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How “As-Is” Process Mapping Can Damage Your SAP Project

January 3rd, 2011 by
Business Process Engineering or Software Engineering

SAP ERP business software implementation

Not only can the “As-Is” process mapping damage your project, it also adds significant amounts of unnecessary cost.

After over 20 SAP projects since 1994 I’ve participated in the “As-Is” and “To-Be” processing mapping exercises many times.  Along the way I learned a few key lessons.  First, the old “As-Is” process mapping approach was (and is) critical for software engineering projects.  As-Is process mapping efforts have very limited application to an SAP implementation, or for that matter any true Commercial Off-The-Shelf (COTS) business software project.

If you’re buying a COTS application like SAP, Oracle, JDE, or any other major ERP business software package you generally go into it with the idea that you are replacing custom-built applications with “standard” off-the-shelf package solutions.  This generally requires an expectation that you will change your busines to match application functions and processes.  To keep the application as close to standard as possible you will do business process engineering rather than software engineering (see SAP Implementation Focus, Software Engineering or Business Process Engineering? ).  As that post points out, there are times when software engineering is justified, but those are exceptions.  Software development or software engineering with a COTS software package may be justified when there is a clear business justification, not just a “convenience” issue to resolve.

“As-Is” process mapping was critical for software engineering but it offers little value to an SAP implementation

If you have made a firm commitment to the business process engineering then the “As-Is” process mapping exercise not only wastes time but it keeps your business stuck in the old ways of doing things and creates a high likelihood of demands for custom development.  Correct SAP blueprinting methods will automatically review the “As-Is” processes but only briefly enough to ensure that the future state covers all of the requirements.

Effectively Mapping Business Processes to the SAP Future State (To-Be)

The correct SAP ASAP approach, which is focused on business process engineering rather than software engineering, relies heavily on a good process scope.  From that process scope you conduct your requirements workshops to map the old processes to the new SAP “best practices” and determine any gaps.  If the process gaps are business-critical they may justify some amount of custom development to meet an actual business need.  At the same time doing full-blown “As-Is” process mapping can create serious problems.

Being committed to business process engineering rather than software engineering makes the “As-Is” efforts throw away work.

By focusing on the “To-Be” process state a good SAP consultant will walk through the “As-Is” processes to ensure they have captured all of the future state requirements. In other words, during the blueprint process I may map out the current process on a white board but ONLY to ensure I have sufficiently captured all of the required blueprint details for the future process.  Unless there is something very unusual or business critical I only map the future state (To-Be) processes with all of the existing business details.

By mapping processes in your SAP scope to the existing business processes you are only looking for process gaps and process differences that may need to be addressed through change management.  You are NOT wasting your time and effort, or expensive consulting resources on mapping “As-Is” processes.  You are reducing the amount of time your consultants and your own employees are immersed in something you want to change.

The ASAP Approach that Saves Money, Time, and Reduces SAP Total Cost of Ownership

Because of the huge expense in custom coding and in ongoing support and maintenance of custom coded solutions your SAP Total Cost of Ownership (TCO) can be dramatically increased by getting immersed in the “As-Is” paradigm (see Lower SAP Application Support Costs – TCO – by Reducing Custom Solutions ).  Think about it, if your project focuses on the current state rather than the future state you are keeping your employees and project leadership immersed in current ways of doing things.  That mindset leads to project team members who believe they must get everything custom coded to match exactly what is done today.  Very little business process engineering is done and more money is expended for an army of coders to engage in a software engineering project rather than a business process project.

There are times when custom-coded software solutions are necessary but they must serve a clear business purpose beyond a convenience or desire to do things the “old way.”

Being committed to business process engineering rather than software engineering makes the “As-Is” process mapping efforts throw away work.  By reducing the time and effort on “As-Is” processes and focusing on the future state you reduce project costs and TCO by avoiding a huge investment in what will eventually become garbage.

Conclusion on the Dangers of “As-Is” SAP Process Mapping

By spending too much time and energy on the “As-Is” state your employees stay focused and attached to all of the old ways of doing things.  Because of this focus they will naturally see more need for custom software engineering rather than business process engineering (i.e. change management). So in the end not only do you pay for the wasted time doing unnecessary “As-Is” documentation but you also get the “bonus costs” of software engineering. Your total cost of ownership for a COTS application goes through the roof.

