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Key Design Considerations for SAP Reimplementation

February 6th, 2012 by
SAP RE-implementation

SAP RE-implementation

Whether you are doing a single instance reimplementation, a system consolidation, or an upgrade rollout you will need to blueprint the differences between your current state and what needs to change for your future state.  Depending on your SAP reimplementation approach there are several key considerations in the SAP reimplementation blueprint. 

All three approaches require a few key steps: 

  1. rationalize your landscape,
  2. consolidate your functionality scope,
  3. evaluate data differences and consolidate custom field requirements,
  4. inventory and eliminate as much custom code as you can,
  5. design for usability

SAP System of Record

Probably the first decision will be the SAP system of record.  This simple concept seems to escape many consultants, clients, and project managers.  Deciding which system will be the “source of truth” for any particular processing stream is critical.  That decision determines landscape architecture, how data conversion decisions are made, interfaces, and how to reconcile data.  I’ve seen so many meetings and discussions which spin forever because there is no clearly defined “system of record” for a particular processing stream.

If you have a single instance of SAP and are looking to undo some of the prior custom coding then this decision is easy.  If you have a diverse SAP landscape it would be hard to imagine that you do not have one of them that you do financial consolidations or house a central chart of accounts.  That system would most likely be the candidate for the “system of record”.

Depending on how fragmented your SAP landscape is with multiple SAP instances in various locations the decision may not be so easy.  Even with a central system where you do financial consolidations or official reporting it may not be the best candidate if there has been a lot of custom development work.  One of the “satellite” SAP instances may be a better starting point if it has remained fairly close to standard.  You will have to carefully evaluate which system works best for your needs.  Ideally this system would be the one which has the least amount of custom coded requirements.

SAP Organization Structure

You will want to take a hard look at reconciling and adjusting your SAP organization structure.  Whether it is a system consolidation, a rollout, or a single system reimplementation the organization structure is the base you build the system on.  The organization structure becomes the foundation for your master data requirements, reporting requirements, and key functionality decisions. 

A properly done organization structure can enhance reporting functionality without dramatically increasing the amount of master data maintenance.  However when it is poorly designed, as you may have discovered, it can create a data maintenance nightmare and still not provide key actionable information.  This raises another consideration for a re-implementation –, if you have a significant investment in custom developed reports they will need to be revisited.

In some cases, even the extra expense of the additional reporting requirements may be justified if the new organization structure provides you with enhanced reporting capabilities or simplifies some of your processes.  The key to remember here is to look past the short term to the TCO (Total Cost of Ownership).  If the changes might have a 3 – 5 year payback horizon it may be justified.  Especially when you consider any future upgrades with the more “stable” organization structure, quicker turnaround, lower cost, less regression testing, outside talent which can come up to speed quicker, etc.




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SAP Reimplementation Method Key Considerations

January 30th, 2012 by
SAP REimplementation

SAP Reimplementation

Among three variations for SAP software re-implementations there are two key approaches.  You either make the changes to your existing production system (or a cloned copy of it) or you make the changes in a pristine, newly designed environment. 

SAP Cloned Production System “Re”-Implementations

Making changes in your existing production system (more likely in a cloned instance of it) helps ensure data consistency and ease of adjustment, however there are several difficulties involved.  If you have a significant number of custom-coded solutions you will have to fight them every step of the way.  You will have to work around them, deal with them throughout the process, adjust any out of date coding, and most likely will end up keeping many of them.  As you can tell, I’m not a big fan of an SAP reimplementation in a production system with lots of custom coding.

You either make the changes in your existing production system or in a newly installed instance with no data.

For example if you decided to consolidate organization structures from a multi-system environment you might quickly discover lots of hard coded values in custom programs.  These hard-coded values in the programs themselves, rather than using table driven values and parameters, can cause system consolidation nightmares.  This is just one type of problem from many of the custom-coded solutions so often provided.

Another problem occurs with any of the existing system configuration.  If you make changes to existing objects that are already in production you have the challenge of timing and coordinating your cutover to prevent disruption to existing processes.  Depending on your circumstances if you decide to do a transition in your own production system with the eventual goal of moving away from it and into  cleaner environment then it may be best to create all new custom configuration objects.  You have to make that determination.

