SAP Program Management

Many may be unaware that SAP provides a broad set of tools and resources for Program Management and Competency Maturity Management (or CMM). Very few are familiar with SAP’s broad set of supports for this purpose such as the “new” ASAP Methodology Phase 6 “Run” enhancement. It is loaded with key information which aligns with Program Management responsibilities and CMMI.

So, what is CMM (or CMMI as it is more properly referred to)?

“CMMI (Capability Maturity Model Integration) is a process improvement approach that provides organizations with the essential elements of effective processes, which will improve their performance… CMMI models are collections of best practices that help organizations to dramatically improve effectiveness, efficiency, and quality” [FN1].

The entire CMMI methodology and development is maintained at Carnegie Mellon’s Software Engineering Institute. These CMMI standards have been applied in a vast number of organizations together with various methodologies. The CMMI approach is well suited to engineering and software development, design, or implementation. SAP’s entire ASAP methodology, and especially the “new” Run methodology incorporates a number of CMMI principles.

SAP Program Management is all about Competency Maturity Management (or CMM)

The contract SAP program manager is accountable for providing the key tools, templates, techniques, and resources to ensure projects are properly managed and delivered for business benefit. If they are not providing this type of methodology guidance, including key templates and techniques to deliver business benefit, what are you paying them for?

SAP Program Management or Project Management Gaps

After all these years one of my biggest frustrations is the lack of SAP contract program or project managers use of the ASAP Methodology. They all talk about it, and during sales presentations they use lots of SAP’s material, but as soon as the project begins you never see it. They seem to have absolutely no idea what they are doing.

As I have often said, I never believe that a client / customer of project management or program management services has the primary responsibility for this knowledge. If they did why bother hiring outside help and paying the rates for this service except for that contract “expertise?”

Contract SAP program management or SAP project management that is not able to deliver on clearly understandable methodology development are fakes. Anyone can call themselves a program manager, but what does that mean? What is the contract SAP Program Manager accountable for? What are they on the hook to deliver and how is their performance measured?

Using SAP ASAP and CMMI to Mature the SAP Enabled Enterprise

The SAP ASAP Methodology, in particular the Phase 6 Run section, should be studied by every SAP program manager before they start doing project or program work. Even though it is in the last ASAP Methodology phase, its greatest effectiveness is realized when you begin your internal SAP delivery maturity planning from the beginning of your SAP project.

One of the critical benefits of starting your CMMI related planning right from the beginning is your SAP project can be structured to support business integration at the outset. Using this type of maturity model integration as part of your project guidance can have significant benefits to the enterprise:

“Many CMMI using businesses have beneficial results to their bottom line… including improvements in schedule and cost performance, product and service quality, forecasting accuracy, productivity, customer satisfaction, return on investment, and other measures of performance” [FN2].

SAP has already done a significant amount of the work for you. All your program manager has to do is adjust the plans, alter the templates, follow the ASAP Methodology instructions, and build the resources to support this transition. You really must question SAP program manager service providers who do not keep up with the ASAP tools and delivery methodology that SAP provides and supports.

SAP’s Competency Maturity Model Starting Point

The following maturity model is just one small example of a powerful tool that is critical for long term technology and business integration [FN3]:

This model, provided freely by SAP as part of their standard ASAP methodology is a great starting point. Your contract SAP program manager should be able to use this as it is, or adjust it to fit your particular organizational needs. This is just one very small component of the Run Phase and an even smaller component of the entire ASAP Methodology toolset.

In many cases you would be better off sending your own internal employees to SAP ASAP certification courses and Microsoft Project classes and making use of their new found knowledge. At least then you would have a knowledgeable employee who could help keep an integrator who claims to use ASAP honest. And if they claim to use ASAP in their sales materials or sales pitches GET THAT CLAIM IN YOUR STATEMENT OF WORK AND YOUR CONTRACT WITH THEM!

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For more information on related topics please see:

• SAP Project Manager – SAP Program Manager, Lessons from the Trenches
• Effective Results from SAP Project Managers – SAP Program Managers
• SAP IT Convergence Beyond Business to IT Alignment
• Create SAP Convergence Instead of Business to IT Alignment
• Integrating Business Stakeholders as Part of SAP IT Convergence
• Steps to Achieve SAP IT Convergence
• SAP IT Convergence is About Business Focused Integration
• Steering Committee Governance for an SAP Center of Excellence
• Using Your SAP Steering Committee for Business Transformation

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[FN1] CMMI Overview: Software Engineering Institute at Carnegie Mellon University, retrieved November 5, 2011. http://www.sei.cmu.edu/cmmi/

[FN2] Why CMMI: Software Engineering Institute at Carnegie Mellon University, retrieved November 5, 2011. http://www.sei.cmu.edu/cmmi/why/

[FN3] SAP ASAP Methodology version 7.1, WBS 6.2.1 – Table 1: Maturity Level Characteristics. For more information on the SAP ASAP Methodology please go to http://www.sap.com/services/more/servsuptech/asap.epx

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

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Related Posts:

• Steps to Achieve SAP IT Convergence
• Steering Committee Governance for an SAP Center of Excellence
• ERP and SAP Business Case for ROI, Business Benefit, and Success
• Why Use the SAP ASAP Methodology?
• SAP IT Governance, SAP Program Management, SAP PMO Metrics

Business Systems

The day after I released my last post (SAP IT Governance – Achieve Business IT Engagement) techrepublic.com published a review of the CIO future direction. While I do not agree with all of the Gartner conclusions they published I certainly agree with the “new CIO manifesto” (TechRepublic: Get drastic: 15 IT best practices to kill). Reading through the comments left on the TechRepublic post was enlightening, most of the comments focused on the details of one or two points of disagreement while missing the focus of the entire message.

