SAP ROI — Enterprise Architecture & Business Solutions

What if some little guy like me–, a lowly contract consultant came along and said “SAP, I’ve got some really, really great ideas on how you can dramatically change the application for far greater success in the marketplace!” 

What if it would make a significant change in the usefulness of the application, AND would not cost that much in developer time or resources. 

What if it could be done with almost completely pre-existing functions, functionality, and code that SAP already has but has not done a good job themselves of integrating?

Low cost, high benefit, game changing scenarios in the ERP application space.  Game changing because the changes below and many more I know of cover the vaunted three areas of value proposition all at once–,  product innovation, operational excellence, and customer experience.

What if these changes demonstrated enough benefit to create a compelling case for version upgrades without expiring support as the reason? 

What if these changes made it an easier sell into the Small and Midsized Business (SMB) space?
 
Would SAP take up the cause?

I’ve got just such a set of propositions for you.  Just the thing to completely change the ERP competitive landscape and move the application to the next level without much cost, complexity, or difficulty involved.
  
Remember when you paid millions upon millions of dollars to do the “EnjoySAP” design work, employ the consultants (internal and external), developer coding, and lots of expenses to build that user experience.  I’m giving you the next generation application process FREE and it will make a huge difference in the application experience. 

SAP, knock, knock, anybody there?  You know basic value proposition issues like “customer experience” leading to better user acceptance.  These and other solutions also cover the operational excellence value proposition of reducing the post-go-live change management “valley of despair”?
 
SAP, what if I can deliver without all the bucketloads of cash you paid for “EnjoySAP”?  Are you interested?

“EnjoySAP”? 

Years ago I remember when SAP embarked on a transformation project called “EnjoySAP.”  The idea was to design the application to be more user friendly, and to be just plain more usable.  Along the way we ended up with a new GUI interface and lots of “N” transactions for the new interaction paradigm.  That was about 10 years ago.  It’s time for a change…

SAP has the ability today to add tremendous value to its transaction processing and to be able to take the application to the next level by doing a few “relatively minor” changes.  These would appear to be dramatic changes on the surface, but underneath they are relatively simple and low cost.  Best of all, all of them can be made 100% backward compatible, and most of that even without having to use a “switched framework.”  How’s that for benefit?
 
Most can be done with few or no core application code changes to existing transactions, and even when there must be a few changes, they can still be done without tremendous difficulty.  Even when those changes are necessary, SAP can simply incorporate its “switched framework” for coding enhancements and add the switches to the IMG to give customers the option of using the old, existing ways, or the new, significantly enhanced methods.

Here we Go…   

For many years I’ve done full-cycle, full-module, functional configuration in SD, MM, and PP.  Along the way I’ve encountered some interesting things that have made me wonder why in the world SAP hadn’t done more work on application “usefulness” to the end user.  We’re talking one of the vaunted three value proposition pillars here SAP –, “customer experience.”

DIMP solution add-on transaction, ADSUBCON 

The SAP subcontracting functionality has always been a royal pain in the backside.  Separate t-codes for nearly every process, separate inventory management processes, separate stock report t-codes (forget about MMBE here), you name it.  Overall it is a disjointed and painful process.  However, one day on a DIMP project at an automotive company I accidently ran into this absolutely amazing subcontracting processing cockpit transaction called ADSUBCON.  It is probably one of the most useful, well thought out, and well-designed transaction options in the system.
 
Why isn’t this included in the core application for every customer, whether they use DIMP or not?  SAP, are you listening?  This is a BIG win for end customers.
 
This “cockpit” paradigm should be extended to other process areas of all of the modules.  Simply create the transaction code process flows, with all of the options, and enable configuration to be done to include or exclude certain transaction “buttons” or “options” in the cockpit.  Here are the advantages of the cockpit paradigm.  Users are exposed automatically to the full breadth of the process so they gain a more holistic business process perspective (even if they can’t execute certain transactions).  Knowledge transfer and usability are facilitated by the common look and feel of the cockpit.

ME21N – Do we need a VA01N? 