By focusing the project on the “To-Be” state right from the beginning you won’t eliminate all custom coding but you will reduce it.  In this way you reduce meetings and meeting time, reduce the amount of time and effort in blueprinting, and you focus on value-added efforts.  By insisting on a forward looking focus on the future state and using a “To-Be”  review as an analysis to ensure the project scope is complete enough you will reduce the amount of time employees are enmeshed on the “old ways” of doing thing.  This type of expectation setting is critical to a successful business process engineering project enabled by SAP business software applications.

Once again I will clarify, there are times when custom-coded software solutions are necessary but they must serve a clear business purpose beyond a convenience or desire to do things the “old way.”  So there are some times when the current way of doing business might justify the “As-Is” approach.




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SAP System Vendor Project Success Criteria & Factors 5

November 29th, 2010 by

High Performance SAP ProjectThis is the final post in the series on SAP project shared success criteria.  Doing this entire topic justice has been more of a challenge than I had originally anticipated and at some point I will put it all together in a PDF e-book. 

This series leaves you with a lot to digest but over the years these items generally make up the foundations for a very successful project that is able to transform your business.  This series has been challenging but interesting and I am glad it is complete. 

In a few more weeks I will be coming back around to try to wrap up my series on SAP reimplementation for little more cost than a technical upgrade.  That one turned out to be more challenging than I had originally expected.  Until then, here is the final installment in this series on project success criteria.

No. SAP or ERP Critical Success Factor Company Integrator
5 Experienced SAP consultants   A
7 SAP implementation strategy z A
8 SAP project management A z
9 SAP tools, templates, and resources   A
10 SAP scope development z A
11 SAP scope management A z
12 Strong SAP project and business communication (inward and outward) A z
13 SAP change management A z
15 Sufficient SAP training (user and project team training) A A
16 SAP system vendor and customer trust   A
17 SAP system design decisions z A
18 Amount of custom ABAP or other SAP coding z A
19 Appropriate SAP software configuration (system settings) z A
20 SAP system change control process   A
21 SAP data analysis and conversion A z
22 SAP test planning A z
23 SAP test development z A

Legend

A = Primary Responsibility for the success factor
z = Shared but secondary responsibility for success

21.  SAP Data Analysis and Conversion

One of the major activities of an SAP project is the data analysis and conversion. On many projects there are too many new data requirements or data changes needed after the system goes live.  One way to avoid so many of the data correction in a live production system is to ensure that you have sufficient integration and cutover testing.  We will look at testing in a moment.

The primary responsibility for data conversion is generally on the customer.  Customer primary responsibilities include:

  • Identifying legacy and other data sources
  • Cleaning or scrubbing the data
  • Ensuring the converted data meets business processing requirements
  • Defining sufficient test plans to validate data is properly converted
  • Provide sufficiently skilled employees to work the data
  • Make as many data corrections as possible in legacy systems before conversion
  • Ensure there are sufficient hardware resources available for meaningful data conversion tests

I’ve developed a short list of the common data conversion risks as adapted from the SAP ASAP 7.0 Data Migration and Risk Assessment Template.  That template, provided by SAP, contains a sample issue and risk log, and includes some suggestions on how to manage the following common data conversion risks:

SAP Data Conversion Project Management Risks

  • Improper estimates of data migration effort and activities
  • Client side skills gaps on data migration
  • Deferring data corrections until after go-live
  • Knowledge of and access to data sources
  • Insufficient or incorrect change control processes
  • Insufficient participation from key functional project team members (client and consulting)
  • Improper management of dependencies between functional areas or modules. 