Clean SAP Re-Implementation with Old Legacy SAP for History

The other approach to SAP re-implementation is to do a re-implementation in a clean, non-modified system.  That approach assumes that after conversion to the newly designed environment you will leave your old “legacy” SAP system in place for reference and historical data only.  Using a new system for a re-implementation means that you do not have to work around any of the bad setup or design decisions that were made previously.  You avoid all of the headaches with the custom programs and only bring in those custom programs that are really business critical.

If necessary, and if you already have a BI / BW / or other reporting system it will require some additional work to integrate old data structures with new.  However even that will be easier with standard functionality.  The SAP BI / BW / BObj reporting options already contain a number of standard extractors that can be used more easily and with less expense.

The Optimum Solution is a Phased SAP Global Instance Harmonization

The most cost effective way I have found over the years to do a reimplementation is to bring in an operation that is moving to SAP in a “clean” environment.  It is not particularly complicated to integrate two SAP systems using ALE (Application Link Enabling).  In this way you create a new environment, with more up to date and more standard functionality that you can eventually migrate other business units into.

As upgrade projects occur it is only incrementally more expensive to migrate the upgraded companies into the less customized environment.  With an upgrade you still have to do the custom ABAP program reviews, code validations, etc.  With a cleaner environment that does not have all of the custom coded artifacts it is much easier to pick and choose what is really of value and what can be replaced by new, or better understood functionality.

For additional rollout locations there is virtually no additional cost over the rollout project for bringing those companies or organizations onto the more standard SAP environment.  In fact, the reduced custom coding would tend to be less expensive because the amount of time spent regression testing custom functionality, or fixing any organization specific settings, as well as training people how to deal with some of the custom functionality would be lower.  Consulting time, and therefore consulting cost, would be lower as well because the closer you stay to standard the larger pool of resources there is available to make or adjust system settings rather than work with custom programs.

SAP Organization Structure and Master Data Harmonization

One other possible project approach is to do the SAP Org Structure harmonization in all of the separate SAP global instances and then agree on the common master data types.  At “go-live” you extend all of the existing data in each production instance to begin executing with the new structure and master data types in each production instance.  By doing this, the “legacy” data and “legacy” org structures stay in place so that little or no business disruption occurs.  A transition period of approximately a year is needed to complete at least one full annual financial close under the new structures and data in the existing production system.

By using this approach you are actually making the transition in two-steps.  First you build out the new state in your existing system,  then after flushing out and adjusting most of the issues you do a conversion or cutover to a clean system after a financial close.  This approach allows for an orderly transition from the old to the new with relatively little business disruption.  While the old SAP org structure elements and master data types are being made “obsolete” they are still available for all processing and reference purposes.

Some of the key considerations for this approach involve what to do with custom coding and how to transition the master data.  It is impossible to know what custom coding is in place that might be replaced with standard functionality.  However some new data types may help resolve the issue of moving off the custom coding in the same system.  Eventually the goal would be to upgrade away from the custom coding and into more standard functionality unless there is some clear business justification preventing this.




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SAP Reimplementation for Little More Cost than a Technical Upgrade Part 2

September 7th, 2010 by

SAP Upgrade

There are a number of important considerations in an SAP reimplementation that do not exist for a technical upgrade.  As a result the up front planning and evaluation time will be more involved.  For example you will have to consider any organization structure changes.  How will any new organization structure items map to old ones?

Then there is the analysis on how to handle old master data if the organization structure changes are so significant that they require a whole new master data paradigm.  If you have done a LOT of custom coding there may be a number of custom fields that you might want to handle differently.  Then you have to evaluate do you even want to bring those programs forward or do you want to use a “switched” framework that accesses the old data structures based on certain criteria but uses new or more standard functionality for newer items.  There are a lot of up front planning and evaluation considerations. 

If you are seriously considering an SAP upgrade and found this article, PLEASE take the time to get a little more key information about the upgrade options and considerations you have.  The following posts will help to clarify some of the direction to take on whether you should do a technical upgrade or a reimplementation:

Reduce SAP Application Lifecycle Costs by Going more “Vanilla”

One of the key goals of moving to more of a standard SAP system is to reduce application lifecycle costs by making upgrades quicker, easier, less expensive, and less risky.  Together with this the ongoing maintenance and additional functionality becomes less expensive to add.  When you don’t have all of that “software engineering” it is easier and less time consuming to add new functionality, easier to find knowledgeable consultants, and easier to find experienced employees for full time positions. 

