.

Preparing the SAP and IT Organization for a Center of Excellence

This post will provide an overview of ways to achieve business benefit, reduce costs, and achieve ROI. While I would like to go into detail for each of these components, leaving them in a list format is best. (To expand on them would create a twenty- or thirty-page document.)

Your goal is to drive business innovation and marketplace differentiation.

To keep things simple, I will condense this down into a bullet point list that covers the following three key topic areas:

1) Engaging the Business,

2) Reducing Complexity, and

3) Delivering Excellence.

The SAP Organization Must Engage the Business

  • Converge IT and Business efforts.
    • Regularly convene a senior business representative steering committee.
    • Facilitate business and IT planning sessions.
    • Use business resources to help manage the project.
  • Develop “dotted line” IT staff to business organization relationships.
    • Assign one or more IT staff to each business area.
    • Have IT/SAP resources work in the business areas on a regular basis.
    • Ensure they perform some of the routine tasks in the business area.
    • Develop improvements, solutions, or ideas in conjunction with business users.
  • Create Service Level Agreements (SLAs) for post-production activities.
    • New feature or functionality requests
    • System performance and uptime
    • Issue escalation and resolution
  • Build Technology Solution Roadmaps.
    • Define and prioritize technology requests:
      • Need
      • Want
      • Market impact
      • Strategy impact
      • Business area(s) impacted
    • Perform cost/benefit analysis.
    • Evaluate alternatives.

The IT and SAP Staff Must Reduce Complexity

  • Consolidate:
    • Hardware
    • Applications
    • Network infrastructure
    • Application delivery infrastructure
    • Interfaces
  • Decommission legacy systems.
    • Reduce license management.
    • Reduce technical support costs.
    • Reduce interfaces.
    • Improve data consistency.
  • Reduce custom solutions – clear custom development.

The SAP and IT Organization Need to Deliver Excellence

  • Lean implementation
    • Use SAP Best Practices (and, as of today, consider Signavio).
    • Use SAP Solution Manager.
    • Employ ASAP methodology (as of today, use the SAP Activate Methodology).
    • Leverage vendor templates where they are useful.
  • Optimize performance.
    • Make use of automated batch jobs for repetitive transaction tasks.
    • Use performance and monitoring tools.
    • Scale sufficiently to provide the right user experience.
  • Use QA processes to ensure quality results.
    • Ensure all project code is QA checked.
    • Perform project QA’s at key milestones.
    • Ensure deliverables are complete and useful (if they are not value added, they are a waste of time).
      • An example of a wasted deliverable is something that serves only administrative “reporting” functions.
    • Ensure testing is thorough and challenge testing is performed.
  • Employ proper IT Governance Principles.
    • Ensure proper standards are created and then followed.
    • Evaluate, review, and escalate as necessary.
    • Ensure key decisions are time bound.
    • Be prepared to transition to support at go-live.
    • Create issue and risk management processes.
  • Ensure knowledge transfer.
    • Make sure that company IT or business staff can support the solution.
    • Ensure end user training is thorough.
    • Send IT or business support staff to SAP courses (pay now, or you will pay far more later).
    • Use post-production learning and improvement sessions.

Conclusion on Reducing SAP TCO While Realizing SAP ROI

Customers who are either considering or undergoing an SAP project must perform due diligence to ensure they get what they are paying for. You have to evaluate not only cost savings, but also the cost of ownership (software, ongoing support, and maintenance costs). Together with that, you must ensure you get some business value from your SAP investment. (More than just promises! You also need to define, develop, and then measure success criteria after the SAP implementation.)

To make things even more complicated, your SAP and IT support staff must work to become directly integrated into the business. Your goal is to drive business innovation and marketplace differentiation.

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