SAP Data Technical Conversion Risks

  • Lack of agreement on system of record, data definitions, standards, transformations, conversion methods, etc.
  • Data migration tool(s) not well defined or settled
  • Hardware sizing and data volume are inconsistent
  • Requiring historical data conversion (rather than using legacy systems for historical purposes)
  • Multiple legacy sources of data for single master record loads in SAP.
  • Data gaps – no corresponding data record for SAP conversion
  • Different data structures between legacy systems and SAP.  For example SAP may have structured hierarchies and the source data may not.
  • Poor data quality – errors, duplicates, inconsistent use of fields

Preparing conversion programs, or more specifically, using SAP’s variety of conversion tools and resources is a vendor responsibility.  Together with that the vendor, who has set up the system with the master data requirements is also responsible for providing data load templates as well.  Further the vendor’s functional consultants must participate in the data conversion design and development activities because they are the ones that set up the system and know the master data requirements better than anyone.  The only exception to this is if you decide to bring in consultants who do knowledge transfer to your implementation team and your own internal team does all of the system setup.

For an overview of the various data transformation methods in an SAP project please see the following post:

Planning For a Smooth SAP Go-Live: Part 2
http://www.r3now.com/planning-for-a-smooth-go-live-part-2

SAP Blueprint Master Data Requirements

As a final note, a system integrator should be able to provide a first pass at basic master data requirements by the end of the Blueprint phase.  In fact your SAP Blueprint should contain a technical blueprint section with significant amounts of detail. 

  • It should include each master data type (Material Master, Vendor, Customer, Routing, Sales or Production BOM, Work Center, Chart of Accounts, Profit Centers, Cost Centers, etc., etc., etc.)
  • And it should include each master data SUB type, using just the Customer Master as an example it should contain the requirements of sub-data types, for example you may need Ship-To Customers, Sold-To Customers, Bill-To Customers, Payers, Agents, Freight Forwarders, Carriers, one-time customers, web shop or online customers, etc.  This type of breakdown and segmentation should be done for every data type so that you know what data conversions are necessary.  And this level of detail MUST be contained in a sufficient blueprint.
  • At the end of the blueprint, to ensure that you have all of the master data requirements covered as well, your system integrator SAP blueprint document should contain the specific details of every transaction data type.  That transactional data requirement will be a key part of the data conversion.  For example using the Material Master and inventory movements SAP provides the blueprint document should contain the specific types of inventory movement transactions you perform.  Simple goods receipts, goods issues to production, goods receipt from consignment stocks, issues to consignment stocks, scrapping, shipping / distribution goods issues, receipt into restricted / quality hold, move into unrestricted from quality hold, transfer from plant to plant, transfer from storage location to storage location, etc., etc., etc.

 If your SAP system integrator Blueprint does NOT have this level of detail then it is not sufficient to set up the system and perform the necessary master data conversion.  Further, if it lacks this level of detail you may want to fire your system integrator and demand a refund of at least part of what they bill.

By having this level of detail at the end of SAP blueprinting (process details, master data details, interface requirements, forms, reports, etc.) you can immediately move into setting up the system. If you lack this level of detail you may find yourself forever in design mode (revisiting normal blueprint requirements) and blowing both the budget and the timeline.

I suggest you add this summary of the type of detail you want by the end of the blueprint phase to your contract.

22.  SAP Test Planning

You will have to determine who needs to perform what testing, when, and where.  Together with that you will also want to use this as an opportunity to get both “power users” and non power users involved in the testing.  This becomes the early part of knowledge transfer as well as user acceptance testing.  Inevitably the additional resources from outside of the project team will discover gaps or items that might need to be addressed. 

The Test Planning responsibility is primarily on you as the SAP customer.  Your primary goal here is to ensure that every process you put in scope is represented in some type of testing script. For example, in your order to cash process you might want test scenarios that include credit processing with and without product returns; third party drop shipping to the customer direct from the vendor; pro-forma invoice processing and then follow-up commercial invoice processing; interfaces to and from various external systems; online order entry processing with and without manual intervention; backorder processing and sourcing from other facilities, etc.  At a high level you will be responsible for ensuring that you cover all of the key processes that need to be tested.

