Business Solutions with SAP

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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How to Execute an SAP Reimplementation

January 23rd, 2012 by
ERP or SAP Business Case, CRM, ERP, BI, and IT investment

SAP Reimplementation

Some time ago I started a series on doing an SAP reimplementation for little more cost than a technical upgrade.  While I have done these, there were also a couple of interesting scenarios that added new complexities which needed to be addressed.  For example, how do companies deal with a seriously fragmented application landscape?  This is esepcially true in large enterprises where each company code, location, business unit, or other area decided to implement their own SAP applications independent of the others.  Then there are the companies with rollouts or upgrades underway.  For them the situation is a little different.  As a result I have decided to try to wrap this up with a focus on three key types of situations outlined below.

To review the previous posts on this topic, please see:

This topic is difficult just because there are so many “dimensions” of options to consider. As a result I’ve narrowed the focus to a few key areas.

Primary SAP Reimplementation Approaches or Options

As I pondered it more, and looked at the re-implementations I’ve done, as well as some of the system assessments and options, I finally decided to “bracket” them with a few key approaches. Because the numbers of options for re-implementation are too significant to address here I decided to stay at the high level to cover the major approaches.

  1. A reimplementation of a single SAP production instance.
  2. Integrating a landscape with multiple SAP production instances onto a single global instance.
  3. Rollout – whether it is an ongoing project that is not complete or a fully implemented system and you are considering an upgrade.

SAP Reimplementation Assumptions

As I wrote previously, one of the crucial considerations for a re-implementation is to move away from Software Engineering and toward business process engineering. First, let’s establish a few very basic assumptions about an SAP reimplementation:

  1. After you went live, or as you continued to roll out your solution, you discovered several “if we had known “x” we would have done “y.”
  2. Or, you may have incorporated a significant amount of custom code, or custom application development (inside or outside of SAP) and discovered that standard functionality would have met about ~90% (more or less) of your requirements (see SAP Implementation Focus, Software Engineering or Business Process Engineering?).
  3. You’ve already worked through the hard stuff in your original SAP implementation (see the section by this same title in SAP Reimplementation For Little More Cost than a Technical Upgrade Part 1). In other words, the hard decisions around the processes, organizational structures and data types have already been made.
  4. You may have additional functionality or other modules you want to implement and find that custom coded “solutions” are making them difficult to bring in.
  5. The custom-coding is requiring significant amounts of time for break-fix testing, integration testing, regression testing, SOX or other regulatory compliance when any new change is added.
  6. As new regulatory or other industry requirements are established, in whatever jurisdictions your company operates, you have to custom-code new solutions to meet them (rather than using SAP’s standard maintenance to add the new functionality).
  7. The time to work around all of the customized “solutions” when you want to add new functionality, or new modules, takes a significant amount of time.
  8. In some cases adding on brand new functionality is nearly impossible because of how much your system was “hacked together.”
  9. You need to upgrade, but there are probably hundreds, and in some cases thousands of custom programs to evaluate, test, integrate, and update to the newer version of ABAP.

Coming up we will start to review the three key types of re-implementations: a single production instance, consolidating multiple instances into a single global instance, and a re-implementation rollout.

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