One of the really useful functions in ME21N is the document overview and the ability to drag requisitions to the shopping cart to create new POs.  Why doesn’t this exist for Sales Orders?
 
Come on SAP, you could easily incorporate the VA05 transaction processing behind the scenes to make this more usable.  The VA05 could be the document overview like what is used in ME21N.  The copy control could easily be used to copy document to document, or item to item.  And on top of that, depending on how the transaction is structured, it could also include a list of the last X orders / deliveries / invoices (based on configuration settings) for that Ship-To party as soon as that customer number is entered and you press ENTER.  Wow, now that would be useful.
 
On top of that, the development for a lot of this has already been done in several function modules that are used for the R3 Internet Sales application.  What are you waiting for?  This would create a dramatic change in usability for a key transaction string.  Along with that it would not require a huge amount of development work. 
 
SAP, can you see the benefit to the end customer who uses these transactions?

Document Flow in MM and PP 

The PO History was a good start in the ME”xx”N transactions, but this should be extended to material documents, accounting invoice displays, etc.  This was done in SD and has been a tremendous asset and help for troubleshooting, understanding document history, etc.  Why hasn’t this same paradigm been applied to MM and PP yet?  Come on SAP, the info is already there, it’s not that hard to attach the data.

Pricing, Schmicing, SD-MM coordination 

This one would require some re-design but in the end it would be worth the pain.  I’ve always been baffled by the “differences” between SD “Pricing Procedure” maintenance and MM “Schema” maintenance.  A significant amount of the backend plumbing, tables, etc. are the same between the two modules.  Even a lot of the programs are the same but are separated by application area settings.  Why again are they named differently?
 
In reality lots of these things should be made exactly the same, but in reverse.  I’ve even been on many clients where they wanted to do similar types of posting functionality that is available on the SD side but on the MM side.  Instead of revenue accounts, maybe expense and liability account determination. 
 
The consistency in naming conventions in the IMG for SD and MM pricing would be helpful.  The similarity in functionality would open doors to more consistent thought and condition setup leading to better business benefit.  The ability to be able to drive more granular General Ledger level spend tracking on PO’s by having similar functionality to SD’s Revenue Account Determination functionality would provide greater ability for business to track discrete components of the competitive pressures that vendor power creates.

Making the pricing processes both similar and just as robust on both the SD and MM side, along with the expanded FI integration opens a whole new world of possibilities for business.

Output Processing WMTA-Style 

On nearly every project I’m on there is always some request to automate this transaction into that one, etc.  The process chain automation seems to be a consistent and routine theme no matter what module it is. 
 
Over the years I’ve used Lean WM and the Auto TO creation through the standard WMTA condition. 
 
This paradigm is a great solution to performing any kind of auto processing throughout the system.  Because of the number of BAPIs and Function Modules that are already produced for most of the document creating (or changing) transactions, this would be relatively easy to do.  Simply include a BAPI or function module in a condition to create the follow-on document and pass the data to the function module or BAPI through the print program.
 
This solution is tremendously flexible because of the ability to control the individual behavior of each output through the use of the condition technique and access sequences.  What a great way to get the job done!
 
On top of that, you could develop a standard print program with all of the standard supported output options, and a configuration switched framework that uses the application area and standard or custom condition type to be processed.  Then unnecessary processing would not be required, only a single print program would need to be maintained, and the output condition could have its own separate BAPI or function module assigned.
 
Do I hear highly flexible workflow without all of the difficulties, pain, and setup work of normal workflow?  This is a great way to enable business process flows with standard functionality and standard programs for processing or re-processing outputs.  This is the type of innovation that small and midsized businesses badly need.

Conclusion 

SAP, if you’re listening at all, I have many more areas where you can substantially improve the ERP application, without significant expense, time, or resources.  These and many other improvements begin to provide a compelling case for upgrades even without support ending.  Between these and several other ideas I have you could make the case so compelling for an upgrade that it might create a rush to “keep up with the SAP Jones’s” so that their competitors don’t gain too much of an advantage.
 
