Get the Most Out of Your SAP

In today’s connected world, the continuous optimization of enterprise applications to realize your digital strategy is key.

EXECUTIVE BRIEF

Analyst Perspective

Focus optimization on organizational value delivery.

	Chad Shortridge Senior Research Director, Enterprise Applications Info-Tech Research Group
	Lisa Highfield Research Director, Enterprise Applications Info-Tech Research Group

Enterprise resource planning (ERP) is a core tool that the business leverages to accomplish its goals. An ERP that is doing its job well is invisible to the business. The challenges come when the tool is no longer invisible. It has become a source of friction in the functioning of the business.

SAP systems are expensive, benefits can be difficult to quantify, and issues with the products can be difficult to understand. Over time, technology evolves, organizational goals change, and the health of these systems is often not monitored. This is complicated in today’s digital landscape with multiple integrations points, siloed data, and competing priorities.

Too often organizations jump into selecting replacement systems without understanding the health of their systems. We can do better than this.

IT leaders need to take a proactive approach to continually monitor and optimize their enterprise applications. Strategically re-align business goals, identify business application capabilities, complete a process assessment, evaluate user adoption, and create an optimization plan that will drive a cohesive technology strategy that delivers results.

Executive Summary

Info-Tech Insight

SAP ERP environments are changing, but we cannot stand still on our optimization efforts. Understand your product(s), processes, user satisfaction, integration points, and the availability of data to business decision makers. Examine these areas to develop a personalized SAP optimization roadmap that fits the needs of your organization. Incorporate these methodologies into an ongoing optimization strategy aimed at enabling the business, increasing productivity, and reducing costs.

Insight summary

Continuous assessment and optimization of your SAP ERP systems is critical to the success of your organization.

• Applications and the environments in which they live are constantly evolving.
• This blueprint provides business and application managers with a method to complete a health assessment of their ERP systems to identify areas for improvement and optimization.
• Put optimization practices into effect by:
  • Aligning and prioritizing key business and technology drivers.
  • Identifying ERP process classification and performing a gap analysis.
  • Measuring user satisfaction across key departments.
  • Evaluating vendor relations.
  • Understanding how data plays into the mix.
  • Pulling it all together into an optimization roadmap.

SAP enterprise resource planning (ERP) systems facilitate the flow of information across business units. It allows for the seamless integration of systems and creates a holistic view of the enterprise to support decision making. In many organizations, the SAP system is considered the lifeblood of the enterprise. Problems with this key operational system will have a dramatic impact on the ability of the enterprise to survive and grow. ERP implementation should not be a one-and-done exercise. There needs to be ongoing optimization to enable business processes and optimal organizational results.

SAP enterprise resource planning (ERP)

What is SAP?

SAP ERP systems facilitate the flow of information across business units. They allow for the seamless integration of systems and create a holistic view of the enterprise to support decision making.

In many organizations, the ERP system is considered the lifeblood of the enterprise. Problems with this key operational system will have a dramatic impact on the ability of the enterprise to survive and grow.

An ERP system:

• Automates processes, reducing the amount of manual, routine work.
• Integrates with core modules, eliminating the fragmentation of systems.
• Centralizes information for reporting from multiple parts of the value chain to a single point.

SAP use cases:

Product-Centric

Suitable for organizations that manufacture, assemble, distribute, or manage material goods.

Service-Centric

Suitable for organizations that provide and manage field services and/or professional services.

SAP Fast Facts

Product Description

• SAP has numerous ERP products. Products can be found under ERP, Finance, Customer Relations and Experience, Supply Chain Management, Human Resources, and Technology Platforms.
• SAP offers on-premises and cloud solutions for its ERP. In 2011, SAP released the HANA in-memory database. SAP ECC 6.0 reaches the end of life in 2027 (2030 extended support).
• Many organizations are facing mandatory transformation. This is an excellent opportunity to examine ERP portfolios for optimization opportunities.
• Now is the time to optimize to ensure you are prepared for the journey ahead.

Vendor Description

• SAP SE was founded in 1972 by five former IBM employees.
• The organization is focused on enterprise software that integrates all business processes and enables data processing in real-time.
• SAP stands for Systems, Applications, and Products in Data Processing.
• SAP offers more than 100 solutions covering all business functions.
• SAP operates 65 data centers at 35 locations in 16 countries.

SAP by the numbers

Only 72% of SAP S/4HANA clients were satisfied with the product’s business value in 2022. This was 9th out of 10 in the enterprise resource planning category.

Source: SoftwareReviews

As of 2022, 65% of SAP customers have not made the move to S/4HANA. These customers will continue to need to optimize the current ERP to meet the demanding needs of the business.

Source: Statista

Organizations will need to continue to support and optimize their SAP ERP portfolios. As of 2022, 42% of ASUG members were planning a move to S/4HANA but had not yet started to move.

Source: ASUG

Your challenge

This research is designed to help organizations who need to:

• Understand the multiple deployment models and the roadmap to successfully navigate a move to S/4HANA.
• Build a business case to understand the value behind a move.
• Map functionality to ensure future compatibility.
• Understand the process required to commercially navigate a move to S/4HANA.
• Avoid a costly audit due to missed requirements or SAP whiteboarding sessions.

HANA used to be primarily viewed as a commercial vehicle to realize legacy license model discounts. Now, however, SAP has built a roadmap to migrate all customers over to S/4HANA. While timelines may be delayed, the inevitable move is coming.

30-35% of SAP customers likely have underutilized assets. This can add up to millions in unused software and maintenance.

– Upperedge

SAP challenges and dissatisfaction

Finance, IT, Sales, and other users of the ERP system can only optimize ERP with the full support of each other. The cooperation of the departments is crucial when trying to improve ERP technology capabilities and customer interaction.

Info-Tech Insight

While technology is the key enabler of building strong customer experiences, there are many other drivers of dissatisfaction. IT must stand shoulder-to-shoulder with the business to develop a technology framework for ERP.

Where are applications leaders focusing?

Big growth numbers Year-over-year call topic requests	Other changes Year-over-year call topic requests
We are seeing applications leaders’ priorities change year over year, driven by a shift in their approach to problem solving. Leaders are moving from a process-centric approach to a collaborative approach that breaks down boundaries and brings teams together.	Software development lifecycle topics are tactical point solutions. Organizations have been “shifting left” to tackle the strategic issues such as product vision and Agile mindset to optimize the whole organization.

The S/4HANA journey

Optimization can play a role in your transition to S/4HANA.

• The business does not stop. Satisfy ongoing needs for business enablement.
• Build out a collaborative SAP optimization team across the business and IT.
• Engage the business to understand requirements.
• Discover applications and processes.
• Explore current-state capabilities and future-state needs.
• Evaluate optimization opportunities. Are there short-term wins? What are the long-term goals?
• Navigate the path to S/4HANA and develop some timelines and stage gates.
• Set your course and optimization roadmap.
• Capitalize on the methodologies for an ongoing optimization effort that can be continued after the S/4HANA go-live date.