Denial of the purpose of any IT initiative, especially SAP business solutions, will only lead to significant levels of outsourcing. IT areas and functions that become more like “commodities,” or, as one commentator calls these functions “taxes” on the enterprise are quick to be outsourced. While these “taxes” are necessary infrastructure components (such as e-mail, phone, wide area networks, and even PCs or laptops), other areas are starting to be seen as commodities subject to significant cuts.

SAP Consultants Must Get Serious About Customer Focused Value (or find another career)

Unless more functional SAP application consultants get serious about understanding business and helping stop the fakes then enterprise applications will become a commodity as well. This isn’t just idle speculation. Those of us who have been around SAP for 10 years or more (and some of us approaching 20 years or more) remember the days when ABAP skills were sky high–, now they are a commodity which is frequently outsourced to India, Malaysia, or China. The same commodity status is true of SAP Basis–, it is outsourced overseas or to hosting providers. Without real value SAP (or Oracle, MS Dynamics, etc.) are soon to follow.

The Coming SAP Business Technology Revolution

The TechRepublic post hit on a key theme which is the focus of this site–, helping business realize (and recognize) value from their SAP projects. Under the subtitle “New CIO manifesto” TechRepublic notes:

“information [may be] more important than information technology” and the majority of IT spend will be used to “measurably improve… financial conditions of an enterprise” by supporting “revenue generating rather than expense related business processes.”

This manifesto is more aligned to sales, marketing, and innovation. These areas of the enterprise are in line with CEO priorities (see e.g. What is the Proper Relationship for the CIO, CEO, and CFO?). The TechRepublic post then goes on to note that:

“IT has to stop thinking of itself as a business utility and start seeing itself as a business catalyst. In order to do that, it’s going to have to think in business terms and economic impact for everything it does…”

What Can Skilled SAP Consultants Do to Prevent Becoming Commodities?

FIRST do what you can to educate clients around consultant screening (for details see Protecting Yourself from SAP Consulting Fraud). For example, if you find out a client is looking for consultants ask them if they have received that candidate’s references from their last three projects and whether they directly asked for confirmation of experience from those references?

As clients continue to see marginal or substandard results from so many of these frauds they will consider you the same and rate pressure will quickly move you to commodity status. Worse still, you may be on a project where you have to do so much clean up and correction behind an incompetent consultant just to get your own area working that you do not have the time to deliver on real value that will set you apart.

SECOND make sure you focus your consulting efforts on delivering value to your clients. When I say value I mean in terms of business benefit and return on what you are being paid for. Don’t just do some configuration because that is what you are being told, or because that is what is in scope. Do it in such a way that it helps the client long term. For example, just because SAP supports a particular type of functionality the ongoing maintenance after go live may not be in the client’s best interests. Carefully consider the short and long term effects on your customer of what you do. If you take this approach you may lose out on a little extra billable time in the short term, BUT you will stand out to them as someone who looks out for their interests. When it comes time to upgrade or add on additional functionality a call from you could land you a direct client without the middle man staffing firm. You can avoid competing with so many of the frauds the staffing companies try to place which may destroy a client project and damage the value you can add.

The choice is yours. You can start working to be more client and customer focused to generate value or you can watch the marketplace move you to commodity status. In the end no matter how good you are as the marketplace erodes your value in it does as well. It’s time to start acting like a consultant, a paid advisor to give your client the best possible direction you can and in doing so you also help to protect your own future as well. For more insight on delivering SAP enterprise value focus on the components of ERP II or ERP III (see ERP vs. ERP II vs. ERP III Future Enterprise Applications).

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

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Related Posts:

• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• The Real Reason Executive Participation Creates IT Project Success
• Using SAP to Improve Revenue and Profitability
• SAP IT Convergence Beyond Business to IT Alignment

Business - IT Convergence

In the new global business age it is more important than ever to leverage technology organization expertise for business benefit.  Too often technology organizations focus on technology for the sake of technology rather than for how it might improve products and services or how it might create more customer focus.

In today’s competitive global economy, filled with international economic instability, no part of the enterprise can afford to move very far from what pays the bills.  If your SAP or IT organization is focused completely on technology solutions you lose sight of what is important to the business.  And what is that?  Customers: customer retention, acquisition, loyalty, satisfaction, and experience.  Without customers there is no growth or revenue.  Without growth or revenue there is no need for that expensive SAP or IT investment.

Finding SAP IT Convergence in Innovation and Customer Focus

A dynamic shift away from “back office” or operational focus is needed to move the SAP organization toward genuine IT convergence.  To make the change requires a deeper and more meaningful understanding of business itself.  It requires a focus on the organization’s products or services (i.e. innovation, read Process Execution of Business and IT Innovation) and then how those products or services are marketed and sold.

This emphasis on IT convergence, especially in the SAP enterprise, is about preparing your organization for the changes which are beginning to shape the future of enterprise applications, or “ERP III” (for a detailed explanation of ERP, ERP II, and ERP III see ERP vs. ERP II vs. ERP III Future Enterprise Applications).  So what is ERP III?  ERP III is the next generation of enterprise applications which leverage social media (or other collaborative tools) in news ways to integrate customers into the borderless enterprise.

Without a clearer focus on customers as well as innovation in the enterprise, or “how business gets done,” the SAP and overall IT organization becomes a very expensive operational support layer.  Without the genuine business focus the organization becomes a commodity to be outsourced.

How Can You Transition to Full SAP IT Convergence?

By now the need for full convergence is clearer.  But if it’s still not clear enough consider another element or your SAP or IT organization–, look at the pay structure for your SAP skills.  Your SAP staff is likely paid equivalent salaries to very senior level employees at your company.  In some cases they may make as much as some of the junior executives.  And then remind yourself, this pay range is for non-management positions.  So we have to consider what it will take to change the organization to achieve convergence.

