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ValueSAP Initiative Offers "Life Cycle" Analysis and Support

by Werner Dilzer | SAPinsider

June 1, 2000

by Werner Dilzer, Value SAP SAPinsider - 2000 (Volume 1), June (Issue 1)

In today's rapidly changing economic environment, businesses must continually evolve just to survive. But those enterprises that have brought in Enterprise Applications solutions to maximize the efficiency of their business processes are faced with an additional challenge: What happens when the business processes themselves undergo change? How can the Enterprise Applications remain relevant and effective? For some companies, resolving these questions is a challenge, but for others that have turned to SAP for their solution, there is an answer in the new ValueSAP initiative.

     ValueSAP is a "life cycle" approach to creating and running an enterprise-wide software system - one that recognizes that achieving "go-live" is not the ultimate goal, or even the most important one. Instead, precisely defining the right solution before implementation and continually improving it after implementation are equally important considerations. In fact, the ValueSAP initiative holds that the primary goal for an enterprise's system, such as, ought to be continuous value generation through the entire life cycle of the solution.

     By design, the ValueSAP initiative enables companies to get the most from their enterprise application solution throughout its entire life cycle. In doing so, ValueSAP moves beyond the traditional focus on product solutions, recognizing that in this dynamic Internet-fueled age, inter-enterprise projects using, for instance, can no longer be considered to have a defined start and finish. Instead, an organization must continually review and adapt its IT capabilities to reflect the changing market, customer, and vendor environment. In short, the ability to remain flexible and responsive has become a commercial necessity.

Four-Phase Approach

ValueSAP's "life cycle" approach focuses on four distinct phases: Discovery, Evaluation, Implementation, and Continuous Business Improvement (CBI), as shown in Figure 1. Each phase uses proven methodologies, tools, and content that have been specifically designed to identify an enterprise's key business processes and to measure their value to the organization. Traditionally, SAP has been strong within the Implementation phase - and these methodologies have been further strengthened in ValueSAP - but by expanding the focus to include Discovery, Evaluation, and CBI phases, the entire SAP product life cycle is enhanced, and new value is continually created.

  1. ValueSAP's Discovery Phase and Evaluation Phase help companies identify and define the right IT solution to support their business goals. Using a step-by-step process, these phases articulate an enterprise's business strategy in terms of the human, cultural, technical, and process requirements necessary to achieve it. They assess the financial and technical risks involved. The Evaluation phase helps define how the implementation will be achieved, and incorporates the measurements upon which the implementation's success will be based. In short, these phases together provide the clearest possible picture of what needs to be done and how it will be achieved, ensuring the right things are done in the right way.

  2. The Implementation phase leverages the metrics and indicators defined during the Evaluation phase to ensure that the processes being implemented achieve the desired goals, from the highest to the lowest levels. There are also new layers of tools and activities within the implementation, dedicated to maximizing the quality of the solution. In addition, the Implementation phase also provides data to support the methodology's next phase, Continuous Business Improvement.

  3. The Continuous Business Improvement (CBI) phase is a methodology that checks an organization's business processes and SAP enterprise applications, and provides recommendations on how to optimize their use. In doing so, it enables companies to identify and adopt more flexible business practices to increase their profitability and competitiveness. It also helps companies exploit and optimize their initial investment in SAP and plan for future value-added investments. See page 105 for a detailed overview of the four phases and more on how the stages are related.

Industry Solution Maps and Key Performance Indicators

The key to the success of ValueSAP's new "life cycle" approach lies in SAP's unique industry solution maps and its key performance indicators (KPIs), both of which greatly enrich the tools and methodologies used across the ValueSAP process.

  • Industry solution maps describe key processes within defined industry sectors, as well as the technologies and services required to support those processes. They provide a powerful and useful overview of the organization's primary business processes and their interrelationships. Solution maps are used during both the Evaluation and CBI phases, and are linked to the SAP Reference Models, which reflect the same business processes but at a more detailed level.

  • Key performance indicators are used throughout the entire ValueSAP process. During the Evaluation phase, they enable an organization to understand more clearly how its business processes are linked by demonstrating the dependencies between them, and by defining the goals for creating value. KPIs also redefine the success metrics of Implementation, adding value to the already important considerations of speed and cost of implementation. As a result, each ValueSAP phase is now considered complete only when the KPI targets for that phase are achieved.

Linking the Evaluation and Implementation Phases In this approach, the Evaluation phase and the Implementation phase are bound very closely together. By linking the Industry solution maps with the more detailed processes of the SAP Reference Model, the scope defined during the Evaluation phase can be easily transferred to the Implementation phase. In addition, the KPIs used in the Evaluation phase can, at any time, be remapped to the Implementation phase to maintain precise focus on the business objectives. Meanwhile, ValueSAP deploys SAP solution review techniques to make sure that progress is monitored before, during, and after the system rollout.

     The Evaluation phase also takes advantage of the strategy definition roadmap recently introduced in Global AcceleratedSAP (Global ASAP). It is understood that ASAP's predefined processes shorten implementation times, lower project costs, and provide a higher return on investment. Now, the ValueSAP Evaluation phase also helps the customer identify the most relevant long-term solutions as well, by defining a complete business case that identifies various opportunities for generating additional value.

CBI Enhancements

ValueSAP's Continuous Business Improvement Services help management teams evaluate and approve ongoing enhancements and improvements to their processes and systems as business conditions change. The CBI methodology and tools enable an organization to evaluate its current position, revisit its original business objectives, and identify strong new business opportunities. CBI Services also employ industry-standard KPIs, which have been generated by SAP's business partners.