Many organizations may be coming up against changes to their SAP ERP application portfolio.

Some challenges organizations may be dealing with include:

• Heavily customized instances
• Large volumes of data
• Lack of documentation
• Outdated business processes
• Looming end of life

Application optimization is risky without a plan

Avoid these common pitfalls:

• Not pursuing optimization because you are migrating to S/4HANA.
• Not considering how this plays into the short-, medium-, and long-term ERP strategy.
• Not considering application optimization as a business and IT partnership, which requires the continuous formal engagement of all participants.
• Not having a good understanding of your current state, including integration points and data.
• Not adequately accommodating feedback and changes after digital applications are deployed and employed.
• Not treating digital applications as a motivator for potential future IT optimization efforts and incorporating digital assets in strategic business planning.
• Not involving department leads, management, and other subject-matter experts to facilitate the organizational change digital applications bring.

“[A] successful application [optimization] strategy starts with the business need in mind and not from a technological point of view. No matter from which angle you look at it, modernizing a legacy application is a considerable undertaking that can’t be taken lightly. Your best approach is to begin the journey with baby steps.”

– Medium

Info-Tech’s methodology for getting the most out of your ERP

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Get the Most Out of Your SAP Workbook

Identify and prioritize your SAP optimization goals.

Application Portfolio Assessment

Assess IT-enabled user satisfaction across your SAP portfolio.

Key deliverable:

SAP Optimization Roadmap

Complete an assessment of processes, user satisfaction, data quality, and vendor management.

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.

Guided Implementation

Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.

Workshop

We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.

Consulting

Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is series of calls with an Info-Tech analyst to help implement our best practices in your organization. A typical GI is 8 to 12 calls over the course of 4 to 6 months.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com1-888-670-8889

Phase 1

Map Current-State Capabilities

This phase will guide you through the following activities:

• Align your organizational goals
• Gain a firm understanding of your current state
• Inventory ERP and related applications
• Confirm the organization’s capabilities

This phase involves the following participants:

• CFO
• Department Leads – Finance, Procurement, Asset Management
• Applications Director
• Senior Business Analyst
• Senior Developer
• Procurement Analysts

Step 1.1

Identify Stakeholders and Build Your Optimization Team

Activities

1.1.1 Identify stakeholders critical to success

1.1.2 Map your SAP optimization stakeholders

1.1.3 Determine your SAP optimization team

This step will guide you through the following activities:

• Identify ERP drivers and objectives
• Explore ERP challenges and pain points
• Discover ERP benefits and opportunities
• Align the ERP foundation with the corporate strategy

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Stakeholder map
• SAP Optimization Team

ERP optimization stakeholders

• Understand the roles necessary to get the most out of your SAP.
• Understand the role of each player within your project structure. Look for listed participants on the activities slides to determine when each player should be involved.

Info-Tech Insight

Do not limit project input or participation. Include subject-matter experts and internal stakeholders at stages within the project. Such inputs can be solicited on a one-off basis as needed. This ensures you take a holistic approach to create your ERP optimization strategy.

1.1.1 Identify SAP optimization stakeholders

1 hour

1. Hold a meeting to identify the SAP optimization stakeholders.
2. Use next slide as a guide.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Understand how to navigate the complex web of stakeholders in ERP

Identify which stakeholders to include and what their level of involvement should be during requirements elicitation based on relevant topic expertise.

Large-scale ERP projects require the involvement of many stakeholders from all corners and levels of the organization, including project sponsors, IT, end users, and business stakeholders. Consider the influence and interest of stakeholders in contributing to the requirements elicitation process and involve them accordingly.

EXAMPLE: Stakeholder involvement during selection

Activity 1.1.2 Map your SAP optimization stakeholders

1 hour

1. Use the list of SAP optimization stakeholders.
2. Map each stakeholder on the quadrant based on their expected influence and involvement in the project.
3. [Optional] Color code the users using the scale below to quickly identify the group that the stakeholder belongs to.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Map the organization’s stakeholders

The SAP optimization team

Consider the core team functions when putting together the project team. Form a cross-functional team (i.e. across IT, Marketing, Sales, Service, Operations) to create a well-aligned ERP optimization strategy. Don’t let your project team become too large when trying to include all relevant stakeholders. Carefully limiting the size of the project team will enable effective decision making while still including functional business units such as Marketing, Sales, Service, and Finance as well as IT.

1.1.3 Determine your SAP optimization team

1 hour

1. Have the project manager and other key stakeholders discuss and determine who will be involved in the SAP optimization project.

• The size of the team will depend on the initiative and size of your organization.
• Key business leaders in key areas and IT representatives should be involved.

Note: Depending on your initiative and the size of your organization, the size of this team will vary.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Step 1.2

Build an SAP Strategy Model

Activities

1.2.1 Explore environmental factors and technology drivers

1.2.2 Consider potential barriers and challenges

1.2.3 Discuss enablers of success

1.2.4 Develop your SAP optimization goals

This step will guide you through the following activities:

• Identify ERP drivers and objectives
• Explore ERP challenges and pain points
• Discover ERP benefits and opportunities
• Align the ERP foundation with the corporate strategy

This step involves the following participants:

• SAP Optimization Team

Outcomes of this step

• ERP business model
• Strategy alignment

Align your SAP strategy with the corporate strategy

ERP projects are more successful when the management team understands the strategic importance and the criticality of alignment. Time needs to be spent upfront aligning business strategies with ERP capabilities. Effective alignment between IT and the business should happen daily. Alignment doesn’t just need to occur just at the executive level but at each level of the organization.

ERP Business Model Template

Conduct interviews to elicit the business context

Stakeholder Interviews

Begin by conducting interviews of your executive team. Interview the following leaders:

1. Chief Information Officer
2. Chief Executive Officer
3. Chief Financial Officer
4. Chief Revenue Officer/Sales Leader
5. Chief Operating Officer/Supply Chain & Logistics Leader
6. Chief Technology Officer/Chief Product Officer

INTERVIEWS MUST UNCOVER

1. Your organization’s top three business goals
2. Your organization’s top ten business initiatives
3. Your organization’s mission and vision

Understand the ERP drivers and organizational objectives

Info-Tech Insight

One of the biggest drivers for ERP adoption is the ability to make quicker decisions from timely information. This driver is a result of external considerations. Many industries today are highly competitive, uncertain, and rapidly changing. To succeed under these pressures, there needs to be timely information and visibility into all components of the organization.

1.2.1 Explore environmental factors and technology drivers

30 minutes

1. Identify business drivers that are contributing to the organization’s need for ERP.
2. Understand how the company is running today and what the organization’s future will look like. Try to identify the purpose for becoming an integrated organization. Use a whiteboard or flip charts and markers to capture key findings.
3. Consider external considerations, organizational drivers, technology drivers, and key functional requirements.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Create a realistic ERP foundation by identifying the challenges and barriers the project will bestow

There are several different factors that may stifle the success of an ERP implementation. Organizations that are creating an ERP foundation must scan their current environment to identify internal barriers and challenges.

