Six Strategies to Manage Complexity and Reduce TCO in SAP Environments
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Six Strategies to Manage Complexity and Reduce TCO in SAP
Frank PowellChief Operating Officer
Wednesday April 21, 1-2pm Central
Implementation Support
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Symmetry’s 21st Century Approach to Managed Services
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
ECC DEV ECC QAS ECC PRD
BW DEV BW QAS BW PRD
CRM DEV
CRM QAS
CRMPRD
EDI
Time Clock
Payroll
UPS
The Landscape
SAP Landscape
ECC DEV ECC QAS ECC PRD
BW DEV BW QAS BW PRD
CRM DEV
CRM QAS
CRMPRD
EDI
Time Clock
Payroll
UPS
ECC DR
BW DR
CRM DR
Reporting
Vendor
Order Entry
Regulatory
The Landscape
SAP Landscape
ECC DEV ECC QAS ECC PRD
BW DEV BW QAS BW PRD
CRM DEV
CRM QAS
CRMPRD
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
ECC DEV ECC QAS ECC PRD
BW DEV BW QAS BW PRD
CRM DEV
CRM QAS
CRMPRD
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 Haase414-238-2341mhaase@sym-corp.com
Frank Powell414-732-2731fpowell@sym-corp.com
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