One of the key steps in an implementation, or a re-implementation is to review the risk and cost of changes that have been or will be made.  You have to review all of that “software engineering” that was done rather than the business process engineering.  Since the focus of this post is on reimplementation we will look at the starting point for evaluating your upgrade project. The following development table, combined with the “frustration factor” (discussed later) will help determine if you are a good candidate for a reimplementation or a technical upgrade of your SAP system.

Start out by doing a careful evaluation of your current development and custom coding from your original implementation.  Then move on to understand where you have functionality gaps that you either expected from the original implementation or that the business found were important after you went live.

How do you know if you should consider an SAP Re-Implementation?

Probably the first sign you might be a good candidate for an SAP reimplementation is if you have an army of SAP support staff.  Some of the obvious indications you should consider a reimplementation rather than a techical upgrade are:

  • Your business probably has a massive IT department that looks more like a “full-employment” program for SAP skills.
  • You are highly dependent on contractors.
    • Contractors and consultants have become more like extended staff and staff augmentation rather than spot consultants.
  • Your SAP related support budget is beginning to approach the budget of some small countries ;)

Other things to consider that are not as obvious relate to the amount of business fit, custom coding, and business reporting requirements that we will look at next.

Evaluating custom development impact on your SAP upgrade

I have put together a table below related to development efforts (cost) and / or the risk involved with the development effort.  This table can be applied to a new SAP implementation or to an upgrade.  Whether that upgrade is a reimplementation or a technical upgrade this development table helps to understand the impact of a key part of the effort.

For an upgrade if all of your development efforts are in the Low to Average categories, and your “frustration factor” is low, you are probably a good candidate for a technical upgrade.  However, if there is much development work in the High category, or if the “frustration factor” is moderate to high then you are probably a good candidate for an SAP reimplementation.

Significant amounts of development in the High category (below) indicates that there may have been a number of custom coded solutions.  Unless these solutions were done to address a key business driver aligned with your company’s strategic direction or mission, and there were no other standard options you might want to reassess this type of development for a reimplementation.  This is especially true for any type of regulatory compliance requirement.  The reason it is critical there is because SAP maintains all of the system functionality to comply with the latest regulatory compliance requirements as part of your standard application support.  If a regulation changes SAP provides support and application changes for standard system functionality, not for custom coded solutions your system integrator invented.

Considering the frustration factor in your SAP upgrade

The other area to consider for evaluating a reimplementation or a technical upgrade is the “frustration factor.”  First, I’ll define the frustration factor as the failure of the SAP application to deliver on your business expectations.  This might be badly aligned organization structures that do not support easy reporting requirements; it might be partially implemented, poorly implemented, or not implemented at all functionality that supports a key part of the business; it might be any number of business reasons that the applications did not meet your business needs.

One of the other key areas where a reimplementation may be needed is if you are in a large enterprise with multiple SAP systems.  You may want to try to consolidate your SAP instances into a single system and a single enterprise-wide system.  The desire to consolidate systems onto a single application is one of the biggest reasons to consider a reimplementation, but this can also be one of the most challenging reimplementation types because of the amount of analysis of the delta in setup and design differences between systems.

SAP Technical Upgrade or Re-Implementation Conclusion

So, you’ve decided you are a good candidate for a reimplementation project.  You want to lower your overall SAP application lifecycle support costs; you want to ensure that future upgrades are less difficult and less expensive; and you have a pretty good idea of the delta of differences in your current system and what you would like to have; you also have a good idea of any additional functionality you would like to use.  So, where do you go from here?

Stay tuned, in a couple of weeks I’ll provide a post on the specifics and details of how to do a reimplementation in a fairly effective and efficient manner.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


SAP ABAP Development Risk and / or Cost Table

Reports, Interfaces, Conversions, Enhancements, and Forms (RICEF or FRICE).

