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Orange County Convention Center

Orlando, Florida | June 3-5, 2014

SAP Center of Excellence


Maximize Return on your SAP Investment
by Creating a Business/IT Partnership
- Adolf Unoarumhi
- Sussan Chakamian

LEARNING POINTS
COE Overview
COE Design Support Models
COE Business / IT partnership
COE Design - Critical success factors

Why projects fail

Senior Management believes the company vision and


strategy is understood by all

No quantifiable measurement of benefits identified and


monitored

Business/IT staff resume their traditional roles after


go-live without creating the necessary partnership

Senior management underestimates transformation


complexity and under-funds project

Business staff not involved in the project presume that


only end users will be affected

SAP COE Building the partnership


Going live with an SAP implementation is a tremendous
landmark and an investment that every company wants to
support properly. In order to achieve this objective, it is
necessary to transform the current IT services organization
from an IT support provider to a business partner.

One way to achieve this Business/IT partnership is to


create a center of excellence (COE).

SAP COE - Bridging the Business/IT gap


Traditional
IT

Traditional
Business

System Analyst to
System programmer

Business focus, limited


application knowledge

Each legacy system


had limited scope and
impact

Specialization by
function, few end-toend people

Specialization in
single systems and
technologies

Relied on IT for
systems support

Business/IT
Partnership
(SAP COE)
Business and application
knowledge
End-to-end process knowledge
with understanding of integration
points required
Owners of new systems

SAP COE Enabling a seamless transition

Maximum integration and


real time information

PERFORMANCE

Expected Performance Level per Business Case

Go
Live

Inter-process
efficiencies

Continuous
improvement
process

Streamline your process


Stabilization

Horror
Stories

TIME

Current Performance Level

Benefits of SAP COE


DECENTRALIZED
SUPPORT

Center of
Excellence

Cost & Process Leadership


-Program Mgmt
-Governance
Redundant
-Plan
Customer
Economies
-Build
Focused
of Scale
-Operate
Inefficient
Local Business
Standardized
Service
Mentality
Knowledge
Processes
-Support
Non-Standardized
-Train

CENTRALIZED
SUPPORT
Unresponsive
Detached from
Business
Inflexible

Knowledge Sharing
-Benchmarks
-Templates

Change and Project Management


Governance
SUB-OPTIMAL

OPTIMAL

SUB-OPTIMAL

Return on SAP investment


How are savings achieved?

Standardization

Centralization

Optimization

Sustainable
Behavior

COE Role

Clear ownership and standardization of business and IT processes


will drive reduction in support /operational costs and reduce risk
Standardized policies drive clear and consistent messaging across
the COE

Maintain central
repository of policies,
Level 4 process flows,
Solution architecture,
etc.

Standardized organization model with subject matter resources


Highly leverage-able resources with key skill sets ready to deploy
Knowledge hub for sharing ideas sparks innovation

Hub of resources with


SAP SMEs that allows
for rapid execution of
projects

Implement SAP industry leading practices


Innovative use of technology tools to increase automaton

Knowledge of leading
technology and process
material that can be
utilized for projects

Cumulative savings can only be achieved through an integrated


strategy & design

Drive cost savings across


business units by
leveraging repeatable,
standardized processes

Orange County Convention Center


Orlando, Florida | June 3-5, 2014

SAP COE Design Support Models

Leading SAP COE Design Practices


Organize the COE around the processes implemented
in the organization with a process owner for each
major process
Centralize as much of the COE as possible to improve
quality and reduce cost
Establish rigorous governance processes to control
change
Leverage Super User network to better understand
business needs
Staff COE not only to maintain current systems but
also take on some enhancement projects
Identify performance metrics (OLAs/SLAs) to manage
COE relationships with both the business and external
vendors

SAP COE Design Support Models


Centralized Support Model
Business
Unit 1

Business
Unit 2

Business
unit 3

Option 1

In a Centralized model, all Business Units


and geographies are supported by one
organization. This organization is typically
physically housed where the greatest
concentration of the IT resources are. In
rare cases, this can be a Virtual
organization.