With some of these enhancements, the case for ease of use, business process focus, and innate knowledge transfer are so strong that it provides reasons for small and midsized business sales as well.  
 
If you’re listening and interested have one of your key developers from Palo Alto or Waldorf call me.  After over 20 implementation projects I have a pretty good idea what customers are looking for and what is meaningful to the small and midsized business space.  Let’s work together to “supercharge” the ERP application and in the process shoot for 90% of the entire ERP application space!  It’s time for order of magnitude changes on the customer experience and business process side of the house.

Think about it, these changes cover the vaunted three areas of value proposition all at once–,  product innovation, operational excellence, and customer experience.  How could you possibly go wrong! 

Related Posts:

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

When implementing or upgrading SAP too often I encounter back yard mechanics who changed the oil on someone’s cars and checked the tire pressure–, somehow they think that qualifies them to do engine overhauls on Formula 1 race cars.

And just in case the analogy doesn’t seem to make sense, why again do you expect old-style implementation vendors and consultants to transform your business into a competitive powerhouse by only addressing cost-focused ROI and TCO methods?

What About SAP and ERP Cost Savings for ROI and TCO?

Sure, cost-savings and process improvements are critical today, and they can not be ignored or dismissed on any ERP project, but they can NOT be the key focus of the project either if you expect your company to gain any marketplace competitive advantage.

No wonder survey after survey shows C-level executives disappointed by the return on their ERP investments. If you want Formula 1 results in the marketplace, use Formula 1 approaches, methodologies, vendors, and consultants on your SAP implementation or upgrade. I must warn you though, most consultants and vendors are clueless at how to do anything but take you down the same old tired cow paths to marketplace obscurity.

A cost based ROI or TCO implementation or upgrade approach will never make you a winner in the marketplace.

It’s certainly important to save you a few bucks and reduce some of your overhead, but you can only squeeze so much out before something else has to give. There is nothing about it that makes you unique that can’t easily be copied by all of your other competitors in the marketplace. Worse still, sometimes when you are the first to implement all of these new process improvements and automation methods your competitors get your lessons learned on what worked and what did not when it comes time to modify their own processes.[FN1] You pay the R&D premiums for the trial and error which they receive the benefit of in lower costs and reduced time. Sure, they may lag a little behind but in today’s world I can assure you they are not that far behind.

With today’s globally competitive environment focusing on cost-based metrics alone will not make you win in the market unless that cost decrease is a game changer. Many of today’s modern companies are in the last few miles of business process improvement in system design–, the last few miles of “better, faster, cheaper” ways of doing business. The drive to reduce cost has become so extreme that to squeeze the last few pennies out of products and services companies now outsource entire factories, plants, and operations to Third World countries. But now everyone is doing that too.

Except for some game changing process transformation (which is not likely) the last few miles of process improvement yield the smallest gains at the highest cost. ALL of these ROI and TCO methodologies use lagging indicators to measure success. And lagging indicators will not provide you with the forward business benefit you need to win in the marketplace.

Dusty Old Trails – Why ERP Implementations Focused on Cost

The herd mentality is alive and well with ERP implementatoin vendors. Marching down the ROI and TCO road all I find are the same old worn-out cow paths cut in the brush that everyone wants to follow. In the technology arena, known for innovation, cutting edge transformation, and forward thinking, these old dusty paths are silly. Sure, these implementation vendors try to re-package their offerings, try to suggest a focus on ROI, but they only understand cost-based lagging indicators because they don’t truly understand business.

The Perfect Lagging Indicator of Cost Control

Here’s an extreme example of why these methods are dangerous, unless there is a significant improvement in cost without a significant impact in operations or marketplace competitiveness.

It is the PERFECT lagging indicator or the “perfect” accounting scenario. It is a set of perfectly balanced books, with no deviations, no discrepancies and no risks. It is the model of absolute simplicity. The books close immediately with no lag, and they always balance to the penny. It is the company with no employees, no inventory, no products, no services, no buildings, no assets, no expenditures, no shareholders, no nothing. It is an empty, hollow shell. But that is the “perfect” lagging indicator of accounting and financial performance. It’s also an extreme illustration of some of the silliness in the marketplace around ROI and TCO for an implementation.

