2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Panaya Inc.
2009 SAP® Upgrade Benchmark
Survey
Survey Results and Executive
Summary
For questions and additional information
e-mail [email protected] or visit www.panayainc.com
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Table of Contents
Executive Summary............................................................................. 3
Respondent Demographics................................................................... 4
SAP System Sizing............................................................................... 6
SAP System Characteristics .................................................................. 7
Upgrade Goals .................................................................................. 10
Outsourcing and Use of Partners ........................................................ 11
Upgrade Challenges, Impact of the Economy....................................... 13
Upgrade Duration and Effort .............................................................. 14
Disclaimer and Trademark Notices...................................................... 17
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Executive Summary
Upgrading the SAP system is a major undertaking for companies that run their business on SAP. Not only is the upgrade project intensive on resources, it is also a source of risk. Any system errors introduced during the upgrade progress could be severely disruptive to the company’s operations. This benchmark survey was conducted by Panaya to help companies that are planning an SAP upgrade validate their planning assumptions and compare them to those of other organizations. Survey results are based on 152 responses collected from European and North-American SAP customers and system integrators through a standardized online questionnaire during December of 2008. i Some of survey’s key findings include:
• The primary reasons cited for the upgrade are end of maintenance
(58%), followed by functional requirements (37%) and improving
usability (28%).
• The average overall project duration for an organization with less than 100 users is 26 weeks, while the average duration for an organization with over 10,000 users is 63 weeks.
• The top three upgrade challenges are estimating the upgrade project
cost/effort (40%), following by justifying the project budget (36%) and assessing the impact on existing solutions (31%).
• Most upgrade projects remain on schedule for 2009 despite the economic downturn. Overall, three out of every four projects remain on schedule, and only 11% are being delayed beyond
2009.
About Panaya
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• Show which custom programs will break as a result of an upgrade. • Explain exactly how to fix them. • Create the most efficient test plan. • Calculate the required budget the resources for the project.
To learn more, or apply for a free upgrade evaluation click here: http://www.panayainc.com/Free-Upgrade-Analysis-for-your-SAP.html
2009 SAP® Upgrade Survey
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Respondent Demographics
The survey was completed by representatives of 134 companies that are either currently upgrading their systems or have plans for a future upgrade.
25%
43%
12%
16%
4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
In Process Next 6 months 6-12 months Over 12 months Unknown
Figure 1: Upgrade Planned Project Start
The vast majority (73%) of the survey respondents come from companies that are SAP customers and run their own business on the SAP system. The remaining 27% represent SAP-partner organizations that help other companies with their upgrade projects.
Consultant/SI27%
Customer73%
Figure 2: Respondents Relationship to SAP
Approximately two thirds of the respondents are from Europe, with the remainder representing North American companies.
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Europe66%
North America34%
Figure 3: Respondents by Region
Customer organizations responding to the survey come from a variety of industries, with a particularly strong representation of the manufacturing sector.
2%
3%
4%
4%
5%
6%
6%
8%
11%
11%
13%
25%
Healthcare
Professional Services
Aerospace & Defense
Communications
Retail
Financial Services
Construction
Public Sector & Education
Utilities
High Tech
Other
Manufacturing
c
Figure 4: Responding Customers by Industry
Close to half of the responding customers come from smaller companies (revenues of less than one billion US dollars). 25% represent midsize
companies ($1-5B in revenues), while 33% represent large companies (revenues over 5 billion dollar).
2009 SAP® Upgrade Survey
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Company Size (2007 Revenues in $US)
42%
25%
33%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
<$1B $1B-5B >$5B
Figure 5: Responding Customers by Company Size
SAP System Sizing
Over half of the responding customer organizations operate more than one SAP production system, with some organizations operating over fifty systems.
46%
34%
15%
5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
One Two to Five Six to Ten Over Ten
Figure 6: Number of SAP Production Systems (Customer Organizations)
Close to half of the responding customer organizations (48%) have over 1,000 production users, with 14% reporting over 10,000 users and the largest organization with 200,000 users.
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
9%
42%
34%
14%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1-100 101-1,000 1,001-10,000 Over 10,000
Figure 7: Number of SAP Production Users (Customer Organizations)
SAP System Characteristics
The vast majority of the respondents are currently using either version 4.6 or 4.7.
4%
33% 34%
19%
11%
0%
5%
10%
15%
20%
25%
30%
35%
40%
4.0 4.6 4.7 ERP2004 Other
Figure 8: Current Version
The modules most commonly used by survey respondents are FI (96%) and CO (90%). Least used modules are PS (35%), QM (34%), and LE (29%).