Note:  The following table provides some guidelines on how to judge the risk and / or cost of any development effort.  It is NOT meant to be a complete or comprehensive listing of the different scenarios or options.  There will always be other situations and circumstances which may fall into any of these categories. 

One other key consideration is that a piece of custom development may fall into the “Low” or “Average” area for actual development effort and cost but if it is mission critical, creates significant financial exposure, satisfies an external reporting reqiurement, or is related to a regulatory requirement it is automatically a “High” risk development.


RICEF or FRICE Object

Low

Average

High

Reports
  • Single table data extract (no joins)
  • One header description
  • Simple Ad-Hoc report
  • Minimal testing effort
  • A few input selections
  • A few header descriptions
  • Simple totals, subtotals, sums, or a few simple field calculations.
  • Simple table joins (generally 3 or less).
  • Data records and joins with one to one and in some cases one to many relationships.
  • Simple report layout
  • Simple Input / Output (I/O)
  • Moderate testing effort.
  • Mission critical; financial impact; external reporting; or regulatory impact.
  • Several input selections.
  • Several header descriptions
  • Complex totals, subtotals, sums, or field calculations.
  • Complex layout requirements.
  • Multiple headers
  • Complex Input / Output (I/O)
  • Complex or significant joins including many to many data relationships.
  • Substantial testing effort or multiple types of tests. May include positive and negative testing as well.
Interfaces
  • Simple change to an existing interface.
  • Manual trigger or simple batch processing.
  • Minimal testing effort .
  • Simple Input / Output (I/O)
  • Simple logic, little or no data transformation between interface points (i.e. no value lookup tables, no value substitutions, and few or no data value calculations within the interface).
  • Simple interface reporting requirements.
  • Single direction (inbound or outbound).
  • Single input or output record.
  • Moderate data volume.
  • Can generally be managed through periodic batch processing.
  • Moderate testing effort.
  • Mission critical; financial impact; or regulatory impact.
  • Complex Input / Output (I/O)
  • Complex logic with moderate to complex data transformation requirements (i.e. value lookup / reference tables, field value substitutions, field value calculations within the interface).
  • Multiple transaction formats
  • Complex calculations
  • Multi-directional
  • Real time interaction or involved batch processing (such as with batch job dependencies).
  • Average to High reporting effort (from above).
  • Moderate to high data volume.
  • Multiple input parameters
  • Multiple input or output records
  • Substantial testing effort or multiple types of tests. May include positive and negative testing as well.

Conversions

  • Inbound data is well defined
  • Single source of data
  • Data is clean or cleansed prior to conversion
  • Data mapping is straightforward and one-to-one
  • Simple reconciliation required
  • SAP ALE distribution directly from one system to another without any changes.
  • Low data volumes.
  • Possible candidate for manual entry because of low data volumes and simplicity.
  • Minimal testing effort .
  • Data source is defined but field data formatting varies from source to input.
  • Multiple sources of data for a single conversion
  • Cleansing is defined via conversion routines
  • Complex data mapping but still one-to-one data relationships.
  • Only data formatting changes but not data value changes.
  • Easy to moderate data transformation rules from source system to input system.
  • Multi-step reconciliation of data conversions.
  • Use of control totals for value fields and record counts for data conversions.
  • Moderate data volume
  • Moderate testing effort.
  • Both field data values and field data formatting need changes.
  • Multiple sources of data and possible multiple data transformation steps.
  • Significant time and effort for data mapping and conversion routines between systems.
  • Complex logic with moderate to complex data transformation requirements (i.e. value lookup / reference tables, field value substitutions, field value calculations within the interface).
  • Complex calculations
  • Multiple sources of data requiring multiple mappings, or multiple table joins, and potential manual logic input.
  • Data cleansing and data transformation values must be performed outside of the source system (either in an intermediate mapping and logic step or in the receiving system as it is imported).
  • Data mapping contains potential many-to-many relationships or complex logic which is dependent on multiple field values or multiple data characteristics.
  • Reconciliation tools or complex reports required
  • Large data volume
  • Substantial testing effort or multiple types of tests. May include positive and negative testing as well.

