Sweet Ovations' first experience with SAP hosting didn't exactly jive with its name.
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The company had to look for its own SAP hosting and support services after its parent company was sold to a private equity firm. The company did its homework when selecting the initial SAP hosting provider – including getting references from other SAP customers.
But major problems ensued -- the provider, which Sweet Ovations declined to name, being unable to back up the system.
Sweet Ovations has since turned over responsibility to another provider -- Symmetry, based in Milwaukee, which also handles its SAP Basis support. Sweet Ovations uses Symmetry to host R/3 4.6c (it's currently working on an upgrade to ECC 6.0). Symmetry runs Sweet Ovations' SAP for financials, inventory management, warehouse management, profitability analysis, sales and distribution, quality management, environment, health and safety, and production planning. It also runs a BW database.
More companies are turning over their SAP applications to hosting providers, seeking cost savings achieved through economies of scale and better leveraging of the skills they have on staff for business-critical projects. But selecting an SAP hosting provider and ensuring a successful SAP hosting engagement can be challenging.
First, organizations should check out the references not just from the provider in general but the actual data center location where the applications will be hosted, according to Joe Cleary, Sweet Ovations' vice president of finance, who also handles IT matters for the 200-employee, Philadelphia-based company that sells the ingredients for sweets.
Sweet Ovations got plenty of references from other SAP customers that used the first hosting provider they signed on with. But the company neglected to check whether the actual location it chose for a data center had experience hosting SAP, Cleary said. Sweet Ovations instead chose the data center location based on proximity, thinking that a data center close to its offices would reduce latency issues.
"Really make sure that the very location, not just the company, the location you're hosting the system at is fully prepared to handle a role and a job of the complexity of your system," Cleary said.
In turn, consider handing SAP hosting and Basis support over to the same provider.
The problems with the original hosting provider were actually brought to Sweet Ovations' attention by the Symmetry Basis administrators whom the company had hired for SAP Basis support .
"There is a lot of integration between hosting and Basis," Cleary said. "Having the responsibility for both parts of that allows us to go to one place for an issue, and work on the whole solution."
Like Sweet Ovations, many SAP customers are finding benefits from buying both hosting and support services from their SAP implementation providers or support providers.
"They get some resource continuity, some process continuity and perhaps some cost advantages," said Liz Herbert, senior analyst at Forrester Research.
In fact, the top SAP managed hosting providers are IBM, CSC and EDS, according to Forrester principal analyst Bill Martorelli.
Sweet Ovations has also found it helpful to have the same hosting and support provider for things like getting a better understanding of the licensing agreements. The company maintains control of the SAP licensing agreements but looks to the Basis team for such information as how support pack adoption will affect the infrastructure.
In turn, in gathering requirements for an SAP hosting project, don't just look at the current database size, Cleary said. Organizations need to have a good handle on the real story around environment, he said. A snapshot of the database size doesn't reflect how dynamic the environment is, how fast it's growing and challenges at certain times of the month. Sweet Ovations hired a technical IT consultant and enlisted help from its former parent company in identifying these various parameters of its existing systems. This is crucial information for ensuring that organizations get the right response to RFPs.
"Have a good solid understanding of the current as-is environment and think about where you're going with the data center," Cleary said.
When negotiating the contract, make sure that the platform selected from the SAP hosting provider will also support an upgraded system, he added.
In turn, every one of these data centers has a different flavor when it comes to WANs and how they connect into them. Look very carefully at the structure and approach to WAN switches, as well as the connection between the organization's WAN and the data center to ensure that it's a clean connection, Cleary said.
"That seems to be the longest line item in the [negotiation] timeline, getting that connection together," he said.
Finally, don't be afraid to relinquish control of SAP.
A lot of people are afraid to give up control of hosting the system themselves, Cleary said. But Sweet Ovations felt that its SAP systems – which run multiple locations of its business – were best entrusted to a specialist, leaving the company free to focus on its core competencies.
"Even if there are hiccups at one location, other locations go along as if nothing had happened," he said. "[Symmetry] can bring resources and talent to the hosting situation all the time. We couldn't possibility have 24/7 staff."