SAP

My engagement till date with SAP implementation projects be it domestic or global, has exposed me to different approaches and philosophies being adopted by companies, during their SAP journey. And a critical point that I have realized is that when a company takes this strategic decision of implementing a package solution from a specialized vendor like SAP, it should consciously try and avoid combining custom developments to the extent possible.

When referring to custom developments, I am not talking about developing custom reports and interfaces, as these can be essential from business requirement perspective and hence has to be developed. However, companies should preferably not change standard SAP codes and create complex additional functionality which can be difficult to manage later on. On the contrary, it is always advisable to adopt standard SAP best practices and functionality and if possible tweak existing business processes to adapt SAP provided solutions to their problems. This is because, it has been seen on multiple instances that making complex developments on SAP's standard solution has proved catastrophic to the eventual success of the project.

In addition, let me highlight some common mistakes which keep recurring during various stages of SAP implementation lifecycle:

Inadequate requirement gathering:  It is extremely important to have a detailed understanding of the business requirement right at the onset of the project. If we have not defined each and every functionality at an early stage, then accommodating them at a later point of time will definitely be resource and time intensive. So a good solution definition not only caters to the current requirements but also maps planned future functionality. 

Lack of core team involvement: It should be realized that the technical expertise, system knowledge and prior experience of implementing in similar industry of SAP consultants, are not sufficient to automate business processes on its own. This is because, it is not possible to gather complete information about the business without involvement of key business owners, who should definitely be a part of the dedicated core team. Thus when the business owners are not equally involved in defining the to-be processes, they will not eventually take ownership of the SAP system, and will not assume responsibility for its success and maintenance. 

Complex System hard to manage: There are examples wherein companies end up paying more attention to SAP tools and functionalities than their own business processes. It has to be understood that SAP is just a facilitator which will make their processes more efficient. Our primary objective should be to build a system which will make processes more efficient and not a complex one. This is because we can come up with a system which has all possible functionalities SAP provides and is theoretically right, but might not be very useful at the end due to issues like transaction volume, cost-benefit analysis, human resources etc. On the same lines, it is better to use SAP's standard offerings wherever possible than go for custom developments, as mentioned at the very beginning of this blog. These customizations can become potential issues while implementing new functionality or during upgrades at a later point of time.

Ineffective change management: We have to accept that with every SAP project, there will be change in functions, positions and ways of doing things. Hence, neglecting this soft aspect of change management can be a costly mistake. No matter how mature an organization is, it is extremely important to administer these changes through adequate involvement of external consultants, internal stakeholders and HR. Depending on the size of the organization and project, this activity will correspondingly demand commensurate focus.

Finally it probably will be right to conclude that keeping the above factors in mind and taking appropriate measures can contribute significantly to the success of an SAP project.

Posted by Prabuddha Kumar Biswas at 4:03 AM | Permalink | Comments ( 3 ) | TrackBacks ( 0 )

With the timeline for adoption/convergence of IFRS fast approaching , its important for businesses worldwide to understand the impact of it on IT systems. Those not involving IT from the beginning are typically the organizations underestimating the level of changes associated with IFRS implementation.The ability to meet these challenging reporting requirements largely depends upon the magnitude of the IFRS and GAAP differences, the capabilities of the company's information systems and the agility of its processes.There cannot be one best solution for all companies, it is better to start the process earlier than late.

Adoption of International Financial Reporting Standards( IFRS) is one of the most singnificant challenges faced by all entities worldwide. IFRS requires disclosure of large amount of information to be reported as part of the financial statements and the notes to accounts. This creates need for new data, changed calculations and changes in reporting requirements. IFRS conversion projects are often viewed as finance specfic projects. However, these projects impact finance, accounting, information system and human resources. Adoption of IFRS can provide opportunuties for achieving synergies with other IT projects and strategic intiative.