Option 2

Each BU COE provides dedicated support to


their respective BU lacking global
integrating mechanisms such as global
governance and common support
Procedures and SOPs. This leads to
divergence from a Global template.

Option 3

The federated model is a hybrid model that


takes into account the positive aspects of
extreme centralized or decentralized
models. It promotes enterprise-wide
strategy and architecture while staying
close to business needs.

COE

Decentralized Model
COE1

Business Unit 1

COE 2

Business Unit 2

COE 3

Business Unit 3

Federated Model
Global vision and leadership
Enterprise-wide strategy and architecture
Centralized COE

Decentralized COE

Insufficient
Response Time

Economies of
Scale

Users control
of COE

Minor attention to
business-specific
requirements

Global Governance

Critical Mass of
Skills

Business
Ownership

Minor ownership
of the system by
BU

Rapid
Response

Strategic Control Synergies

High Cost

Low Standards

Redundant
Development

Minor
Integration

SAP COE Models Benefits/Challenges


Centralized Model
Characteristics

Delivers end-to-end SAP deployment


services enterprise-wide

Establishes and governs standards,


guidelines, and processes for SAP
technologies/tool use based on industry
best practices and internal experience

Cost efficient due to economies of scale

Best coordination of scarce resources

Ability to maintain global standards

Better ability to manage quality of project


deliverables

Characteristics

Small independent COEs designed to meet


the requirements of each region/Business
Unit

A hybrid COE may be organized around


various dimensions, e.g.., lines of business
or geographies

SAP governance at region/business unit


level

Core COE team is augmented with satellite


locations

Multiple SAP instances

Strategy & Planning is a responsibility of


the core COE Team. The degree of
responsibility for the satellite locations
depends on specific business scenario

Benefits

Cost is absorbed by each business unit

Better fit with local requirements

Less cultural barriers

Ability to respond quickly to requests

Central repository of knowledge

Challenges

Cost allocation & charge-backs

High # of skilled FTE required for timely


end-to-end delivery

Strong stakeholder management and


communication required to manage
business areas expectations

Characteristics

Federated Model

Skilled resource pool resides within the COE

Benefits

Decentralized Model

Robust SAP COE resource planning and


project prioritization required

Benefits

Economies of scale

Central repository of knowledge

Ability to maintain global standards while


remaining close to customer requirements

Challenges

High cost of operation

Minor integration with limited focus on


enterprise-wide initiatives, more projectfocused

Requires strict coordination and strong


governance across satellite COEs

Complex reporting structure

Less sharing of knowledge and best


practices across business areas

Lack of access and visibility to COE


leadership from satellite locations

Difficult to maintain global standards and


processes

May requires several point of contacts with


vendors

Redundant developments

Challenges

Orange County Convention Center


Orlando, Florida | June 3-5, 2014

SAP COE Business/IT Partnership

Typical support challenges


Lack of clearly defined scope of services
Lack of integration across Business and IT
Lack of proper balance between global and regional
activities and ownership
Limited accountability due to ad-hoc project-like
reporting relationships
Lack of focus on business metrics and limited
accountability for shared performance metrics across
Business and IT
Lack of standardized and formalized processes
Lack of transparency on risk management and issue
resolution

5 steps to achieving Business/IT Partnership


1. Position the SAP COE as a strategic instrument
to enable transformation of the business.
2. Create a customer service mentality where
supporting the business is the focus.
3. Demonstrate cross functional knowledge of
both the business and IT to establish
credibility.
4. Establish clear vision and specific goals for the
COE. This will create an opportunity for both
entities to work together in achieving a common
goal.
5. Define a governance process that requires a
supporting business case for new requirements.