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
34%
35%
47%
46%
87%
29%
57%
96%
90%
81%SD
QM
PS
PP
PM
MM
LE
HR
FI
CO
Figure 9: Number of SAP Production Users (Customer Organizations)
Just over half (51%) of the respondents use SAP Netweaver Components. Among those that use the Netweaver Components, BW/BI is the most commonly used (60%).
Figure 10: Components Used (% of those using components)
2009 SAP® Upgrade Survey
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Over 39% of the respondents are using SAP industry solutions.
No61%
Yes39%
Figure 11: Use of Industry Solutions
Almost every organization (96%) has at least one interface from SAP to
another system. 55% of the organizations have more than ten interfaces, 32% are using over fifty interfaces, and 21% have over 100 different interfaces.
4%
41%
23%
11%
21%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
None 1-10 11-50 51-100 >100
Figure 12: Number of Interfaces to Other Systems
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Upgrade Goals
Top 3 Reasons for
Upgrade 1. End of
Maintenance
2. Functional Requirements
3. Improve Usability
The primary reasons cited for the upgrade project are End of Maintenance (58%), followed by Functional Requirements (37%) and Improving
Usability (28%).
5%
17%
17%
19%
28%
37%
58%
4%Other
Legal Compliance
Consolidation/Integration
Standardize Functionality
Leverage LatestTechnology
Improve Usability
Functional Requirements
End of Maintenance
Figure 13: Reasons for Upgrade (Top Two Selected)
Given that the majority of organizations are upgrading due to end of maintenance, it is not surprising to see that most (69%) are starting out with a Technical Upgrade. It is important to note that the majority of organizations (73%) do plan on functional or strategic enhancement
as part of the upgrade project, but most of them plan on doing it as a
second phase following the technical upgrade. ii
2009 SAP® Upgrade Survey
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Technical upgrade only27%
Technical upgrade w /subsequentl functional or
strategic enhancements
42%
Functional upgrade (technical upgrade w ith deployment of
additional functionality)
18%
Strategic upgrade (technical upgrade
w ith strategic enhancements)
13%
Figure 14: Upgrade Type
Unicode conversion is an important goal for many organizations and highly recommended by SAP. Over half of the organizations (53%) surveyed are including Unicode conversion as part of their upgrade project.
Figure 15: Unicode Conversion Included in Upgrade Plan?
Outsourcing and Use of Partners
Almost all of the organizations surveyed outsource at least part of the
upgrade project work to third party partners, with only 12% of the organizations not using the help of any partner. 56% of the organizations outsource at least half of the project work.
2009 SAP® Upgrade Survey
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88% of outsource at least part of the upgrade work. 56% outsource at least half of the work.
11%13%
5%
19%
10%8%
11%
5%2%
4%
12%
0%
5%
10%
15%
20%
25%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% of work outsourced
% o
f re
spo
nd
ents
Figure 16: Use of Outsourcing
Most Cited
Partners: 1. SAP 2. IBM 3. TCS 3. Accenture 5. Deloitte 5. Capgemini 7. HP 8. NEORIS 8. Logica
9. CGI
Many organizations use more than one partner. The most commonly cited partners are SAP, IBM, TCS, and Accenture.
4%
4%
4%
7%
9%
9%
11%
11%
18%
22%
CGI
Logica
NEORIS
HP
Deloitte
Capgemini
Accenture
TCS
IBM
SAP
Figure 17: Most Mentioned Partners
Other partners mentioned inlcude: ACS, AICON, Aral, Atos, Axon, BC, Bizaps & Roc, Blue Sof Consulting, BP, Capgemini, CGI, Dell, Deloitte, Diagonal, EDS, Esso, GDC, HP, Infosys, Itelligence, Jet, L&T, Logica, NEORIS, Novi Sad, Optimal Solutions, Oracle, Perfect for People, Realtech, Siemens, Spinnaker, Spring, Steria, TechOn Group, and T-Systems.
2009 SAP® Upgrade Survey
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Upgrade Challenges, Impact of the Economy
Top 3 Challenges 1. Cost/Effort
Estimation
2. Justify Budget 3. Assess Impact
on Existing Solution
It is interesting to note that the top three challenges mentioned by survey respondents relate to the planning phases of the upgrade. Justifying a budget becomes more difficult when accurate estimate of the cost/effort as well as the impact on the existing solution are two major challenges.
