Discuss business intelligence, integration, compliance and a host of other SAP-related topics – implementation, best practices and resources to negotiate the world of SAP better!

March 30, 2015

Cloud or Captive - IT cost reduction strategy for SAP infrastructure

Two broad trends once can see in the SAP market.

Trend 1 - Working with SAP hosting partners and then move towards full-fledged SAP on the cloud

By and large organizations are moving away from an on premise SAP data center environment to having partnership with SAP hosting service providers. Basically companies lease server space and as well outsource BASIS Administration activities of their SAP systems to the hosting partners. These organizational can be expected slowly and steadily move towards embracing full fledged ERP on the cloud model as they mature and gain confidence with the hosting partners and also with the whole partnership model. Small organizations of $2 to $ 5 billion sized are the ones who are moving towards the "Public cloud" option which provide the most cost effective solution for them. Bigger organizations will tend to go for "Private Cloud" as they tend to have multiple SAP systems in their landscape and will see more advantage in the dedicated infrastructure even on cloud. "Hybrid cloud" is something that can appeal to bigger organizations as that addresses the risk and confidentiality aspect by moving only the development and quality environments into cloud while leaving the production environment on premise. To me the Hybrid cloud option is the ladder through which SAP user organizations can join the cloud bandwagon, build robust partnership model around risk and confidentiality for moving towards the Private cloud option which provides economies of scale.


Trend 2 - Keep the SAP data center on premise but move the SAP service department into a captive unit in a low cost location.

This option is sort of preferred for large SAP behemoths. Big companies in the order of sizes more than $10 billion will have huge SAP infrastructure and such systems tend to be dated and something heavily customized environments. It is these kind of organizations which consider going for cloud based SAP systems is too risky. These companies have large SAP systems and will keep adding new SAP systems or engage in spin-off activities due to regular merger and acquisitions. Over the time their data center have become too big and too complex, that any new CIO is threatened by the risk involved in even considering disturbing the functioning data center environment. So moving to cloud as a cost reduction strategy will have no buy in and even if implemented it will be on very small areas on ad-hoc basis. For such companies moving the IT support organization to low cost locations is safest bet on cost reduction. Having already outsourced many of the regular production support process, most likely these organization will have retained a core team of IT professionals who run the show with in house knowledge capability around core processes. It is these core process knowledge retention team that will become target cost reduction by way of opening a captive unit in a low cost country.


Is the second trend a viable?, given the rapid advances being made on cloud capabilities in the market and as well on the fast paced changes in the SAP capabilities. 5 to 10 years from now would the large SAP user organizations be better served by an in house data center or complexities will zoom to a level of tipping point where in move to cloud becomes a necessity. I read about a very similar story during the early industrialization due to lack of reliable power grids, big manufacturing industries had invested in building power plants on their own to ensure reliable electricity supply. But with the advancement made in power grids, and efficiencies achieved by utility companies, the concept of in house power plants vanished. It looks to me the same will be the case of data centers for large organizations. Given the advances being made by cloud service providers, it is going to soon become un economical to even have on premise data centers. SAP being the core ERP system for these companies, it is better addressed early for cloud migration. Investing in captives can be a strategy on IT cost reduction along with movement to cloud, but the latter will have larger impact on the bottom line and make large organization's IT nimble enough to react to market dynamics quickly and effectively.

January 28, 2015

Use of Iterative Methods and Testing Strategy as key differentiator for Project Execution

Use of Iterative Methods and Testing Strategy as key differentiator for Project Execution

For SAP Consultants, testing is one of the phase in overall implementation, change management or support projects. Testing can play a very vital role to make first time right impression on the client.

Various models in Testing are :

1.       Waterfall Model à  It goes sequential

2.       RAD (Rapid Application Development) Model  à  To deliver project in short span and create testing strategy related to overall delivery schedule.

3.       Iterative Model  à Where development and testing goes hands in hand and multiple iterations are made.

4.       Agile and Scrum à Extension of iterative model where overall Project is broken into multiple individual areas and multiple integration areas and overall delivery plan is made. 

 

 

We say we are following ASAP methodology for delivering a SAP Project which has

1.       Requirement Gathering

2.       Blueprinting

3.       Realization

4.       Cutover Activities

5.       Go Live and initial support

Here we are following Waterfall or Sequential model for overall testing strategy where bulk of our testing goes in realization phase.