Common Internal Barriers

ERP Business Model

What does success look like?

Top 15 critical success factors for ERP system implementation

Source: Epizitone and Olugbara, 2020; CC BY 4.0

Info-Tech Insight

Complement your ability to deliver on your critical success factors with the capabilities of your implementation partner to drive a successful ERP implementation.

“Implementation partners can play an important role in successful ERP implementations. They can work across the organizational departments and layers creating a synergy and a communications mechanism.” – Ayogeboh Epizitone, Durban University of Technology

1.2.2 Consider potential barriers and challenges

1-3 hours

• Open tab “1.2 Strategy & Goals,” in the Get the Most Out of Your SAP Workbook.
• Identify barriers to ERP optimization success.
• Review the ERP critical success factors and how they relate to your optimization efforts.
• Discuss potential barriers to successful ERP optimization.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

1.2.3 Discuss enablers of success

1-3 hours

1. Open tab “1.2 Strategy & Goals,” in the Get the Most Out of Your SAP Workbook.
2. Identify barriers to ERP optimization success.
3. Review the ERP critical success factors and how they relate to your optimization efforts.
4. Discuss potential barriers to successful ERP optimization.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

The Business Value Matrix

Rationalizing and quantifying the value of SAP

Benefits can be realized internally and externally to the organization or department and have different drivers of value.

• Financial benefits refer to the degree to which the value source can be measured through monetary metrics and are often quite tangible.
• Human benefits refer to how an application can deliver value through a user’s experience.
• Inward refers to value sources that have an internal impact and improve your organization’s effectiveness and efficiency in performing its operations.
• Outward refers to value sources that come from your interaction with external factors, such as the market or your customers.

Organizational Goals

• Increased Revenue

Application functions that are specifically related to the impact on your organization’s ability to generate revenue and deliver value to your customers.

• Reduced Costs

Reduction of overhead. The ways in which an application limits the operational costs of business functions.

• Enhanced Services

Functions that enable business capabilities that improve the organization’s ability to perform its internal operations.

• Reach Customers

Application functions that enable and improve the interaction with customers or produce market information and insights.

Business Value Matrix

Link SAP capabilities to organizational value

1.2.4 Define your SAP optimization goals

30 minutes

1. Discuss the ERP business model and ERP critical success factors.
2. Through the lens of corporate goals and objectives think about supporting ERP technology. How can the ERP system bring value to the organization? What are the top things that will make this initiative a success?
3. Develop five to ten optimization goals that will form the basis for the success of this initiative.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Step 1.3

Inventory Current System State

Activities

1.3.1 Inventory SAP applications and interactions

1.3.2 Draw your SAP system diagram

1.3.3 Inventory your SAP modules and business capabilities (or business processes)

1.3.4 Define your key SAP optimization modules and business capabilities

This step will guide you through the following activities:

• Inventory of applications
• Mapping interactions between systems

This step involves the following participants:

• SAP Optimization Team
• Enterprise Architect
• Data Architect

Outcomes of this step

• Systems inventory
• Systems diagram

1.3.1 Inventory SAP applications and interfaces

1-3+ hours

1. Enter your SAP systems, SAP extended applications, and integrated applications within scope.
2. Include any abbreviated names or nicknames.
3. List the application type or main function.
4. List the modules the organization has licensed.
5. List any integrations.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

ERP Data Flow

Be sure to include enterprise applications that are not included in the ERP application portfolio. Popular systems to consider for POIs include billing, directory services, content management, and collaboration tools.

ERP – enterprise resource planning

Email – email system such as Microsoft Exchange

Calendar – calendar system such as Microsoft Outlook

WEM – web experience management

ECM – enterprise content management

When assessing the current application portfolio that supports your ERP, the tendency will be to focus on the applications under the ERP umbrella. These relate mostly to marketing, sales, and customer service. Be sure to include systems that act as input to, or benefit due to outputs from, ERP or similar applications.

1.3.2 Draw your SAP system diagram

1-3+ hours

1. From the SAP application inventory, diagram your network.

Include:

• Any internal or external systems
• Integration points
• Data flow

Download the Get the Most Out of Your SAP Workbook

Sample SAP and integrations map

Business capability map (Level 0)

In business architecture, the primary view of an organization is known as a business capability map. A business capability defines what a business does to enable value creation, rather than how.

Business capabilities:

• Represent stable business functions.
• Are unique and independent of each other.
• Will typically have a defined business outcome.

A business capability map provides details that help the business architecture practitioner direct attention to a specific area of the business for further assessment.

ERP process mapping

The operating model

An operating model is a framework that drives operating decisions. It helps to set the parameters for the scope of ERP and the processes that will be supported. The operating model will serve to group core operational processes. These groupings represent a set of interrelated, consecutive processes aimed at generating a common output. From your developed processes and your SAP license agreements you will be able to pinpoint the scope for investigation including the processes and modules.

APQC Framework

Help define your inventory of sales, marketing, and customer services processes.

Source: APQC

If you do not have a documented process model, you can use the APQC Framework to help define your inventory of sales business processes. APQC’s Process Classification Framework is a taxonomy of cross-functional business processes intended to allow the objective comparison of organizational performance within and among organizations.

APQC’s Process Classification Framework

The value stream

Value stream defined:

Value streams connect business goals to the organization’s value realization activities in the marketplace. Those activities are dependent on the specific industry segment in which an organization operates.

There are two types of value streams: core value streams and support value streams.

• Core value streams are mostly externally facing. They deliver value to either an external or internal customer and they tie to the customer perspective of the strategy map.
• Support value streams are internally facing and provide the foundational support for an organization to operate.

An effective method for ensuring all value streams have been considered is to understand that there can be different end-value receivers.

Process mapping hierarchy

Source: APQC

APQC provides a process classification framework. It allows organizations to effectively define their processes and manage them appropriately.

APQC’s Process Classification Framework

Cross-industry classification framework

Info-Tech Insight

Focus your initial assessment on the level 1 processes that matter to your organization. This allows you to target your scant resources on the areas of optimization that matter most to the organization and minimize the effort required from your business partners. You may need to iterate the assessment as challenges are identified. This allows you to be adaptive and deal with emerging issues more readily and become a more responsive partner to the business.

