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3 Development Phases for SAP Center of Excellence Maturity

May 14th, 2012 by
SAP CoE Maturity

SAP CoE Maturity

Before we get into the substance of HOW TO build a next generation IT organization that is integrated with business a quick review is in order.

Last week’s post on SAP Service Provider to Business Peer Through Center of Excellence Maturity proposed the direct maturity of the SAP IT organization.  The key principle is there are three stages or strata of Organizational Change Management Inside the SAP IT Support Organization These stages create clear distinctions between SAP Service Delivery versus Value Delivery

This week is an overview of the development and maturity details to use SAP as a Change Enabler through SAP Enabled Business Transformation for IT Leadership.  Please keep in mind this organizational development overview is just one component of the Series on SAP Competency Center or SAP Center of Excellence.  The need to continue your Steering Committee Governance for an SAP Center of Excellence cannot be ignored.  Properly formed and instituted your SAP steering committee is a key enabler for business to IT convergence. 

To achieve SAP IT Convergence Beyond Business to IT Alignment requires a senior leader change champion to make this a deliberate and accountable effort.  This is not intended to be a theoretical discussion but instead it is an action plan.  The entire initiative is as a project and needs a project plan, deliverables, key milestones, assigned resources, etc.   All of the structure and processes will need to be defined within your IT organization to move this forward.

SAP Center of Excellence Maturity Development Level 1 – Internal Focus on IT Operations (Service Provider)

Internal focus is an “all hands on deck” effort.  If internal focus, or basic IT service delivery is suffering then everyone within the IT organization must work to ensure your systems are meeting business needs.  You will not gain enough trust of the business community to become a partner or peer until the basic infrastructure works. Some of the key development in this phase includes:

  • A skills matrix
  • IT staff training and development plans
  • Clear SLA requirements
  • Consistent and regular feedback and coaching

Typical activities for service delivery include:

  • Help desk functions
  • Data maintenance
  • Security and authorizations
  • Technical infrastructure (servers, system performance, database maintenance, network, etc)
  • System access (desktop, remote, mobile, etc).
  • Hardware procurement
  • Knowledge (information) base development (Wikis, SharePoint, collaboration tools, etc.)
  • Knowledge transfer to the user community (formal and informal training)
  • Super user development

Skills development focuses on SAP or technical domain competence

  • Application module specialties (SD, MM, PP, SRM, CRM, FI, APO, BObj, etc)
  • Programming languages (ABAP, Java, PHP, etc.)
  • Infrastructure (Cisco, routers, VOIP, IPv6, DHCP, LDAP, etc.)
  • SAP Solution Manager use
  • Effective presentation skills

SAP Center of Excellence Maturity Development Level 2 – SAP IT Integration With the Broader Business Enterprise (Business Partner)

At this stage, depending on the size of your SAP or IT organization, there are 2 levels of leadership here: 1) delivery management, and 2) process management while developing methodologies, tools, templates, and controls.  A key part of the process management is the development of KPI indexes.  Typical activities for business (enterprise) integration include:

  • Requirements gathering
  • Blueprinting
  • System & solution architecture
  • Business case development (cost and value)
  • Knowledge transfer
  • Subject matter expert training
  • Super user training
  • KPI and PPI* development with analytics
  • Project management
  • Team and project leadership
  • Basic supervisory tasks
  • Mentoring, coaching, and staff development
  • Budget adherence
  • Sourcing and supplier management
  • SAP Solution Manager setup and maintenance for project delivery as well as BPM

Skills development focuses on project delivery and management.

  • Facilitation, meeting, and time management skills
  • Project management (training and certification)
  • Managing conflict
  • Supervisory & leadership
  • Negotiation skills
  • Organizational Change Management
  • Total Quality Management
  • Business Process modeling

SAP Center of Excellence Maturity Development Level 3 – Strategic Development Around the Marketplace and Competitors (Business Peer)

Split development track for leaders – 1) product or service engineering support (i.e. the “innovation” track) or 2) sales and marketing (i.e. customer focus).  Typical activities for value added strategic technology convergence include:

  • BPI* development and analytics
  • Marketplace analytics with solution proposals
  • Customer analytics with solution proposals
  • Value analysis – ROI assessment and benefit compliance
  • Cost analysis – TCO assessment and cost savings
  • Business case review for strategic fit
  • Technology roadmap for system & solution architecture
  • System architecture integration with business process management
  • Program management
  • Program & project budget development
  • Project audits / QA’s
  • Mentoring, coaching, and development of level 2 participants
  • Vendor management

Skills development focuses on business drivers, marketplace competitive pressures, sales, and senior leadership.

