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After you say 'I do' to ERP

Analyst Michael Doane says there's something you should be doing to get more from your ERP system.

LONDON -- Michael Doane may be a technology analyst, but when he addresses a crowd he actually sounds more like...

a relationship counselor.

After all, Doane likens his area of expertise -- post-implementation ERP -- to a 25-year marriage. And, as with a lot of couples preoccupied about wedding details, Doane says that many companies enter into SAP installments geared up for the go-live date, only to find themselves ill-prepared for a lifetime with the software.

Doane told more than 200 SAP users attending the inaugural Conference Europe that they'd better try to make the most of their SAP implementations because -- for better or worse -- they're stuck with the software.

"Once you've married SAP, there's no divorcing SAP," said Doane, vice president and service leader at Stamford, Conn.-based Meta Group.

In fact, breaking up isn't just hard to do, it's never been done. Doane said that no company has ever implemented SAP's hefty ERP suite and then replaced it with an application set from another vendor.

While he evangelizes the value in planning for post-implementation, it seems few are heeding Doane's words. Of the 204 firms running SAP ERP that Meta Group recently surveyed, only 34 said they realized ongoing benefits, and very few even planned to measure long-term success.

Doane said the causes are numerous: implementation teams break up after go-live, business-side employees hand over all ERP responsibilities to IT, and objectives don't evolve over the software's life. Doane said that ERP gets treated like "old IT."

"IT is about technology; ERP is about business," Doane said. "Go back to senior management and sell them this idea."

He said companies can avoid these pitfalls by building in an extra 3% to their ERP consulting budgets and tacking on additional project time to create a center of excellence (CoE), a business-led unit responsible for driving continuous ERP improvement, optimizing systems usage, maintaining and supporting the software, and overseeing change management.

In short, the CoE keeps ERP on the front burner. The team invests in ongoing user training and, by proving the business benefit of SAP software, spurs future technology investment.

Doane illustrated his point with an example: one company was losing thousands of dollars because a manager was approving sales orders only at day's end, leaving some orders sitting in the queue for more than 10 hours. A CoE could detect lags like this one, amend the business process and cut operating expenses, Doane said.

The positioning of the CoE is also key. He recommended that it be called a "center of excellence" or "customer care center" to lend some cache and entice business-side employees to the staff. He added that CoE staff should not report to the chief information officer but to a non-IT executive.

That subtlety is not lost on JJ Landa, financial systems manager at Birmingham, England-based telecommunications firm Sendo International Ltd. He's a trained accountant who is a member of a so-called "mini center of excellence," a four-person dedicated SAP team that reports to the company's chief financial officer and oversees the company's 300 SAP users.

Landa said that, as a business staffer, he gets "independence and added respect." Six months after go-live, his group is responsible for ongoing development, bug fixing, training and internal business consulting.

Despite the apparent benefits, Meta Group research shows that only about one in five SAP customers has a center of excellence. That means SAP's current installed base -- which Doane said outnumbers those who will implement its software during the next 10 years -- will need to compile a strong business case for setting up a center of excellence. Doing so after go-live is often costlier and logistically tougher than building a CoE into an implementation plan.

That's a problem that Richard Stewart, program manager at the United Kingdom Hydrographic Office in Taunton, England, is facing. Several years into his company's SAP implementation, he feels the company could benefit from a dedicated SAP team.

"We do need some sort of center of excellence," Stewart said. "We are lacking in knowledge of what the [SAP] system can do for us. But trying to justify pulling people out of business in this economy would be tough."


Coverage of Europe conference

Decision Maker: Top 10 SAP implementation mistakes to avoid, part 1 webcast: Life after live with SAP: Seven steps for post-implementation

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