SAP modules and process enablement

Cloud/Hardware Fiori Analytics Integrations Extended Solutions

R&D Engineering Enterprise Portfolio and Project Management Product Development Foundation Enterprise Portfolio and Project Management Product Lifecycle Management Product Compliance Enterprise Portfolio and Project Management Product Safety and Stewardship Engineering Record Sourcing and Procurement Procurement Analytics Sourcing & Contract Management Operational Procurement Invoice Management Supplier Management Supply Chain Inventory Delivery & Transportation Warehousing Order Promising Asset Management Maintenance Operations Resource Scheduling Env, Health and Safety Maintenance Management

Finance Financial Planning and Analysis Accounting and Financial Close Treasury Management Financial Operations Governance, Risk & Compliance Commodity Management Human Resources Core HR Payroll Timesheets Organization Management Talent Management Sales Sales Support Order and Contract Management Agreement Management Performance Management Service Service Operations and Processes Basic Functions Workforce Management Case Management Professional Services Service Master Data Management Service Management

Beyond the core

1.3.3 Inventory your SAP modules and business capabilities

1-3+ hours

1. Look at the major functions or processes within the scope of ERP.
2. From the inventory of current systems, choose the submodules or processes that you want to investigate and are within scope for this optimization initiative.
3. Use tab 1.3 “SAP Capabilities” in Get the Most Out of Your SAP Workbook for a list of common SAP Level 1 and Level 2 modules/business capabilities.
4. List the top modules, capabilities, or processes that will be within the scope of this optimization initiative.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

1.3.4 Define your key SAP optimization modules and business capabilities

1-3+ hours

1. Look at the major functions or processes within the scope of ERP.
2. From the inventory of current systems, choose the submodules or processes for this optimization initiative. Base this on those that are most critical to the business, those with the lowest levels of satisfaction, or those that perhaps need more knowledge around them.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Step 1.4

Define Optimization Timeframe

Activities

1.4.1 Define SAP key dates and SAP optimization roadmap timeframe and structure

This step will guide you through the following activities:

• Defining key dates related to your optimization initiative
• Identifying key building blocks for your optimization roadmap

This step involves the following participants:

• SAP Optimization Team
• Vendor Management

Outcomes of this step

• Optimization Key Dates
• Optimization Roadmap Timeframe and Structure

1.4.1 Optimization roadmap timeframe and structure

1-3+ hours

1. Record key items and dates relevant to your optimization initiatives, such as any products reaching end of life or end of contract or budget proposal submission deadlines.
2. Enter the expected Optimization Initiative Start Date.
3. Enter the Roadmap Length. This is the total amount of time you expect to participate in the SAP optimization initiative.
4. This includes short-, medium- and long-term initiatives.
5. Enter your Roadmap Date markers: how you want dates displayed on the roadmap.
6. Enter Column time values: what level of granularity will be helpful for this initiative?
7. Enter the sprint or cycle timeframe; use this if following Agile.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Step 1.5

Understand SAP Costs

Activities

1.5.1 Document costs associated with SAP

This step will walk you through the following activities:

• Define your SAP direct and indirect costs
• List your SAP expense line items

This step involves the following participants:

• Finance Representatives
• SAP Optimization Team

Outcomes of this step

• Current SAP and related costs

1.5.1 Document costs associated with SAP

1-3 hours

Before you can make changes and optimization decisions, you need to understand the high-level costs associated with your current application architecture. This activity will help you identify the types of technology and people costs associated with your current systems.

1. Identify the types of technology costs associated with each current system:
1. System Maintenance
2. Annual Renewal
3. Licensing
2. Identify the cost of people associated with each current system:
1. Full-Time Employees
2. Application Support Staff
3. Help Desk Tickets

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Phase 2

Assess Your Current State

This phase will walk you through the following activities:

• Determine process relevance
• Perform a gap analysis
• Perform a user satisfaction survey
• Assess software and vendor satisfaction

This phase involves the following participants:

• SAP Optimization Team
• Users across functional areas of your ERP and related technologies

Step 2.1

Assess SAP Capabilities

Activities

2.1.1 Rate capability relevance to organizational goals

2.1.2 Complete an SAP application portfolio assessment

2.1.3 (Optional) Assess SAP process maturity

This step will guide you through the following activities:

• Capability relevance
• Process gap analysis
• Application Portfolio Assessment

This step involves the following participants:

• SAP Users

Outcomes of this step

• SAP Capability Assessment

Benefits of the Application Portfolio Assessment

	Assess the health of the application portfolio Get a full 360-degree view of the effectiveness, criticality, and prevalence of all relevant applications to get a comprehensive view of the health of the applications portfolio. Identify opportunities to drive more value from effective applications, retire nonessential applications, and immediately address at-risk applications that are not meeting expectations.
	Provide targeted department feedback Share end-user satisfaction and importance ratings for core IT services, IT communications, and business enablement to focus on the right end-user groups or lines of business, and ramp up satisfaction and productivity.
	Gain insight into the state of data quality Data quality is one of the key issues causing poor CRM user satisfaction and business results. This can include the relevance, accuracy, timeliness, or usability of the organization’s data. Targeted, open-ended feedback around data quality will provide insight into where optimization efforts should be focused.

2.1.1 Complete a current-state assessment (via the Application Portfolio Assessment)

3 hours

Option 1: Use Info-Tech’s Application Portfolio Assessment to generate your user satisfaction score. This tool not only measures application satisfaction but also elicits great feedback from users regarding the support they receive from the IT team around SAP.

1. Download the ERP Application Inventory Tool.
2. Complete the “Demographics” tab (tab 2).
3. Complete the “Inventory” tab (tab 3).
1. Complete the inventory by treating each module within your SAP system as an application.
2. Treat every department as a separate column in the department section. Feel free to add, remove, or modify department names to match your organization.
3. Include data quality for all applications applicable.

Option 2: Create a survey manually.

1. Use tab (Reference) 2.1 “APA Questions” as a guide for creating your survey.
2. Send out surveys to end users.
3. Modify tab 2.1, “SAP Assessment,” if required.

Record Results

Record this information in the Get the Most Out of Your SAP Workbook.

Download the ERP Application Inventory Tool

Download the Get the Most Out of Your SAP Workbook

Sample Report from Application Portfolio Assessment.

2.1.2 (Optional) Assess SAP process and technical maturity

1-3 hours

1. As with any ERP system, the issues encountered may not be related to the system itself but processes that have developed over time.
2. Use this opportunity to interview key stakeholders to learn about deeper capability processes.

• Identify key stakeholders.
• Hold sessions to document deeper processes.
• Discuss processes and technical enablement in each area.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Process Maturity Assessment

Step 2.2

Review Your Satisfaction With the Vendor/Product and Willingness for Change

Activities

2.2.1 Rate your vendor and product satisfaction

2.2.2 Review SAP product scores (if applicable)

2.2.3 Evaluate your product satisfaction

2.2.4 Check your business process change tolerance

This step will guide you through the following activities:

• Rate your vendor and product satisfaction
• Compare with survey data from SoftwareReviews

This step involves the following participants:

• SAP Product Owner(s)
• Procurement Representative
• Vendor Contracts Manager

Outcomes of this step

• Quantified satisfaction with vendor and product

2.2.1 Rate your vendor and product satisfaction

30 minutes

Use Info-Tech’s vendor satisfaction survey to identify optimization areas with your ERP product(s) and vendor(s).

1. Option 1 (recommended): Conduct a satisfaction survey using SoftwareReviews. This option allows you to see your results in the context of the vendor landscape.
2. Option 2: Use the Get the Most Out of Your SAP Workbook to review your satisfaction with your SAP software.

Record this information in the Get the Most Out of Your SAP Workbook.

