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