R3Now.com – No Nonsense Answers for IT Leaders – Results Oriented ERP, SAP, and IT Solutions: “It’s Time to Evolve the SAP SI Delivery Model” plus 4 more |  |
- It’s Time to Evolve the SAP SI Delivery Model
- Striving for a Customer Focused Approach to Innovation 1 of 3
- IT Outsourcing, Off Shore Support, Cost Cutting and IT Department Changes
- Outsourcing Your SAP Application Support
- Social Media Fads and the Risk to the Enterprise
| It’s Time to Evolve the SAP SI Delivery Model Posted: 15 Jun 2010 08:25 AM PDT 
Skip the article, read the comments… I pledge to write more about this in a later post. For the moment, I wish to concentrate on what I believe is at the heart of chronic questions about the efficacy of SAP systems integrators: the need to move to a more evolved delivery model. When I began working in the world of SAP in 1995, there was no SAP (or ERP) specific delivery methodology extant. Most of the larger players were using modified versions of the 1980's style Design Build Run methodologies which unfortunately did not at all address configurable software across entire business processes. Further, these methodologies placed a very high emphasis upon the As-Is phase (which I coined the consulting partner's Retirement Fund phase). In the spring of 1997, SAP itself unveiled Accelerated SAP (ASAP). Despite the fact that the earlier versions of the methodology were shallow at best, there was an immediate benefit: all systems integrators began working to mutually understandable "sheet music" (which happily included a brief and intelligent verse of As-Is analysis). By 2001, through a combination of more years of field experience and SAP's iterative improvements to the methodology, we began to see better field results, more on-time implementations, and greater client satisfaction. In addition to the improvements to ASAP Focus brought by SAP, the various partners have all added tools and layers built around the core of ASAP in order to differentiate and to address field aspects that may not be addressed in ASAP. In order to cut through the fog regarding "good" or "bad" implementations, I led surveys in 2005 and 2007 regarding the relative field performance of the leading SAP systems integrators. Input from 1,502 clients of the six leading SAP systems integrators for projects completed from 2003-2007, yielded over-all positive results with an average over-all client rating of 6.8 on a scale of 1 to 10 in which 6 equals "good". Given the high number of participants in these surveys, I conclude that the SAP consulting fields are not the mess that many make of them. The field performance of the systems integrators varied according to type of project (new implementation, upgrade, optimization, roll-outs), client size, and project size. Accenture had world-class scores for its very large clients and, um, nothing to write home about for the others. Deloitte had persistently low scores for new implementations but enviable scores for the other types of projects. CSC was consistently mediocre, BearingPoint was all over the map. Only IBM had consistently decent levels of performance. Having said that, I do believe that the final results of too many SAP engagements are disappointing. While over-all scores were good, many of the sub-results were less sunny-side. One key provided by the 1,502 clients: the systems integrators quite frequency go off the reservation and do not adhere to their own methodologies. Another is that the focus of most projects is adhering to time and budget. This is mostly the fault of clients and the flawed nature of Total Cost of Ownership (given that it provided only one side of the necessary measure of ROI). The research also shows that, without a clear notion of how an SAP project is going to bring measurable value, clients behave in ways that hinder ultimate success. The syndrome is: I Said I Wanted Chicken But Now I Want Steak and Later I Will Be Happy to Have a Hot Dog. I said I wanted chicken: while choosing a systems integration partner, clients look for a balance between potential performance and cost. Now I want steak: once the project starts, clients add scope and extend the aims of a project I will be happy to have a hot dog: fatigued and running out of budget, clients stumble to go-live. ================== Published with permission from the Author, Michael Doane who runs an EXCELLENT site devoted to how SAP customers can get the most from their implementations. The original post can be found here: http://sapsearchlight.blogspot.com/2010/02/its-time-to-evolve-sap-si-delivery.html And his site is here: http://sapsearchlight.blogspot.com/ ================== Related Posts: |
| Striving for a Customer Focused Approach to Innovation 1 of 3 Posted: 26 Mar 2010 03:57 PM PDT 
If your company does any kind of innovation, how would you describe it?