SoftwareReviews’ Enterprise Resource Planning Category

Download the Get the Most Out of Your SAP Workbook

2.2.2 Review SAP product scores (if applicable)

30 minutes

1. Download the scorecard for your SAP product from the SoftwareReviews website. (Note: Not all products are represented or have sufficient data, so a scorecard may not be available.)
2. Use the Get the Most Out of Your SAP Workbook tab 2.2 “Vend. & Prod. Sat” to record the scorecard results.
3. Use your Get the Most Out of Your SAP Workbook to flag areas where your score may be lower than the product scorecard. Brainstorm ideas for optimization.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

SoftwareReviews’ Enterprise Resource Planning Category

2.2.3 How does your satisfaction compare with your peers?

Use SoftwareReviews to explore product features, vendor experience, and capability satisfaction.

Source: SoftwareReviews ERP Mid-Market, April 2022	Source: SoftwareReviews ERP Enterprise, April 2022

2.2.4 Check your business process change tolerance

1 hours

1. As a group, review the level 0 business capabilities on the previous slide.
2. Assess the department’s willingness for change and the risk of maintaining the status quo.
3. Color-code the level 0 business capabilities based on:

• Green – Willing to follow best practices
• Yellow – May be challenging or unique business model
• Red – Low tolerance for change

Download Get the Most Out of Your SAP Workbook for additional process levels

Heat map representing desire for best practice or those having the least tolerance for change

Determine the areas of risk to conform to best practice and minimize customization. These will be areas needing focus from the vendor supporting change and guiding best practice. For example: Must be able to support our unique process manufacturing capabilities and enhance planning and visibility to detailed costing.

Phase 3

Identify Key Optimization Opportunities

This phase will walk you through the following activities:

• Identify key optimization areas
• Create an optimization roadmap

This phase involves the following participants:

• SAP Optimization Team

Assessing application business value

In this context…business value is

the value of the business outcome that the application produces. Additionally, it is how effective the application is at producing that outcome.

Business value is not

the user’s experience or satisfaction with the application.

First, the authorities on business value need to define and weigh their value drivers that describe the priorities of the organization. This will allow the applications team to apply a consistent, objective, and strategically aligned evaluation of applications across the organization.

Brainstorm IT initiatives to enable high areas of opportunity to support the business

Brainstorm ERP optimization initiatives in each area. Ensure you are looking for all-encompassing opportunities within the context of IT, the business, and SAP systems.

Capabilities are what the system and business does that creates value for the organization. Optimization initiatives are projects with a definitive start and end date, and they enhance, create, maintain, or remove capabilities with the goal of increasing value.

Info-Tech Insight

Enabling a high-performing organization requires excellent management practices and continuous optimization efforts. Your technology portfolio and architecture are important, but we must go deeper. Taking a holistic view of ERP technologies in the environments in which they operate allows for the inclusion of people and process improvements – this is key to maximizing business results. Using a formal ERP optimization initiative will drive business-IT alignment, identify IT automation priorities, and dig deep into continuous process improvement.

Address process gaps:

• ERP and related technologies are invaluable to the goal of organizational enablement, but they must have supported processes driven by business goals.
• Identify areas where capabilities need to be improved and work toward optimization.

Support user satisfaction:

• The best technology in the world won’t deliver business results if it’s not working for the users who need it.
• Understand concerns, communicate improvements, and support users in all roles.

Improve data quality:

• Data quality is unique to each business unit and requires tolerance, not perfection.
• Implement data quality initiatives that are aligned with overall business objectives and aimed at addressing data practices and the data itself.

Proactively manage vendors:

• Vendor management is a critical component of technology enablement and IT satisfaction.
• Assess your current satisfaction against that of your peers and work toward building a process that is best fit for your organization.

Step 3.1

Prioritize Optimization Opportunities

Activities

3.1.1 Prioritize optimization capability areas

This step will guide you through the following activities:

• Explore existing process gaps
• Identify the impact of processes on user satisfaction
• Identify the impact of data quality on user satisfaction
• Review your overall product satisfaction and vendor management

This step involves the following participants:

• SAP Optimization Team

Outcomes of this step

• Application optimization plan

The Business Value Matrix

Rationalizing and quantifying the value of SAP

Benefits can be realized internally and externally to the organization or department and have different drivers of value.

• Financial benefits refer to the degree to which the value source can be measured through monetary metrics and are often quite tangible.
• Human benefits refer to how an application can deliver value through a user’s experience.
• Inward refers to value sources that have an internal impact and improve your organization’s effectiveness and efficiency in performing its operations.
• Outward refers to value sources that come from your interaction with external factors, such as the market or your customers.

Organizational Goals

• Increased Revenue

Application functions that are specifically related to the impact on your organization’s ability to generate revenue and deliver value to your customers.

• Reduced Costs

Reduction of overhead. The ways in which an application limits the operational costs of business functions.

• Enhanced Services

Functions that enable business capabilities that improve the organization’s ability to perform its internal operations.

• Reach Customers

Application functions that enable and improve the interaction with customers or produce market information and insights.

Business Value Matrix

Prioritize SAP optimization areas that will bring the most value to the organization

Review your ERP capability areas and rate them according to relevance to organizational goals. This will allow you to eliminate optimization ideas that may not bring value to the organization.

3.1.1 Prioritize and rate optimization capability areas

1-3 hours

1. From the SAP capabilities, discuss areas of scope for the SAP optimization initiative.
2. Discuss the four areas of the business value matrix and identify how each module, along with organizational goals, can bring value to the organization.
3. Rate each of your SAP capabilities for the level of importance to your organization. The levels of importance are:

• Crucial
• Important
• Secondary
• Unimportant
• Not applicable

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Step 3.2

Discover Optimization Initiatives

Activities

3.2.1 Discover product and vendor satisfaction opportunities

3.2.2 Discover capability and feature optimization opportunities

3.2.3 Discover process optimization opportunities

3.2.4 Discover integration optimization opportunities

3.2.5 Discover data optimization opportunities

3.2.6 Discover SAP cost-saving opportunities

This step will guide you through the following activities:

• Explore existing process gaps
• Identify the impact of processes on user satisfaction
• Identify the impact of data quality on user satisfaction
• Review your overall product satisfaction and vendor management

This step involves the following participants:

• SAP Optimization Team

Outcomes of this step

• Application optimization plan

Satisfaction with SAP product

Improving vendor management

Create a right-size, right-fit strategy for managing the vendors relevant to your organization.

Info-Tech Insight

A vendor management initiative (VMI) is an organization’s formalized process for evaluating, selecting, managing, and optimizing third-party providers of goods and services.

The amount of resources you assign to managing vendors depends on the number and value of your organization’s relationships. Before optimizing your vendor management program around the best practices presented in Info-Tech’s Jump Start Your Vendor Management Initiative blueprint, assess your current maturity and build the process around a model that reflects the needs of your organization.

Note: Info-Tech uses VMI interchangeably with the terms “vendor management office (VMO),” “vendor management function,” “vendor management process,” and “vendor management program.”