On adoption of IFRS, an information system is required to capture, analyze and report new data in the format as required. It necessitates hanges to be made in the present IT/process landscape.The process of aliging the information collected according to the Local GAAP requirements with the IFRS is one of the key issues on adoption/convergence of IFRS.The conversion to IFRS is fraught with complexity due to -

• Intricacies in the technical accounting standards themselves
• Domiciles of organizations
• Local and international regulatory requirements

The impacts on information systems fom conversion to IFRS arise from difference in the accounting treatment between current accounting standards and IFRS. This may create a need for -

• New data
• Changed calculations
• Changes in reporting

To facilitate these changes, information systems may need to be implemented, modified, re- mapped or reconfigured. To enable the organisation to succeed, it is vital that the IFRS conversion project refects holistically the true impact on the organisation - it far more than just numbers.Following are the main steps involved in converting the existing IT sytem land scape to IFRS complied system:

Evaluate :
The first step in the adoption of IFRS is to find out the standards applicable for the company. This will help to understand the additional information to be captured and reported. Evaluating the existing situation will help the entity to assess the impact of IFRS on the people, process and technology. To assess the impact of IFRS on the information system, an organization shall have a good level of understanding about the accounting level differences, impacts and risks associated with the adoption of IFRS. It is a time consuming process. The success of adoption depends on how the accounting differences are translated to technical system specifications.

Envisage:
After assessing the current Information System capabilities and projecting the future requirements, next step is desiging the new Information System. Adoption of IFRS necessitates the need for new information. The entity may be required to capture new data or change the calculations. Evaluation of existing systems helps to findout whether existing systems can be modified or altered to meet the suggested system changes.

Excel:
This is the ultimate stage of the whole process. Inputs required for this stage are - project plan, revised processes & procedures, revised business blue print, transition document etc. Key activities in this stage includes Implement changes in the applicable systems,System integration test and user acceptance testing, Map the changes to transition document and obtain sign off,Parallel run systems in Local GAAP and IFRS, Refine internal and external reporting, Strengthen controls over newly implemented strategies and Cut over and switch to IFRS.

To summarize , an IFRS adoption project is much more than just a Finance/accounting project . It encompasses a complete busines trasnsformation and hence there is a need to have a holistic approach and participation from all stakeholders.

Posted by Anand Prakash Jangid at 2:25 PM | Permalink | Comments ( 7 ) | TrackBacks ( 0 )

                   Output Management software is the one that creates, formats, personalizes and distributes the content to improve customer satisfaction. Ideally the software needs to provide structured, interactive, reliable, efficient and cost effective information delivery in today's ever-changing business environment.
  In this blog, we will try to find out some of the leading established service providers in this space.

Vendor Evaluation Criteria-Important Criteria:

a. Output management infrastructure support: Capabilities that improve efficient print production like Print house and Archiving.

b. Strength in formats and conversions: Strength of support for AFP,XML   content into HTML and PDF.

c. Ease of application development: The product's capabilities to   develop, manage and integrate structured output by business users.

d. Multichannel capability: The ability of the system to support output   for print, email and web channels.

e. Template management: The ability to store, archive, version and   administer templates.

f. High volume customers: Vendor's installed base of high   volume customers providing structured output.

g. Availability: Availability of product and support functional at US and other global  markets.

h. Scalability: Larger volume of data/larger no of users/Multilanguage   and Multicurrency support.

i. Flexibility/Maintainability: Ease of change/update/replace and ease   of use.

 

Some of the established players:

1. Exstream Software: Exstream's Dialogue is one of the leading players in high volume segment of structured Document Output Management (DOM) market.

2. Pitney Bowes: Group1 software, now part of Pitney Bowes, has extended its solution with ECM technologies to manage full range of DOM solutions.

3. Adobe Systems (Live cycle/Jet forms):  Adobe looks well-positioned to repeat its desktop publishing success with DOM technology.

4. HPOMS: HP output server has its roots in infrastructure output management, derives from the Dazel product and will focus on interactive and on-demand output management services. solutions.

5. StreamServe: StreamServe is one of the leading provider in DOM spcae, leveraging business applications in ERP,CRM and SCM space.

Conclusion:
Software vendors and consultants have thorough knowledge about Corporate Document Output Management services and its functionalities, but the key challenges remain much the same. DOM software deployment requires through planning with respect to

• customer specific requirements,
• change management aspects,
• budget limitations and also
• IT related technical aspects.  