     In the case of a business that has undergone a major change (such as a merger), the ValueSAP CBI solutions can be applied as the start of a whole new "top-down" evaluation of the new situation. But it is important to note that CBI can also provide an enterprise with a "bottom-up" approach to improving business processes, without first conducting a full ValueSAP evaluation. This can be done by applying CBI tools and metrics to existing implementations. Moreover, CBI benefits are not restricted to large organizations; CBI Services are adaptable to organizations of all sizes.

      For businesses using SAP solutions that haven't first been through the ValueSAP life cycle using AcceleratedSAP, SAP is providing a new range of tools that will enable them to "reverse-engineer" their implementation to benefit from CBI, by extracting live system data and then comparing the performance data from their own business processes with external measures that may be considered best in class. This "gap analysis" can then be plugged into the CBI methodologies. And even those organizations that have documented their implemented business processes may want to go back to verify that the documentation still reflects reality, and call for a strategic review of their business processes against the relevant KPIs. The ValueSAP framework, with the components of each stage mapped out, is shown in Figure 2.

An Integrated Approach

The ValueSAP initiative consists of four tightly integrated phases: Discovery, Evaluation, Implementation, and Continuous Business Improvement. Here's a closer look at how each phase works.

Discovery and Evaluation - The Foundation The Discovery and Evaluation phases start by examining a company's strategy and goals. By describing what is important to the business, and why, a number of value drivers are determined. These value drivers can be fed into SAP's value scenarios, which describe where and how value can be achieved for a given set of business processes.

     SAP's industry solution maps play a crucial role by articulating and documenting "best practice" processes from within 19 industries. Matching the value drivers to the business processes within the solution maps is a powerful way to identify the business processes needed to achieve strategy goals.

     At the Evaluation stage, key performance indicators (KPIs) are brought into play. These metrics define the performance expected from the defined processes, and will become a crucial measure of success in the Implementation phase.

     Once the primary business processes have been defined, the next step is to identify the system components that will best support them. These are drawn up in the business blueprint, which includes the modules, reporting, master data, parameters, interfaces, and conversions that will be required.

     The Implementation plan is also drawn up at this stage. It documents the complete program for implementing the chosen solution, incorporating the system architecture, changing management plans, and education requirements for employees throughout the organization.

     At the end of the Evaluation phase, the customer has a clear picture of what needs to be done to achieve its business strategy and how it will be accomplished. The customer is in a strong position to move to the Implementation phase.

Implementation - Building in Value

Four years ago, SAP began providing AcceleratedSAP, a consistent repeatable method of implementing SAP Solutions. The ValueSAP approach takes this a step further in the Implementation phase. In the past, the main considerations of a successful implementation were based on cost and speed. ValueSAP adds value to that equation by making "time to benefit" a primary goal as well. Linking the value of the implementation to a company's business processes creates a platform that can be leveraged during future activities, so that the total cost of ownership can be dramatically reduced.

     The Implementation phase leverages the KPIs defined during the Evaluation phase to ensure that the processes being implemented achieve the desired goals. There are also new layers of tools and activities, one of the most important of which is role-based education. ValueSAP places a premium on ensuring that staff members know how to maximize the value of their solution. This includes training employees on integration issues so they understand the impact their activities have on the rest of the team.

The Implementation phase also supports the methodology's next phase, Continuous Business Improvement, by providing a defined set of business procedures that establish the exact scope of the implementation. These procedures can be evaluated against their KPIs to see if they need updating. The Implementation phase also yields a blueprint that provides the framework to make improvements and to conduct testing procedures. It enables a company to logically reconfigure its business processes to best suit any new climate, yet still leverage the maximum value from its SAP solution.

CBI - The Path to Greater ROI

The Continuous Business Improvement (CBI) phase helps ensure that systems and processes are always in tune with business needs.

     The CBI process leverages a host of performance measurement tools along with the output of the Implementation phase: a defined set of procedures, the blueprint of how they were implemented, and the testing procedures. The CBI assessment is based on a four-step methodology designed to identify the key opportunities for improvement:

  1. Preparation for the onsite assessment of an organization's key business processes. This includes reviewing an organization's IT history with SAP and reviewing the SAP value scenarios and solution maps.

  2. Analysis of the key business processes identified above. At the end of this phase, the organization receives a comprehensive report and presentation of the findings.

  3. Realization to turn recommendations into actions. The emphasis is on defining measurable objectives, and defining the key activities needed to accomplish them.

  4. Verification, which institutes an organizational structure and supporting business processes to continuously identify and act on new opportunities. It also concentrates on validating the expected business benefits from each opportunity.

The use of the value scenarios, solution maps, and KPIs helps the assessment team understand the current business processes, evaluate the current business environment, and reveal opportunities for improvements.

Web Portal Access

The Internet-based portal will also play an important role in this process, by supplying ValueSAP with "best practice" data accumulated from other organizations, yielding even more powerful information to enhance the efficiency of business processes. will also demonstrate the potential of e-commerce, by enabling organizations to take advantage of the kinds of "best practices" that are now feasible through Internet technology in their dealings with external suppliers and customers.

     Future releases of ValueSAP will provide tools and support for organizations to measure their own performance through SAP's existing Business Information Warehouse and Strategic Enterprise Management tools. These will enable customers to build an even broader set of Knowledge Management values into the solution. But for now, it is clear that the new ValueSAP initiative offers enterprises a complete and precise way to ensure that their ERP implementation is sharply focused from the start, is implemented powerfully and efficiently, and remains flexible and in tune with the organization's changing goals and objectives.

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