From the last few posts, as well as my own experience, here is my “short list” of important things to do to achieve convergence:

• Steering Committee Engagement and Roadmap Management
• Pursue business executive sponsorship but don’t wait for it to get started
• Engage at all levels of the organization
• MBA in the IT organization
• Conduct one or more pilot programs and capture lessons learned

Start a communication program

Exchange staff program to integrate the IT organization into the business

Hold IT staff accountable for participation

Don’t let available tools stifle participation or innovation

• Invest in NON-TECHNICAL IT training

Public speaking

Presentation skills

Meeting skills

Facilitation skills

Questioning and Negotiation

Conflict management and resolution

Managerial skills

There are two other areas that I will offer some insight on.  As a result of the explosion in mobile devices (literally hundreds of millions of them) there is a need to ensure that technology solutions are “device agnostic.”  In other words, as employees begin to provide their own smartphones be ready to support them.  If your organization is tasked with the cost for the plans and hardware, supporting employee provided mobile devices is cheaper even with the additional support overhead.  On the second front there are business direct buy purchases of technology.  As last week’s post pointed out, because of what the business perceives as a lack of responsiveness to their needs they are making more of their own direct technology purchases.  Learn to live with this and to engage in more of an internal consulting role so that the solutions are a better fit for the business and the SAP or IT organization.

How you approach the future for your technology organization–, isolation, alignment, or convergence; will determine how valuable you are to the business in the future.  And with today’s competitive landscape combined with the economic struggles it is more important than ever to demonstrate business value.

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

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Related Posts:

• ERP vs. ERP II vs. ERP III Future Enterprise Applications
• ERP II & ERP III – SAP Business IT Revolution
• Steps to Achieve SAP IT Convergence
• Striving for a Customer Focused Approach to Innovation 3 of 3
• ERP III – Is the Integration of Collaboration the Future of Enterprise Applications

IT Convergence

The other day I was having a conversation with an IT executive from one of America’s largest companies.  I was really interested in his perspective as a hard working senior level IT insider.  We started talking about the role of IT and business as well as the future of business and technology while I relayed my passion for how IT needs to integrate with the business and how the future was going to change significantly (see e.g. What is the Proper Relationship for the CIO, CEO, and CFO?).

I gained a new appreciation for how difficult an IT executive’s job can be when the economy is in turmoil.  I’m sure my comments and perspective were challenging but here is part of what I gained from that conversation (my assumptions and my “read” may be wrong)…

The wider global technology discussion (inside and outside of the company) is putting real pressure on IT return on investment, IT Convergence, and full integration with the business (see Steps to Achieve SAP IT Convergence).  Even while all of this takes place there is still a critical need to stay on top of technology trends and be sure the organization does not stagnate.  To stay competitive what does he do with “cloud” processing, do they need different applications for some of their processes (CRM, APO,SRM, etc.), what about social media (does it even fit), virtualization, shared services, service excellence, outsourcing, in-sourcing, etc., etc., etc.

This executive’s IT organization is being challenged to do more with less.  As a result of cost-cutting pressures his organization is having to look at outsourcing while he also has to maintain a positive and upbeat appearance in the face of working through difficult cuts.  He has to continue encouraging and rallying the troops while some of them will not be there.

A Simple Response to the Nagging Problem of Business IT Convergence

With all of this background in mind one of his responses to me set me back a moment for its simplicity, candor, and most of all the underlying frustration.  It is certainly one of those very difficult struggles that many corporate technology leaders today face:

“What is the business responsibility for this?”

The business not only has responsibility but they have to help drive solutions and delivery. The various business stakeholders must see, understand, and then accept their role in developing the technology roadmap. And once it is developed they must help ensure its execution.

The Business to IT Convergence Solution That Was There All Along

The IT Convergence approach in the SAP enterprise is partially based on best practices around IT Governance.  By creating a governance structure that involves and integrates both the business and IT stakeholders you gain business buy-in and involvement.  I have written a solution brief on this approach and provide a free, no-obligation MS Access application to build technology roadmaps (see the Solution Brief, governance process, and application overview here:  Beyond Technology Alignment )

The basic takeaway here is that business involvement is critical.  They are already making technology investments, with, or without your involvement. So it is critical to gain that convergence so that technology investments are performed as a partnership and not in isolation.  As a recent Harvard Business Review post by Ray Wang notes:

“[O]verall corporate tech spending is up by 17 to 20% in our latest data, spending by IT departments is flat at best. It’s business leaders, not their IT colleagues, who are driving purchasing decisions.”

Coming to Terms with the Consumerization of IT, http://blogs.hbr.org/cs/2011/07/coming_to_terms_with_the_consu.html and a followup with more details on his site at:  http://blog.softwareinsider.org/2011/08/22/mondays-musings-balancing-the-six-ss-in-consumerization-of-it/ (both retrieved 8/23/2011)

So the key here is to integrate the business into the IT and application infrastructure.  One way to do that is through leveraging SAP steering committee skills and business connections to ensure meaningful involvement by IT.

Additional Steps to SAP IT Convergence – Creating the Center of Excellence

Last week’s post provided a few high level steps to achieve SAP IT Convergence, and this week I am adding to that list the following items.

• Pursue business executive sponsorship but don’t wait for it to get started.
• Start a communication program
• Engage at all levels of the organization
• Conduct one or more pilot programs and capture lessons learned
• Hold IT staff accountable for participation
• Don’t let available tools stifle participation or innovation

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

=========================

Related Posts:

• Steps to Achieve SAP IT Convergence
• SAP IT Convergence is About Business Focused Integration
• SAP Program Management Requires a Type of CMMI
• SAP IT Convergence Beyond Business to IT Alignment
• SAP Project Manager – SAP Program Manager, Lessons from the Trenches

SAP IT Convergence

The problems with Enterprise SAP IT organizations are they are focused on SAP and IT.  They lose sight of their purpose which is to support and promote the broader objectives of the enterprise.  In an SAP centered IT organization this means your whole existence is about ensuring business benefit, focusing on enterprise goals, strategies, and objectives.