Jump Start Your Vendor Management Initiative

3.2.1 Discover product and vendor satisfaction

1-2 hours

1. Use tab 3.1 “Optimization Priorities” and tab 2.2 “Vend. & Prod. Sat” to review the capabilities and features of your SAP system.
2. Answer the following questions:
1. Document overall product satisfaction.
2. How does your satisfaction compare with your peers?
3. Is the overall system fit for use?
4. Do you have a proactive vendor management strategy in place?
5. Is the product dissatisfaction at the point that you need to evaluate if it is time to replace the product?
6. Could your vendor or Systems Integrator help you achieve better results?
3. Review the Value Effort Matrix for each initiative.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Examples from Application Portfolio Assessment

3.2.2 Discover capability and feature optimization opportunities

1-2 hours

1. Use tab 3.1 “Optimization Priorities” and tab 2.2 “Vend. & Prod. Sat” to review the capabilities and features of your SAP system.
2. Answer the following questions:
1. What capabilities and features are performing the worst?
2. Do other organizations and users struggle with these areas?
3. Why is it not performing well?
4. Is there an opportunity for improvement?
5. What are some optimization initiatives that could be undertaken?
3. Review the Value Effort Matrix for each initiative.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Process optimization: the hidden goldmine

In ~90% of SAP business process analysis reports, SAP identified significant potential for improving the existing SAP implementation, i.e. the large majority of customers are not yet using their SAP Business Suite to the full extent.

3.2.3 Discover process optimization opportunities

1-2 hours

1. Use exercise 2.13 and tab 2.1 “SAP Current State Assessment” to assess process optimization opportunities.
2. List underperforming capabilities around process.
3. Answer the following:
1. What is the state of the current processes?
2. Is there an opportunity for process improvement?
3. What are some optimization initiatives that could be undertaken in this area?

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Integration provides long-term usability

Balance the need for secure, compliant data availability with organizational agility.

Common integration and consolidation scenarios

For more information: Implement a Multi-site ERP

3.2.4 Discover integration optimization opportunities

1-2 hours

1. Use tab 1.3.1 “SAP Application Inventory” to discuss integrations and how they are related to capability areas that are not performing well.
2. List capabilities that might be affected by integration issues. Think about exercise 3.2.1 and discuss how integrations could be affecting overall product satisfaction.
3. Answer the following:
1. Are there some areas where integration could be improved?
2. Is there an opportunity for process improvement?
3. What are some optimization initiatives that could be undertaken in this area?

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

System and data optimization

Consolidating your business and technology requires an overall system and data migration plan.

Info-Tech Insight

Have an overall data migration plan before beginning your systems consolidation journey to S/4HANA.

Use a data strategy that fixes the enterprise-wide data management issues

Your data management must allow for flexibility and scalability for future needs.

IT has several concerns around ERP data and wide dissemination of that data across sites. Large organizations can benefit from building a data warehouse or at least adopting some of the principles of data warehousing. The optimal way to deal with the issue of integration is to design a metadata-driven data warehouse that acts as a central repository for all ERP data. They serve as the storage facility for millions of transactions, formatted to allow analysis and comparison.

Key considerations:

• Technical: At what stage does data move to the warehouse? Can processes be automated to dump data or to do a scheduled data movement?
• Process: Data integration requires some level of historical context for all data. Ensure that all data has multiple metadata tags to future-proof the data.
• People: Who will be accessing the data and what are the key items that users will need to adapt to the data warehouse process?

Info-Tech Insight

Data warehouse solutions can be expensive. See Info-Tech’s Build a Data Warehouse on a Solid Foundation for guidance on what options are available to meet your budget and data needs.

Optimizing SAP data, additional considerations

Data Optimization

Organizations are faced with challenges associated with changing data landscapes.

Data migrations should not be taken lightly. It requires an overall data governance to assure data integrity for the move to S/4HANA and beyond.

Have a solid plan before engaging S/4HANA Migration Cockpit.

Develop a Master Data Management Strategy and Roadmap

• Master data management (MDM) is complex in practice and requires investments in governance, technology, and planning.
• Develop a MDM strategy and initiative roadmap using Info-Tech’s MDM framework, which takes data governance, architecture, and other critical data capabilities into consideration.

Establish Data Governance

• Ensure your data governance program delivers measurable business value by aligning the associated data governance initiatives with the business architecture.
• Data governance must continuously align with the organization’s enterprise governance function. It should not be perceived as a pet project of IT but rather as an enterprise-wide, business-driven initiative.

3.2.5 Discover data optimization opportunities

1-2 hours

1. Use your APA or user satisfaction survey to understand issues related to data.
   Note: Data issues happen for a number of reasons:

• Poor underlying data in the system
• More than one source of truth
• Inability to consolidate data
• Inability to measure KPIs effectively
• Reporting that is cumbersome or non-existent

1. What are some underlying issues?
2. Is there an opportunity for data improvement?
3. What are some optimization initiatives that could be undertaken in this area?

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

SAP cost savings

SAP cost savings does not have to be complicated.

Look for quick wins:

• Evaluate user licensing:
• Ensure you are not double paying for employees or paying for employees who are no longer with the organization.
• Verify user activity – if users are accessing the system very infrequently it does not make sense to license them as full users.
• Audit your user classifications – ensure title positions and associated licenses are up to date.
• Curb data sprawl.
• Consolidate applications.

30-35% of SAP customers likely have underutilized assets. This can add up to millions in unused software and maintenance.

-Riley et al.

20% Only 20 percent of companies manage to capture more than half the projected benefits from ERP systems.

-McKinsey

	Explore the Secrets of SAP Software Contracts to Optimize Spend and Reduce Compliance Risk
	Secrets of SAP S/4HANA Licensing

License Optimization

With the relatively slow uptake of the S/4HANA platform, the pressure is immense for SAP to maintain revenue growth.

SAP’s definitions and licensing rules are complex and vague, making it extremely difficult to purchase with confidence while remaining compliant.

Without having a holistic negotiation strategy, it is easy to hit a common obstacle and land into SAP’s playbook, requiring further spend.

Price Benchmarking & Negotiation

• Use price benchmarking and negotiation intelligence to secure a market-competitive price.
• Understand negotiation tactics that can be used to better your deal.

Secrets of SAP S/4HANA Licensing:

• Build a business case to evaluate S/4HANA.
• Understand the S/4HANA roadmap and map current functionality to ensure compatibility.

SAP’s 2025 Support End of Life Date Delayed…As Predicted Here First

• The math simply did not add up for SAP.
• Extended support post 2027 is a mixed bag.

