Outsourcing SAP Operations

Yosh Eisbart began his SAP career in 1995 as a consultant for Ernst & Young (now Cap Gemini). Today, he's Director of the SAP Service Line/SAP Consulting Services at Comsys, an IT service provider and consulting firm with headquarters in Houston, TX. During his 14 years of SAP consulting he's worked on numerous SAP implementations across the globe and - with only few exceptions - every project has leveraged outsourcing in some capacity. Yosh is intimately familiar with the decision-making process, application, pro's/con's, engagement arrangements, relationship construct, etc. Yosh has been involved in both the decision on whether to employ this alternative (in numerous forms), and how it actually operates. Yosh also published on the topic of outsourcing and others multiple times (among others, for SAP NetWeaver Magazine) and speaks at conferences.

* ... Foreword by Bridgette Chambers, ASUG CEO ... 15 * ... Preface ... 19 * ... Introduction ... 27 * 1 ... Who Determining Whether Outsourcing is Right for Your Organization ... 35 * 1.1 ... Corporate Culture and Executive Influence ... 37 * 1.2 ... SAP Components Best-Suited for Outsourcing ... 38 * 1.2.1 ... SAP Operations ... 38 * 1.2.2 ... Project Work and SAP Staff Augmentation ... 39 * 1.3 ... SAP Components not Best-Suited for Outsourcing ... 41 * 1.3.1 ... Data Sensitivity, Security, and Compliance ... 41 * 1.3.2 ... Home-Grown SAP Environments ... 41 * 1.3.3 ... Services Providers/Service Level Agreements ... 42 * 1.4 ... Limits of Full-Time Employee Hiring/Quick Hit Temporary Project Work ... 43 * 1.5 ... Organization Size ... 43 * 1.5.1 ... Small Enterprise (SME) ... 44 * 1.5.2 ... Upper Midsize Enterprise (UME) ... 44 * 1.5.3 ... The Fortune 500 ... 45 * 1.6 ... SAP as Software: Its Complexity, Integration, and Inherent Challenges ... 46 * 1.7 ... Summary: The Perfect Organization Best-Suited for SAP Outsourcing ... 47 * 2 ... Why Potential Reasons why Outsourcing Might Make Sense for Your Organization ... 49 * 2.1 ... Cost ... 49 * 2.2 ... Objectivity ... 50 * 2.3 ... Expertise ... 51 * 2.3.1 ... Shadowing (Premeditated Osmosis) ... 53 * 2.3.2 ... Emotional Component ... 54 * 2.4 ... Inherent Standardization Advantage ... 54 * 2.5 ... Specific SAP Initiatives ... 57 * 2.5.1 ... Assessments ... 57 * 2.5.2 ... Optimization ... 58 * 2.5.3 ... Audits ... 60 * 2.5.4 ... "GO No GO" Gate Review ... 61 * 2.5.5 ... "Bulldog" Services SAP Project Management Oversight ... 62 * 2.6 ... Focus on Internal Core Capabilities ... 63 * 2.7 ... Reasons Why NOT to Outsource your SAP Operations ... 65 * 2.8 ... Summary ... 66 * 3 ... What is SAP Outsourcing? The Various Flavors ... 67 * 3.1 ... Baseline: The Various Flavors of SAP Outsourcing ... 67 * 3.1.1 ... Onsite Resources ... 68 * 3.1.2 ... Offsite Resources ... 69 * 3.1.3 ... Nearshore Resources ... 69 * 3.1.4 ... Rightshoring ... 71 * 3.1.5 ... Offshore Resources ... 71 * 3.1.6 ... Hybrid Resources ... 72 * 3.1.7 ... Collocation ... 77 * 3.1.8 ... Partners-in-Projects ... 78 * 3.2 ... Specific SAP Outsourcing Models ... 79 * 3.2.1 ... SAP NetWeaver Basis Operations ... 79 * 3.2.2 ... SAP Hosting ... 81 * 3.2.3 ... Custom Development ... 85 * 3.2.4 ... SAP Centric Help Desk/Service Desk ... 86 * 3.2.5 ... Implementation ... 87 * 3.2.6 ... The Break/Fix to Global Delivery Services Pyramid ... 88 * 3.3 ... Summary ... 90 * 4 ... When Timing and Transition ... 91 * 4.1 ... Choosing the Proper Timeframe ... 91 * 4.2 ... Timing for Post-Production Support Outsourcing ... 92 * 4.3 ... SAP Methodologies' Impact on Timing ... 95 * 4.3.1 ... ASAP ... 96 * 4.3.2 ... Run SAP ... 98 * 4.4 ... Managing Change ... 99 * 4.5 ... Control Advisory Board ... 103 * 5 ... Implementations and Upgrades ... 107 * 5.1 ... ASAP (Focus) Methodology ... 107 * 5.2 ... Outsourcing by ASAP Phase ... 111 * 5.2.1 ... Project Preparation ... 