Top 7 Hidden SAP Support Expenses: #3 - #5

Last week I discussed SAP support costs #1 and 2: Water cooler creep and Upgrades. This week I will be covering costs #3-5. These points focus mainly on employee effectiveness and productivity. Please leave any comments below if you agree/disagree or have some additional thoughts on these 3 bottom-line-sucking costs if not properly managed.

#3: Maintaining Employee Training & Certification

SAP software is a moving target when it comes to the expertise needed to support all of the modules a company has implemented. Your people might have been very good when they were supporting a certain version. However, when it is time to upgrade or install new functionality these people need training and certifications for each new version. This does not include the costs associated with ASUG and Sapphire events for additional education which are cost that must be added into the overall support of SAP. Training has never been cheap and if you have to train more than a couple of people it becomes a very large line item in the budget. Then, as we all know, during difficult times training and events are the first things cut from the budget. Now we have is a staff that is: 1. not happy and 2.  The people are concerned how they will keep their individual skills marketable (See number 6 next week).

#4: Productivity Levels Vs. Inconsistent Workloads

Productivity is sometimes very difficult to measure in IT at the enterprise level. Unlike their counterparts in manufacturing that can show efficiencies in labor and overhead costs at the lowest common denominator for every product produced. There are many moving parts in an SAP shop and basically there are spikes of demand that can be difficult, if not impossible, to forecast. The real answer is that SAP resources are normally staffed for peak demand, therefore having a lot of people (equals fixed costs) doing nothing, searching the internet, attending countless meetings, or just not being productive 8 hours every day.

The question has to be asked; if you are not implementing and you are not upgrading what are all of those configurators, programmers, BASIS, DBA’s, and managers doing every day? It only makes sense that once in support mode that you need to follow a manufacturing and/or distribution model to have staff to handle mission critical areas and out-tasking the rest. It is therefore financially feasible to create with partners a flex and surge model to handle the normal helpdesk functions with the ability to surge when the demand for projects, upgrades or business changes increase. In this model, you have total control of dollars spentand justification for the return on investment. It is difficult, and maybe uncomfortable, for companies to let go of the way they are doing things today. However, it could save hundreds of thousands of dollars and be much easier to manage the spikes in demand over the long term.

#5: Productivity of Generalists

In Productivity Levels vs. Inconsistent Workloads, the discussion is geared more towards SAP staff associated with a particular module like FI/CO, SD, MM, PP, CRM, BI, Basis, ABAP, etc. In the area of generalists, SAP organizations can be top heavy with management staff which is natural due to the career progression path people need to have in a company. A couple of reorganizations in a short matter of time can result in a company having an applications manager, technical manager, solutions architects, data architects and leads for each module. Nobody wants to argue that expertise is needed in all of these areas but again (see number 4) if your company is in support what is the real utilization of these resources at any given time?

When you look at the cost structure and adding it to the overall budget of supporting SAP you would have to question the real return on investment for full time resources. Again, these talented resources can be found and utilized on demand if you move to a flex and surge model (see Number 4). SAP management expertise can also be part of an Outtasking model where specific SAP executive management resources come in and assist the company with strategy and planning as needed. Outsourcing to control costs is the future for IT because of the complexity of the solutions and unfortunately the business still sees IT as a cost center and wants more of a utility model that can be more predictable and cost effective.

Once again, I would love to hear any thoughts you may have regarding these 3 hidden SAP support costs. SAP can be a great tool that can transform your business by creating scalable efficiencies and business agility. However, in order to ensure benefits outweigh costs, organizations need to consider SAP throughout the entire cycle, from implementation all the way through continuous support! Stay tuned next week for my final 2 hidden SAP support expenses and the conclusion of this series.

- Mike Kerrigan, Managing Principle, ERP Services