This guide, which is designed to help SAP administrators through an SAP ECC 6.0 upgrade project, explains best practices for SAP ERP upgrades and lists resources for establishing an SAP ERP upgrade strategy.
The first thing an SAP administrator should know is whether their company is ready to upgrade, and if so, how to complete an SAP ERP upgrade audit to determine which SAP components to upgrade.
This guide will help SAP admins discover how to build a successful business case for SAP ECC 6.0 upgrade projects, how to get management on board for the project and how to make users aware of ERP upgrade benefits. Readers of this guide will also learn how to perform an SAP ERP upgrade assessment, how to address upgrade challenges and how to avoid upgrade pitfalls. They can also see how other SAP users have benefited from ERP upgrades by exploring the section on SAP ERP upgrade best practices, tips, advice and lessons learned.
|Making an SAP ECC 6.0 upgrade assessment: Are you ready to upgrade?|
Knowing when it's time for an SAP ERP upgrade
There are several questions to ask when considering an SAP ECC 6.0 upgrade project. The major question is whether you really need to upgrade to SAP ECC 6.0 in the first place. It may be wise to go through a systems management checklist of items to consider for an ERP software upgrade project, such as:
- Do you need to upgrade?
- How much will the upgrade cost in terms of time and money?
- Whom will the upgrade affect?
- Which components will the upgrade affect?
- What problems will arise if the upgrade fails?
- Do you have SAP support for the upgrade?
- Can you back out of the upgrade if you run into problems?
- What is the timeframe for the upgrade?
Read how SAP users have historically formulated SAP upgrade plans. Upgrades from SAP R/3 4.7 should be to the most current version of ECC, ECC 6.0. The upgrade tools are built to cover several source releases and to "bypass" versions. Upgrading to ECC 5.0 before 6.0 will only increase the cost of the upgrade and the need for downtime.
Assess your resources before an ERP upgrade project, including who will be needed on the ERP upgrade team.
In turn, consider whether you'll need assistance for your ERP upgrade from an outside SAP consultant or support from SAP. Whether you'll need a consultant depends largely on your organization's internal SAP expertise its experience with upgrades. In most cases, SAP consultants are engaged for the duration of an implementation project.
The benefits of hiring consultants include help with upgrade strategy and business process design, as well as with configuring and customizing the software. Consultants can also share best practices for change management.
SAP consulting will almost certainly be required in four upgrade or migration situations:
- The upgrade is steep (i.e., from 4.2 to ECC 6.0).
- Your SAP applications are heavily customized and the customizations may not be upgradeable.
- The upgrade includes additional extended applications or a migration/rollout to other sites.
- SAP systems are heavily interfaced to other internal or external business applications.
Creating an SAP ECC 6.0 upgrade business case
When looking to upgrade, you'll want to make a successful SAP ECC 6.0 upgrade business case, pinpointing how you'll benefit from the upgrade and why the upgrade is needed in the first place. But if you're struggling to build a business case for an SAP ERP upgrade in this recession, you're not alone.
Only one in three SAP customers have upgraded to ECC 6.0. Of those, 90% have opted to do only technical upgrades in order to save time and money.
"I think the economy is going to reinforce the likelihood that companies want to do a technical upgrade," said Derek Prior, research director at Boston-based AMR Research. "The bad news is, there's no business payback for doing the upgrade -- the only thing you end up doing is staying on support. If you're saying [to the board] the business justification is staying on support. . .[t]hey're going to cross you off their Christmas card list."
Still, Prior says there are ways to do a technical upgrade and stay on the board's good side. In terms of making the case on how to make your upgrade succeed, there are steps to follow to make the upgrade proceed more smoothly, such as addressing business objectives for ERP upgrades, preparing the organization for the upgrade, talking to companies who have already performed successful upgrades, and even making training for the new system a priority.
Even though training is a low priority for some companies, many long-time SAP customers still invest heavily in training because they have learned the importance of training the hard way, but these companies are the exception, not the rule.
Of course, the case for upgrading might be more straightforward if it's simply a matter of the time being right. Some customers upgrading to SAP ERP 6.0 are doing so primarily because they've reached the end of their extended support agreements for R/3 4.6C.
"When you survey people, functionality is the No. 1 reason [people say] they're upgrading," said Jim Shepherd, senior vice president of research at Boston-based AMR Research. "And they're always lying."
But there are other reasons to upgrade to SAP ERP 6.0 besides being pushed off R/3 4.6C, or even 4.7. Foremost among these is consolidating software instances. This will facilitate a better return on investment (ROI), and allows faster and more accurate production of orders, consistent customer experiences, decreased error rates and facilitated compliance, according to Ray Wang, principal analyst with Cambridge, Mass.-based Forrester Research.
Forecasting ROI for an SAP ECC 6.0 upgrade
When evaluating the potential ROI of an SAP upgrade, you should look to SAP to quantify the value. While the features of the upgrade can be attractive, it's up to the vendor to provide the business value of those features, as they can help pay for the upgrade.
There are several areas for finding ROI from an SAP upgrade to ECC 6.0. The upgraded system might have a lower total cost of ownership (TCO). Reduced TCO can come from reducing the number of servers to host the application, lowering database size or using fewer IT operations and support staff to manage the infrastructure.
It may also be that new capabilities from the upgrade streamline business processes, or that availability and service levels are improved. Moreover, focusing on future improvements that an upgrade will enable can also help in forecasting ROI for an ERP business case.
For instance, the project team for the Canadian Broadcasting Corp. knew early on that a mySAP ERP technical upgrade would not result in hard ROI. But focusing on future improvements helped the project get approved. The project team, which included business and IT personnel, built the business case with the future phases of the project in mind to make the strongest argument for the upgrade.
"We positioned ourselves to say, 'Here's the benefit we'll gain in a year, two years, three years down the road, with additional investments," said Stéphane Rivest, director of CBC's financial systems. "But we needed the technology upgrade to take the next step forward."