Position the COE as a strategic enabler


Position the SAP COE as a strategic
instrument to enable transformation
of the business:
Demonstrate achieved benefits back to the
business through improved efficiencies
Internal marketing of capabilities and
services to business
Become an innovation hub - source of
knowledge and industry leading practices
offered back to business to solve their
problems

Create a customer service focus


Create a customer service mentality
where supporting the business is the
focus.
Stay close to business needs by leveraging
Super Users to better understand business
issues and common challenges
Design solutions with a business objective
in mind
Conduct customer surveys to keep track of
service quality and areas of opportunity
for improvement

Demonstrate cross functional knowledge


Demonstrate cross functional
knowledge of both the business and IT
to establish credibility.
Leverage COE expertise to provide an
integrated support service to the business
Influence design decisions by demonstrating
knowledge of endto-end business
processes and deep knowledge of the
application functionality

Establish clear vision & goals


Clear vision and goals will create an
opportunity for both parties to work
together in achieving a common goal.
Alignment with Process Owners and
enterprise governance boards to
understand strategic direction and apply to
SAP roadmap
Clear definition of Business and IT roles and
responsibilities with emphasis on
integration points

Define a rigorous governance process


Governance process that requires a
supporting business case for new
requirements:
Identify a business resource for each new
requirement responsible for championing
the business case through the approval
process
Establish clear linkage between change
control process and the solution roadmap
In case of an ongoing deployments,
establish cross governance change control
process to synchronize break-fix and project
design changes

Orange County Convention Center


Orlando, Florida | June 3-5, 2014

SAP COE Design Critical success factors

Engage executive stakeholders

Identify executive stakeholders whose


organization will be impacted by the SAP COE
design early in the design process

Establish the COE executive steering


committee with final approval rights for the
COE design

Gain agreement on COE vision and strategic


objectives from executive steering committee
prior to defining service delivery model and
reporting structure

Clearly define design activities, approval gates,


and escalation paths

Understand conflicting objectives amongst


various stakeholder groups and impact on COE
design; e.g., IT vs. Business, global vs. local IT
groups

Formalize Process Owners


Formalize Process Owner roles to enable
continuous process improvements and drive
efficiencies leveraging SAP.
Process Owners should be accountable and
evaluated on the following focus areas:

Final business process design and associated


key performance indicators

Level of common processes implemented


across the enterprise

Achieving stated process business benefits

Final decision point on when changes to


standard processes are appropriate

Engage Super User network

Identify and authorize skilled SAP users to


function as Super Users

Make the super user role an official part of a


persons job

Clearly define scope of the super user support

Incorporate performance measures in Super


Users performance reviews and reward/
recognize accordingly

Create a network of Super Users covering all


regions/functions - one person cannot be
everywhere!

Dont forget Succession Planning

COE Maturity Model


Business Lever

Core Business
Solutions

COE Defined

COE Managed

COE Optimized

Strategy

There is a link between


the business & IT for
updates

Business has active


ownership of business
processes

Business directs
business process
improvements

Business owns process


transformation

People

Basic end user training

End users receive


periodic refresher
training

End users are


educated about
business process &
training is continuous

End user job


performance is linked
to business
performance

Process

Optimized within
functional group or
sub-process /
applications

End to end processes


have been identified

Business processes
and applications have
been rationalized

Business processes
and application
portfolio have been
optimized

Technology

Infrastructure is
adequate. Data is not
rationalized.

Infrastructure is stable
and application data is
synchronized

Solution +
infrastructure is
flexible and data is
rationalized

EA infrastructure is
adaptive and data is
optimized for BPM

Performance
Measurement

Basic break / fix


metrics are reported

Current KPI is
measured and
reported

KPI measures &


targets are in the
systems

Business KPIs guide


business process
changes

Where are you positioned today?

Contact Us
Please contact us if you have any further questions or if
you would like more information on SAP COE Design.
Adolf Unoarumhi: adolf.unoarumhi@ey.com
Sussan Chakamian: sussan.chakamian@ey.com

THANK YOU
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