best practices for establishing an sap coe

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Best Practices for Establishing (or Restructuring) an SAP Center of Excellence (COE)Christian TitzeGartner

1

What We’ll Cover …

• Establishing (or restructuring) a CoE: overview• Essential elements of successful CoEs• Evolving/restructuring your CoE into an Enhanced CoE• Getting your SAP CoE certified: when, why, and how• Feature: Business Intelligence Competency Center• Wrap-up

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Level Setting – What Is a Center of Excellence (CoE)?

• An SAP CoE is a company’s central point of contact for all queries pertaining to SAP. A CoE:

Ensures the stable operations and continued development of SAP solutionsFocuses primarily on central functions such as operations, support, training, information, and contract managementProvides a link to SAP, especially to service and support

CoEs are also called Customer Competency Centers (CCCs) Note

Intern

ExternCoE

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The Value of an SAP Center of Excellence

• “The most successful SAP enterprises around the world have at least one thing in common: their own highly effective SAP Center of Excellence (CoE)”

source: Gartner: SAP best practice council

source: Forrester: SAP CCC best practices

4

Definition – Objectives

• Main objectives …Safeguard stable operation of SAP solution according to Service Level Agreements (SLAs)Optimize deployed SAP solutions continually, to enhance efficiency and performance of usersMinimize operating costsSafeguard required solution performance or throughputSafeguard data consistencyEnsure fast and effective problem resolutionDefine requirements for hardware and infrastructure operationEnsure continuous change management – from business process to software technology and vice versa

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Definition – Functions

• Typical functions of an SAP CoE …Internally – helps to align business and ITExternally – builds a partnership with SAP

source: Gartner Research

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Drivers to Establish a CoE

• Most common – realize more value from your SAP investment

Stay current with post-SAP implementation best practicesReduce operating costProvide better support to SAP usersKeep strategic knowledge in-houseHave greater visibility on, and better management of, SAP projects and project teams


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Key Challenges When Setting Up and Operating a CoE

• How to maximize the ROI from SAP CoE investments?Long-term strategy, hard and soft financial savings


• How many people do we need in an effective SAP CoE?How many, where located (in-house vs. outsource)?How can we keep them (incentive programs, job rotation, … )?

• How much will an SAP CoE cost us each year?Benchmark, KPI, operational cost reduction?

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Key Challenges When Setting Up and Operating a CoE (cont.)

• Establishing an SAP CoEWhat are the drivers for a CoE?What problems is the CoE expected to solve? What are the objectives and the benefits expected?Is SAP certification required, and what are the commercial requirements and impacts?


“Centers of Excellence/Competency Centers normally start from pain”

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• Evolving an SAP CoEWhat are the responsibilities of the CoE? What technical application and business support does it provide?How is the CoE organized (e.g., centralized, distributed, virtual, etc.)?What is the staffing model? What technical, business, and personal competencies are required?What tools are used (e.g., Solution Manager)?Should a competence center evolve beyond just SAP? If so, how?

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• Delivering value to the bottom lineWhat are the keys to success in establishing and managing a CoE?How is the value of the CoE assessed?


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CoE Framework

• SAP IT Service and Application Management based on ITIL Framework


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CoE Duties

• Example


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CoE Mandate

• SAP Center of Excellence mandate, examples:To support Business Process Owners in the development of continuous improvements while ensuring the Business Transformation vision and principles are adhered to and the SAP investment is maximizedThe SAP CoE will provide leadership and guidance to the business to increase the appropriate utilization of SAP

It will share best practices and focus on improving the user’s experience with SAP while delivering efficient and quality implementations of SAP solutions

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CoE Organizational Options

• There are four key structural approaches; four support models offer varying degrees of support, depending on the support organization’s scope of influence

Choosing the right model can mean the difference between end users perceiving the system as a valued part of the business or a failure

Scope

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CoE Organizational Options (cont.)

• Companies that desire a large degree of standardization, and can centralize control over most business application investment decisions, favor the following models:

A Central Services approach, in which the CoE acts as a full-service hub that coordinates most of the development and sustainment work for the company, prioritizing and overseeing initiativesOr a Shared Services model, in which the CoE serves as a consultant or help desk for project teams that continue doing the hands-on work themselves

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• CentralizedOne single point of support across regions and functionsIssue: language + time zone + CM/CR speed + …

• DecentralizedSeveral local or regional (‘clusters’) support centersIssue: CM/CR coordination + strategic focus + …

• VirtualCentral CoE Manager with distributed team


Virtual CoE

Finance Sales ...

