Should You Manage Your Own SAP System?
By Sam Sliman, President, Optimal Solutions Integration

 

While it is certainly the norm for SAP customers to outsource a portion of their SAP-related work, many organizations still cling to the practice of handling most of it internally, especially the non-trivial functions related to SAP application management. With media touting the virtues of Software-as-a-Service (SaaS), so-called utility computing and cloud computing, SAP customers face increasing pressure to justify the practice of managing their oftentimes complex SAP systems for themselves.

 

Today, perhaps more than ever before, fierce competition and unrelenting economic pressure demand that IT do more with less, and that SAP customers reflect honestly on the question: Should we be managing our own SAP applications?

 

Given that an estimated two of every three IT dollars is spent on day-to-day maintenance and support of existing technology, it is no surprise that outsourcing SAP application management services (AMS) is on the rise.

 

Topping the list of challenges that come with managing SAP internally is the lack of appropriately skilled SAP subject-matter experts and the time and cost burned in finding, hiring and training new SAP talent to compensate for employee turnover.  And, yes, this applies even in a tough employment environment.

 

For many SAP customers, the question of whether or not to manage their SAP system internally has become rhetorical: They most definitely should not manage their own SAP systems. With increasing frequency companies are reaching the conclusion that they should stick to their proverbial core competencies – and managing SAP is rarely, if ever, on that list.

 

The major components of AMS include hosting, technical management and functional management, and the justification for outsourcing AMS is straightforward and compelling:

• Cost – It is markedly cheaper and more efficient to leverage the experience of specialists who understand and strictly adhere to proven methodologies and processes for delivering AMS services on time and within budget. They do this on a daily basis for multiple customers, and the success of their business hinges on their ability to do AMS well and for the lowest possible cost.

• Quality – What happens when there’s a glitch in a vital SAP system? Best to have 24/7/365 access to the best skills (and broader array) for those inevitable times when things don’t go as planned, and you need a little extra help.

• Risk mitigation – What happens when Joe Basis who knows every last wrinkle of your SAP system takes a new job and leaves?  Best to have a backup pool of skilled resources that can quickly step in and take over so your business doesn’t skip a beat.

Successful outsourcing of SAP AMS depends on:

• Well defined responsibilities between you and your AMS partner
• Detailed descriptions of service level agreements and key performance indicators
• Disciplined approach to managing change in your SAP environment
• Standardization using proven tools and industry best practices

Not surprisingly, simply going through the exercise of preparing to outsource your SAP application management pays dividends. Our clients tell us that it forces them to put more structure and methodology in place, consider more carefully the impact and cost of proposed changes to their SAP environment, and injects more rigor into the process of defining and prioritizing business requirements -- all things that companies should be doing anyway, but ones that are often neglected without the discipline of a customer-supplier relationship in place.