111 * 5.2.2 ... Blueprinting ... 113 * 5.2.3 ... Realization ... 115 * 5.2.4 ... Final Preparation ... 119 * 5.2.5 ... Go-Live and Support ... 121 * 5.3 ... Using SAP Solution Manager during Implementations ... 123 * 5.3.1 ... Maintenance Optimizer ... 124 * 5.3.2 ... Project Administration/Work Centers ... 127 * 5.3.3 ... Service Desk ... 129 * 5.3.4 ... Upgrades ... 131 * 5.4 ... Using the Custom Development Management Cockpit (CDMC) for Upgrade Preparation ... 135 * 6 ... Production Support ... 139 * 6.1 ... SAP Production Support Models ... 139 * 6.1.1 ... Break/Fix Model ... 140 * 6.1.2 ... Production Support Plus ... 143 * 6.2 ... SAP's Run SAP Methodology and its Advantages ... 144 * 6.2.1 ... Why is Run SAP Important for Organizations? ... 145 * 6.2.2 ... Run SAP Advantages for your Production Support Environment ... 146 * 6.3 ... SAP Enterprise Support ... 148 * 6.4 ... SAP Business Processes and Technical Areas that Work Well for Outsourced Production Support ... 151 * 6.5 ... Tools to Optimize your Production Support Center ... 153 * 6.5.1 ... Central System Administration ... 154 * 6.5.2 ... Central System Monitoring ... 158 * 6.5.3 ... SAP Solution Manager and SAP NetWeaver BW Integrated Reporting ... 160 * 6.6 ... Managing Work Effort ... 163 * 6.6.1 ... Managing the Work Effort Process ... 163 * 6.6.2 ... Formalized Proven SAP Work Effort Processes ... 164 * 6.6.3 ... Tracking Tools ... 165 * 7 ... Global Delivery ... 171 * 7.1 ... The Basics ... 171 * 7.1.1 ... Advantages of Global Delivery ... 172 * 7.1.2 ... Disadvantages ... 173 * 7.2 ... Center of Excellence (COE) ... 175 * 7.3 ... The Rise of the Customer Competence Center and the Center of Expertise ... 178 * 7.4 ... Summary ... 182 * 8 ... Engagement Construct ... 183 * 8.1 ... Primary Models ... 184 * 8.1.1 ... Offsite: "Three Wise Monkeys" ... 184 * 8.1.2 ... Manager to Manager Integration Model ... 186 * 8.1.3 ... Hybrid ... 190 * 8.1.4 ... Dynamic Resourcing ... 193 * 8.1.5 ... Pure Onsite ... 194 * 8.2 ... The Role of Key Management ... 196 * 8.2.1 ... Integration Manager (Internal or Outsourced Resource) ... 196 * 8.2.2 ... Offsite Delivery Manager (Outsourced Resource) ... 197 * 8.2.3 ... Technical Architect (Typically Internal Resource) ... 197 * 8.2.4 ... SAP NetWeaver Administrator (Internal or Outsourced Resource) ... 198 * 8.2.5 ... Business Process Leadership (Internal Resources) ... 198 * 8.2.6 ... Executive Sponsor (Internal Resource) ... 198 * 8.2.7 ... Project Governance (Both Internal and Outsourced Resources) ... 199 * 8.3 ... Conclusion ... 201 * 9 ... Selecting a Partner ... 203 * 9.1 ... Understanding What You Need (not Want) ... 204 * 9.2 ... Overview of Various SAP Partner Types ... 204 * 9.3 ... Establishing Baseline Criteria ... 207 * 9.3.1 ... Common Baseline Criteria ... 207 * 9.3.2 ... Baseline Criteria Unique per Initiative ... 208 * 9.3.3 ... Scoring Allocation ... 211 * 9.4 ... The Selection Process Lifecycle ... 213 * 9.4.1 ... Request for Information (RFI) ... 214 * 9.4.2 ... Vendor Summit ... 214 * 9.4.3 ... Request for Proposal (RFP) ... 216 * 9.4.4 ... Oral Presentations ... 216 * 9.4.5 ... SOW/Final Negotiations ... 217 * 9.4.6 ... Partner(s) Selection ... 217 * 9.5 ... The RFX Structured Deliverables Used in the Selection of a Partner ... 218 * 9.5.1 ... The Request for Information (RFI) ... 218 * 9.5.2 ... The Request for Proposal (RFP) ... 220 * 9.5.3 ... The Statement of Work (SOW) ... 223 * 9.5.4 ... Contract Negotiation ... 225 * 9.6 ... SAP Accreditations ... 226 * 9.6.1 ... SAP Services Partner ... 227 * 9.6.2 ... Business Process Outsourcing (BPO) ... 228 * 9.6.3 ... SAP BusinessObjects ... 228 * 9.6.4 ... Channel ... 228 * 9.6.5 ... Education Partners ... 229 * 9.6.6 ... SAP Hosting ... 229 * 9.6.7 ... Software Solution Partners (Powered by SAP NetWeaver) ... 230 * 9.7 ... Screening Process ... 