Six Strategies to Manage Complexity and Reduce TCO in SAP Environments

Six Strategies to Manage Complexity and Reduce TCO in SAP

Frank PowellChief Operating Officer

Wednesday April 21, 1-2pm Central

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Introducing

Frank PowellChief Operating OfficerSymmetry

AgendaSources of ComplexityEvaluating the Cost of ComplexitySix Strategies to Reduce Complexity

SOURCES OF COMPLEXITY IN SAP

The LandscapeSAP Landscape

DEV QAS PRD

The Landscape

SAP Landscape

ECC DEV ECC QAS ECC PRD

BW DEV BW QAS BW PRD

CRM DEV

CRM QAS

CRM PRD

The Landscape

SAP Landscape



CRM DEV

CRM QAS

CRMPRD

Email

EDI

Time Clock

Payroll

UPS

The Landscape

SAP Landscape



CRM DEV

CRM QAS

CRMPRD

Email

EDI

Time Clock

Payroll

UPS

ECC DR

BW DR

CRM DR

Reporting

Vendor

Order Entry

Regulatory

The Landscape

SAP Landscape



CRM DEV

CRM QAS

CRMPRD

Email

EDI

Time Clock

Payroll

UPS

ECC DR

BW DR

CRM DR

Reporting

Vendor

Order Entry

Regulatory

Internet

DNS Routers WAN

Backup Recovery

Domain

The Landscape

SAP Landscape



CRM DEV

CRM QAS

CRMPRD

Email

EDI

Time Clock

Payroll

UPS

ECC DR

BW DR

CRM DR

Reporting

Vendor

Order Entry

Regulatory

Internet

DNS Routers WAN

Backup Recovery

Domain

Sources of ComplexityNumber of systems required to run all the applications

Each new APP needs a homeVirtualization helps – but adds another layer of complexity

Number of interfaces that need to be managed3rd partyCustomer developed

Network requirementsFaster, faster, faster!

Security demandsSOXRegulatory

High availability and Disaster RecoveryMany times not clearly defined to meet requirementsNo “one size fits all” solution

Managing vendor relationships in support of the environment

Sources of ComplexityChanging business requirements

Acquisition/divestitureExpansionRegulatory changes

Required customizations (from standard SAP)A canned solution just doesn’t existThe canned solution is too expensive

Evolving technologyVirtualizationClusteringReplication

Number of disciplines required to manage it allBudgetingPersonnel management

EVALUATING THE COST OF COMPLEXITY

Impact of Complexity and its CostIts all Plumbing

Even in a relatively simple system, once you start tugging on once piece, it affects all the other piecesProfessional plumbers don’t like working on old systems and charge more for doing so, they’d rather work on new construction

Impact of Complexity and its CostUltimate complexity

The human body has aspects of plumbing, but adds several dimensions such as organs (complex systems themselves), diet, medications, exercise, habits, environment, emotions ,etc.Doctors have many more variables in “managing” the human bodyDo you know of someone who takes 20 pills a day for health reasons who wonders if the pills have started to be the problem?

Impact of Complexity and its CostInformation Technology

Somewhere in the middleBut at some point the time and effort going into just managing complexity can start out weighing the benefit.

Do an internal evaluation to ask yourself where these costs exist.

Communication IssuesDeveloping silos are inevitable, but can be prevented

Department to departmentInternal to external (vendors, consultants, customers, etc.)

Lack of a common understandingMisunderstanding about how the entire system really works due to the silos of experience and knowledgeCauses departments to pull in different directions“I thought that was my responsibility” vs. “that’s someone else’s problem”Staff turnover hurts tremendously

Communication breakdowns have direct financial impactLeft hand doesn’t know what the right hand is doingRepeat efforts and loss of efficiencyProject scope creep

Cost of ManagementCost of management is more than you realize – The more complex the system, the more management required

Example: Cost of Management Weekly “status” meetings with:

Basis, security, datacenter, and functional departmentsAt least 3 vendors e.g. hardware, security support, project support, functional support, Basis support, hosting provider, SAP rep, 3rd party software rep.

7 hours of meetings x 50 weeks = 350 hours spent in meetings350 hours = 43.75 days = 5 weeks!!!5 weeks x IT director’s wage = $$$

Just to keep up with understanding your complex system!Can’t be eliminated, but what if it could be cut in half?

Cost of Management Lost opportunity cost – what could you have done with the extra time

Start other initiativesEvangelize IT within your organizationDrive innovationMentor your teamGo to trainingOr do a better job at…

ContractsBudgetsReviewsReportingProject planningEtc….

There is real effort and cost at all levels managing a highly complex system

Cost to ProjectsTime and Money

Poor communication between departmentsPoor communication with vendorsIt becomes difficult to understand all the nuances of a complex systemDon’t know what you don’t know, or what you want until it’s too late….

Q: Why didn’t you tell me it could do that?Q: Why didn’t you tell me this was a bad idea?Q: Why didn’t you tell me this in the beginning?

A: Because we didn’t know or fully understand!!!

Cost to ProjectsThe real issue…

Scope creep – what you thought you could do “quick and easy” turned out to be “complex and difficult”Over budget (More Time + Resources = Higher Cost)Missed deadlines

Lost opportunityExtended vendor contracts

Reputation effectNever on timeNever on budgetNever done right

Cost of DowntimeCost of downtime

Real costs do existWhat does an hour of downtime cost?

Annual Revenue / 8760(hours/year) = Cost of an hour

$1,000,000,000 / 8760 = $114,155.25 per hour

A day of downtime is more than many companies spend on SAP support in a year

Cost of DowntimeHow much downtime can you afford before it starts to cost you money?