Cost savings are an important part of any implementation or upgrade. But unless the cost savings are dramatic, unless they provide you with a major improvement in the “operational excellence” value proposition, they are often hardly worth the effort. Using lagging indicators such as cost-based measures of implementations or upgrades does little to alter a company’s competitive landscape.

The last few miles of process improvement (i.e. cost reductions) yield the smallest gains at the highest cost.

So why won’t it work? Unless you have huge process improvement gaps either as an industry, or compared to your competitors, you just don’t gain that much from process improvement initiatives alone. Should you avoid it? Of course not, it would be both silly and absurd to suggest you should not take on process improvement initiatives. Every little bit helps, there’s no denying that. But without dramatic changes most process improvement initiatives are little more than tactics when your business needs strategies to address your competitive pressures and revitalize your value proposition. And then this needs to be translated into your SAP ERP or CRM implementation–, you need solid, strategy-based IT solutions!

SAP’s Rarely Used Tools and Techniques for Strategic ERP Implementation

It’s always shocking to me to find out how many vendors, consultants, and sales people have no idea about the value and strategy tools and resources SAP provides. And of the few that do, most of them have little idea or understanding on how to use them because they are not experts, they are merely technicians. Along the way they’ve found or developed their one or two “wrenches” and they’ve found “cool” ways to convince you their tire pressure gauge is the best at working on your race car. They’re not Formula 1 mechanics they are oil changers.

With so many vendors and consultants who are not aware of the SAP value and strategy tools, or how to use them, how can SAP customers be aware of them? Few vendors or consultants understand business strategy, competitive pressures, value propositions, and how to integrate them into an SAP implementation of the ERP package or CRM. They know how to change oil and and show you their cool tire pressure gauges. Sure, they’ve got slick presentations to try to convince you their wrench or pressure gauge is really a super-secret James Bond gadget that can do magic, but if that were the case there wouldn’t be so many frustrated C-level executives over the lack of ERP results.

Now that SAP is a very mature product with significant market penetration the focus of the conversation is changing. CIOs, CFOs, and CEOs are now starting to cut back on their SAP budgets, ignoring upgrade requirements, running to alternate support vendors, and generally have little or no desire to go through a painful upgrade process. And the number one reason why this is all happening is because C-level executives are not seeing the return promised by all those implementation vendors.

For over 10 years that I know of many of these tools and techniques have been available freely to customers and vendors in one form or another. Even though they are not used nearly as often as they should be, SAP continues to develop and invest in them but somehow they keep getting missed. While all of those consultants and implementation vendors are out there tuning up their oil changing techniques, and trying to build better tire pressure gauges, the market marches on and C-level executives continue to challenge the ERP paradigm.

The Future of SAP is in Leading Indicators of Business Success Like Customer Acquisition, Customer Retention, and Revenue Generation

Surveys of CIOs routinely show that top priorities for their IT department spend is to focus on business related issues like customer acquisition, customer retention, profitability, etc. And implementation vendors are unable to articulate how an SAP implementation or upgrade can enable that to happen. SAP provides the tools and resources to make that happen but no software company can change the skills, talents, and abilities of the implementation vendors or their consultants. That is up to the educated ERP consumer to ensure they are actually getting what they are paying for.

Significant SAP and ERP Success Criteria will not Change Until Business DEMANDS that Fakes and Frauds are Removed from the Marketplace

Business must become more savvy at “looking under the hood” of their implementation vendors. Vendor claims must be more carefully evaluated and the skills of the consultants they provide more thoroughly vetted.

To this day I’m still shocked by the number of resumes I see which show some 5 – 10 years, and 3 or more full lifecycle implementation projects in a country where the individual making these claims can barely understand or speak the language. Again I have to ask how did they lead the requirements discussions sessions to know what needed to be set up? And how do they lead meetings and discussions related to markets, company direction, or required processes to support your business? And who wrote their portion of the blueprint or logged their issues or resolved complex process and integration problems that came up during the project? Just exactly how does someone who barely speaks the native language of the company they are performing the work for take care of the communication intensive knowledge transfer and change management activities? Are you getting the picture here? [FN2]

In other words, do you really have to wonder why your implementation didn’t deliver to your expectations when so many of the consultants you bring onto your project can hardly understand the language?

It’s a testament to SAP’s ability to deliver methodologies like ASAP, Best Practices, and other materials that there aren’t more lawsuits for all of the outright fraudulent “consultants” with completely fake resumes in the marketplace.

Is it any wonder there is little genuine business awareness on what tools and techniques SAP offers to take your business to the next level?

Too often these vendors and their consultants are just like the carnies at the County fair on the midway hawking their “better, faster, cheaper” midway games to the unwary. And just like those carnies, they’ve got lots of slick marketing, slick packaging, and supposed unique methodologies and approaches to solve your problem and deliver to you cost-reduction based ROI.

They replace your legacy transaction systems with future legacy transaction systems in the form of your SAP implementation. But they have no idea on how to use the tools and techniques SAP provides to realize value based on a strategic implementation method.

SAP Tactics, Strategies, or Both?

So here we are, back to the old back yard mechanics, the ones who checked their tire pressure and changed the oil on a few cars but want to overhaul a Formula 1 race car engine. Good luck!

Doing research for an upcoming book on using a strategy based implementation or upgrade approach to SAP I’ve read probably thousands of pages of academic articles, research information, and company websites about “ROI” with IT systems, and more directly, “ROI” with ERP implementations. Maybe one percent (1%) of the material I read contains any substance about strategic options for ERP. This seems to be a “mystical subject” where the Formula 1 mechanics can’t be found so companies continue to rely on tire checkers and oil changers to overhaul their race cars.

Companies undertaking an ERP implementation will continue to be disappointed until they begin to demand the Formula 1 teams and realize they may cost a little more than the backyard mechanics. They will be disappointed until they begin to demand real business consultants from the marketplace who understand and can communite about competitive pressures, value propositions, and change management about the SAP application in terms of:

• Knowledge transfer
• Change management
• Competitive pressures
• Marketplace performance
• Supply chain integration with the customer
• Customer experience
• Customer or sales conversion
• Product or service innovation
• Niche markets
• Joint venture opportunities
• Product or service portfolios

and a whole host of business issues that the application can enable. That list contains BUSINESS issues, not application issues. How is a company going to achieve real breakthroughs in SAP or ERP implementations or upgrades with-out focusing on business reasons for the system? And even if you do, you still need to find the vendors and consultants who understand how to translate these business-centered strategic initiatives into application solutions.

Why, why do you buy a Formula 1 race car and then bring in backyard mechanics to work on it?

Some of the research I read is plainly misplaced, it is more like marketing material for the backyard mechanics claiming they have the answer to working on your Formula 1 racer. One research piece that tried to make the case that just improving processes alone “supports” goals of revenue and profit growth. Sure, that’s a marginally true statement, but business doesn’t just need the “support” that process improvement offers (unless there are large improvements), business needs a new IT focus.

That same research paper went on to explain that business should not be cutting back on ERP IT spend during tough economic times. And while I agree, it is for an entirely different reason. ERP IT spend should be preserved, but with a new focus and direction. That direction is on strategic implementation and upgrade directed at business benefit along with the tactical cost-based process improvements. [FN3] In other words, IT spend should be focused on producing business centered solutions and results, not just replacing transaction systems with cool new best practice processes.

 

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

[FN1] Change How You Look at SAP to create ROI
http://www.r3now.com/change-how-you-look-at-sap-to-create-roi

[FN2] Screening methods to find the right SAP consultant
http://www.r3now.com/screening-methods-to-find-the-right-sap-consultant

[FN3] Why SAP Projects Fail to Deliver ROI (and how to change it)
http://www.r3now.com/why-sap-projects-fail-to-deliver-roi-and-how-to-change-it

Related Posts:

• 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
• Opportunities for INNOVATION SAP, HELLO?
• Business and IT Alignment – Integrating Technology and IT Spend with Business