Posted by Virupaksha Gopala Krishna Kalaga at 7:35 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

How well  and how far cloud computing can be leveraged for the business is  being discussed in the public domain and IT decision makers are trying  to address it in their own environments.  Like the others, Life Sciences organizations have found it extremely relevant but the extent of lever is yet to crystallize. In the value chain of a typical Life Sciences company, from Drug Discovery and Development to Marketing and Sales a series of IT based applications and tools is being used. To start with the Drug discovery involves clinical research data which is highly sensitive and detailed. IT applications are prevalent for managing data objects  like Laboratory Data (LIMS), Target Identification, Electronic data capture (EDC), clinical data (CDMS), contract research organizations (CROs), pre-clinical and clinical trials and associated supplies, electronic patient diaries, patients' Electronic Health Records (EHR), patent related data like NDA and the compliance documentation across all the processes. When it comes to manufacturing and sales there are IT applications being used for Integrated Business Planning, Demand Planning, Sales and Operations Planning, optimizing supply resources (SRM),  Manufacturing execution (MES), transaction processing systems (ERP), warehousing and distribution (WMS), enhancing  customer connect (CRM) and  so on. Above all the operational tools comes the reporting and analytics application (BI) to make sense of the plethora of data generated everyday and aid the business decision making.

Cloud computing has surfaced in to two currents poised to transform the Life Sciences enterprises - first is the new way of carrying out some of the business activities or processes and second is the model of hosting enterprise applications. The extent of leveraging 'cloud' for its operational superiority and competitive advantage will decide the 'cloud quotient' of an enterprise.

The core function of Drug Discovery and Development is getting transformed with the new option of cloud computing. Health Social Networking is a good example of changing approach of business activities in a Life Sciences company and with increased activity on the internet, it has enormous potential of changing the way drug discovery and development works.  Going beyond the traditional way of carrying out clinical trials, it is now the patient community on the internet which is feeding drug makers with inputs and sharing their responses with others with similar conditions. Tasks like subject identification and recruitment, patient diaries updating, assessing efficacy of drugs can all be now on the web. Also diseases experiences of other people around the world with similar conditions, treatment options, recommendations for best Doctors can all be known with the networking sites like patientslikeme.com and healthchapter.com

Pfizer, Eli Lilly, and Novartis are amongst the early adopters of the new technology option and exploring innovative ways of conducting activities like clinical trials, as observed in the publicly available reports. US FDA too recognizes secure external data center and data communication for clinical trials.

With the increasing popularity and adoption of cloud computing, now a key question is - what are the good-candidate applications in the IT landscape of an enterprise to move to cloud and will it indeed add value to the business. I'll try to delve upon this in my next post. Are you on the cloud?

Posted by Hemant Pathak at 4:37 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

Call of the time is to produce IT Experts with strong knowledge of a particular Industry segment. As such, it makes great sense for the IT Service providers to have special industry vertical focus within their resource pool. The objective is to develop Business Process Consulting capability around the IT / ERP skills. Attention needs to be given to enhancing domain competency within the IT professionals' group, so as to enable them to deliver optimal solution that is best suited for the particular Industry vertical. This would help the service teams to manage customer issues more effectively, provide value added solutions to problems seen and also those yet unseen by a particular customer, through experience sharing.

The Appropriate Way Ahead For The IT

There is an increasing market demand for harnessing deep Industry know-how with the IT Service offering. One effective way for achieving this is to invest in establishing Centre of Competence, dedicated to a particular Industry vertical, to train the IT professionals in industry domain fundamentals. For an ERP Service provider group, these CoCs would deal with those Industry needs which are effectively addressed by the ERP package. In parallel, it would also pay attention to those needs which are only partially fulfilled or not fulfilled at all through the ERP solution.  As such, CoC would concentrate on training the IT Consultants on the niche features that an ERP offers, that are aptly suitable for the Industry segment, so that more and more Industries can avail advantage of the same. At the same time, CoC would give due consideration to the grey areas, with the aim of coming up with simple work-around as a short term solution and some innovative development through long term plan in these areas. CoC may have 4 main focus areas - (1) Training (2) Knowledge - Gaining & Sharing (3) Reference Process Flows and Best Practices Repository (4) Solution Development. Through these focus areas, CoCs would develop Industry specific expertise in relation to the ERP offering under consideration.