“Just in time” nature of businesses means that companies that integrate your product into their manufacturing now face delays and losses. When customers can’t buy a Widget they go Widget Inc’s main competitor Many suppliers face penalties when deliveries timeframes/accuracy are not met (i.e. Automotive industry, Walmart)

Hard to quantify “other” costsLoss of reputationLost sales opportunities

Cost of Issue ResolutionRegardless of the scope of the problem, reducing the time-to-resolution has a financial impact

Printer in shipping department down – customer impactGetting tax documents out on-time – regulatory impactManufacturing halted all together – across the board impact

More complex environments by nature have longer issue resolutions times

Time to resolution is key

Cost of DiscoveryHow does complexity impact your Cost of Discovery

Information gapsMisinformationExtra time to locate resourcesExtra time to bring new resources up to speed

Cost of Discovery

Time Issue Resolution Should Take

Cost of Downtime

=Actual Time to Issue Resolution

minus( ) x

SIX STRATEGIES TO REDUCE COMPLEXITY

1. Invest in Professionally Developed ToolsOpt for professionally developed 3rd party tools and utilities rather than home grown programs or utilities

Some development of small utilities ok, but avoid home grown:Backup recovery programsDR programsSingle sign-on solutionsDatabase interfaces outside of SAP API

Time and effort to write and maintain home grown tools can be enormousTroubleshooting them is difficult for anyone other than the creator

Poorly written documentation or no documentationNo knowledge transfer if the creator leaves the companyInefficient programming or logic issues make enhancements difficult

Generally no “support” for them (no one to call for help)

1. Invest in Professionally Developed ToolsAlthough you may feel you have an “investment” in those home grown applications, look for jumping out points

At upgrade timeAt budget timeAt a teachable moment

2. Standardize, Standardize, StandardizePlatform StandardizationExample

Having ECC on Unix/Oracle and BW/CRM on Windows/SQLMultiple technical disciplines needed to support the environmentMultiple vendor relationships and contracts

Standardizing results inReduced management overheadReduced resources needed for support (staff, consultants)Leverage common toolsets and licensing

ROI in converting not necessarily shortThink of this as a long term strategyAvoid being in the position in the first place

2. Standardize, Standardize, StandardizeStandardize custom code where possible

ReportsUser exitsCore mods (changes to standard SAP source code)

Does SAP now have standard functionality to replace them?Leverage upgrade projects as an opportunity to standardize your platform and custom codePerform an analysis on whether the old custom code is even being used (RBE tool)Benefit from reduced maintenance costs!

Customer code now part of standardCode that is no longer usedReduction in ABAP developer time

3. Rein in Over-EngineeringTry not to over-engineer solutionsJust because you can, doesn’t mean you should

Example: Linux , Clustered, Oracle RAC, VM, implementationStill did not provide 100% uptimeA DR solution may have been a better fit

Over engineeringAdds complexityAdds points of failureIncrease troubleshooting effort (each part could potentially be the problem)Complicates your DR planMany times adds a false sense of securityAbove all equals an overall increase in cost

3. Rein in Over-EngineeringStrike a balance of meeting the requirements, maintainability and costEvaluate whether the value of the added complexity outweighs the added risk and cost – not always an obvious answerDon’t avoid proven solutions – just be sure to use them where appropriate

4. Don’t Ignore SecurityPoorly designed security architecture results in:

Huge maintenance workload for security staffExample 1

Department manager needs a change to their department roles. Then all the managers want it so support ends up with 15 changesNon sensitive transactions go into a common role that everyone gets

Example 2In a task based role architecture each role contains one function (e.g.) create purchase order. Staff require many, many roles to do their jobJob based roles make it easier to assign someone everything they need to do their daily job

Much greater risk of excessive access or segregation of duties violations

E.g. – cut yourself a check, ship goods to your own home, see other’s social security numbersIf a transaction is added to a role inappropriately then everyone who has it will have that access

4. Don’t Ignore SecurityPoorly designed security architecture results in:

Difficulty knowing what access people really have and what risks actually exist

Well architected security is easier to managePresents few risks to the corporationSaves money:

Time of security personnelFinancial lossReduced audit efforts

5. Consolidate SupportOutsource technical support / project work to a team that has worked together before

Too many vendors can create confusion – need clear lines of responsibilityTendency of “throwing it over the fence”Balance workload of internal vs. external staff

Benefits of reducing the number of vendors include:Reduce management overhead of relationshipsFinancial benefits from better deals on services / productsDealing with fewer vendors that know your environment and strategic goals

Improved communications, reduction in knowledge gap issuesImproved support, fewer issues, less downtime

Lower cost of discovery

5. Consolidate Support Be cautious of using only one vendor

Generally require long term contractsBase pricing sounds great until nickel and diming startsLose leverageFeeling of being held hostageFall into “group think” – the only way they know howNo 3rd party keeping them honest

6. Consider a Hosting SolutionSmaller organizations benefit from improved operationsLarger organizations benefit from reduction in management headachesNo need to develop expertise in commodity based servicesDedicated support team has benefits

Not a new name with every callReduced cost of discovery

A vendor that provides an integrated solution can keep costs downHostingOS/DBA supportSAP support3rd party applicationsProject work

6. Consider a Hosting SolutionFind a vendor that nicely fills the voids of your organizationDetermine where clear lines of responsibility can best be drawnDecide which functions don’t require intimate knowledge of your business

Final ThoughtsDemand fixed price contracts

They will force vendor to align their goals with yoursGetting things done quicklyGetting things done rightGetting things done for the long haul

Request support from the “same” resourcesQuality does not get enough attentionEfficiency does not need to sacrifice qualityNeed to stay the course with a strategy

Changing business requirements will force adjustmentConstant retooling will not produce a desired result

Evaluate, plan, execute, repeat!

Michael [email protected]

Frank [email protected]