The Common Approach to Innovation, Generally Stoic or MaelstromThere are generally two separations around innovation in practice. 1) There is the "continuous improvement" type of "innovation" which is incremental or stoic. 2) There is the complete "free for all" type of "innovation" that relies more on being creative for creativity sake and tends to be a chaotic maelstrom. Think about it, improvement, creativity, and innovation are distinct words with different meanings even though each can include components of the other. Innovation generally requires application of the creative process, not just the creative process in a vacuum, and it requires the incremental process of improvement. Therefore I am proposing an approach to innovation that uses an innovation narrative and early prototyping to achieve new products or services with limited risk and cost. Stoic Innovation (This is Really Continuous Improvement)A number of product oriented companies rely heavily on the "stoic" method to innovation. They make incremental design or usability changes to existing products and product lines. This approach has some merit as it is generally risk averse and has application in mature markets, commodities, or areas where there is little competition. This approach is best seen in many auto manufacturers in between major model overhauls. They will make incremental changes and improvements to an existing model for roughly 8 – 10 years and then make a complete departure with a new platform or model. Innovation Maelstrom (Much Ado About Creative Chaos)Some academic institutions, several Fortune 1000 companies, and those who buy into unscrupulous consulting models that promote blue sky approaches to design or innovation generally adopt the maelstrom approach. Although this approach is capable of producing "blockbusters" it is very high risk, very expensive, and has little application outside of training exercises and academia. Those "blockbusters" that are produced are rarer than winning massive lotteries. The underlying problem with this approach (as anything other than a training exercise) is the deliberate disconnection of brainstorming and the creative process from constraints or limitations. While the creative juices may flow, and even a few truly breakthrough innovations, inventions, or novel approaches may emerge, the results are rarely (if ever) cost effective. They are usually preceded by huge budget expenditures and string after string of "oddities" that have little or no useful application. Here are a few blockbuster examples of innovative design work that eventually paid off, but not until mountains of money was spent to devise and develop useful applications. Look at the laser, invented in Bell Labs which took some 20+ years to find commercial uses for it. Or what about the original IBM tube based computer, commercial application took nearly 30+ years to begin to gain widespread business acceptance. What this points out is that innovation for innovation sake is not a productive or cost effective use of a company's limited resources. And although both the laser and the computer had dramatic, life altering impacts later on, it took many years to realize the benefits and massive amounts of expenditures. Neither of these innovations was very effective before another invention – the transistor – was able to animate them and allow for any practical productive use. Stretch Innovation (Striving for a Future State)The third approach, which I personally consider the most balanced of the three between achieving great results without too much risk, and without too much cost would be the "stretch." This approach relies heavily on the relentless pursuit of an idea or ideal. But to bring the idea or ideal to life it relies heavily on the ability to draw key information out of your customers, or from the marketplace, and then create a special "narrative" about the new state of the product or service. Think of it like an ideal state elevation, rather than a full blown blueprint, but committed to writing. Just like the artist's rendering, or the architect's elevation does not include all of the construction details, a good narrative of the future state should produce something that people can picture and work toward. Related Posts: |
| IT Outsourcing, Off Shore Support, Cost Cutting and IT Department Changes Posted: 22 Mar 2010 10:15 PM PDT 
IT departments generally have not focused on customer acquisition, customer retention, profitability or revenue generation and have become commodities to be outsourced. Imagine a presentation to the Board of Directors about how much money the company could save by outsourcing the sales and marketing functions. I mean come on here, look at the massive budget savings! If you were making that presentation I would suggest you have your resume in order and already have another job lined up. Can you imagine outsourcing discussions with that same Board of Directors if IT were seen as a strategic business partner, a business partner integrated with and indispensible to the revenue side of the business. What if IT were actually considered a very real or even a pseudo profit center? Not only would outsourcing be off the table for the IT functions that are directly related to revenue