SAP Test Strategy and Testing Approach

  • SAP Test Management
    • Test planning, scheduling, and logistics / coordination
      • Identify users to perform testing
      • Identify who will coordinate testing activities
      • Location and equipment logistics for testing
      • Method for communicating test schedule to participants
      • Test data – common master “data sets” to use for testing.  This is different than the converted data testing.
  • Types of SAP Testing and Methods for Testing (whether manual or automated)
    • Unit testing (single transaction)
    • Business Process testing (unit test strings within the same functional module like SD, MM, PP, FI, CO, etc.)
    • Integration testing (Business Process testing including the integration points with other functional modules)
    • Interface testing
    • Data conversion testing (test the data load programs)
    • Converted data testing (test the converted data at performing various functions)
    • User Acceptance Testing
    • Regression Test
    • Batch Job testing (test batch programs, timing, and sequence)
    • Security Test
    • Performance / volume testing
    • Any positive and negative testing requirements for security or transactions
    • Ad hoc testing of unplanned variations and variants
  • Testing Toolset (various spreadsheets, or automation tools for building and managing the testing process).
  • SAP Test Reporting and Analysis
    • Test Metrics
    • Defect Management

Change Control Process (for an overview and details of the SAP change control process see SAP System Integrator Shared Success Criteria Evaluation 4 which focuses critical success factor on #20 on this list of “System Change Control Process”). 

As for a test script, I have included an example one which is a modified version of the standard options SAP provides as part of the older ASAP methodology.

EXAMPLE SAP TEST SCRIPT with Ad Hoc or Variant Section information.

23.  SAP Test Development

As for test development this is clearly a vendor primary responsibility.  Unless you use SAP’s integrated Solution Manager resources for testing this is probably one of the areas where you will have to rely heavily on your SAP partner. The reason this is primarily a vendor responsibility is that as an SAP customer “you don’t know what you don’t know.” 

Unless you have adopted an approach where you require the implementation vendor to act as pure consultants, where your own project team does all of the system setup, you will not know the detailed testing requirements.  As a result a vendor must be able to walk you through the transaction strings and dependencies.  They must be able to take the entire process-related solution they blueprinted from master data creation through cash processing and any interfaces or manual steps in between. 

Because of time, budget, and limitless possibilities there is only so much testing in a project.  These limitations create a requirement that only a “limited universe” of testing can be accomplished and SAP system integrators will usually require someone to sign off on those limited tests. 

There are a few things to beware of here:

1) When the tests have been “gamed” to support only a successful outcome and not to actually test the solution.

2) When a system integrator pushes back on testing variations that they may not have documented in the “formal” test scripts.

3)  Any vendors who engage in hard push back against additional ad hoc, variant, or converted data testing.  Unfortunately I have seen a couple of the major SAP system integrators KNOWINGLY push trash on their customers.

For a thorough testing program you should always ensure your tests include any of the custom development objects as well as manual processing steps.  For example, a thorough test process must include testing of any outputs (forms), interfaces, enhancements, and reports.  Data conversions should also be tested but may be done separately.  However, one strong word of caution here, once converted data is available, even if you do not do formal testing, be absolutely certain to do as much process testing as possible with the converted data.  Testing with converted data will reveal a number of potential problems that can be corrected or resolved before you go live.




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SAP System Vendor Project Success Criteria & Factors 3

November 15th, 2010 by

SAP drives business performanceThe other day I made a post to SAP’s Community Network on making sure customers get the best SAP business software integrator for their money.  One of the comments to that post suggested I was advocating for customers using ONLY SAP as their system integrator.  My response made it pretty clear that my goal is to encourage SAP customers to get educated so they actually achieve value and ROI from their SAP business software projects.  My response sums up why I started this site and what the posts here are all about.

Don’t waste money on consultants who cannot help you implement business software in ways that improve your business!

And to that end we will look at the implementation of SAP or other large business software applications.  Continuing this series of posts on shared success criteria, please see the table below for more information.

No. SAP or ERP Critical Success Factor Company Integrator
5 Experienced SAP consultants   A
7 SAP implementation strategy z A
8 SAP project management A z
9 SAP tools, templates, and resources   A
10 SAP scope development z A
11 SAP scope management A z
12 Strong SAP project and business communication (inward and outward) A z
13 SAP change management A z
15 Sufficient SAP training (user and project team training) A A
16 SAP system vendor and customer trust   A
17 SAP system design decisions z A
18 Amount of custom ABAP or other SAP coding z A
19 Appropriate SAP software configuration (system settings) z A
20 SAP system change control process   A
21 SAP data analysis and conversion A z
22 SAP test planning A z
23 SAP test development z A

Legend

A = Primary Responsibility for the success factor
z = Shared but secondary responsibility for success

16.  SAP System Vendor and Customer Trust

I place this SAP critical success factor (SAP CSF) clearly in the SAP system integrator column.  I can’t say it any clearer than you are writing the checks for an SAP system integrator who needs to deliver value, otherwise what are you paying for anyway?