  • Advertising principles
  • Business statistics
  • Market research
  • Sales management
  • International marketing
  • Sales models
  • Organizational development
  • Coaching and leadership
  • Delegation
  • Strategic planning

Conclusion on SAP Center of Excellence Maturity Development

This analysis provides a framework for development of a world class, fully integrated SAP IT organization.  However, this framework only scratches the surface of a much broader and more important topic–, Organizational Change Management Inside the SAP IT Support Organization.

Communication is One Key to Business and IT Integration

One of the most critical components of a change management program is not listed above in any of the bullet points – developing communication channels.  Maybe this is naïve of me but I would expect that actively and aggressively developing clear and open lines of communication between IT at all levels with the business would be assumed.  Developing an overall communication program and plans is a basic part of any change management initiative.

There is a significant amount of additional guidance for developing your SAP Center of Excellence in the Series on SAP Competency Center or SAP Center of Excellence.  A systematic approach, including key milestones to measure progress against are important elements to success.  To that end I hope this framework contributes to the dialog and direction of future SAP IT organization maturity.

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* An upcoming post in the future will look in detail at this concept of “KPI, PPI, and BPI” as Key Performance Indicators, Process Performance Indicators, and then finally Business Performance Indicators.




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SAP Service Delivery versus Value Delivery

April 30th, 2012 by
SAP Value Delivery

SAP Value Delivery

In my review of academic literature around SAP or ERP implementations I find some thought provoking items.  Recently I reviewed a study which helped me to form a more complete picture of important issues in IT delivery.  Even though I’ve been writing about it for years I gained a new clarity around evaluating some of the existing delivery models [FN1].  What it comes down to is are you looking for service delivery or business results for your SAP project?

SAP Service Delivery or Business Value Delivery – You Determine Your Future

Because my career started in business and later was exposed to SAP as part of the client core team, and then finally moved on to consulting, I have always recognized the importance of business value.  At the same time much of the System Integrator marketplace has been promoting the same old service delivery model they are familiar with. The biggest reason so many system integrators struggle with business value delivery is because they often focus on hiring a lot of really smart college graduates with little or no business experience.  Fresh out of college and heads filled with textbook ideas about how business works. 

If you just want services delivered then no matter what the sales pitch, all of the system integrators are the same

SAP, ERP, or Enterprise Application customers are looking for something more.  As a recent article I read noted, CIOs do not command the respect of the other key disciplines within the enterprise.  In fact, many of their “C” suite peers question whether or not the technology organization serves much of a useful purpose at all.  That my friends is a frightening and shocking perspective to me.  Stop and think about that a minute, many organizations question whether IT organizations serve a useful purpose in the enterprise.  Is it any wonder outsourcing and off-shoring have become so popular?

What Does This Mean for SAP Projects?

At the end of your SAP project are you satisfied that a project was delivered?  Hopefully on time and on budget, but delivered nonetheless?  If you are satisfied that your SAP project was delivered on time and on budget then you are focused almost exclusively on service delivery

Many senior level IT leaders and delivery folks just want something to get in as quickly as possible.  This is exclusively a service delivery oriented project.  The only thing you are concerned about are the skills needed to address the particular technology / application / solution need right now.  This will not however provide you any type of ROI (Return on Investment) or ROE (Return on Equity) because ROI and ROE (along with other measures) are pure business metrics.  These are not IT metrics and do not measure things like uptime, response time, # of service tickets closed, etc.  The idea of ROI, ROE, or Asset Turns are reflections of business activity and investor / owner value.  Although they may be seen as irrelevant by many in IT they are still useful to understand if any value was delivered for the investment that is made.

Do you want services delivered or business value delivered?

Truth is, if you just want services delivered then no matter what the sales pitch, all of the system integrators are the same.  For that matter, why even bother with a system integrator or SAP consultants at all?  Why not just go to your nearest college and recruit a bunch of really smart graduates for a temporary project and pay them about half what the system integrators charge for a temporary contract? 

Seriously, why even bother with experienced consultants at all? 

If SAP service delivery is your focus and not business results it is just a game of who can best make it through the sales process.  Whether it is IBM and their premium rates or Rajakrishna’s Consultant Shack and their all you can eat offshore rates.  If they can’t speak the local language it really doesn’t matter.  On the other hand if you are looking for business results that is entirely different.

If your only focus is on time and on budget then you are only looking for service delivery.  You are not looking for results, or business change, or IT transformation, or business strategy.

Let me make clear I am not suggesting on time and on budget projects should be ignored.  What I am suggesting is that if your only focus is on time and on budget then you are only looking for service delivery.  You are not looking for results, or business change, or IT transformation, or business strategy.  You are merely looking for resources to deliver services to get you to some date at some budget amount.  Any offshore or consulting shack fake will get you to a dollar amount (that is the brutal truth but they will deliver “services”).

Where is the SAP Value Proposition Focus on Business Results?

