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Achieve Business Benefit Through SAP Prototype Demonstrations

July 16th, 2012 by
Imagine what is possible by showing what is achievable

Functionality Prototype and Demonstration

SAP Conference Room Proof of Concept Pilots

Proof of Concepts with frequent early prototyping drive project costs down.  It is like the old saying that “an ounce of prevention can avoid a pound of cure.”  Proof of concept pilots during the project is one of the rarely mentioned SAP critical success factors. 

Early in my SAP career I used to get a little frustrated by the disruption these prototype sessions, conference room pilots, or whatever you want to call them would cause.  My thought was I had a job to do and didn’t have time for this.  No one ever stopped to help me understand WHY these pilots and prototypes are important.

Before I get into the substance of this let me first be very clear about what I am referring to–, a prototype, pilot, or demonstration is ACTUAL system functionality set up in the application to demonstrate transactional business processing.  I have heard of some system integrators who call PowerPoint process flows these types of “pilots” and that is completely ridiculous.  That is just regurgitating SAP Blueprint process flows and is NOT a prototype, pilot, or system demonstration at all.

Stop the SAP Consulting Merry Go Round – Real Life Experiences

Nothing is more frustrating than trying to work through a complex issue and going around and around with meetings, discussions, process flows, etc.  At one client we had a very complex third party process which involved one foreign company code doing sales deliveries for a domestic company code, but the domestic company would bill the customer and collect the cash, the foreign company would do inter-company billing, etc.  There was not only third party processing involved, there was also foreign trade, batch, and serial number tracking required (YUCK!).

After getting a large and very expensive group of consultants together with key client resources we hammered the first pass out.  Then we did it again a few days later, and then again a few days later.  After about 4 or 5 weeks of this madness it turns out the consultants were the problem more than the client.  Several of the consultants essentially said this couldn’t be done.

To stop the complete waste of time I left the last meeting and spent 3 days setting up a prototype the consultants said couldn’t be done.  Now, in their defense it is complicated and it DOES involve setup in SD, MM, PP, FI, and EDI.  Very FEW consultants have ever done this type of integrated setup.  I scheduled a DEMONSTRATION with all of the key stakeholders and project leadership to put this issue to rest.  The SAP standard functionality covered approximately 90% of the overall requirement and we were now discussing small tweaks or changes that were required rather than trying to over engineer a customized process mess!

Reduce SAP Implementation Cost, Improve SAP Quality, and Manage SAP Scope More Effectively

Using Conference Room Pilots, or Functionality Playbacks is effective for difficult to understand processes system demonstrations.  This technique can significantly reduce meeting times and increase customer satisfaction.

Stanford professors Carleton and Cokayne spent seven years studying the user of physical prototypes in “foresight engineering” which is the ongoing development of products or services that are three or more product cycles in the future.  They studied the use of prototypes for “capturing and communicating a team’s opportunities inside the organization, connecting the company’s vision and strategy with… day-to-day [engineering design work], and helping teams to connect vision to research to engineering design.”  Carleton, T., and Cockayne, W., (2009) The Power of Prototypes in Foresight Engineering.  International Conference on Engineering Design, ICED’09/493, Stanford University, August 24-27 2009, page 1.

The use of prototypes has been found to “make ideas tangible, iterate quickly at a low cost, and develop a shared language” (ibid.).  These demonstrations are part of the change management process and can help to bring the broader organization along in the process. In the second half of the post on ERP, SAP, or IT Project Management and Prototyping for Success more detail is provided for the following items:

  • System demonstrations focus on delivering what is important while allowing for early adjustments.
  • Complex or difficult functionality demonstrations help reduce the overall amount of meeting time.
  • System demonstrations identify gaps and problems earlier reducing the number of testing defects and rework time.
  • Early demonstrations help ensure scope is properly accounted for and last minute process surprises are reduced.
  • Some performance problems are exposed.
  • Possible schedule and work completion issues may be exposed while they might still be manageable.

By doing a LOT of prototypes early in a project you also quickly separate the good IT resources from those who are not so talented or even those who are complete fakes.

Conclusion on Using SAP Prototypes, Functionality Demonstrations or Conference Room Pilots for Project Success

Just as the real world example I noted above shows, by using prototypes or demonstrations to understand where the real business requirement gaps are you may be able to avoid a major investment in custom development work.  And by avoiding that development you reduce ongoing maintenance headaches.

