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Avoiding Pitfalls in a Rapid SAP ERP 6.0 Upgrade

by Ranjan Baghel

July 10, 2009

Many companies are jumping into quick, technical SAP ERP 6.0 implementations in a flurry to complete their upgrades — and are missing out on features that could save a lot in customization and process optimization. The first step to become knowledgeable with the key elements available in SAP ERP 6.0 -- enhancement packages, value scenarios, and enterprise services -- is to be sure your IT team is not unnecessarily reinventing the wheel now or in the long term.
 

With many SAP customers diving right into an SAP ERP 6.0 upgrade, it’s become clear that many companies are doing this hastily, geared toward a short-term, tactical, quick-fix approach. But by taking this approach, they’re missing out on some enormous business benefits of their upgrade.

Before you embark on your upgrade project, be sure to make the most of the functionality already available in SAP ERP 6.0. By ensuring that your project teams clearly understand a few key elements of SAP ERP 6.0 — enhancement packages, value scenarios, and enterprise services — and how to make the most of them, you can stretch your maintenance dollars, avoid needless customization, reduce upgrade efforts, and sidestep the pitfalls of a typical short-term, tactical implementation. The goal is to optimize what’s available out of the box.

Here we’ll provide an overview of these three important elements of SAP ERP 6.0, as well as resources to help your project team quickly locate the processes and services they can use to shorten their project timelines.

Resist the Temptation of Quick-Fix Technical Upgrades

If you’re planning or launching your SAP ERP 6.0 upgrade, you’re in good company. Perhaps your organization is upgrading in response to a merger, embarking on a first-time SAP implementation, or — like many established SAP customers — upgrading primarily because maintenance support for legacy systems is ending.

However, in the rush to move projects like these forward in quick-fix implementations, managers, executives, and project heads are making the mistake of not investing enough time to really know the extent of what they’re getting.

This is understandable. In the current economy, getting the green light to move forward with a project has instilled a “full-speed ahead” mentality. But this can result in a limited view of your upgrade if you rely on a disproportionately technical approach.

Take Advantage of SAP’s Efforts

By stepping back to understand the development effort that SAP has already put into the SAP ERP 6.0 release, you can:

  • Avoid creating application components that are already pre-built and ready to go on day one of your implementation.

  • Make the most of reuse and interoperability through services and industry standards built into SAP ERP 6.0.

  • Avoid skipping functional upgrades in a rush to get through a technical upgrade.

  • Sidestep costly and unnecessary customization — and instead focus only on the modifications that are really needed.

  • Staff your projects to align with your full awareness of the roles required for the tasks at hand.

  • Leverage industry-specific and SAP-based capabilities and processes to streamline your business internally and your relationships with key business partners.

Get to Know Enhancement Packages — and Avoid Needless Customization

Before your team builds any interfaces from scratch or customizes any solutions, make sure that they know exactly which processes have already been built for the solutions in your system.

Many SAP customers are by now aware of enhancement packages, as well as optional integrated units called business functions, which introduce new industry-specific functionality, once activated. With enhancement packages, these functions can be brought in as required, allowing organizations to upgrade a single component of their SAP ERP system without affecting other components.

But even with this understanding of enhancement packages, some SAP customers may still overlook opportunities to use them to meet business requirements. For example, I’ve seen one organization, spend multiple cycles developing a custom interface for HR functionality that was already developed and available out of the box — if they had only activated the SAP ERP HCM Time Management functionality in enhancement package 3.

Avoid similar pitfalls by understanding every new cross-industry process in every enhancement package, from enhancement package 1 onward. For example, in the Financials functionality, SAP has added XBRL reporting in response to recent government mandates — which could save you from looking for third-party or custom solutions to meet this requirement.

The table below summarizes some processes just from enhancement package 3.