Broadly, the expertise can be divided into 3 levels - Basic, Core, Expert. The junior roles need to be at least at "Basic" level of knowledge of the particular industry working. The "Core" level, which would map to Team Lead positions, should have in-depth business knowledge of the organisation under consideration. The "Expert" level would be the "Solution Owner" position, having pan-Organisations knowledge. A person marked to be an "Expert" would typically carry solid working experience from the relevant Industry.  And further, the Expert level CoC training would enable him / her to provide more value add to the customers. The value add could be in form of proposals for business process modification, adoption of best practices prevalent in the said industry, optimum planning for future IT landscape etc. CoCs can further strengthen the objective through a certification framework for "ERP + Industry" knowledge courses. The CoCs can also develop supporting artifacts, like dedicated portals, expert forums, knowledge repositories etc. for the selected Industry vertical. Going forward, this would effectively create specialists for a particular Industry, who would have good Industry / business knowledge (and experience), along with excellent grip on the ERP package / IT solution in his area of work.

Going few steps ahead, Organisations can establish their own Training Centers or Universities or "Organisational CoCs", who would hold the overall responsibility to train people in their areas of expertise, from Business as well as from IT perspective. More on the "Organisational CoC" - its objective, scope, how to set it up, ways of working etc., sometime later.

Hope you were with me through this 3 part blog discussion on the IT journey, with respect to the changing demands on the IT from the Industry. Would surely like to hear your views on this subject. Thanks.

Posted by Rajashri Telkar at 7:49 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

Pharma organizations' typical pain point in IT deployment is that it takes a huge amount of testing to fulfill all the Computer Validation requirements as per the 21 CFR Part 11 guidelines. Testing cycle contributes ~40% of the application deployment cost and ~ 50% of the project timelines. The duration of an SAP implementation project in Pharmaceutical organization is atleast 20-30% longer and costlier than the similar project in engineering industry.

So what are the ways to reduce these timelines, effort and cost?

Let us look at the types of testing cycles involved in SAP implementation for a Pharmaceutical organization.

1. Unit Testing
2. Informal Screening &Formal Screening of scenarios
3. End to End Integration Testing
4. Performance testing
5. UAT
6. Mock Runs

The formal screening of scenarios is to ensure satisfactory testing as per the regulatory needs and it consumes lot of testing effort. The business scenarios which are GxP impacted have to be tested formally with extensive documentation which adds up to the testing effort. Apart from it, it needs hardware to comply with certain installation qualifications and operational qualifications (IQ and OQ) which takes more time for environment preparation compared to environments in non regulatory industries.

In such a scenario, does cloud testing help to reduce the timeline and cost?

Cloud testing is utilized to reduce the timelines and effort of testing cycle by creating virtual labs in the cloud. The virtual resources are leveraged to reduce need of purchasing and maintaining your own hardware. However, organization needs to ensure that the environment comply with the IQ , OQ and PQ (performance qualification) requirements. If the service provider offers a specialized service for Pharma organization, it would certainly help reducing the time and cost of environment preparation. While doing so, organization needs to emphasis on due diligence and getting the requirements fulfilled on Security, privacy concerns, lack of control etc.

What could be done to optimize the formal testing and documentation requirements?

Apart from it, the impact of business scenarios has to be clearly specified considering GxP relevance. Infosys' SAP Life Sciences Practice offers a solution which helps identifying the GxP impacted scenarios and optimize the formal testing effort. The rational utilized for assessing the impact follows cGMP, GLP and GCP and the solution could be modified to include organization specific criterions to make it more suitable for organization's requirements. This reduces the time needed to come up the list of scenarios for Formal Vs Informal testing.

So cloud computing and Infosys' solution together could be an answer to reduce the testing timelines as well as cost in SAP implementation projects.

Posted by Ramesh J. Chougule at 6:49 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

After the initial boost the IT environment gave to businesses, there was strong demand from industries for added ROI and realisation of more tangible benefits from IT, in line with the investments made. Talking of ERP packages, industries expected added advantages in terms of business process enhancement and improvements, as well as infrastructure flexibility, stability. It was not enough to have an IT system which merely did tasks otherwise done manually, but organizations wanted benefits in terms of more intelligence, efficient support in decision making and assurance of data sanity.