While SAP Implementation is an Investment NOT an Event many organizations fail to consider their enterprise application deployments as strategic assets designed to produce business results.  The good news is that is changing.  So the next question is Where do you Start with SAP Return on Investment or SAP ROI?  This goes right back to the basics, you must focus on the WHY of Achieving Business Value from SAP Investment.  Is the effort about technology replacement or is there some business reason behind the initiative?

A recent IBM study under the heading of “The CIO as change catalyst” noted:

As the executive working at the nexus of business and technology, CIOs are uniquely qualified to help their companies leverage available tools to meet current economic challenges and to exploit the opportunities that will arise during this crisis—and opportunity will arise for those businesses bold enough to disrupt competition and restructure their industries. CIOs can help transform their companies by better capitalizing on the value of information assets.  They can help manage and mitigate business risk through better, more timely information. They can improve service management. They can lower enterprise-wide operational costs—including IT’s—through automation. [FN2]

SAP and IT organization heads are gaining insight and experience but at the same time they are being squeezed to cut costs and find value.

Focusing on value entails cutting discretionary spending, deploying resources for the highest return, bolstering core competencies and redefining relationships. Cash flow is central to survival and strategic flexibility, which means businesses and business units need to do more with less. Corporations must conserve capital and cut spending where it produces minimal return. Funds must then be redeployed to activities, products and markets that generate growth, improve margins and truly differentiate one business from another. [FN3]

Make Sure You Are Headed Down the Right SAP Path

To make the transition your SAP project must begin with Creating a Knowledge Centered Learning Organization for Business Transformation for IT Leadership.  Whether you are already live with SAP, in the middle of a project, or just starting out, I would strongly encourage you to get serious about Organizational Change Management Inside the SAP IT Support Organization

What most customers do not know is that SAP has offered the “Value Delivery” methodology as part of the ASAP Methodology for many years

If you want to know Why Use the SAP ASAP Methodology? for your SAP project consider the fact that SAP has offered the “Value Delivery” methodology as part of the ASAP Methodology for many years.  Over the years it has taken many forms, all the way back to the early versions of the ASAP Methodology with the old “KPI” lists.  Today it is integrated into the ASAP Methodology structure. 

Isn’t it time to pursue the value delivery method regardless of whether your system integrator is capable of this or not?

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[FN1]  Kieninger, A. and Satzger, G., Risk-Reward Sharing in IT Service Contracts – A Service System View, 2011 Proceedings of the 44th Hawaii International Conference on System Sciences.

[FN2]  From fear to value: CIO strategies for propelling business through the economic crisis, pg. 5.  Retrieved 4/24/2012 ftp://ftp.software.ibm.com/common/ssi/sa/wh/n/ciw03057usen/CIW03057USEN.PDF

[FN3] Ibid. pg. 6.




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SAP Program Management Requires a Type of CMMI

November 7th, 2011 by
SAP Program Management

SAP Program Management

Many may be unaware that SAP provides a broad set of tools and resources for Program Management and Capability Maturity Model (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 (Capability Maturity Model Integration) [FN1].

 

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 Capability 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?  In other words, if the contract program manager is not helping to deliver the key tools, templates, and resources to enhance your project delivery capability then why do you need them at all?

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.

What is the contract SAP Program Manager, or SAP Project Manager accountable for? What are they on the hook to deliver and how is their performance measured?

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 a 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 Capability 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]:

Maturity Level

Action Area

Characteristics

IT Support Provider

  • Vision & strategy
  • Governance
  • Processes
  • Technology
  • Culture and skills
  • Vision and strategy not formulated
  • Controlled by IT costs, focus on IT operations
  • Processes not defined
  • Isolated tool decisions
  • Focus on IT knowledge

IT Service Partner

  • Vision & strategy
  • Governance
  • Processes
  • Technology
  • Culture and skills
  • Strategy derived from IT goals
  • Controlled by IT-focused KPIs
  • Satisfies minimum criteria for SAP solution operations
  • Joint decision about selection
  • Service-oriented, knowledge of SAP solution

Business Support Partner

  • Vision & strategy
  • Governance
  • Processes
  • Technology
  • Culture and skills
  • Strategy developed in cooperation with IT management
  • Controlled by measurable service level
  • Established, role-based process organization
  • Defined standards, SLA reporting
  • Customer-oriented

Business Partner

  • Vision & strategy
  • Governance
  • Processes
  • Technology
  • Culture and skills
  • Strategy derived from company goals
  • Decisions guided by business requirements
  • Aligned with business process model
  • Integrated business processes and tools
  • Expertise in the areas of business processes, SOA, and integration

Value Partner

  • Vision & strategy
  • Governance
  • Processes
  • Technology
  • Culture and skills
  • Strategy as business enabler
  • Controlled on the basis of value contribution for the company
  • Holistic service management lifecycle
  • End-to-end management of business processes
  • Value-oriented, ongoing improvements

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:

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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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