Trust, but verify – Why would you pay an integrator or their consultants who do not deliver business value?

SAP System Vendor “Trust but Verify

There is a Russian proverb which states “trust, but verify” or, its English equivalent, “better safe than sorry.”  The phrase gained popularity in the United States during the presidency of Ronald Reagan.  He often used the phrase when dealing with the Russians about nuclear weapons.  When the U.S.-Russian INF (Intermediate Nuclear Forces Treaty) was signed, Mikhail Gorbachev commented to Reagan that he used the phrase at every meeting, to which Ronald Reagan replied “I like it!”

How does this relate to you and your SAP project?  The whole idea behind the proverb as used during the Nuclear Treaty discussions was the ability to monitor compliance with the treaty details.  Just like this nuclear weapons discussion was critical to the relations and operations of the two nations, and even the world, so is an SAP implementation to your company.  A business software system project is critical to competitive advantage, efficiencies, operations, innovation, and even customer acquisition and retention.  A properly implemented SAP business software system is critical to navigating a hostile competitive global business landscape. 

Progress monitoring, deliverables verification, and QA assessments must take place throughout the project lifecycle.

See the list of SAP ASAP Methodology deliverables by project phase.  Your SAP sales rep or SAP system integration vendor will have access to the most recent ASAP methodology and can provide you with the SAP standard version of the requirements.  Unfortunately because of the way the SAP copyright is written on the material I am unable to directly distribute it legally.

How do you “trust but verify?”  Here are some tips for ensuring this:

  • Ensure that you consistently communicate your expectations to the system integrator
  • Make sure your integrator provides a clear project plan with key project milestones (from the ASAP methodology).
  • Ensure that there are deliverables that have a connection back to the project activity being completed (again, from the ASAP methodology).
  • Verify that the vendor has a complete set of deliverable templates they can show you and explain ahead of time how they will work and how they are used to track SAP project progress.
  • Perform a “mini-audit” at each project milestone with business stakeholders making the determination whether the deliverable(s) were sufficiently addressed and whether the upcoming deliverables templates appear sufficient for the next milestones.
  • At the end of each project phase ensure that you perform a QA check of that phase before continuing with the next.  This is a standard SAP methodology process but is rarely followed by many consulting firms.

17.  SAP system design decisions and

18.  Amount of SAP ABAP custom coding

Both of these topics are directly related and with SAP in particular they are pretty much interchangeable.  The academic literature breaks these two critical success criteria items out because SAP is not the only business software package that is evaluated.  With SAP in particular the depth and breadth of business software functionality is so significant that custom coding should only be used if there is no close fit from standard functionality.

Before you begin your SAP project it is imperative for you as a customer to decide whether or not you want to do software engineering or business process engineering.  This post explains the differences, what the consequences are, and when it might be appropriate:

SAP Implementation Focus, Software Engineering or Business Process Engineering?
http://www.r3now.com/sap-implementation-focus-software-engineering-or-business-process-engineering

The amount of custom-coding and software engineering you engage in will have a dramatic affect on your overall SAP TCO (Total Cost of Ownership).  This will also have a significant impact on the amount of budget you allocate to critical change management activities and to ongoing software support and maintenance.

  • Set a project expectation with the system vendor that everything you had in your scope must be delivered with standard functionality.
  • Create a change review board to address any scope change requests AND any custom coding requirements.
  • Create a contract provision with terms stating you will get ( x ) amount of a credit when a custom coded solution is proposed that had standard package functionality addressing ( x ) % of the business requirement.
  • Ensure that every custom coding decision includes a written justification with:
    • The standard functionality that was evaluated.
    • Why the standard functionality would not work (what were the gaps).
    • What the business justification for the custom coding is (is it business / mission critical?)
    • Alternatives considered (remove from scope, third-party software, manual process, etc.)
    • Business impact if removed from scope or manually performed.
  • If a decision is made to pursue the custom development then a standard functional specification must be completed.  A good template to start with can be found in the SAP ASAP methodology.  It should contain:
    • Detailed requirements.
    • Expected effort and cost.
    • All SAP module or other areas affected (in other words is this custom development going to be a huge project distraction by consuming too many of the consultants’ time and effort).

