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SAP customers slow to build competency centers

With their numbers growing over the last several years, SAP competency centers are finally getting some respect. But some customers are still wary, and industry analysts say it's their loss.

For Wisconsin-based consultant Christopher M. Carter, helping a company build a SAP Competency Center is like building...

the cement foundation for a sturdy building .

"The cost savings and the internal employee growth and satisfaction are considerable and long lasting," said Carter, whose company, Carter Consulting, Inc., is currently helping a grocery store chain build a competency center for its SAP enterprise resource planning upgrade.

The cost savings and the internal employee growth and satisfaction are considerable and long lasting.
Christopher  Carter
consultantCarter Consulting, Inc

SAP said that by the end of 2003, its customers had formed more than 1,100 competency centers globally. Simply put, these centers are centralized SAP knowledge bases, made up of people within an organization who are dedicated to increasing the business benefits out of the software. The number of centers increased by 20% in 2003, the company said. Still, according to many consultants, analysts say customers are too slow to realize the potential benefits.

A recent Gartner Research sampling of 79 global SAP customers showed that only 16 of them, or about 20%, established a competency center. Those that did not establish SAP competency centers said they spent about 20% more in total operations per user than those who did establish such centers, said Brian Zrimsek, vice president of research at the Stamford, Conn.-based research firm.

"The initial challenge is really articulating the benefits of it to the entire organization," Zrimsek said. "It's typically bigger than people initially think it is because people find that to get it right, you have to invest a lot of time in organizing it."

Zrimsek also said companies often struggle with organizing and maintaining a competency center. One problem is retaining the right staff to keep the center organized, he said.

Meanwhile, SAP likes the concept so much it has built it into its service contracts. If a customer builds a competency center, the maintenance fee is not based on the list price of the software, but the net price of the license contract, said Gregor Preidl , manager of SAP's customer competency center program.

"The real value is that the customer is able to support end-to-end business processes and drive continuous improvements within an organization," Preidl said. "The task of the competency center is to support the business processes and bring down the costs as efficiently as possible."

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Carter agrees. By establishing several teams of employees interested in the technological direction of the company, many of Carter's clients have enjoyed fewer software problems, and a more competent staff.

"If a company does have a competency center, they will truly have an environment that is in good shape," Carter said. "They truly have a plan, an educated direction and an educated staff."

Building successful competency centers

To be successful, a competency center should be made up of teams focused on three areas, Zrimsek said.

First, the business process and functional support teams are made up of people familiar with the packaged applications.

People on these teams understand how the software packages work and how they are configured for the business. This group would be the first line of support when calls come into the help desk from the user community on functional issues.

Second, the development and integration teams focus on any custom development needed, such as reports and layouts. These people mostly involve themselves with the details of the data warehouse and take their direction from the folks on the function and process team.

Lastly, the operations teams are responsible for operating the application environment. These people move applications from testing phases to production, and apply patches when needed.

As for Carter, building a team of a company that follows the direction of a company's software life cycle is about creating stable software systems with fewer complaints and helping end users feel good.

"They have a few key people who truly care about the environment and the company," Carter said. "They'll avoid having what we call a dirty system with unplanned outages and software integration problems."

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