231 * 9.8 ... Alternative Sourcing Models ... 234 * 9.8.1 ... Contract-to-Hire ... 234 * 9.8.2 ... Build-Operate-Transfer (BOT) ... 235 * 9.8.3 ... Vendor Management Systems ... 235 * 9.8.4 ... Acquisition Strategies ... 238 * 9.8.5 ... Direct Hire ... 238 * 9.9 ... Exit Strategy ... 239 * 10 ... Large Enterprise ... 243 * 10.1 ... Unique Large Enterprise advantages and their Maximization ... 243 * 10.1.1 ... Deep Pockets ... 244 * 10.1.2 ... Deliverable-Based and Fixed Pricing ... 246 * 10.1.3 ... Building Relationships ... 247 * 10.2 ... The Role of SAP in the Large Enterprise World ... 248 * 10.3 ... Strong SAP Alignment ... 250 * 10.4 ... Bleeding-Edge SAP Technology ... 251 * 10.5 ... Large Enterprise Consultant Modeling ... 253 * 10.5.1 ... Build-Operate-Transfer (BOT) ... 253 * 10.5.2 ... Global Center of Excellence ... 254 * 10.6 ... Summary ... 255 * 11 ... The Midmarket Space ... 257 * 11.1 ... Unique Midmarket Challenges ... 258 * 11.1.1 ... Limited Resources ... 258 * 11.1.2 ... Limited Funds ... 259 * 11.1.3 ... Midmarket Multi-Tasking ... 260 * 11.1.4 ... Lack of Market Appeal ... 261 * 11.1.5 ... Lack of Executive Management Focus ... 262 * 11.1.6 ... Unfamiliarity/Inexperience ... 263 * 11.2 ... The SAP Super-Super User Alternative ... 263 * 11.3 ... Stretching your SAP Dollar: Outsourcing Options ... 265 * 11.3.1 ... Application Management Services ... 266 * 11.3.2 ... Full Service Application SAP Outsourcing ... 269 * 11.4 ... Summary ... 273 * 12 ... The Value of IT Standardization ... 275 * 12.1 ... Why bother with standardization? ... 276 * 12.2 ... Implementing Strong IT Practices IT Process Frameworks, Industry Standards, and Other Tools ... 277 * 12.3 ... A Simple, Common Sense Approach to IT Process Standardization and Improvement ... 283 * 12.3.1 ... Adopt an IT Service Management Framework and Start Speaking a Common Language ... 283 * 12.3.2 ... Initiate a Project to Adopt a Common Approach to IT Service Management and Document Key Processes ... 284 * 12.3.3 ... Assess your Organizational Process Maturity Level ... 285 * 12.3.4 ... Determine Process Maturity Goals ... 286 * 12.3.5 ... Identify Improvement Initiatives and Define an Implementation Master Plan ... 287 * 12.3.6 ... Launch Improvement Projects and Execute ... 287 * 12.3.7 ... Compare Results Against Original Objectives and Start Again ... 290 * 12.4 ... Standardization in SAP Environments ... 290 * 12.5 ... IT Processes Where to Start ... 292 * 12.5.1 ... IT Processes Context Diagram ... 293 * 12.5.2 ... IT Process Documentation ... 294 * 12.6 ... Other Tools for IT Process Standardization ... 297 * 12.7 ... Summary ... 300 * 13 ... The Role of the Integration Manager ... 303 * 13.1 ... The Integration Manager: A Definition ... 304 * 13.2 ... An Integration Manager's Persona: Characteristics and Attributes ... 306 * 13.3 ... The Role of the Integration Manager and the Relationship to the Control Advisory Board ... 307 * 13.4 ... Necessity versus Nicety ... 311 * 13.5 ... The Integration Manager from your Offsite Partner ... 313 * 13.6 ... The Integration Manager's Counterpart: The Offsite Delivery Support Manager ... 315 * 13.7 ... Summary ... 315 * 14 ... Service Level Agreements ... 317 * 14.1 ... Establishing SLAs ... 318 * 14.1.1 ... Primary Components ... 318 * 14.1.2 ... Defining the Correct SLA Amount ... 322 * 14.2 ... SLA Supporting Tools ... 323 * 14.3 ... SLA Guidelines and Determining Factors ... 325 * 14.3.1 ... SAP Landscape ... 325 * 14.3.2 ... SAP Technologies ... 327 * 14.3.3 ... SAP Business Scenarios ... 327 * 14.3.4 ... Type of Initiative ... 328 * 14.4 ... Summary ... 329 * 15 ... Conclusion ... 331 * A ... Sample Request For Information Document ... 339 * B ... Sample Request for Proposal ... 347 * C ... Sample Statement of Work ... 361 * D ... SAP Screening Process ... 369 * E ... The Author ... 371 * ... Index ... 373