3.2.6 Discover SAP cost-saving opportunities

1-2 hours

1. Use tab 1.5 “Current Costs” as an input for this exercise.
2. Look for opportunities to cut SAP costs, both quick-wins and long-term strategy.
3. Review Info-Tech’s SAP vendor management resources to understand cost-saving strategies:
   • Secrets of SAP S/4HANA Licensing
   • Explore the Secrets of SAP Software Contracts to Optimize Spend and Reduce Compliance Risk
4. List cost-savings initiatives and opportunities.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Other optimization opportunities

There are many opportunities to improve your SAP portfolio. Choose the ones that are right for your business:

• Artificial intelligence (AI) (and management of the AI lifecycle)
• Machine learning (ML)
• Augment business interactions
• Automatically execute sales pipelines
• Process mining
• SAP application monitoring
• Be aware of the SAP product roadmap
• Implement and take advantage of SAP tools and product offerings

Phase 4

Build Your Optimization Roadmap

This phase will walk you through the following activities:

• Review the different options to solve the identified pain points
• Build out a roadmap showing how you will get to those solutions
• Build a communication plan that includes the stakeholder presentation

This phase involves the following participants:

• Primary stakeholders in each value stream supported by the ERP
• ERP applications support team

Get the Most Out of Your SAP

Step 4.1

4.1 Build Your Optimization Roadmap

Activities

4.1.1 Pick your path

4.1.2 Pick the right SAP migration path

4.1.3 Build a roadmap

4.1.4 Build a visual roadmap

This step will walk you through the following activities:

• Review the different options to solve the identified pain points then build out a roadmap of how to get to that solution.

This step involves the following participants:

• Primary stakeholders in each value stream supported by the ERP
• ERP applications support team

Outcomes of this step

• A strategic direction is set
• An initial roadmap is laid out

Choose the right path for your organization

There are several different paths you can take to achieve your ideal future state. Make sure to pick the one that suits your needs as defined by your current state.

Explore the options for achieving your ideal future state

Option: Optimize your current system

Look for process, workflow, data usage, and vendor relation improvements.

MAINTAIN CURRENT SYSTEM

Keep the system but look for optimization opportunities.

Your existing application portfolio satisfies both functionality and integration requirements. The processes surrounding it likely need attention, but the system should be considered for retention.

Maintaining your current system entails adjusting current processes and/or adding new ones and involves minimal cost, time, and effort.

Alternative 1: Optimize your current system

MAINTAIN CURRENT SYSTEM

• Keep your SAP system running
• Invest in resolving current challenges
• Automate manual processes where appropriate
• Improve/modify current system
• Evaluate current system against requirements/processes
• Reimplement functionality

Alternative Overview

Option: Augment your current system

Use augmentation to resolve your existing technology and data pain points.

AUGMENT CURRENT SYSTEM

Add to the system.

Your existing application is for the most part functionally rich but may need some tweaking. Spend time and effort enhancing your current system.

You will be able to add functions by leveraging existing system features. Augmentation requires limited investment and less time and effort than a full system replacement.

Alternative 2: Augment current solution

AUGMENT CURRENT SYSTEM

Maintain core system.

Invest in SAP modules or extended functionality.

Add functionality with bolt-on targeted “best of breed” solutions.

Invest in tools to make the SAP portfolio and ecosystem work better.

Alternative Overview

Option: Consolidate systems

Consolidate and integrate your current systems to address your technology and data pain points.

CONSOLIDATE AND INTEGRATE SYSTEMS

Get rid of one system, combine two, or connect many.

Your ERP application portfolio consists of multiple apps serving the same functions.

Consolidating your systems eliminates the need to manage multiple pieces of software that provide duplicate functionality. Reducing the number of ERP applications makes integration and data sharing simpler.

Alternative 3: Consolidate systems

AUGMENT CURRENT SYSTEM

Get rid of old disparate on-premise solutions.

Consolidate into an up-to-date ERP solution.

Standardize across the organization.

Alternative Overview

Option: Upgrade System

Upgrade your system to address gaps in your existing processes and various pain points.

REPLACE CURRENT SYSTEM

Move to a new SAP solution

You’re transitioning from an end-of-life legacy system. Your existing system offers poor functionality and poor integration. It would likely be more cost- and time-efficient to replace the application and its surrounding processes altogether. You are satisfied with SAP overall and want to continue to leverage your SAP relationships and investments.

Alternative 4: Upgrade System

UPGRADE SYSTEM

Upgrade your current SAP systems with SAP product replacements.

Invest in SAP with the appropriate migration path for your organization.

Alternative Overview

Option: Replace your current system

Replace your system to address gaps in your existing processes and various pain points.

REPLACE CURRENT SYSTEM

Start from scratch.

You’re transitioning from an end-of-life legacy system. Your existing system offers poor functionality and poor integration. It would likely be more cost and time efficient to replace the application and its surrounding processes all together.

Alternative 5: Replace SAP with another ERP solution

AUGMENT CURRENT SYSTEM

Get rid of old disparate on-premises solutions.

Consolidate into an up-to-date ERP solution.

Standardize across the organization.

Alternative Overview

Activity 4.1.1: Pick your path

1.5 hours

For each given path selected, identify:

• Advantage
• Disadvantages
• Initial Investment ($)
• Risk
• Change Management
• Operating Costs ($)
• Alignment With ERP Objectives
• Key Considerations
• Timeframe

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Pick the right SAP migration path for your organization

There are three S/4HANA paths you can take to achieve your ideal future state. Make sure to pick the one that suits your needs as defined by your current state and meets your overall long-term roadmap.

SAP S/4 HANA offerings can be confusing

What is the cloud, how is it deployed, and how is service provided?

A workload-first approach will allow you to take full advantage of the cloud’s strengths

• Under all but the most exceptional circumstances good cloud strategies will incorporate different service models. Very few organizations are “IaaS shops” or “SaaS shops,” even if they lean heavily in a one direction.
• These different service models (including non-cloud options like colocation and on-premises infrastructure) each have different strengths. Part of your cloud strategy should involve determining which of the services makes the most sense for you.
• Own the cloud by understanding which cloud (or non-cloud!) offering makes the most sense for you, given your unique context.

See Info-Tech’s Define Your Cloud Vision for more information.

Cloud service models

• This research focuses on five key service models, each of which has its own strengths and weaknesses. Moving right from “on-prem” customers gradually give up more control over their environments to cloud service providers.
• An entirely premises-based environment means that the customer is responsible for everything ranging from the dirt under the datacenter to application-level configurations. Conversely, in a SaaS environment, the provider is responsible for everything but those top-level application configurations.
• A managed service provider or other third-party can manage any or of the components of the infrastructure stack. A service provider may, for example, build a SaaS solution on top of another provider’s IaaS or offer configuration assistance with a commercially available SaaS.

Info-Tech Insight

Not all workloads fit well in the cloud. Many environments will mix service models (e.g. SaaS for some workloads, some in IaaS, some on-premises) and this can be perfectly effective. It must be consistent and intentional, however.

Option: Best Practice Quick Win

S/4HANA Cloud, Essentials

New Implementation

This is a public cloud solution for new clients adopting SAP that are mostly looking for full functionality within best practice.

Consider a full greenfield approach. Even for mid-size existing customers looking for a best-practice overhaul.

Functionality is kept to the core. Any specialties or unique needs would be outside the core.

Regional localization is still being expanded and must be evaluated early if you are a global company.

