Thrive After go Live: Continuous Business Evolution with SAP R/3

1. Thrive After go Live: Continuous Business Evolution with SAP R/3 Barry Wilderman Michael Doane META Group, Inc.

2. Protecting Your SAP Investment 80% of SAP installed base clients express disappointment in: Benefits attained Measurability of benefits User competency 20% created post-ERP IT/Business organizations (CoE) End User Competency is sorely neglected

3. The Fog of SAP War • A Business Case justifies the endeavor (was it measurable?) • Software and SI are selected • Project begins – client grows ‘cost conscious’ • Benefits are forgotten/training is reduced • “We didn’t get what we expected”

4. B Transfer of SAP Knowledge A Overview of an SAP Implementation Project 0 Vision & Strategy Help Desk Interface Support Benefits Monitor Process Improvement Integration Testing Data Migration Interfacing User Testing User Training Project Charter Funding Commitment R/3 Configuration Reporting Interfacing Data Cleansing Enterprise Model Definition Process Design Data Analysis Scoping Staffing Benefits Targeting Production Platform Project Installation Sizing Client Ownership IT Transition

5. Pre-SAP Life Cycle Information Systems Life Cycle The perception of a need Project Planning Degradation Acquisition/ Development Maintenance/ Enhancement Testing & Training Utilization Implementation

6. The SAP Life Cycle Continuous Business Improvement Cycle Enterprise Vision Extended Applications Opportunity New Software Release Business Process Design Configuration Implementation Business Process Refined Configuration Expected life-span of an SAP installation=15+ years

7. Continuous Business Improvement Beyond Day One ROI, Extended Applications, e-Commerce Extensions toward SCM and CRM Yes Core ERP Implementation CoE? Go Live Incremental Improvement TO BE No AS IS Performance The “TO BE” vision established during core ERP implementation is limited to near and mid-term planning and is targeted for achievement at the point of Go Live. At Go Live, a new “TO BE” must be established or business improvements will only be incremental relative to the initial To Be vision. Clients need to simultaneously a) maintain and support existing ERP functionality and b) provide the engine to seize new benefits.

8. CIO Top Issues Matrix (500 CIOs in 2001, 700 CIOs in 2002 CIO Concerns Worldwide = 1. Business/IT Alignment

9. Why an SAP Center of Excellence? • An optimization of business processes that drive business benefit • An optimization of end user competency and employee fulfillment of business processes • Continued coherence and integration of functionality and data through all process chains.

10. IT Steering Committee CIO Change Management Sourcing & IT Financials IT Human Resources Quality & Measurement Security IT Architecture/ Planning Program Management Continuous Education Application Management Business Groups Integration Mgmt Center of Excellence Operational Services Infrastructure Development/ Engineering/ Technical Support • Technology • Domains • Database • Host • Middleware • Network • Desktop • etc. Technical Support Operations

11. Client IT Domain Enterprise Program Management Process Owners Client LOB Domain Users Users Users Users Software Vendor Domain Application Management Domain Help Desk Continuous Education … Production Logistics Finance Sales Extended apps New apps Upgrades Software Configuration & Support Custom Applications Integration Management (Functional, Cross-Application) Integration Management (Technical) Client IT Domain Production Control/Change Management

12. Coe Functions • Maintenance and support of ERP and related functions • Optimization of current system usage • Continuous business improvement • Prepare the company for transformational change.

13. Building an SAP CoE: Planning • Create a high-level vision for a post-implementation Center of Excellence. This vision will address: • The scope of the center of competence: Will it support just the ERP installation, or also legacy systems, bolt-ons, and interfaces? • Organization/structure: There are at minimum four basic variants for a CoE organization depending upon a client’s size, geographic locations, and support requirements. • Transition Plan (High Level): defining the calendar for migration of legacy systems to ERP as well as the migration of legacy IT staff to new roles in the Center of Excellence.

14. Building an SAP CoE Development/Realization • Create a Straw Roster for the Application Management team:   • Establish role definitions for the post-Go Live for Enterprise Program Management, Application Management, and Integration Management. • Determine which CoE functions will be outsourced • Launch outsourcing negotiations with chosen vendors • Create a staff transition plan

15. Realization to Final Preparation • Complete transition education for CoE staff. • Integration and orientation of outsourced CoE functions should commence as the build phase reaches the final preparation phase. • Initial end user training should include an introduction to CoE user support functions and the Help Desk should be in place.

16. Go Live + • The Center of Excellence is operational, with all elements in place for continuous business evolution. • After Go Live, the balance of legacy IT staff will be a) transitioned to the new SAP-centric organization, b) re-assigned with the organization, or c) terminated.

17. Development System - Installation • Master Data Conversion • Interfaces (one time and permanent) • Reports – • Customizing to satisfy Gaps • Production Installation Implementation • Performance Monitoring/Scalability • Interface maintenance • Connectivity (ALE, EDI, Web…) • User support • Data/Business Intelligence Post-Implementation IT Migration from Tradition to ERP

18. Bottom Line • ROI should be measured from the beginning of the project and carried through time • Cost is only half of the equation • ROI has no ceiling (nor does a To Be Vision) • Continuous business evolution is the goal, not just implementation