SAP CoE

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• There is no such thing as a “standard” or “normal” CoE model. SAP did a survey of its CoEs and found the answers to the following two often-asked questions:

To which internal business unit does your support organization report?How is your support organization organized?

source: Forrester : SAP CCC

Setup

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• Centralized global instance CoECentralized CoE for a single product-type firm with a single global instance


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• Diversified headquarters CoETiered CoE for a diversified product company with a tiered architecture


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Steps to Establish a CoE

• From planning, to executing, to controlling …

source: Gartner: SAP best practice councilNote: CC = Competency Center = CoE

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Setup and Staffing Considerations

• Staffing: A CoE bundles several core functions and has an adequate number of representatives in business

• Typically, CoE staffing supports four major areas:Business-oriented supportTechnically oriented supportOngoing trainingOngoing management

• Not included in CoE are:Local key usersTechnical infrastructure staffBusiness support staff (= global business process owners, local business process drivers, regional power users)Communication office and global training center

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Setup and Staffing Considerations (cont.)

• Work Distribution within a CoE/SAP Environment

[B] Business process support

[B] New functions / change management

[T] Configuration management

[T] Development

[T] Data center

[E] Training

[M] Project management / QA

[M] Account-, vendor management

[M] Administration

[B] Business process support

[B] New functions / change management

[T] Configuration management

[T] Development

[T] Data center

[E] Training

[M] Project management / QA

[M] Account-, vendor management

[M] Administration

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• Global Staff DistributionThree CoE “following the sun” principle, one major and two backup

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CC-AP

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• Global Staff Distribution (cont.)Master CC

Lead competence center for any developments and configuration + training + global coordination activitiesCoordination of business process support and change management with satellite CC

Satellite CCBackup competency center for developments and configuration, also responsible for strict local initiativesSome local training activities in coordination with global teamTight relationship with global business CC team for process support and change management

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Post-Go-Live Support Model

• The Complete Picture …Choosing the right model for the post-implementation business application support organization can mean the difference between end users perceiving the system as a valued part of the business or a failure!


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Support Model Staffing Estimate

• And the best staffing method is …

“For every business process,you normally need 1-2 employees”

“Technical skill are important, but business andpersonal competencies are equally important”

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Super User Setup

• Responsibilities:Act as first point of contact for end users within departmentsAct as experts in departmental trainingCommunicate with end users on best practices for use of enterprise applicationsRaise functional incident reports and serve as contact person for related follow-upSpecify user requirements for changes, as well as participate in design, testing, and implementation of these changesRaise, evaluate, and participate in the implementation of proposals of organizational changesAct as member of the local governance board in representation of the corresponding department

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Reporting

• Monthly SLAs on PRD Systems should always include data for:

Hours of availability, unplanned outages, and their causesBusiness transaction volumes, online and batchEnd-user response times

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Measurement – Customer Satisfaction Survey

• Example


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SAP Benchmarks

• Key KPI: Spending distribution within the SAP spending profile with hardware/software/support

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SAP Benchmarks (cont.)

• Key KPI: SAP spending as a percentage of business revenue helps identify the competitive investment level and the overall role of SAP in the business (= focus on yearly operational expense with clearly distinguished capital investments)

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• Key KPI: Spending per concurrent user is a commonly used measure of cost efficiency of SAP support. Hereby concurrent users are defined as average users in the system for one month (working days) for a typical period, based on several snapshots at peak times of the business day on production instances only.

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• Key KPI: The measure FTEs per 100 concurrent usersprovides ranges of typical support ratios and can also be a measure of productivity for the SAP environment

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Enhanced CoE (eCoE) Definition


CoE CoE

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Enhanced CoE (eCoE) Definition (cont.)

• From application functional support, application development, application operations to …


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Tool: CoE Evolution Evaluation

• Assess the evolution of your SAP CoE

source: Gartner: SAP best practice councilNote: CC = Competency Center = CoE

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Evolving to an eCoE – Lessons Learned

• Having clear governance and senior management sponsorship in place

• Market the vision and mission of the SAP CoE (“promote value to the organization”)


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Evolving to an eCoE – Lessons Learned (cont.)