Option: Augment Best Practice

S/4HANA Cloud, Extended Edition

New Implementation With Client Specifics

No longer available to new customers from January 25, 2022, though available for renewals.

Replacement is called SAP Extended Services for SAP S/4HANA Cloud, private edition.

This offering is a grey area, and the extended offerings are being defined.

New S/4HANA Cloud extensibility is being offered to early adopters, allowing for customization within a separate system landscape (DTP) and aiming for an SAP Central Business Configuration solution for the cloud. A way of fine-tuning to meet customer-specific needs.

Option: Augment Best Practice (Cont.)

S/4HANA Cloud, Private Edition

New Implementation With Client Specifics

This is a private cloud solution for existing or new customers needing more uniqueness, though still looking to adopt best practice.

Still considered a new implementation with data migration requirements that need close attention.

This offering is trying to move clients to the S/4HANA Cloud with close competition with the Any Premise product offering. Providing client specific scalability while allowing for standardization in the cloud and growth in the digital strategy. All customizations and ABAP functionality must be revisited or revamped to fit standardization.

Option: Own Full Solution

S/4HANA Any Premise

Status Quo Migration to S/4HANA

This is for clients looking for a quick transition to S/4HANA with minimal risks and without immediate changes to their operations.

Though knowing the direction with SAP is toward its cloud solution, this may be a long costly path to getting the that end state.

The Any Premise version carries over existing critical ABAP functionalities, and the SAP GUI can remain as the user interface.

Activity 4.1.2 (Optional) Evaluate optimization initiatives

1 hour

1. If there is an opportunity to optimize the current SAP environment or prepare for the move to a new platform, continue with this step.
2. Valuate your optimization initiatives from tab 3.2 “Optimization Initiatives.”

Consider: relevance to achieving goals, number of users, importance to role, satisfaction with features, usability, data quality

Value Opportunities: increase revenue, decrease costs, enhanced services, reach customers

Additional Factors:

• Current to Future Risk Profile
• Number of Departments to Benefit
• Importance to Stakeholder Relations
• Resources: Do we have resources available and the skillset?
• Cost
• Overall Effort Rating
• "Gut Check: Is it achievable? Have we done it or something similar before? Are we willing to invest in it?"

Prioritize

• Relative priority
• Determine if this will be included in your optimization roadmap
• Decision to proceed
• Next steps

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

Activity 4.1.3 Roadmap building blocks: SAP migration

1 hour

Migration paths: Determine your migration path and next steps using the Activity 4.1.1 “SAP System Options.”

1. Identify initiatives and next steps.
2. For each item on your roadmap, assign an owner who will be accountable to the completion of the roadmap item.
3. Wherever possible, assign a start date, month, or quarter. The more specific you can be the better.
4. Identify completion dates to create a sense of urgency. If you are struggling with start dates, it can help to start with a finish date and “back in” to a start date based on estimated efforts.
5. Include periphery tasks such as communication strategy.

Record this information in the Get the Most Out of Your SAP Workbook.

Note: Your roadmap should be treated as a living document that is updated and shared with the stakeholders on a regular schedule.

Download the Get the Most Out of Your SAP Workbook

Activity 4.1.4 Roadmap building blocks: SAP optimization

1 hour

Optimization initiatives: Determine which if any to proceed with.

1. Identify initiatives.
2. For each item on your roadmap, assign an owner who will be accountable to the completion of the roadmap item.
3. Wherever possible, assign a start date, month, or quarter. The more specific you can be the better.
4. Identify completion dates to create a sense of urgency. If you are struggling with start dates, it can help to start with a finish date and “back in” to a start date based on estimated efforts.
5. Include periphery tasks such as communication strategy.

Record this information in the Get the Most Out of Your SAP Workbook.

Note: Your roadmap should be treated as a living document that is updated and shared with the stakeholders on a regular schedule.

Download the Get the Most Out of Your SAP Workbook

SAP optimization roadmap

Data strategy optimization

Activity 4.1.5 (Optional) Build a visual SAP roadmap

1 hour

1. For some, a visual representation of a roadmap is easier to comprehend. Consider taking the roadmap built in 4.1.4 and creating a visual.

Record this information in the Get the Most Out of Your SAP Workbook.

Download the Get the Most Out of Your SAP Workbook

SAP strategy roadmap

Implementations Partners

• Able to consult, migrate, implement, and manage the SAP S/4HANA business suite across industries.
• Able to transform the enterprise’s core business system to achieve the desired outcome.
• Capable in strategic planning, building business cases, developing roadmaps, cost and time analysis, deployment model (on-prem, cloud, hybrid model), database conversion, database and operational support, and maintenance services.

Info-Tech Insight

It is becoming a common practice for implementation partners to engage in a two- to three-month Discovery Phase or Phase 0 to prepare an implementation roadmap. It is important to understand how this effort is tied to the overall service agreement.

Summary of Accomplishment

Get the Most Out of Your SAP

ERP technology is critical to facilitating an organization’s flow of information across business units. It allows for seamless integration of systems and creates a holistic view of the enterprise to support decision making. ERP implementation should not be a one-and-done exercise. There needs to be an ongoing optimization to enable business processes and optimal organizational results.

Get the Most Out of Your SAP allows organizations to proactively implement continuous assessment and optimization of their enterprise resource planning system, including:

• Alignment and prioritization of key business and technology drivers.
• Identification of processes, including classification and gap analysis.
• Measurement of user satisfaction across key departments.
• Improved vendor relations.
• Data quality initiatives.

This formal SAP optimization initiative will drive business-IT alignment, identify IT automation priorities, and dig deep into continuous process improvement.

If you would like additional support, have our analysts guide you through other phases as part of an Info-Tech workshop.

Contact your account representative for more information.

workshops@infotech.com

1-888-670-8889

Research Contributors

	Ben Dickie Research Practice Lead Info-Tech Research Group Ben Dickie is a Research Practice Lead at Info-Tech Research Group. His areas of expertise include customer experience management, CRM platforms, and digital marketing. He has also led projects pertaining to enterprise collaboration and unified communications.
	Scott Bickley Practice Lead and Principal Research Director Info-Tech Research Group Scott Bickley is a Practice Lead and Principal Research Director at Info-Tech Research Group focused on vendor management and contract review. He also has experience in the areas of IT asset management (ITAM), software asset management (SAM), and technology procurement along with a deep background in operations, engineering, and quality systems management.
	Andy Neil Practice Lead, Applications Info-Tech Research Group Andy is a Senior Research Director, Data Management and BI, at Info-Tech Research Group. He has over 15 years of experience in managing technical teams, information architecture, data modeling, and enterprise data strategy. He is an expert in enterprise data architecture, data integration, data standards, data strategy, big data, and the development of industry standard data models.

Bibliography

Armel, Kate. "New Article: Data-Driven Estimation, Management Lead to High Quality." QSM: Quantitative Software Management, 14 May 2013. Accessed 4 Feb. 2021.

Enterprise Resource Planning. McKinsey, n.d. Accessed 13 Apr. 2022.

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