generation, but budget discussions and project ideas would be much easier to navigate. [FN1] Why Has IT Become Nothing But An Expensive Cost Center?The typical IT script has created an environment where it is seen as an expensive and expendable cost center. For too long Information Technology departments have focused on applications, programs, and business support to address process improvement, operations, and quality. These are all the cost side of the business and only look at "operational excellence." Once the bulk of the business processes are set up, running, and stable all those significant IT labor costs make great targets for reducing cost and overhead. And from there the next step is to outsource, reduce staff, or off shore. Is "operational excellence" important? Of course it is. But after integrating and automating the "back office" functions or operations of the business IT must then move on to product or service innovation and also revenue. Without a move to the key revenue generation functions of the business IT will forever remain an expendable cost center rather than a key business partner. Why Won't CRM Applications Work to Change the IT to Business Dynamic?A few of the applications in the market have tools and resources to help structure the customer acquisition and customer retention processes. And some of them have some decent rules-based tools for automatically evaluating, and then stratifying customers. There is application functionality in a number of major applications, and several niche applications for handing special offers, marketing programs, or other incentives focused on customer retention or increasing sales conversions. What is the CRM Problem, Why Isn't it Delivering?There are three primary reasons: 1) clueless "CONsultants" who may have some exposure to a CRM application but little or no business knowledge (they lack an entrepreneurial perspective) [FN2]; 2) there are few applications, if any at all, which integrates and then actively engage customers in the business they are buying from [FN3]; 3) sales and marketing programs are poorly structured and designed and do not allow for good sales process analysis. [FN4] In the SAP CRM space a lot of the benefit that is lacking is because of the number of frauds and fakes in the marketplace. They entered the market when the applications were immature and experience requirements were low. They came in droves with fake resumes, fake credentials, and little or no concept about sales and marketing. [FN4] Nearly all CRM applications are focused on sales processes, measuring conversion or retention, and all of the other sales process areas. Software and IT applications do not directly engage the customer in the new product or service development cycle, quality management, marketing, feature or benefit development, or in working with them to address their product or service frustrations. Archaic customer service centers serve as a "touch point" to the customer but beyond that customers are not intimately involved in, or incorporated into the business product or service lifecycle. Conclusion on IT as a Cost Center and IT OutsourcingUntil IT starts to more aggressively focus on the business side of the equation (like revenue, profitability, customer retention, customer acquisition, product development and engineering, etc.) then IT is little more than a dispensable cost center. This model shows the IT application landscape of the future. It also shows the CIO role as a bridge between the CFO and the CEO, or between lagging and leading indicators of business performance and success.
source: Future Technology Landscape Alignment for the CIO, IT Director, or Key IT Decision Maker Once again I will reiterate one of my opening paragraphs here;
This model shows IT in precisely this way. Application alignment is focused on the customer–, customer retention, customer acquisition, revenue generation and profitability. Footnotes and Resources about IT Strategic Alignment with Business – Customer Retention, Customer Acquisition, and Revenue Generation[FN1] See these additional resources about business to IT to customer alignment: Changing the Direction of SAP, ERP, and IT Applications to Focus on the Customer and Innovation CIO, CFO, and CEO Alignment – Why ROI is Lacking from Today's System Landscape [FN2] Many businesses and Corporate IT departments have been sold a “bill of goods” with little to show for their investment CRM, ERP, BI, and IT Investment — Where Do You Find the Business Benefit? [FN3] See the customer integration model for the IT landscape of the future which integrates the customer into the business process. Business and IT Alignment – Integrating Technology and IT Spend with Business [FN4] There is a fundamental change needed in how performance is perceived and measured to understand how to make a difference. Designing Startup Metrics to Drive Successful Behavior Related Posts: |
| Outsourcing Your SAP Application Support Posted: 20 Mar 2010 12:29 PM PDT 