• Focus on human resourcesEstablish a good compensation program (“people retention”)Provide challenging projectsProvide training opportunities (“human capital development plan”)Provide staff cross-functional experiences within CoE (“a strong team with the right skill set in place”)Provide learning opportunities, rotate staff between development projects and supportCreate an enjoyable work environment

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Evolving to an eCoE – Lessons Learned (cont.)

• Develop strong process orientation (“business alignment”)

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SAP CoE Certification – What Does it Mean?

• DefinitionOnce an SAP CoE has successfully passed the SAP CoE certification audit from SAP, it is recognized as a certified CoEThere are over 700 certified SAP CoEs worldwide

• Core functions required for certification:Support Desk PerformanceContract AdministrationDevelopment Request CoordinationInformation Management

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Should I Get My CoE Certified?

• SAP CoE certification is not required, but it’s nice to have (case examples)


“Certification is apsychological factor”

“Certification bringsa financial benefit”

Don't Forget

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How SAP CoE Certification Works

• CoEs are acknowledged as being certified after undergoing a successful audit and receiving the corresponding certificate

SAP charges maintenance on the basis of the total list price if the customer fails to certify or recertify within one year


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How SAP CoE Certification Works (cont.)

• An SAP Operations Competency Assessment (SOCA) has to be conducted to evaluate companies’ processes against best practices

Takes up to three days of interviews with business and ITMandatory functions: support desk + contract administration + development request coordination + information mgmt

• Additional benefits available only to certified CoEs:Early knowledge transfer for new SAP products, participation in ramp-up validation testsDiscounts on SAP training courses, enhanced Knowledge Management accessSpecial handling for problem messages sent to SAPYearly maintenance fee applied to discounted contract value

e.g., 55% discount off list-price

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Phases of the Certification Process

• From planning, to executing, to controlling …


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Certification and Recertification – Summary

• SAP has streamlined the CoE certification process, now lean + objective + transparent


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50

Business Intelligence Research

• By 2008, 25% of organizations supporting an active Business Intelligence Competency Center (BICC) will use this effort as a core business process that not only drives efficiencies and business impact, but increases competitiveness

• By 2009, more than 60% of global 2000 companies and government agencies with cross-enterprise, strategic BI initiatives will have formed a BICC

• By 2010, 40% of organizations that support a BICC will use a virtual BICC as part of their operations

• A successful BI strategy is the result of a well-defined and executed methodology, aligned with the overall business strategyand goals. Selecting tools is one step within the methodology, but it’s not the first step.

Key question: WHY a BICC and WHO needs a BICC?

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BICC Objectives

• BICC Setup and Evolution = ObjectivesA Business Intelligence Competency Center creates a center for excellence with skills and capabilities that continually weaves together business and people processes to achieve evolving business intelligence goals and objectives… Linking goals and vision + people + processes + technology… Visionary: BI to become more pervasive/embedded in operational and workplace applications, as companies will use BI to lead, support, explore, measure, manage, and optimize their businesses


20062000 2012Decide ManageMeasure Optimize InnovateDiscover

Applications and Processes

Users

Business Objectives

2000Time: 2006 2012

Role of BI

BIIC

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BICC Inventory/Organization

• Due to the lack of a cohesive strategy, many organizations have created multiple uncoordinated tactical BI implementations, resulting in silos of technology, skills, and processes

• Prepare a BI inventory (# BI silos and root causes with people/process/technology) as basis for developing a more strategic plan


Perception of a history of failed BI initiatives?

Silos of BI skills

Cost of BI not justified, business value not proven

Sale/Business Mgr: Why can't I

just get the information I need to do business?

IT Manager: They have NO idea how hard

this is!

CIO: How can I deliver projects that enable business growth and increase agility?

CEO/CFO: How can I grow business and

increase performance?