4%
12%
12%
16%
22%
25%
31%
36%
40%
2%End-user Training
Other
IT Infrastructure/Sizing
Modification Adjustment
Project Management
Minimize Downtime
Efficient Testing
Assess Impact onExisting Solution
Justify Budget for Project
Cost/Effort Estimation
Figure 18: Upgrade Challenges (Top Two Selected)
Most upgrade projects remain on schedule for 2009 despite the economic downturn. Overall, three out of every four projects remain on schedule,
and only 11% are being delayed beyond 2009. At the same time, almost one out of three (28%) of the companies that are not delaying the upgrade are looking to complete the project with a lower budget.
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Figure 19: Impact of the Economy on Project Plans
Upgrade Duration and Effort
Survey respondents reported overall project duration ranging from 4 weeks to 120 weeks (2+ years). Overall project duration is highly correlated to the number of production users. The average overall project duration for an organization with less than 100 users is 26 weeks, while the average duration for an organization with over 10,000 users is 63 weeks.
0
10
20
30
40
50
60
70
1-100 101-1,000 1,001-10,000 Over 10,000
Number of Production Users
Du
rati
on
(in
wee
ks) Cutover & Support
Cutover Preparations
Realization
Blueprint
Preparation
Figure 20: Average Project Duration by Stage and Number of Production Users
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
As can be seen in the chart, the most time-consuming stage is Realization, followed by Preparation. iii
The total effort invested in the upgrade project range from just a few days to
over 60,000 person days. Not surprisingly, the total effort of the project is also highly correlated to the number of production users. The average effort for organizations with less than 100 users is 395 person days, while the average for organizations with over 10,000 users is 13,516 days.
-
5,000
10,000
15,000
Production Users
Eff
ort
(in
per
son
day
s)
Average Effort 395 1,553 5,152 13,516
1-100 101-1,000 1,001-10,000 Over 10,000
Figure 21: Average Project Effort by Number of Production Users
System complexity also impacts the upgrade effort. For example, the use of Industry Solutions increases project effort by 15-550%.
The use of Industry Solutions increases project effort by 15-550%.
-
5,000
10,000
15,000
20,000
Production Users
Eff
ort (
in p
erso
n da
ys)
No Solutions 377 791 1,853 11,385
With Solutions 441 3,076 10,430 15,647
1-100 101-1,000 1,001-10,000 Over 10,000
Figure 22: Average Project Effort with and without Industry Solutions (by Number of Users)
2009 SAP® Upgrade Survey
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Table of Figures
Figure 1: Upgrade Planned Project Start............................................................4
Figure 2: Respondents SAP Relationships ..........................................................4
Figure 3: Respondents by Region......................................................................5
Figure 4: Responding Customers by Industry.....................................................5
Figure 5: Responding Customers by Company Size ............................................6
Figure 6: Number of SAP Production Systems (Customer Organizations) .............6
Figure 7: Number of SAP Production Users (Customer Organizations) .................7
Figure 8: Current Version .................................................................................7
Figure 9: Modules Used....................................................................................7
Figure 10: Components Used............................................................................8
Figure 11: Use of Industry Solutions .................................................................9
Figure 12: Number of Interfaces to Other Systems.............................................9
Figure 13: Reasons for Upgrade (Top Two Selected)........................................10
Figure 14: Upgrade Type................................................................................11
Figure 15: Unicode Conversion Included in Upgrade Plan?................................11
Figure 16: Use of Outsourcing ........................................................................12
Figure 17: Most Mentioned Partners................................................................12
Figure 18: Upgrade Challenges (Top Two Selected) .........................................13
Figure 19: Impact of the Economy on Project Plans .........................................14
Figure 20: Average Project Duration by Stage and Number of Production Users.14
Figure 21: Average Project Effort by Number of Production Users .....................15
Figure 22: Average Project Effort with and without Industry Solutions (by
Number of Users) ..........................................................................................15
2009 SAP® Upgrade Survey
com.panayainc.www 2009Panaya Inc, ©
Disclaimer and Trademark Notices This report is provided by Panaya Inc. It is completely independent of and not affiliated
with SAP AG.
SAP is a registered trademark of SAP AG. SAP and other SAP products and services
mentioned herein as well as their respective logos are trademarks or registered trademarks
of SAP AG in Germany and in several other countries. All other product and service names
mentioned are the trademarks of their respective companies.
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respect to anything in this document, and shall not be liable for any implied warranties of
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consequential damages.
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Copyright © Panaya Inc. All rights reserved.
2009 SAP® Upgrade Survey
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i The survey can be accessed online at http://panayainc.sap-upgrade-survey.sgizmo.com
ii For more on the types of SAP upgrades, see http://www.panayainc.com/Articles/SAP-Upgrade-Types.html
iii These are SAP-defined upgrade stages, as described in the ASAP methodology.