 

Instead of this if we use Agile and Scrum methodology then we can break each phase in ASAP methodology into an Iterative Method and Testing Cycle and can do multiple iterations to come out with final Results.

For Example :

Requirement Gathering :  Break into multiple areas where we foresee Business expectations. Align to standard industry practices. Do multiple iterations in each area separately with business to come out with best fitted requirements.  Similarly we should do multiple iterations on the integrations areas in requirement analysis and see best fitted methods for integrations.

When all individual and integrations areas are finalized, a single process (having branches) catering to multiple requirements can be formulated.

 

Same methodology can be applied to other phases of ASAP method. This makes us pretty confident that no area within the solution is untouched while delivering final solution to client. It makes sure also that we do not find surprises after solution goes live.

 

Though in practice we find difficult to go through iterative processes due to time constraints, it's always better to even include Iterative Methodology and Testing Strategy with Agile and Scrum in our efforts estimation and highlight our process as one of the key differentiator in our Proposal Response.

 

Siddhant Metkar

Lead Consultant

January 16, 2015

Why incorporating sustainability in purchasing is investing in "green equity"

Is sustainable purchasing all about meeting regulations and compliance or does it has any larger objectives as well? To put it simply, is it all about obligations or about genuine social responsibility, which encompasses care about environment and the people.
The answer to this question determines the long term rewards and returns for pursuing sustainability practices. Depending upon the viewpoint, companies adopt their approach to sustainability. A short sighted approach means it becomes only a cost controlling tool. It is looked upon as a mere overhead to meet regulations, rather than an enabler for securing future markets. However, companies which see this beyond meeting regulations are taking a more strategic view of sustainability and developing integrated plans to invest in this process.


Yes, it does cost more to incorporate a greener product or substitute in the supply chain, but it gets rewarded in long term through increased customer loyalty, reduced risk and overall increase in profitability. As per recent surveys, more and more consumers prefer products that are more environment friendly and reduce carbon footprint. In the new age, being viewed as a socially and environmentally responsible company is pivotal for market success.


Purchasing is a critical function influencing implementation of sustainability practices. The primary job of purchasing still remains to minimize cost, but it needs to optimize it with respect to impact on environment. This would entail devising a purchasing strategy to look for alternate suppliers, product substitutes and maintaining a track record of suppliers in sustainability performance.


When it comes to devising a purchasing strategy around sustainability, size does matter. It would really depend upon the size of the company and the type of product business. However a common approach would be to start slow instead of a big bang approach. Otherwise it risks becoming too lofty a vision to be realized. Aim for realistic improvement by identifying non-critical inputs like packaging materials, MRO items etc. as potential candidates for 'quick wins' . Develop new breed of 'green' suppliers by actively promoting and engaging them. This would entail a new supplier onboarding strategy driven by a strategic policy of encouraging 'green' suppliers. Monitor supplier performance by measuring KPI's related to sustainability. Build external intelligence network to capture indicators of various regions to identify risks proactively.


To support these changing purchasing processes, a solid supplier management tool is a must, which would help not only in managing the basic and operational metrics but also cover the strategic metrics concerning the sustainability parameters. It needs to track the performance of suppliers and help purchasers with informed decision on when to phase out and develop new suppliers.


For SAP customers, the recent SAP SLC product from SAP fits the bill by offering a comprehensive supplier management functionality. It features a dedicated scorecard functionality to create sustainability scorecards and ratings. Being integrated into SAP ECC and SRM environment, it provides easy adoption to operational procurement processes.


Overall a successful purchasing strategy incorporating sustainability practices would need commitment from top. Driven by a strategic plan combined with investment in right tools would reap dividends in long run.

January 7, 2015

Infosys thought leader to shed new light on leading simplification within business on VoiceAmerica

As we enter the New Year, companies are brainstorming on the best path to chart through the year. In this age of digital, where there is an overdose of information, creating a strategy that is simple and breaks down complexity is foremost on the minds of business leaders.

Continue reading " Infosys thought leader to shed new light on leading simplification within business on VoiceAmerica " »

December 11, 2014

Join me and other thought leaders as we look at seasonal hiring trends on VoiceAmerica radio show!

 

It's that time of the year - sitting in front of the fireplace - sipping hot coffee and spending the time with your family. This is how I visualize my holiday season to look like. Year-end means different things to different people. Some of us choose to relax, rejuvenate and look forward to an exciting new beginning ... and for others - the keen-eyed discount hunters - there cannot be a better season than the year-end to brag about their retail exploits.


Continue reading " Join me and other thought leaders as we look at seasonal hiring trends on VoiceAmerica radio show! " »

September 23, 2014

MDG Integration


Recently Infosys implemented SAP MDG solution for introducing data governance on material master for one our clients that has an ERP landscape involving multiple SAP systems and non-SAP systems. We focused on the SAP systems first during the implementation and then came up with a scalable integration solution with non-SAP systems.


The requirement for integration was along the following lines

1.      Integration solution should be scalable to enable to add non-SAP ERP system into data governance as and when such systems are ready

2.      Initiation of integration should not entail any new development effort in the SAP MDG system

3.      SAP MDG user interface should be enabled to allow the data steward to pick and choose the target non-SAP ERP systems to replicate the material master data

4.      Receive and process acknowledgement carrying success or failure message

Scalability is the paramount requirement as the number of non-SAP ERP systems are around 30+, hence having a mini development project for each of such application as and when the regions represented by these applications join the global data governance process is not a feasible. So the integration solution needs to be designed in such a way that any new region joining the global data governance stream is just handled by a master data type extension. This forces us to think hard on coming up a viable solution that achieves this scalability and at the same time is not technical complex to develop in the first place.

After studying multiple solution options we went ahead with standard SAP Classification based solution. The contours of the solution are

  • Every material created by the MDG solution will have a default material class assigned.
  • The class will have characteristic whose value represents the non-SAP ERP system.

    • This way any new non-SAP ERP system is just handled by addition of one characteristic value.

    • Some amount of work in the middleware SAP PI is needed once the characteristic value is defined in MDG but does not involved very detailed development effort in PI too.

From a solution development perspective only major drawback we faced was due the fact that SAP creates a separate idoc (intermediate document) message for material classification values for integration with external systems, which means the middleware has to process to two idoc messages for each material and that can make it complex for middleware. So to eliminate this we had to enhance the standard material master idoc message with additional segments to carry the classification values too. But still this is an one time development effort and we found that there is good amount of effort and cost savings compared to alternate solution which might need a development for each non-SAP ERP application addition to data governance and went ahead with this approach



Recently we presented this solution at ASUG (Americas SAP user group) St. Louis, USA conference. The solution idea and the benefits were well appreciated by the august audience.

Some of the interesting comments received were

From a Monsanto executive

"We have millions of material masters in our system and all the challenges and issues you highlighted are very much there and I seriously yearn for your solution in our system"

From an EATON Corporation executive

"We have a high priority requirement to create material master workflow, I am now convinced after listening to your presentation, MDG is the way forward"


 










Continue reading " MDG Integration " »

September 8, 2014

IT Service Management - An Overview of Service Strategy

Today, Information Technology is a driving factor in delivering Business Services. Due to this, new avenues have opened up in the field of conventional IT landscape. Thus, a guidance and support about how to manage the IT infrastructure is required to improve functionality and quality in a cost effective manner. IT Service Management (ITSM) forms the core of Information Technology Infrastructure Library (ITIL) concepts.
ITSM acts as an enabler for IT governance. In a broader sense, ITSM concurs with the principles of BSM (Business Service Management) and IT portfolio management. However, the guidelines & principles for project management are not covered under ITIL terminologies. Some process oriented ITSM methodologies include ITIL, TQM, COBIT, CMMI etc.

IT Infrastructure Library
ITIL is a widely accepted ITSM framework that provides much-needed guidance on how to manage IT infrastructure so as to streamline IT services in line with business expectations. To know more about ITIL history, refer to our previous blog:
http://www.infosysblogs.com/sap/2014/05/service_transition.html
The 5 core volumes of ITIL are Service Strategy, Service Design, Service Transition, Service Operations and Continual Service Improvement (CSI).

Service Strategy
In ITIL, Service Strategy provides a guidance related to service-provider's investment in services. This helps the organization with the clarity and prioritizing of the services to be delivered. These principles are helpful for developing service management processes, policies and guidelines across Service Life-cycle.
Activities covered in Service Strategy volume include the development of customer markets, service assets and request catalog, and implementation of business strategy. Other key topics include Service Portfolio Management, Financial Management, and Strategic Risks Management.
The key benefit of formulating a Service Strategy is that it helps IT organizations improvise their service delivery. Service Strategy relies to a large extent on a customer satisfaction approach wherein it focuses on business-case development, service value definition, service assets, service provider types and market analysis.


When defining a service, the strategist should think of the service on the following lines:
Value creation: Creation of value to the business
Asset service: Assets required to build, deliver and operate the service.
Service provider types: Whether the Service Provider will be an Internal Service Provider, External Service Provider or a Shared Unit.
Service structure: Defining governance structure to ensure smooth operation of service

The key stakeholders & processes involved in Service Strategy are:
Service Portfolio Manager
• Strategic service assessment: Assessing need of new service
• Service strategy definition: Definition of goals, customers & customer segmentation
• Service portfolio update: Aligning service offered with the strategy definition
• Strategic planning: Controlling and Definition of projects required to execute the service
• Demand Management: Understand how to best meet the needs and expectations of customers, clients, partners& enablers and deliver a proper forecast and sizing of demand.

Financial Manager
• Financial management support: Define structure for managing costs and financial planning data
• Financial planning: Estimate financial resources over next cycle of the service
• Financial analysis and reporting: Analyse financial costs and service profitability.
• Service invoicing: Raising invoices for the provisioned service.

Service Strategist
• IT portfolio management: Applications and tools to manage the activities, projects and investments in a systematic manner.
• Business relationship management: It is an approach to understand, define, and support a plethora of inter-business activities related to knowledge and service management in a multi-vendor scenario.

Key takeaways from Service Strategy Phase:
Service strategy enables the transformation of service management from an organizational capability to an asset that can be leveraged for strategic decision making. It helps an organisation to objectify the relationship between services, systems. This helps in alignment of processes, business models and their objectives.
A strong service strategy enables strategic decision making for investment in services sets; this, in turn leads to a better performance towards customer satisfaction.

Check out this space for our next blog on ITIL - Service Design.

 

September 2, 2014

SAP Fiori with ERP integration a Game Changer in ERP Market Share

SAP Fiori with ERP Integration to play Major Role in gaining ERP Market Share for SAP

Currently SAP owns around 24% Market Share in overall ERP Market. Though it's a huge Market share with main competition from Oracle, Sage, Microsoft, SAP's End user still complains of inflexible User interface it has developed for most of its core and add-on applications.

While using SAP, customers want that it should be flexible enough to modify their own dashboards so as to bring important aspects of their daily to do list in Dashboard at the front. Customers also have in their wish list that while using applications for creation, modification or approval of documents they should be able to do the activities as ease using their mobile devices so that overall transactional process is faster and device independent. In addition, their expectation is that they need not logon to multiple systems once entered into main Dashboard.

To bring Customer Wish list in reality, SAP has developed and still developing multiple applications called SAP Fiori. It calls it SAP UX which means SAP Fiori user experience.  These applications can cater to individual areas within SAP like ECC, CRM, SRM, HCM, GRC, PLM, SCM, TM, EM etc.

With Fiori, SAP is trying to gain ground on 3rd party applications which uses HTML or Java or other to design user Dashboards which are really easy to use but requires separate integration with SAP Applications. These increases licensing cost of Customers for 3rd party applications as well as for SAP ERP.

Below chart depicts SAP's market share by ERP and cumulative application share by ERP Type.

 

Graph for Market share for ERP and Cloud products.jpgReferences: Forbes, Gartner & Zdnet, Panorama

Reference Link:  http://www.forbes.com/sites/louiscolumbus/2014/05/12/gartners-erp-market-share-update-shows-the-future-of-cloud-erp-is-now/

http://www.zdnet.com/2013-erp-research-compelling-advice-for-the-cfo-7000011619/

When it comes to cloud applications like CRM cloud, SAP is in fact is not the market leader.  Salesforce has taken the lead due to pleasant working experience on its cloud based applications, easy and flexible dashboard use, quick to plug Mobile infrastructure availability and reduced pricing due to SaaS (Software as a Service) model.

Though SAP Fiori is not exactly a Cloud Application, it makes user experience working on the applications far too pleasant. Customization or enhancements of Fiori applications are quicker as they are developed specifically for particular operations like Purchase Order approval. When individual business wants a change in Purchase Order approval flow, it can be easily done by doing the enhancement only Purchase Order related Fiori application. 

In coming days we'll also see fierce fight in User interface and ERP integration market and how companies launch different products or applications either to retain or enhance their market share.