Somewhere between the SAP sales cycle and the SAP go-live the concept of business benefit gets lost and is never found again.  By the time you go live with the SAP application the entire IT organization becomes narrowly focused on the care and feeding of the new system.  Everything is all about the “new” ERP application and the business is left holding an empty bag –, the money is gone but the business now has to struggle through getting their operations stabilized just to continue doing business.

The entire IT organization’s existence must focus on enabling business.

Today’s enterprises will no longer pay the premium prices for SAP or IT organizations which exist in a silo.  To continue with this old way of doing SAP or IT support will turn those internal services into very expensive commodities to be outsourced to the lowest cost provider(s).  If you want to do more than survive, but rather to thrive, you must build a converged SAP or IT organization.  Without IT convergence you can expect budget cuts and more outsourcing pressures.

Research Shows a Business Focus Produces SAP Results Needed for IT Convergence

Successful SAP projects require the management and measurement of expected benefits and the purpose for the project throughout the entire SAP life-cycle (Holland and Light, pg. 1630-1636, 1999).  To gain business benefits from an ERP package like SAP you will need serious discussion of goals, direction, objectives, and what the business software can do in those areas.  After that, coordination of key resources from both business and IT is also required to create business to IT alignment (Willcocks and Sykes, pg. 33-38, 2000).  This business to IT alignment produces some great results but is just the beginning.

[F]irms that invested more heavily in business process redesign and devoted more of their IT resources to increasing customer value (e.g. quality, timeliness, convenience) had greater productivity and business performance (Hitt, Wu, and Zhou, pg. 3, 2004 citing Brynolfsson and Hitt)…   [A 1999 study on] the impact of ERP systems on self-reported company performance based on a survey of 101 US implementers of SAP R/3 packages [showed]… companies reported substantial performance improvement in several areas as a result of their ERP implementation, including their ability to provide information to customers, cycle times, and on-time completion rates (Hitt, Wu, and Zhou, pg. 5-6, 2004).

In the 2004 study just cited they also referenced compiled research by Gattiker and Goodhue (2000) which identified four broad categories of ERP benefits including (1) better information flows, standardization, integration, communication and coordination; (2) centralization of administration activities like, AP, payroll, etc. (i.e. “shared services”); (3) reduced IS maintenance costs and improved ability to deploy new IS functionality; (4) a move to “best business practices” around business processes.

Some of the additional and very interesting findings (Hitt, Wu, and Zhou, pg. 18, 2004) include:

• Greater sales employee performance
• Higher profit margins
• Better return on assets including greater asset utilization
• Higher inventory turns
• Greater receivables management (including better “cash to cash” cycles)
• More revenue generated per unit of input

This is impressive but notice these benefits are nearly all operational business performance results.  They certainly appeal to the CFO and improve market valuation making them meaningful. However, as operational benefits they are nearly all focused on lagging indicators of business success.  Shareholders like them with the valuations of companies who implement ERP systems like SAP being “worth approximately 13% more than their non-adopting counterparts, controlling for assets, time and industry” (Hitt, Wu, and Zhou, pg. 20, 2004).  So implementing SAP has a positive impact on stock values.

Today’s SAP Enterprise Can Realize Even More Through SAP IT Convergence

All of these benefits and gains from roughly a decade ago are not enough today.  While the study from Hitt, Wu, and Zhou (as well as the others reviewed here) showed tremendous benefits for SAP they were based on studies at least 10 years old.

In the last decade the entire global landscape has dramatically changed –, the Internet and the pace of technology change has disrupted every value proposition model relied upon by business.  No area of the enterprise is off limits–, business is in the midst of a global and dynamic transformation of operations, innovation, and customer focus.  To thrive in our modern business era we will all have to move past the IT to business alignment model and push into IT convergence.

Your SAP Enterprise Can No Longer Avoid Full Business to IT Integration (i.e. “Convergence”)

The business benefit focus has been difficult for SAP or IT leaders trying to quantify returns from their investments.  Even though SAP has been at the forefront of addressing this message it is slow to catch on.  Over a year ago I highlighted SAP’s “value delivery” and value focus to implementing their software:

Studies have shown that there is a critical disconnect between projected benefits in business cases for IT investments and actual value achieved, because so many firms focus on going live with a project rather than its value delivery. An SAP / ASUG best-practice survey on the ability to capture the projected benefits of an IT project found that 73% of companies do not quantitatively measure value post-implementation (SAP Executive Insight Series, pg. 7, 2009)…  Critical business benefits for an SAP project require taking a hard look at the enterprise and its goals or direction…  (see A New SAP Implementation Methodology and Implementation Steps).

And while all of this is critical for realizing SAP ROI from your investment there is still more to do.  With this groundwork focusing on the need for business benefit, or measurable ROI, we can take the next step and start to explore full IT convergence around your SAP endeavors.

Next week we will look at some methods to create SAP IT convergence.

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Gattiker, T., and Goodhue, D. Understanding the plant level costs and benefits of ERP: Will the ugly ducking always turn into a swan? In: R. Sprague, Jr. (Ed.), Proceedings of the 33rd Annual Hawaii International Conference on System Sciences ( CD-ROM), Los Alamitos, CA: IEEE Computer Society Press, 2000.

Hitt, L., Wu, D.J., and Zhou, X. ERP Investment: Business Impact and Productivity Measures.  Wharton School at U of P (2004).

Holland, C. and Light, B. Critical Success Factors Model for ERP Implementation.  IEEE Software. May / June (1999).