As for dealing with scheduling and work completion I have been on many projects where some of the consultants or team leads would simply lie about their status and completion.  By having a clearly defined pilot and playback schedule throughout the project for certain key functionality you help to ensure that what is committed is actually delivered.  Too many times the real status does not show up until testing starts, or worse still, items get taken out of scope because of misleading status.  By then it is too late.

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Untangle SAP Software Licensing

July 9th, 2012 by
SAP Software License Guide

SAP Software Licensing

Recently I read a self-serving post on LinkedIn from a company who promotes how “wonderful” Oracle is for having a public price list and how terrible it is that SAP and others do not.  While it may be true that SAP does not publicly publish a price list there is one, it is regularly updated, and it is quite thorough. 

The main complaint was that SAP lacks “transparency,” whatever that means.  There was no mention in the post about how Oracle sales tactics include virtually giving their software away and then after a company finally gets stable they hammer them with massively increasing maintenance fees and costs.  Think about that, once you become dependent they more than make up for the software license with the forced maintenance march.  That really makes their price list completely worthless.  My response about SAP’s lack of “transparency” was:

On this point I completely disagree.  It is not that SAP does not have transparency, it is that their solution and license portfolio, as well as dependencies reflect their size.  Unfortunately it does make it complex.

So, I will absolutely guarantee you that if you do NOT have deep SAP application experience you will be completely baffled.  Not because anyone is trying to trick anyone, but because the solution portfolio and its capabilities are huge. 

SAP is like an “erector set” both in how you set up the various applications to meet business needs AND how you deal with multiple application integration issues to address a particular need.

Just concluded an SAP software licensing negotiation.  Significant solution portfolio, significant application landscape, typical fragmented multi-national who grew by M&A.  If you do not know the SAP landscape you will become completely LOST in their price list and in understanding the solutions.  You almost need to be a solution architect to really be able to help customers navigate the solution footprint.

———————-

I can absolutely guarantee you that if you do not have deep SAP solution exposure you WILL be lost.  However that is NOT a function of some nefarious scheme to hide pricing.

I reviewed a recent copy of SAP’s price list I have from January 2012 and found there are roughly 18 spreadsheet type pages, with a little over 50 price list entries on each page, for around 900 total entries.

One Reason Why SAP Doesn’t Publicly Publish Their Price List

I have heard from some SAP insiders that one reason for not publishing their price list is the sheer amount of confusion it would create.  Solution architecture can be difficult enough –, even as an SAP veteran since 1994, with a deep and diverse SAP background, the substantial size of the SAP solution portfolio can be overwhelming.  Then combine that with the dependencies or requirements for each solution and you have a recipe for more confusion rather than clarity by publishing a large price list.  Then you have the “sales model” of “give it away” and make it up by crushing dependent customers after they finally stabilize.  Add to this the natural tendency of competitors to seize on any single item and deliberately take it out of context to “land a deal” and it is understandable why SAP doesn’t publish their price lists publicly.

Where To Get SAP Licensing and Pricing Information

Probably as a result of the licensing confusion SAP publishes a public license guide and has a price list which is also available.  Both of them are designed to help clarify licensing with SAP products and solutions.  Keep in mind that between the “introduction” guide and the actual price list document we are approaching 200 pages (Into Guide about 40 pages, full price list around 140+).

The introductory guide helps customers understand the SAP licensing approach and options.  It is freely available and I have included a recent version on my site here:

While this license guide provides you the key principles you need to understand there is also an actual, detailed price list as well.  That price list includes roughly 120 pages of explanations and examples for licensing the various specific SAP products, and then another 20 pages of the roughly 900 price list items.  THAT guide should be obtained through your SAP sales rep.  I can assure you that they will generally provide this if you ask. 

Out of respect for SAP’s decision not to openly publish their price list to the public I will not place any versions of their price list online.  However if you are a customer and are confused with the price list I will be happy to walk you through it if you contact me.

Good luck on your SAP journey!

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SAP Contract Requirements for a Center of Expertise

July 2nd, 2012 by
Deliver SAP Excellence

Deliver SAP Excellence

If not all, most new SAP contracts and agreements contain provisions which require customers to create a “Center of Expertise” (or CoE). This is a customer’s, and SAP’s, first line of maintenance support. The CoE terms and conditions define a great aspiration that your organization will support “efficient implementation, innovation, operation and quality of business processes and systems” based on the Phase 6 RUN SAP ASAP Methodology. Good luck with all that!