IT infrastructure was value add as long as something new or better could be developed to provide cost savings, efficiencies, improvements, or as many commentators note “better, faster, cheaper” solutions. Now that the “last mile” of technology is becoming more costly with lower returns IT departments are moving into full blown maintenance mode. They are becoming the modern day “mail rooms” to be outsourced for lower cost to focus on more fundamental or core business requirements. IT departments have allowed themselves to become a type of “administrative” overhead and a key target for cost reduction. This outsourcing trend has focused primarily on infrastructrure tasks like network monitoring, database administration, e-mail system maintenance, OS and Office application rollouts, etc. With all of the hype around “cloud” computing, or what used to be referred to a few years ago as “ASP” (Application Service Providers), or application hosting this trend will accelerate. I see this same trend beginning to occur in the business application space as well. The business application functions are moving into maintenance mode and are slowly being outsourced. Those functions which support the supply chain at many companies have automated, streamlined, and process improved (i.e. “better, faster, cheaper”) so that they are now mature. With that maturity the last mile of improvement becomes cost prohibitive with little payback. For more insight on this topic please see the following posts: Competitive Pressures and Value Propositions, Is Lean the Answer? Business and IT Alignment – Integrating Technology and IT Spend with Business Operational technology adoption generally follows a fairly consistent adoption model:
As soon as maintenance operations begin to stabilize, and as the processes and support requirements are finalized the IT area becomes a prime target for outsourcing. Future IT Application Alignment and TrendsThe next few years of the application space will see a MAJOR separation of consultants, vendors, applications, and solutions around operations, sales, and new products / services. Forward looking IT organizations will be those who can move into the “value add” areas of the enterprise to support and automate sales, marketing, engineering (i.e. innovation functions), etc., the losers will be those who continue to focus on operations after the initial “low hanging fruit” has been picked. As an IT leader if you want to avoid obsolescence and outsourcing then it is important to retool your organization with the best and the brightest to begin focusing on the customer and innovation portions of the business. Once operations are well underway the next phase for the successful IT leader who does not want to face outsourcing their department, and possibly their own job, is to partner with the sales, marketing, and engineering sides of the business for long term success. The Operational CIO must Become a Strategic CIOThe past business application focus has seen a focus on finance and operations. Key metrics in the past have included improving month-end close times, reducing various supply chain cycle times, and overall view of operational and financial data in real time. These are all the lagging indicator side of the business which is focused on the CFO / COO side of the business. It is time for application vendors like SAP as well as consulting companies to begin focusing aggressively on the sales, marketing, and innovation / engineering portions of the business. Or, in business terms, the leading indicator portion of the business. The successful CIO of tomorrow will be the one who can build a bridge with technology solutions between the CEO and the CFO / COO. Those CIOs (and by proxy their subordinate IT leaders) who are able to make that transition to covering the holistic business will see their career prospects flourish. Those who don’t will be marginalized, stagnate, and find tremendous budget pressure slowly collapsing their organizations. I’ve penned a few things on this topic as well which explains the changing dynamic for the CIO and the future of the application space. Here is a short piece that explains that new relationship in more detail: What is the Proper Relationship for the CIO, CEO, and CFO? A permanent change in today’s business and consumer landscape is leading to a permanent change in IT staffing and project work in SAP and all other commercial applications. You can either plan for it, adjust to it, and then learn to work within the coming paradigm or you can be run over by it. Global economic conditions and the near financial collapse have created a permanent change in how businesses operate and customers purchase. Financial institution regulatory controls have closed the door to many of the previous credit holes that allowed some of the out of control speculative and self-indulgent spending by consumers. That trend is not likely to change for many years. It is even less likely to return to the heady days of free flowing credit and consumer spending binges. Related Posts: |
| Social Media Fads and the Risk to the Enterprise Posted: 17 Mar 2010 05:44 AM PDT 