Willcocks, L. P. and Sykes, R. The Role of the CIO and IT Function in ERP.  Communications of the ACM, Vol. 43, Iss. 4 (2000).

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

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Related Posts:

• Integrating Business Stakeholders as Part of SAP IT Convergence
• Steps to Achieve SAP IT Convergence
• What are SAP Best Business Practices Anyway
• Why Indexed KPIs are Critical for Business Performance and Success
• Using SAP to Improve Revenue and Profitability

SAP Center of Excellence Governance

This post is based on information from my recent ASUG presentation in Atlanta…  Beyond Technology Alignment – Building a Center of Excellence @ http://bit.ly/jJefxP

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At the intersection of business and IT you have convergence.  At the place of convergence is where the Center of Excellence exists.

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One of the key SAP project success factors is to use a steering committee made up of key business stakeholders.  They can meet once a week or once a month, but generally they are involved to provide business level guidance to an SAP project or IT programs.  The most effective steering committees include at least one executive and several senior leaders from throughout the business (see The Real Reason Executive Participation Creates IT Project Success).

That steering committee performs a critical function over large projects like SAP implementations.  This group is critical to your project’s success because of the amount of time from company employees, capital from the organization’s coffers, and decisions which change the business.

Some of the key functions a steering committee carries out during the course of your SAP project include:

• Set SAP project scope and then help manage it.
• Define project objectives and evaluation criteria.
• Monitor project progress, including key milestones and deliverables progress.
• Oversee Quality reviews at key check points.
• Evaluate and mitigate organizational impact of business changes.
• Promotes the project throughout the organization.
• Coordinates staffing and resource levels from key business areas.
• Makes critical decisions which the project team is unable to resolve (escalations or key business decisions).

The ongoing functions and tasks of the SAP steering committee cannot be underestimated. During the course of their duties they gain that list of unique and critical skills related to applying technology to business issues and problems (see Using Your SAP Steering Committee for Business Transformation).

You go live and WHY do you disband your steering committee???

Integrating the SAP – IT Organization Into the Business

In an SAP Center of Excellence, after your SAP implementation goes live, the steering committee functions change to one of developing and managing technology road-maps.  Their skills with scope, schedule, cost, performance, prioritizing, and evaluating risks / rewards are ideally suited to their continued involvement in the application of technology to the business.  But the underlying issue here is that they must continue to function –, they should not be disbanded.

One of the key benefits of continuing to leverage the SAP Steering Committee after the SAP business software goes live is you continue to build on their experience and unique skills.  Even as they rotate out of the steering committee role these individuals move through the ranks of the larger enterprise and take that technology to business integration experience with them.  If they have served on a steering committee long enough to see the benefits technology can bring to the larger enterprise their exposure is invaluable to building a long term Center of Excellence –, an organization dedicated to converging business and technology to meet business marketplace requirements.

These individuals have worked through many key business decisions, budget decisions, scope and schedule decisions, and how to move to technology integration project success.  As a result of their experience applying technology solutions to the business they develop critical skills for the converged and integrated organization, these skills are difficult to replicate.  In a nutshell this steering committee develops a convergence of three critical skills for tomorrow’s powerhouse enterprises: they understand management, technology, and business integration.  Those are the key ingredients to the converged SAP enterprise.

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

=========================

Related Posts:

• SAP Program Management Requires a Type of CMMI
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• The Real Reason Executive Participation Creates IT Project Success
• Change How You Look at SAP to Create ROI
• Why Use the SAP ASAP Methodology?

Stop the Sales Tactics

This week we will look at more aggressive ERP sales tactics used to manipulate you into signing over your checkbook to these ERP system integrators.  Moving through the process the tactics used are starting to get more interesting–, we’ve gone from manipulation (Overcome SAP-ERP System Integrator Sales Tactics 2) to more aggressive tactics.

Often software vendors with inferior products resort to many underhanded or dirty tactics and scams.  And if you stop and think about it, it makes perfect sense.  When business software vendors are up against a competitor with a superior product they can only hope to prevent you from making an objective comparison of their product to the competitors.  When you add in the massive payday; tens of thousands, hundreds of thousands, or in large sales millions of dollars on the line it should be expected.  And don’t get me wrong, it only gets more intense when it comes to the services offerings.  At least you have a greater chance to gain a more objective evaluation of the software than you do vendor service claims.  Tactics can get downright nasty, but always with a smiling patina that the sales person is just “trying to help.”

Once you know the tactics you can identify them and discount their effectiveness.  Always remember the sales person’s goal is to sell to you.  Your goal is to make sure you get benefit for your company and see a return on your SAP investment.

Deep into the SAP-ERP System Integrator Sales Cycle

• Introduction of doubt
  • “Try to discredit your competition without being obvious – pointing out bad press (where it may not be warranted, although at times it is), providing “rumors” or “special insight” that they really don’t have, anything that distracts from a practical / objective decision on the ACTUAL functionality should be viewed with suspicion.
• The “Survey Demo”
  • Need + Feature = Benefit.  They will try to “discover” requirements not in the RFP to show you “cool” things you didn’t request.  It’s all about trying to create an impression with you.  Counteract this by simply asking, “what RFP section does this address?”
• My manager must meet  your manager
  • IBM study…
    • Sales person with the most “face time” wins
• Unload the bus – a “mob” shows up to “work” the room and every client or ERP RFP participant.  Resolve this by restricting the number of on-site vendor participants.
• Crocodile salesmen – All mouth and no ears.  They are too busy telling you everything they think you want to hear, whether it is true or not, so they can make you their next meal.
• The magic number game – We saved your competitor $$$…  You can gain up to x% market / revenue / margin / cost reduction…  You name it.  They throw numbers around as if they are the masters of entire markets and industries.   They baffle you with statistics and financial claims.  Or they might ask you where you “need to be” to make a deal.