This competition is likely to be among SAP, ORACLE, Salesforce, Microsoft, Infor, Sage, Google etc.           

Who knows we may see altogether a totally new brand appeared from nowhere and followed unexpected approach to become Market Leader in this space.

 

Siddhant Metkar

Lead Consultant, CSI MFG,

Infosys Limited

June 10, 2014

Is Agile giving you personal fulfillment?

Years after the introduction of Agile development, many articles have been written about advantages of this software development methodology. Continuous delivery of working code, customer involvement and buy-in, quick response to a changing environment and self organizing teams are named among the many benifits. Agile is regarded as the optimal method to organize every IT organization. What strikes me is that only little has been written about the individual and Agile. When entering Agile and personal development in Google search, no results return. But isn't it that the members of the team are the once that have to strive for the agility of the method? And who will mentor them in doing this?

 

One might think that the Scrum master would have the role of mentoring any each member who needs personal growth, both technically as well as on a personal level. Cause doesn't the scrum master role have the same tasks as a team lead or project manager? Unfortunately this is not the case. By principal, the Scrum master is the facilitator of the group. The master is accountable for removing impediments for the team, so that the members can deliver the product goals and deliverables, not for people managing the once that need it. In practice,  a Scrum master acting as  a people manager might even result in conflicting responsibilities, unclear authority, and sub-optimal results. 

 

So if no people manager is available in a scrum team, is each member expected to be senior enough to self organize and motivate themselves? You can imagine that in a team, not all individuals work with the same enthousiasm and drive, which can cause frictions and different expectations. In a waterfall project a lead or a mentor could perform this steering or give personal attention. Who is there in a Scrum team?

Another shortcoming experienced in Scrum is the continuous sprinting. Personally, I have been sprinting for almost 4 years. Sprints in scrum can be seen as an interval running program; imagine 3 minutes of jogging at a quick 8 mph pace, followed by 1 minute slow walking, then 3 minutes at 8 mph again and 1 minute walking, and so on. But unlike interval running, where the run might end in an hour, scrum sprints have no ending. As if you are sprinting forever and ever. Often Scrum members complain about tiredness, because of continuously having to meet deadlines, without having an final goal or objective.

You might think that tiredness and lack of personal development could be solved by rotating roles and responsibilities. Just change your role every often from developer, to tester, to functional or even to scrum master. But are these roles interchangeable? Can a tester be a developer or scrum master. Mostly the roles and knowledge are locked and irreplaceable, due to the specific skill set needed.

So what do you think can be done to both reach the common goals of the team as well as cater to the personal (development) needs of each member?  

 

 

 

June 5, 2014

Data Quality Cockpit using SAP Information Steward and Data Services - Part 3

 

Setting up Data Quality Cockpit - Challenges and Key advantages

Previous blog: We discussed how to fix the issues identified with data and get better ROI

To make good use of the DQ cockpit, a proper data quality or governance organization is required. Data Stewards and owners need to continuously engage with business users to understand the changing needs in data and its validation to continuously build or keep the rules updated. As data matures and expires with time, the same rules may not always hold good and the rules or validations that govern the data needs to continuously change and refine as business demands. Analysts can run daily, weekly or periodic jobs to generate reports that can help business or information stewards understand the state of data quality and take continuous measures to keep data clean and reliable.

Below are some key advantages and benefits of the tool

  1. An easy plug in solution that could extract in-process data at particular stage of business process, cleanse/enrich and put data back into the productive database

  2. Rules that could be easily coded by data admins/stewards for data validation and ensure reuse in for actual cleansing. Rules can be exchanged between SAP IS and SAP DS

  3. Usage of external services for enriching data like the address directory services for different countries

  4. Periodic health check of the productive database and dashboard view to governance/business to ensure data standards and quality are maintained at appropriate levels

  5. Identifying duplicates , determination of survivor and maintaining history of merged records

  6. Financial impact analysis and calculating ROI

The SAP Information Steward and SAP Data Services are very important tools for the Stewards, Analysts and Business Users to regularly conduct a health check on the quality of data and take timely corrective actions. It is imperative that data quality management is not a one-time exercise but a continuous one. Continuous improvement in the quality of data enabled by SAP IS and SAP DS provide the key foundational elements that enable governance and improve trust in the data infrastructure of the Organization.

This blog is posted on behalf of Arvind H. Shenoy, Lead Consultant, Retail, CPG & Logistics, Infosys.
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