Today’s IT landscape is filled with hype around Web 2.0. While collaboration is a key forward looking initiative for any organization it requires a specific purpose and goal. Without a clear direction and purpose for social media initiatives they are at best a distracting fad, and at worst an enterprise disaster. Anyone who carefully and objectively looks at today’s “Twitter” and “Facebook” applications can see that they are a fad. Popular today, and they will be around for a while, but like all “social” outlets they are a fad waiting for the “next big thing.” Are they important to the IT organization and future? Yes, but ONLY in the context of a genuine and legitimate business purpose. Social Media Study Shows Current Tools Have Little Value In the EnterpriseThe other day, while on a flight to a client site, I picked up the airline magazine and read through a Harvard Business Review synopsis of an experiment done with Facebook and an Austin based company. Although very upbeat about promoting the wonders of using social media there is little real evidence of consumer behavior changes that could be attributed to Facebook. First, a little over 2% of the thousands of customers the company contacted actually joined Facebook. The ones that did were already “raving fans” of the company. They did slightly increase their overall spend BUT, it is really unknown if the increase in spend wasn’t more related to the offers and promotions on Facebook rather than the use of the medium itself (in other words, would other marketing channels to provide similar offers have produced similar, of even better results?). Very few new folks were added to Facebook over the 3 months of the experiment… Etc., etc., etc. There is little value to the organization in any form of customer conversion and that the bulk of “fans” for a company on facebook are those people who already like the company. It is questionable if the medium had any bearing on changing customer buying behavior beyond other types of marketing–, it’s efficacy as a sales source is debatable. So, in the end, Facebook and other social media outlets may just be all hype. And keep in mind, in the particular experiment there was a business purpose, and there was promotion and coupon activity. So if in the end it turns out to be an effective marketing medium it must be looked at as a small part of an overall marketing portfolio with limited appeal to customers who are already some of the best buyers. The next question would be whether or not there is any cost / benefit. The facebook study confirmed my suspicions about the “value” of these type of social media outlets in the enterprise. That does not mean that some types of social media do not have a clear place in the enterprise, only that today’s hype is overblown and risky to business. Social Media and Collaboration Must Have a Specific Business Purpose to Have Any ValueIn a nutshell, as I have written “Collaborative initiatives that are divorced from a specific business purpose are disasters waiting to happen.” From Collaboration to Innovation to Market – Toward a Working Model I’ve been working with collaboration technologies as a Knowledge Manager for about a dozen years now. I started with collaboration tools in the enterprise long before the hype and the Web 2.0 fervor and I say the hype is all HOGWASH! Based on my years of collaboration experience, a short excerpt from a recent post: ERP III – Is the Integration of Collaboration the Future of Enterprise Applications
What say you? Are you considering social media in your enterprise? If so, does it serve a specific business purpose or objective? Related Posts: |
It's been a year since the recently-departed Leo Apotheker had an infamous outburst of criticism of, specifically, Accenture and IBM in the realm of SAP consulting. This highly-publicized moment led to an avalanche of largely uninformed blog posts (one gentleman cited SAP translation problems from the 1990's that have long since been resolved). One over-arching theme that emerged was the need to certify SAP consultants even though various forms of such certification have been in existence since 1993. My own, belated, contribution to this particular point was a post about certifying SAP implementation partners, not just the individual consultants. (point to post).
Businesses everywhere are looking to shore up their bottom lines by cutting costs. As a result, cost centers, like IT departments, are prime targets for outsourcing and off-shore maintenance. The typical business script is that as the IT organization moves into maintenance mode that cost center with high overhead becomes a prime target for reducing costs. 
I believe it was Peter Drucker who opined about outsourcing and then wrote a book on the subject. The original premise was that low level administrative functions, which were not a key or core focus of the business (like mail rooms) could be outsourced. Fast forward several years and business has learned that virtually all “non-value add” functions can be outsourced.
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R3Now.com – No Nonsense Answers for IT Leaders – Results Oriented ERP, SAP, and IT Solutions: “It’s Time to Evolve the SAP SI Delivery Model” plus 4 more Part 1
R3Now.com – No Nonsense Answers for IT Leaders – Results Oriented ERP, SAP, and IT Solutions: “It’s Time to Evolve the SAP SI Delivery Model” plus 4 more Part 1
R3Now.com – No Nonsense Answers for IT Leaders – Results Oriented ERP, SAP, and IT Solutions: “It’s Time to Evolve the SAP SI Delivery Model” plus 4 more Part 1
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