Want to change it?  EVERY TIME they make some claim ask them if they can put that claim in their contract with the penalty clause!  WATCH THEM SLITHER AWAY FROM THE CLAIMS!

Deep into the Sales Cycle – Product Demos

In the previous section the focus was on the sales approach used by the sales people themselves.  This section is an overview of product demos and the various tactics and strategies used here.

• Provide your data for demonstrations
• Create “day in the life” scripts
• Give the supplier time to prepare
  • Differences in prep time could indicate complexity
• Hold-back some exceptions
  • See if the vendor says “No” or makes excuses for why the exception can’t be done
  • Test flexibility in the solution and in their skill by asking them to demonstrate these exceptions in their solution.  Let them know at the beginning of the demo what they are and ask them to have it prepared by the end.
• Make sure they include sample implementation plans, templates, resources, tools, etc.
• If your supplier does well, tell them but DO NOT commit (at this point a decent sales person will “move in” for the close).

There is one last sales type to consider here, that is the effective sales person.  Notice I didn’t say “good” sales person but effective.  They have been carefully trained, they know how to “work” the room, and they know how to move you along in the process.  They are polished, understand listening skills, and they will relay back to you exactly what you want to hear.  These are the “vaporware” aficionados – they  will slyly sell you on something that does not exist.  They will sell you on their “A” team when the best they can provide is a “B” team.  They will sell you on how well their software or solution fits your needs without actually showing you any proof it does.

These sales people want you to fall in love with their amazing “story” about how they will somehow produce amazing results for you.  Like a magician with their smoke and mirrors to hide their real actions they carefully find out what you want to hear and tell it to you whether it is true or not.  What proof do they have that they can deliver these results for you?

They sell you a vacation with the intention of delivering you a bucket of sand for the full vacation price.  They sell you a vacation home but after you sign the contract they hand you a doll house box full of parts and a hot glue gun.

They will convince you that using them will cost you less without committing to anything that might actually put a real limit or box around their fees.  The will promise you will get the results you want without actually providing any way of achieving them.  These are the dangerous sales people.

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

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Related Posts:

• Overcome SAP-ERP System Integrator Sales Tactics 7
• Overcome SAP-ERP System Integrator Sales Tactics 6
• Overcome SAP-ERP System Integrator Sales Tactics 5
• Overcome SAP-ERP System Integrator Sales Tactics 4
• Overcome SAP-ERP System Integrator Sales Tactics 1

Use SAP Best Business Practices For Commodity Processes But More Carefully Evaluate Competitive Processes

The debate and discussion around SAP best business practices usually assumes an “either-or” mindset.  Either you use the SAP best business practices as they are or you abandon them (for more background on SAP’s “Best Business Practices” see What are SAP Best Business Practices Anyway).  Several commentators suggest you should not do a software vendor’s “best practices” because you are adopting the “herd” mentality and will not be competitive in the marketplace.  They completely ignore the reality that some processes do not need huge development investments.  SAP provides a number of tools and resources to evaluate its solutions for your enterprise’s business processes (see Using SAP Solution Composer for SAP Scope – Process Alignment).

Commentators who are broadly against “best practices” have failed to recognize that there are different types of business processes.  One type are what I call “commodity processes” or the things you must do to run business, that everyone does, but adds little or no value to reducing cost, increasing revenue, or improving margins.  The other type are “value added” processes where the process itself (not ancillary manual steps) directly aid in reducing cost, increasing revenue, or improving margins.  Some business processes justify custom development when a standard solution will not do certain business critical processes (see e.g. Lower SAP Application Support Costs – TCO – by Reducing Custom Solutions).

Value added processes must directly contribute to market share or address a specific pressure from a competitor or they are commodity practices which are good candidate for “best practices.”  By reducing costs or increasing revenue and margins you are directly affecting your competitive posture in the marketplace.

What Are Value Added Processes in the SAP Organization?

Let me clarify one thing here, a “value added” process can be any process in a company.  In one company or environment a process may be a commodity process, however in another company, or industry, that same process may be a value added process.  The test for a “value added” process is whether or not it adds to your business marketplace competitive advantage.  That generally means it has to reduce cost or increase revenue in more than a minimal way.  As an illustration ask yourself, if you significantly increase your margins on a slow moving, outdated, low volume product or service is it worth a huge amount of time and effort?  Was the investment worth it?

Management’s primary responsibilities are to increase revenue, reduce cost, and improve margins

A value added business process will generally have some type of reporting requirement attached to it.  Some way to measure its performance because the process is critical to the organization’s mission.  If you have developed KPI’s, goals, metrics, or reports for a particular portion of your business processing you can be sure it is a good candidate for special attention as a “value added” process (see Why Indexed KPIs are Critical for Business Performance and Success and Using Key Performance Indicators for Building a Strategy Focused Organization).

What are Commodity Processes in the SAP Organization?

In most companies “commodity” processes would include purchasing, warehousing, inventory, distribution, or other routine processes.  Commodity processes and those business functions that do not have a direct impact on your competitive position.  If you are a third-party logistics provider then your competitive processes would include warehousing and distribution.  It is the core of your business and what you do.  However in other businesses those would be commodity processes.  If you are a consumer products company then sales and marketing processes would be value added where purchasing and inventory would be more commodity processes.

Worse still, in recent years IT has been seen as a “commodity” resource to be outsourced.  As IT and technology functions have become more and more focused on cutting costs and shaving pennies from a few process areas they are finding smaller and smaller returns at more and more cost.  As new technology is rolled out and it stabilizes the business and senior management see IT as more and more of an expensive cost center with functions that can be performed elsewhere at a lower cost.  IT organizations everywhere must begin to aggressively focus on business integration and value realization or become prey to outsourcing themselves (see IT Outsourcing, Off Shore Support, Cost Cutting and IT Department Changes).