However, back on planet earth, the RunSAP Methodology is a good starting point. Although SAP references the need to go further the delivered methodology only covers basic technical operations. As we look at SAP Enabled Business Transformation for IT Leadership it is apparent that the RunSAP Methodology is all about Internal IT Focus. The SAP delivered CoE requirement doesn’t deliver much on How To Navigate the SAP Business Transformation Journey around Enterprise Integration or External Business Drivers.

What ARE SAP Center of Expertise Requirements (as defined in their Terms and Conditions)?

For background and insight, here is an actual SAP Terms and Conditions excerpt from the SAP ENTERPRISE SUPPORT SCHEDULE (“Schedule”):

4. Customer Center of Expertise.

4.1 Role of the Customer Center of Expertise. In order to leverage the full potential value delivered as part of SAP Enterprise Support, Licensee is required to establish a Customer Center of Expertise (“Customer Center of Expertise”, or “Customer COE”). The Customer COE is designated by Licensee as a central point of contact for interaction with the SAP support organization. As a permanent center of expertise, the Customer COE supports Licensee’s efficient implementation, innovation, operation and quality of business processes and systems related to the SAP Software Solution based on the Run SAP methodology provided by SAP (for more information on the Run SAP methodology, refer to http://service.sap.com/runsap). The Customer COE should cover all core business process operations. SAP recommends starting the implementation of the Customer COE as a project that runs in parallel with the functional and technical implementation projects.

4.2 Basic Functions of the Customer COE. The Customer COE must fulfill the following basic functions:

  • Support Desk: Set-up and operation of a support desk with a sufficient number of support consultants for infrastructure/application platforms and the related applications during regular local working hours (at least 8 hours a day, 5 days (Monday through Friday) a week).
  • Licensee support process and skills will be jointly reviewed in the framework of the service planning process and the certification audit.
  • Contract administration: Contract and license processing in conjunction with SAP (license audit, maintenance billing, release order processing, user master and installation data management).
  • Coordination of innovation requests: Collection and coordination of development requests from the Licensee and/or any of its affiliates provided such affiliates are entitled to use the Enterprise Support Solutions under the Agreement. In this role the Customer COE shall also be empowered to function as an interface to SAP to take all action and decisions needed to avoid unnecessary modification of Enterprise Support Solutions and to ensure that planned modifications are in alignment with the SAP software and release strategy.
  • Information management: Distribution of information (e.g. internal demonstrations, information events and marketing) about Enterprise Support Solutions and the Customer COE within the Licensee’s organization.
  • CQC and other remote services planning: Licensee regularly engages in a service planning process with SAP. The service planning starts during the initial implementation and will then be continued regularly.

4.3 Customer COE Certification. Licensee must establish a certified Customer COE upon the later to occur of the following: (i) within twelve (12) months after the Effective Date; or (ii) within six (6) months after Licensee has started using at least one of the Enterprise Support Solutions in live mode for normal business operations. To obtain the then-current primary Customer COE certification or re-certification by SAP, the Customer COE undergoes an audit procedure. Detailed information on the initial certification and re-certification process and conditions, as well as information on the available certification levels, is available on the SAP Service Marketplace (http://service.sap.com/coe).

What the SAP Center of Expertise (or CoE) is NOT

As previously noted, even though there are several great aspirations in the CoE requirement the details are all about a focus on technical competence. In many respects this makes sense to SAP, you make sure your internal resources are the first line of defense. You cover your own maintenance and then only if you really can’t resolve the issue internally you turn to SAP.

Several critical components of a good Enterprise level integration program are completely missing from the real detailed requirements:

  • Governance (although it is referenced in the RunSAP methodology)
  • Program or Release Management
  • Enterprise Architecture
  • Business / IT convergence or integration

It is unfortunate that the RunSAP Methodology only covers the entry level stage of support. To move to something I call the “Center of Excellence” rather than the “Center of Expertise” you must focus on much more than just the CoE step 1 of 3 Development Phases for SAP Center of Excellence Maturity. To move past the first stage requires moving from an SAP Service Provider to Business Peer Through Center of Excellence Maturity.

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