19.  Appropriate SAP Software Configuration (system settings)

The system integrator is hired to set up the SAP software.  Through the sales process they’ve convinced you their consultants have the experience you need for success and you hire them for your SAP project.  They are the experts and you have to rely on them because you don’t have the internal experience.

This is where good SAP consultants come into play.  The SAP ERP application contains so much functionality that nearly any business process can be addressed.

Appropriate software configuration is one of those things that is usually discovered at integration testing.  By that time in the project it may be too late to make significant corrections or adjustments without jeopardizing the entire project timeline and budget.

Make sure you invest in your own project team’s training

As a customer there are several things you can do to help ensure that the correct SAP software configuration and settings are made even though you as a customer may not know what they should be.  Here are the major ways to ensure good software configuration.

SAP Project Team Training

First and foremost to ensure appropriate SAP software configuration and to ensure you get good SAP consultants make sure you invest in your own project team’s training.  This critical training should be budgeted for right from the beginning and do not let any SAP system vendor talk you out of it.

An educated client is a sophisticated client, and sophisticated clients usually have the best implementations.

Some system vendors will try to convince you that they can teach your project team rather than having you send your people to independent SAP training.  That is a great way for them to “control the message” you receive about SAP’s functionality and the consultant’s level of skill.  Often times the “pitch” they use to try to sell you on the idea that they should be training your people instead of you sending them to training is that it is cheaper.  But if you do the math for the consulting hourly rates and then factor in the consultants’ time away from value added implementation efforts it doesn’t add up.  Often it is less expensive to send your project team to formal training and even if it isn’t, you still need that independent oversight.  Only independent training ensures your people really know what they need to know.

SAP Prototyping and Proof of Concepts for SAP Project success

I personally favor the prototyping approach.  The reason is that if you are a customer who wants to make sure you have the resources you are paying for this is the easiest way to find out.  By requiring a baseline proof of concept no later than the end of your Blueprint phase you will quickly see which consultants have real experience that the SAP system vendor has provided.  By contrast you will also see those who lack the experience as well.

In the SAP ASAP methodology one suggestion is that the initial baseline prototype (the first one done right at the end of blueprint) might cover 50 – 80% of the business requirements. 

For more information on prototyping and the steps for ensuring project success please see the post ERP, SAP, or IT Project Management and Prototyping for Success at http://www.r3now.com/erp-sap-or-it-project-management-and-prototyping-for-success  

Be sure your system integrator’s consultants do FULL END TO END process prototypes.  For example just doing a single transaction is not enough to demonstrate the system will meet the business needs.  By the end of Blueprint a seasoned and experienced consultant should be able to demonstrate these simple, straightforward, and standard processes.

  • In the SD area (Sales and Distribution) an order, and then delivery with picking and goods issues, and then an invoice must be created.  You may wish to have them post cash and then review the material and accounting documents as well.
  • In the PP area (Production Planning) maybe you want to see independent requirements run through MRP and then convert the results into the purchasing and production documents.  From there you may wish to have them do the receipts, and the confirmations of the production on a material, and even shows costs.
  • In the MM (Materials Management) area you may wish to integrate this with PP (or not) and have the consultant show you the requisition to PO to Goods Receipt to Invoice receipt and then application of cash payments to the vendor.

In other words a skilled SAP consultant can do the setup work to do at least a first pass at all of these processes by the end of Blueprinting.

Significant benefits of SAP Prototyping and Proofs of Concept

I strongly favor SAP prototypes and functionality demonstrations throughout any SAP project.  Prototypes can quickly expose process gaps, potential integration problems, business process issues, and ensure that testing is smoother.  One of the significant advantages of prototyping is that it places an emphasis on overall business processes.

By relying heavily on prototypes and functionality demonstrations throughout an SAP project you help to ensure that the project team works more closely together, that only the best consultants are provided by the integrator, your internal client project team acquires more knowledge sooner in the process, and a better go-live.

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