The Limitations and Shortfall of Information Technology

As each Industry had its own way of working compared to others, ERP packages needed to be tailored to the needs of a particular Industry.  To address this, ERP vendors started coming up with improvements and amendments best suited for a particular Industry segment. In parallel, they also started making their software solution more open & flexible to interact and adapt to varied IT environments. However, although improved products were introduced in market, there was a dearth of efficient system administrators and maintenance teams to manage these new versions offered by IT and ERP vendors. With the IT entering into all areas of business operations, starting from hiring in HR to complaint handling in CRM, all processing and data was now interconnected and interrelated. This increased the business dependence on IT to a very large extent. With heavy financial and administrative investments going in, but without much of apparent benefits realisation, IT setup started becoming a burden rather than a facilitator. However this was a stage where there was no going-back on computerization and so, after having been adopted it, the organizations now aimed at exploiting the IT setup to the fullest. They needed support from the product vendors as well as service vendors who could clearly understand their business requirements and aspirations and further enable those through the IT systems.

IT & Business Hand-In-Hand Today For Efficient Tomorrow

This demanding thrust from organisations led to concentrated focus and efforts to provide Industry specific solutions as against "off-the-shelf" generic solutions. The facilitating functions of an organisation, like the IT setup, are expected to help run the business smoothly, sustain and grow and so deliver what is specifically needed by the industry, rather than generic solutions. This prompted vendors like SAP to come up with different Industry Solutions to support business process improvement. They also introduced NetWeaver platform to make the SAP setup more adaptive to the overall IT setup in any organisation.

The overall IT structure of an industry needs to be efficient enough to supports the business on its niche requirements. The needs of the organisation are largely driven by the Industry type, like, a Manufacturing Industry would have different business needs as against a Pharma industry or a Retail. The requirements (needs & wants) are in line with how a particular industry typically functions, what are its basic market demands and the emerging trends in that industry. E.g. efficient JIT setup would be very close to an Auto industry while for a Pharma industry the main focus would be FDA compliance as well as Track & Trace capability. For a Retail & CPG industry effective DSD setup, traceability, efficient Transportation are of prime importance. Each Industry segment is different and so are their needs. These specific business needs must be ably translated into the supporting IT landscape as well. The team that manages the IT function therefore, has a responsibility to support, maintain & enhance the system in line with the needs of the organisation.

Now the market is offering products for better efficiency, better results but there is a gap in terms of efficient brains and hands to deploy these products most effectively. To effectively utilise the Industry specific features offered by an ERP package, the person managing the solution has to first know what the typical industry requirements are. Only after appreciating the industry needs, he can translate those into the system configuration. So the teams that manage the IT landscape with respect to business process mapping, process enhancements, integration as well as uninterrupted availability and hardware planning need to be aware of the business norms, along with IT / software requirements. Business awareness helps the teams to plan, devise & suggest new solutions which support business aspirations, leading to overall enhanced efficiency. The business understanding also helps one talk "business language" rather than technical language. A consultant who understands the importance & dynamics of "Product Promotion" would only be in a position to design an efficient IT system for successful Promotion Planning & Execution, in a Retail / CPG Industry scenario. As such, it adds a great value if the IT consultants are exposed to and trained on the Industry business knowledge (apart from the core IT system / ERP package).

SAP started with a single, integrated solution and continued initially with 'one ERP for all' approach, however, over the last few years they have launched 21 industry specific solutions.  This is because, as stated above, each Industry segment is different and so are their needs.  But now, to exploit these newly added features for a specific industry, the consultant configuring the system must first know the business. For this, the Service Providers who maintain these IT and ERP systems need to have specially trained consultants who can understand "the particular" industry business well. This not only helps exploit available ERP features but also promotes sharing and implementation of Best Industry Practices.

In recent times, new license sales for traditional products have been declining, while there is a significant increase in Industry specific products license sale. This clearly shows that Industries are now more concerned about and interested in what suits them best, rather than what's available in market. So, an "ERP Expert having specific Industry knowledge", along with his IT expertise, is an asset to the industry.

In the next concluding Part-III of this blog, I will share my thoughts on how IT Service providers and Industries can address this need of the time.

Posted by Rajashri Telkar at 4:38 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )