SAP is one of the most popular technology in the world today allowing companies to run and manage their end-to-end business processes on one integrated technology platform. SAP NetWeaver allows companies to integrate third party systems and external web applications together with SAP core ECC system(s) there by providing a robust technology infrastructure. This helps enterprises which have already invested in other third party systems to preserve their investment to support their business growth. Now having said all about SAP, you all know that any SAP transformation project is a huge undertaking and every customer wants to put maximum effort and dedicated workforce to make the implementation successful.
Today I would like to emphasize on some best practices SAP customers may want to consider to minimize any risks and ensure success of your IT transformation project. I have been blessed to have the experience building SAP core applications and leading over 13 SAP implementations for over 10 years. In the recent years, I have been working on mid-size & large SAP implementations as a SAP Program Advisor (also referred to as a Trusted Project Advisor) advising the customer executive leadership on best practices on SAP technology, implementation, methodology and all other aspects of the program with an unbiased independent third party opinions. Every company has different business needs to meet their corporate growth strategy which makes each SAP project unique in its own way and I will share some best practices on a very high level that your SAP project leadership can use to their advantage to ensure that their SAP project is setup for success.
So how does a IT Transformation project begin ? Typically, An IT strategy to support a company's short term and long term business growth is established by the C-level executive leadership (mostly by CEO, CIO, CFO, Vice Presidents of business and IT / Systems). Once the IT strategy is defined and approved, an executive steering committee is formed with some of the above executives and key leadership people representing the business. The project is then officially kicked off into planning, preparation, blueprint, functional design, technical design & build, test, deploy, go-live and maintenance phases. As a project advisor, there are different best practices or actions I recommend depending on the client and project circumstances. It may not be practically possible to cover best practices for all scenarios in this article. But, I will make an attempt to cover the best practices and proactive measures at a macro level that should be followed during each of the implementation phases to minimize risks and avoid any unforeseen challenges to budget and go-live dates.
In part 1, I will discuss best practices for SAP project planning phase which includes business readiness, technology (and SAP modules/packages) selection, selection of SAP implementation partner (also known as SAP Systems Integrator) and finally the project preparation phase. Part 2 and 3 will cover the remainder phases of your SAP project.SAP Basis Planning Phase Early on in this phase, the steering committee should meet and establish the initial composition of project leadership that should include a program sponsor, business lead and IT lead who are part of your business today and shall continue to lead the IT strategy of the company going forward. In addition, based on my past SAP experiences, I will always recommend having a SAP Program Advisor to advice the project leadership on key decisions including selection of technology, vendors, methodology and guide your project all the way through the project go-live.
Business Readiness (Define Goals, Scope & Engagement Model)
In the planning phase, initially the project leadership should meet with key stakeholders and define their department objectives that should be met by the SAP project. For example, if the new transformation project includes a new business initiative or significant enhancements to existing business processes, then time to go-live will be a major factor. Is the go-live timeframe aligning with the time when you are planning to launch the new business initiative? Next thing I will recommend is to prioritize the important project factors such as schedule, budget, and quality so that these constraints can be clearly articulated during the vendor selection process. Also, define the high level scope of the project into 3 distinct categories for each business work stream such as "High", "Medium" and "Low" priority. Also, business stakeholders and leadership needs to identify scope items that can be eliminated if the project budget and schedule is challenged. To the minimum it would be good to have a PMO process in place to de-scope any of the items when time or budget is challenged.
During this phase the project leadership team should review the scope of the project and decide on the engagement model with the software implementation vendor. Typically you can choose between a "Fixed Fee" or "Time & Materials" engagement model. Fixed Fee model means the vendor has to implement the whole project or each phase of the project for a fixed price. With Fixed Fee model, you as a customer need to define your scope clearly so that you can include it in the statement of work. Fixed fee will also mean that you will be typically charged in most cases about 20% surcharge by systems integrator to cover the risk to deliver the project on a scope that was mutually agreed upon at a fixed price. The drawback with this approach is sometimes there is a potential for quality of deliverables to be impacted in the process of delivering solution as quickly as possible within the predefined budget. A change control board should be established and protocol for handling change requests should be defined. It is advisable to do quality reviews on deliverables and overall implementation with the help of independent Project Advisor to ensure that solution delivered is of high quality. The other engagement model is "Time & Materials" wherein the customer is paying for resources on time and material basis. Project management office (PMO) has to monitor the project budget with respect to progress on deliverables very closely to ensure that project is delivered within the budget. It is easy to add scope and resources to meet deadlines thereby overshooting the planned budget. With this model I will recommend an additional third party or in-house SAP project manager (apart from SI project and/or delivery manager) to ensure project delivery in time and budget. Estimates and re-estimates should be done in a timely manner at appropriate milestones within each phase when using this model. If the SAP Basis implementation project is complex and scope is not clearly known then this may be a better option. Now, in this phase you should analyze all the pros and cons of both of these models and pick one that suits the best for your business.
Usually planning phase can last between few weeks to a few months and if you have business team members already identified for the implementation, you can engage them in defining the future state business requirements. This would help accelerate the business requirements gathering phase and creation of BPRDs during the blueprint.
Technology Selection
In this article an assumption is made that you have already made a decision to go with SAP, but nevertheless not all projects go with a presumed technology of choice. In very brief, if your company needs to select a technology to support your IT growth strategy there are several factors that need to be taken into account such as the following:
* Scalability of the technology platform
* Ability to support the long term business growth in terms of functionality, data volume, performance, etc.
* Robust integration capabilities with internal and external systems
* SOA (Service Oriented Architecture) capabilities
* Ability to enhance the system in-house after go-live with minimal or no support from the product development team from the technology vendor
* Business functionality fit with SAP standard modules such as FI-CO, FSCD, SD, MM, IS Solutions, BI, PI, etc.