Extensions or Enhancements

  • Simple rules
  • Standard SAP supported enhancements completely contained in SAP OSS Note instructions.
  • Field default changes
  • Copying of logic to custom records or views
  • SAP Authorizations are not affected.
  • Simple form routines that are very slight variations of existing form routines.
  • Simple user exits with 1 or no loop statements and no table joins.
  • Minimal testing effort .
  • New table
  • New table structure with no more than 2 table references.
  • Simple data modification rules or simple coded business rules which influence data values.
  • Standard SAP enhancements such as extending field catalogs, creating pricing form routines, common delivered SAP user exit or enhancements (not necessarily supported by SAP OSS Notes), and other simple user exit or enhancement point coding.
  • Single User Exit or single Enhancement Point coding to achieve result(s).
  • Create or modify SAP Search Helps.
  • New data tables based on existing SAP table structures.
  • Custom info structure definitions (without coding).
  • Display screen field adjustments.
  • Simple adjustments to existing SAP programs / transaction and assigning new transaction codes.
  • Coding that requires 2 table joins or 2 loop statements.
  • Moderate or detailed program testing with multiple options or variants.
  • Mission critical; financial impact; or regulatory impact.
  • Creating significant portions of processing functionality with custom code.
  • Coding which involves a process string or chain of 2 or more data “transactions” or complete process exchanges.
  • Multiple new tables with multiple formulas.
  • Coding which requires multiple criteria, multiple data dependencies, or multiple table evaluations.
  • User exit coding which requires significant design effort where there is no standard SAP proposed solution that does not meet at least 80-90% of the requirement.
  • Coding which involves 2 or more user exits.
  • Coding which involves functionality in 2 or more SAP modules.
  • ANY Coding which involves direct table updates is automatically high risk (and should be avoided).
  • Development of new custom transactions with significant non-standard functionality.
  • User exits, enhancements, or custom program that require custom field additions to existing SAP tables for additional processing.
  • Custom screen requirements with new fields and processing requirements.
  • Coding that requires more than 2 table joins, or coding that requires more than 2 loop statements.
  • Custom development that requires enhanced or additional security authorization objects.
  • Substantial testing effort or multiple types of tests. May include positive and negative testing as well. Generally involves testing within and across a module or function.

Forms

  • Use standard SAP pre-delivered forms without changes.
  • Accept SAP form logic and coding, accept standard SAP print programs and make only minor layout changes to existing forms.
  • Single forms without any variants for each type of output processing.
  • Use standard pre-delivered forms but make minor logic and programming changes to form processing.
  • Can make form layout modifications, even significant ones, as long as they are based on an existing SAP form (not a brand new form developed from the beginning).
  • Use standard print programs but make minor changes to print program processing.
  • Up to 2 types of layouts (with only minimal changes in layout or logic) for each document type that needs to be printed.
  • Multiple types of variants or processing of forms but with minor adjustments to layouts or logic.
  • All logic or coding changes to both forms or print programs are within the same module / processing stream (not dependent on requirements from other transaction streams or other modules).
  • Can retrieve data from a single table outside of the standard print program processing stream and apply simple logic.
  • Any print program or form program changes which fall within the criteria and examples provided under the “Average” section of the “Extensions / Enhancements” section.
  • Moderate or detailed program testing with multiple options or variants.
  • Mission critical, financial impact, or regulatory impact.
  • End customer-specific, or end vendor-specific form layout requirements.
  • Pricing requirements that must be recalculated in the form logic (not able to use standard functionality).
  • Substantial layout modifications or creating whole new forms or print programs that are not based on standard SAP forms or programs.
  • Substantial modifications or alterations to standard SAP forms or print programs.
  • More than 2 types of layouts for any document processing type. For example, more than 2 types of invoice layouts, production orders, goods movement slips, etc.
  • Form or print program logic that requires data outside of the module or processing stream that is being transacted in.
  • Form or print program that requires any custom tables or customized rules for processing.
  • Multiple output streams from the same document or transaction process.
  • Data or logic criteria accessed from multiple tables not included in the pre-delivered standard print program.
  • Any print program or form program changes which fall within the criteria and examples provided under the “High” section of the “Extensions / Enhancements” section.
  • Substantial testing effort or multiple types of tests. May include positive and negative testing as well. Generally involves testing within and across a module or function.





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