SAP Software Best Business Practice Processes

While I have long advocated for business process engineering rather than software engineering there are times when custom development is justified.  The key to understanding when you might choose one approach or the other is related to whether a process (or sub-process) is a “commodity” process or a “value added” process.

Considering cost, revenue, and margins separated from marketplace competitiveness is misplaced.  Unless there is some significant competitive advantage or directly aligned business driver then only standard functionality should be used.

When you consider your SAP software investment it would provide the greatest business benefit to pay special attention to value added processes. Do not waste time or development effort on commodity processes.  Spend the time, effort, and money on change management for commodity processes because after the initial change cost ongoing Total Cost of Ownership (TCO) for these SAP processes will be the least expensive (see Where do you Start with SAP Return on Investment or SAP ROI?).  Regression testing, patches, fixes, new functionality, and all of the other things you do with SAP business applications will be easier and less expensive for the commodity processes.

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

=========================

Related Posts:

• Using SAP to Improve Revenue and Profitability
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• Aligning SAP Scope to Meaningful Business Requirements
• ERP Business Case: Do You Really Need a New System?
• SAP Development Landscape and Systems: Misguided Practices Carry Huge Costs

Business to IT Convergence

This is part of an ongoing exploration of creating an SAP or Technology “Center of Excellence” within your enterprise.  For the background and key insights on this approach see the Series on SAP Competency Center or SAP Center of Excellence .

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The real future of technology is for IT to integrate with business, or in other words to “converge” business and technology.  The idea of “aligning” with business is too weak of a statement to define what IT and SAP must do within the enterprise to generate significant ROI.

Think about it, during the course of an SAP project the focus is on integrating the enterprise into a single data repository with dependent process chains.  Somehow that same level of integration is not required of the business and IT after you go live.

Product Convergence Lessons for Next Generation SAP Organizations

Convergence, convergence, convergence, what do I mean by convergence?  The idea behind convergence is the enabling of business with technology so that the two can not be distinguished from each other.  It means the lines between business and IT departments must be deliberately blurred.

Although the following examples are about product convergence they are great illustrations for how business and IT should integrate, or “converge” their functions.

• ARPAnet which was created by the U.S. Defense Department’s Advanced Project’s group eventually became the Internet.  This was originally an advanced data and communications “fabric” that could withstand a nuclear war and route both data and communications in the event whole areas of the network were unavailable.  That back-end technology was later combined with early graphical software to create the public Internet as a global information resource never seen before in human history.
• E-mail was a convergence of network technology with hardware, communication protocols, and then combined with software applications.  These combined to create a new form of communication which has transformed both business and social structures.  That convergence has extended to the Internet for various forms of “webmail.”
• The advent of the personal computer and its increasing power made the way for decentralized processing in the form of “client-server” based applications.  Central business functions and tools could run on a server but each user’s experience and application needs could be tailored at their individual workstations.
• ERP applications such as SAP’s ERP suite were made possible by the need for a centralized source of data, at the intersection of databases, network technology, and software user interfaces.  “Cloud” based applications or Software as a Service (SaaS) were an extension of that convergence to include remote hardware sourcing and access through the Internet.
• Social media was the next “extension” of collaborative technologies.  They converged the Internet’s ability to connect people with software applications that allowed people to communicate in new ways. LinkedIn, Twitter, Facebook, and others are moving forward by connecting people to share more information in real time.

Look at most of Apple’s products.  For many years the Mac PCs and laptops only had marginal market share, while it is increasing it was their other products, their “convergent” products which produced explosive market penetration.  What was the difference?  It was convergence, the convergence of the customer experience with the things people use (see Business Strategy and IT Strategy to Reproduce Apple Innovation ).

What is Really Different About Apple Anyway?

Since Apple is so successful today we will look at their example.  The iPhone, iPad, iPod, all have one thing in common–, they took the idea of usability around the convergence of several technology streams to the next level.  Apple leveraged technology, communication, and entertainment to create something MORE than just a Graphical User Interface (or GUI), they created something useful for entertainment.  Apple products are a pleasure to use–, they created a “user experience.”  In the iPhone, even with its irritating lack of integrated e-mail calendar integration, it is a powerful business and personal communications tool which would have been considered a miniature PC a few years ago.

Apple didn’t really invent anything new.  Apple found that place of “convergence” with quality technology products and user experience

Apple didn’t invent the cell phone, portable music (remember Sony’s Walkman?), Internet data delivery (think, music sharing streaming software).  What Apple did was converge these technologies with a great front-end and delivery system.  Or as Steve Jobs has said, they “put a Mac in a cell phone.”  Apple also went one step further, they sought to own the entire content delivery infrastructure and the hardware architecture for their devices.  For the iPod it was the music delivery system (think iTunes), for the iPhone and iPad it was the extension of iTunes to add an Application store, etc.

That is an example of a product convergence that has had huge market impact.

Business and IT Convergence Can Transform Your Company

If we take this product concept one step further and apply it to IT and Business there are ways to bring about “convergence” in the IT enabled enterprise.

Business-technology convergence and business-technology management are terms that spring from a simple idea: Technology is a means for achieving business objectives; therefore, managing business and technology together provides significantly better results than managing them in separate silos. By converging business and technology management, enterprises can nimbly respond to changing marketplace dynamics, technology evolutions and competitive pressures—capabilities that are especially important during an economic downturn. [FN1]

[C]onverged enterprises know when to change the rules to maintain a strategic advantage over their competitors—and to sense and respond to changes in the marketplace.

I am a strong advocate for the convergence of roles between business and IT–, how will the IT organization know and understand the business “rules” without participating directly in business?