BICC

Silos of BI implementations

Strategic

Tactical

Business Focus

Delivery Focused

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BICC Structure

• An Appropriate Structure to Support Business Goals… The evolvement of knowledge centers from an IT-driven initiative that provides basic reporting for users to a business-driven, cross-organizational initiative that encompasses a wide range of users, customers, and partnersBICC to report to the CIO, CFO, or main business executive with a clearly defined mandate and a stable, yet flexible core


BICC as an IT department Virtual BICC

Distributed BICC

CIO

Department BICC ICC

Finance Sales ...

Corporate

Division 1 Division 2 Division 3

BICC

BICC as part of operations

COO

Division 2

BICC

Division 1 Division 3

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BICC Methodology

• Manage the BI Project with a Well-Defined MethodologyThe BI methodology ties together the phases, steps, roles, and skills required to successfully develop, deploy, and evolve a data warehouse and BI project!Use a BI implementation methodology to plan the projectConsider the hidden costs of not investing in a BICC, and the qualitative benefits of improved decisions from better insight


Construct

1. Definition

2. Dataidentification andinventory

3. Toolevaluation/selection

4. Develop,implement,train

Consume

5. Discoveryand exploration

7. Developdecisionalternatives

6. Access,monitor, analyzefacts

8. Shareand collaborate

9. Effect change

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BI Strategy

• As-is situation at clientsCompanies with an existing BI strategy focusing on a core BI platform

How can IT further enhance the value of BI, avoid a threatening diversity?

Companies with a diversity of BI activities and assetsHow can IT come up against the BI variety and transfer it together with the lines of business?

Companies with no BI strategy yetHow can a strategy be defined and implemented/aligned together with the lines of business up front?

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BI Strategy (cont.)

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BI Strategy (cont.)

• To-Be Situation, start SMALL, but think BIG

9. Consider ways to turn BI into a revenue stream

8. Expand both scope and sponsorship

7. Pilot and market the BICC

6. "Sell" BICC for new BI programs

5. Define a BICC plan: Priorities, technologies,standards, methodologies and skills

4. Recruit an executive sponsor for BICC

3. Develop vision and a business case

2. Identify areas of duplication or deficiencies

1. Do an inventory of BI programs and skills


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Resources

• Gartner (www.gartner.com)Toolkit: Best Practices in Defining an Organizational Structure for Enterprise Information Management (12/06)How to Choose a Business Application Competency Center Model That Fits (11/06)Toolkit: Analytical Skills Template for a Business Intelligence Competency Center (10/06)The State of Shared Services (09/06)The Role of Testing in Business Application Support (07/06)Toolkit: IT Skills Template for a Business Intelligence Competency Center (09/06)Case Study: Shared Services Environment for Core Applications Delivers Significant Benefits (08/06)Integration Competency Centers Demand a Wide Set of Skills (08/05)

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Resources (cont.)

• Gartner (www.gartner.com) (cont.)Toolkit: Business Skills Template for a BI Competency Center (07/06)Gaining Insights From SAP Support Staffing Data (06/05)Super User Role Is Key to Post-Implementation Support of ERP Systems (04/06)Comparing the TCO of Centralized vs. Decentralized ERP (01/03)Company Improves IT Services and Support by Standardizing Processes (02/06)Organizing for IT Infrastructure and Operations: Trends and Best Practices (01/06)

• Forrester (www.forrester.com)SAP Customer Competence Center, Best Practices (06/04)

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7 Key Points to Take Home

• Don’t delay in starting the CoE. Clients that have one often wish they had put it in place from the start.

• Companies with revenues of $1 billion or more, that have SAP ERP as their primary ERP system, should have a basic SAP CoE

Ones with more than $10 billion in revenue should have an Enhanced/Enterprise CoE

• Go through the SAP CoE certification process in order to take advantage of all the additional benefits

Early knowledge transfer + enhanced KM access + special problem handling + discounted yearly maintenance

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7 Key Points to Take Home (cont.)

• Keep the primary focus of your CoE on business process improvement; deliver on the tactical support issues in order to maintain credibility

• Calculate your staffing centered around business processes with a good mixture of technical, business, and personal competencies; benchmark your CoE cost and staffing data

• Involve process owners and drivers as well as super users from the business side

• Start thinking about a Business Intelligence CoE

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6363

Your Turn!

How to contact me:Christian A. Titze

[email protected]+43 664 8458582 (AT)(917) 868 7370 (US)

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best practices for establishing an sap coe

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