 
Functionality
Processes
Financials
  1. Simplified financial reporting
  2. XBRL reporting
  3. Enhancements of the new general ledger
  4. Group close: Automatic sign-off
  1. Treasury and risk management: New
    financial instruments, risk analyzer
  2. Local close: Closing cockpit for cross system scheduling
Sales and Services
  1. Sales and billing improvements
  2. Advanced order processing and
    billing functions
  1. Logistics, commodity pricing engine in the Sales and Distribution (SD) and Materials Management (MM) modules
Human Capital
Management (HCM)
  1. Talent management: E-recruiting
    • General enhancements
    • Manager portal in SAP ERP
    • New search capabilities
  2. Cross-Application Time Sheet (CATS)
    • cProjects integration: Maintain cProjects details from CATS classic and CATS regular
  1. HCM localization topics
  2. Talent management: Analytics
  3. Employee portal in SAP ERP
    • Enhancements for personal
      information scenarios
    • Concurrent and global
      employment enablement
Corporate Services
  1. Environmental compliance integration
  2. SAP Environment, Health, and Safety
    Management (SAP EHS Management):
    Usability and reporting
  3. Enterprise asset management: Takeover and handover of technical objects
  4. Enterprise asset management: Shift
    notes and reports
  1. Quality management
  2. Earmarked funds
  3. Project system functional and usability enhancements
  4. Pool asset management
Product Development and Manufacturing
  1. Recipe management compliance checks
  2. PI-sheet enhancements
  3. cFolders: Import and export of MPNs
  1. Manufacturing information system
    • Shift report/notes, confirmation
    • XSteps in routing and production order
Procurement and Logistics Execution
  1. Buyer role for simplified access of complete
    Procure-to-Pay scenario
  2. LE warehouse integration
  3. Warehouse operations manager role
  1. Creation and collective processing of purchase requisitions
  2. Returnable packaging logistics without DIMP
 
A summary of some of the new cross-industry processes in enhancement package 3

Enhancement packages enable organizations to adapt to newer version releases relatively easily and generally uninterrupted by taking a more incremental, as-needed approach. There’s a significant set of functionality available to enhance your implementation: The latest release is enhancement package 4; enhancement package 5 is coming soon.

For the complete list of all functionality available through each enhancement package, visit the wiki on the SAP Developer Network (SDN) for each release. For example, for enhancement package 4, visit https://wiki.sdn.sap.com/wiki/display/ESpackages/SAP+enhancement+package+4+for+SAP+ERP+6.0.

For direct links to each of the enhancement package Web pages, see the Resources box at the end of the article.

Other Potential Benefits of Enhancement Packages

Enhancement packages help control implementation costs because you only pay for the business functionality you use within deployed packages. Other benefits can include:

  • Reduced testing time. A very small portion of the system is tested, rather than the entire SAP ERP system, so much less effort for implementing and testing is needed.

  • Targeted end-user training. Only the end users who depend on the specific functionality being updated will be affected — so they’ll be the only people you’ll need to train.

  • Limited outages and risk factors. Since enhancement packages affect only the relevant system components in isolation from the entire system, there’s less risk of downtime. For example, when we (at Fujitsu) applied enhancement package 3 on our own SAP ERP 6.0 system, the downtime was only eight hours. The system typically goes down only during core system updates (not during prep time and follow-up activities), so you avoid downtime for activities such as initialization, configuration, checks, and finalization.

Make the Most of Pre-Built Processes Designed for Your Industry

As you explore the solution-oriented enhancement packages, you will discover that there is also industry-specific functionality that can enhance and extend your current solutions listed as industry-specific business maps on the online enterprise services workplace. Here your project team can search for processes and then drill down into relevant components of enhancement packages that apply to your industry. Each process includes enterprise services, which allow you to interconnect to other SAP and non-SAP systems.

The table below compiles examples of industry-specific services excerpted from SAP’s more extensive lists. For links to a list of industry-based process components, plus some relevant links for an Order-to-Cash process, see the Resources box at the end of the article.

 
Industry
Functionality
Banking
  1. Credit Risk Management – Financial Instrument Pricing
  2. Credit Risk – Modeling
  3. Customer Information Management – Business Operations
  4. Current Account Management – Business Operations
  5. Financial Accounting – Financial Instrument Accounting Integration
  1. Financial Accounting – Financial Instrument Pricing
  2. Financial Accounting – Loans Integration
  3. Financial Accounting – Results Integration
  4. Loans Management – Business Operations
  5. Management Accounting – Results Integration
  6. Sales and Service – Account Origination
Defense
  1. Information System Integration
 
Healthcare
  1. Foundation for Collaborative Health Networks
  2. Resource and Supply Chain Planning for Healthcare Providers
 