The best convergence candidates are likely your power users or super users who participated in your SAP project.  They come from the business but have exposure to the system and the challenges around IT.  The IT folks should also work in the business areas to become “super analysts.”  They need to know and understand how business actually gets done so they can figure out the best way to apply technology for business objectives to be addressed.

Completing the SAP Convergence

On top of the business users being integrated into IT and IT integrated into the business, the steering committee must not be disbanded.  This need cannot be stressed strongly enough.  That group of senior level business individuals are a key part of the “glue” for a successful and ongoing transformation of the business.  They are one of the critical ingredients for convergence to occur.

If you continue to develop your key business users and maintain your steering committee you have a power organization structure in place to build on convergence of business technology. For more information on the importance of continuing involvement by the steering committee long after the SAP project has gone live see my previous post on Using Your SAP Steering Committee for Business Transformation .

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[FN1]  http://www.baselinemag.com/c/a/Business-Intelligence/The-Value-of-Convergence-236013/

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

=========================

Related Posts:

• Business Strategy and IT Strategy to Reproduce Apple Innovation
• CRM, ERP, BI, and IT Investment — Where Do You Find the Business Benefit?
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• The Real Reason Executive Participation Creates IT Project Success
• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP

SAP Business Technology Convergence

How Long Term SAP Steering Committee Integration Changes the Enterprise

One of the biggest benefits of an SAP implementation is the business transformation it can bring.  At first the changes and challenges are uncomfortable, even downright painful.  But in the mid to long-term SAP brings about a business culture transformation.  When that transformation is enabled by ongoing steering committee involvement then business to IT convergence occurs.  Over time this convergence of business and technology produces financial and marketplace improvements.

Use the Steering Committee’s Experience for Ongoing Governance

An SAP best practice is to form a steering committee before the project even begins.  In other words this group should be together before the first RFI is issued.  They (the steering committee) should be key members of senior leadership who have the ability to make business altering decisions.

The most effective SAP steering committees typically:

• Set SAP project scope and then help manage it.
• Define project objectives and evaluation criteria.
• Monitor project progress, including key milestones and deliverables progress.
• Oversee Quality reviews at key check points.
• Evaluate and mitigate organizational impact of business changes.
• Promotes the project throughout the organization.
• Coordinates staffing and resource levels from key business areas.
• Makes critical decisions which the project team is unable to resolve (escalations or key business decisions).
• Etc.

Even on a relatively short duration project of six months, many of these steering committees will have worked together in this fashion for a year or more.  Going through the initial business needs analysis, software selection, vendor selection, the project execution, and then go-live support for some period brings this group together for some time.

Gaining Competitive Advantage through the Ongoing Integration of SAP into the Business

As a steering committee works together over the course of a year or two they develop a unique and key skill set that is well-suited to ongoing technology integration into the business (called “convergence”).  As the SAP project goes live and some stabilization occurs the SAP steering committee has learned more about the enterprise from a leadership perspective than anyone in the company.

While the project team is gaining the focused process skills within an SAP module the steering committee is gaining invaluable insight into the overall operations of the business from a leadership perspective.  This steering committee is also exposed to technology and how it applies to business, solving problems, its capabilities, and its limitations.  They have become the most capable future leaders of business transformation and of competitive advantage in the marketplace.  They have worked through the hard things in an interconnected and integrated way.  They have set the stage for future advances.

What happens next?

Your company moves into maintenance mode and the steering committee disbands!

That my friends is a crime!

Do NOT Disband Your SAP Steering Committee After Go-Live

The ideal solution is to retain the SAP steering committee and convert their role to one of managing technology to business integration.  The skills they gain during the course of their duties cannot be underestimated.  They are invaluable to future IT initiatives of expanding the SAP footprint in the enterprise or other key business centered technology projects. This is a role and a function that is seriously lacking from today’s businesses.

In 2007 the BTM Institute (or Business Technology Management) published research indicating that companies who focused on converging business and technology enjoyed greater revenue growth and net margins than their competitors.  They were also found to have consistently greater returns on their investments than their competitors. [FN1]  The BTM Institute defines four broad categories for analysis of business and technology convergence which are:

• Strategy & Planning
• Strategic Investment Management
• Governance & Organization
• Strategic Enterprise Architecture

Think about it, your SAP steering committee has engaged in all of these broad dimensions throughout their existence.  Assuming the SAP steering committee was in place before the project for RFI and RFP preparation they would determine business objectives, priorities, strategic direction, and then develop scope.  These are clearly strategy, planning, and strategic investment activities.  As the project progresses they would engage in oversight, decision making, high level technical architecture analysis, and organizational requirements.

The steering committee must continue to function but take on a new role as the SAP project goes live and you move into stabilization.  Don’t kill the strategic engine of business transformation just as it is finished being built.  They are a critical component of the conversion to an SAP Center of Excellence after your SAP system goes live.

Steering Committees can ensure SAP or IT to business convergence to move from project, to competency center, to center of excellence.

The idea of a center of excellence is the integration or convergence of technology, leveraged in a powerfully competitive way, to ensure business benefit.

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For more information on developing an SAP Center of Excellence please see:

• Series on SAP Competency Center or SAP Center of Excellence
• Toward an SAP Center of Excellence or SAP Competency Center – PART 1
• Toward an SAP Center of Excellence or SAP Competency Center – PART 2
• Toward an SAP Center of Excellence or SAP Competency Center – PART 3

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[FN1] Business Technology Convergence Index, The Role of Business Technology Convergence in Innovation and Adaptability and its Effect on Financial Performance, BTM Institute, June 2007

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175

=========================

Related Posts:

• 3 Keys to Reduce SAP TCO & Move to SAP ROI
• CRM, ERP, BI, and IT Investment — Where Do You Find the Business Benefit?
• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• SAP Program Management Requires a Type of CMMI
• SAP Offshore Development Project Experience