Higher Education
and Research
  1. Course Approval Processes
 
Insurance
  1. Insurance Billing and Payment
  2. Insurance Claims Handling
  3. Insurance Credentialing
  4. Insurance Document Vendor
  1. Insurance External Claims Investigation
  2. Insurance External Reporting
Media
  1. Advertising Management
  2. Subscription Management
 
Oil and Gas
  1. Supply Chain Operations and Execution for Oil and Gas
 
Public Sector
  1. Funds Commitment Processing
  2. Public Sector Accounting Structures
  3. Public Sector Budget Management
 
Retail
  1. Demand Management
  2. Global Data Synchronization
  3. In-Store Food Production Integration
 
Travel and Logistics Services
  1. Compliance Relevant Data Exchange – eLogbook
 
Utilities
  1. Advanced Meter Infrastructure
 
Wholesale Distribution
  1. Trade Price Specification Contract
 
 
A sampling of industry-specific functionality via enterprise service enablement with enhancement package 3

In addition, be sure that your project team has thoroughly investigated the value scenarios available for your industry. SAP has solution engineers dedicated to identifying and then creating the high-value processes within your specific industry vertical. These value scenarios clarify the relationships between SAP capabilities that support these processes and are organized using well-defined guides and business terms, rather than function and feature lists.

For example, the Integrated Product Design value scenario for manufacturing can enable a collaborative platform, allowing relevant business departments — Sales, Supply Chain, Operations, Procurement, Manufacturing, and Finance — to connect. This value scenario was created to enhance quality, market demand forecasts, and product information accuracy during product design. SAP has worked with various industry experts to identify and enable the entire business process implementation. When you activate a value scenario, you activate an entire process.

Organizations that are able to leverage these value scenarios are well positioned to achieve faster business processes and meet business requirements. Not only will value scenarios save time because of fewer processes to integrate, but they already come built into SAP ERP 6.0. And considering that a value scenario has a multi-year roadmap, organizations using SAP ERP 6.0 can really capitalize on the particular value scenario’s ability to drive their priorities, investments, and capabilities for each of the core application components.

Realize How Enterprise Services Are Built In — And Reduce Your Project Timeline

References to enterprise services and service-oriented architecture (SOA) sound like a technical discussion — not a business one. But services directly affect any project team that is developing processes — and therefore has a direct business impact by considerably reducing custom development effort and project timelines.

Each value scenario and enhancement package process includes, along with integration and interface details, an enterprise service. With SAP’s out-of-the-box enterprise services, you can start using these applications on day one and reduce your project timeline. As part of an enhancement package, everything — the complete code, the mappings — is there for use right after activation.

Basing these processes on enterprise services significantly accelerates the development of applications and assists in making the information exchange more flexible among your SAP and non-SAP systems. Your developers could code these services in ABAP or Java and then create the integration points and design the interface. But in many cases, these services are ready-made. So deploying, for example, the Sales Order Creation (Create Sales Order) service automatically triggers all the related processes.

You can locate these enterprise services by industry and process — not in an arcane and technical services index, but rather via the enterprise service workplace (http://esworkplace.sap.com). Within the manufacturing industry link, for example, you can dive deeper into relevant sub-verticals, such as automotive, chemicals, and consumer goods. Within each sub-vertical you can see all enterprise services available for that sub-vertical. Links to manufacturing industry services and enterprise services for the consumer goods industry are available in the Resources box.

For example, to find the Create Sales Order service, you’d start at https://wiki.sdn.sap.com/wiki/display/ESpackages and look at these services from a process level within the sales section of “Overview SAP Core.” There, you can look at Order to Cash, which has information on the Create Sales Order enterprise service, processes, and business objects — so you aren’t stuck with an overwhelming index of enterprise services to sort through.

And if you do need some modification, this can be done fairly easily, so you don’t have to start from scratch like you would with past approaches to custom development.

Final Thoughts

SAP ERP 6.0 has the potential to help your IT landscape be more flexible, stable, and versatile, while also being able to support end-to-end industry- specific processes. To see this potential through to actual results, however, management must fully understand how the concrete technical capabilities of SAP ERP 6.0 support the enterprise’s real business priorities. Keep in mind that the ultimate goal is to avoid as much customization as possible and optimize what’s available out of the box. SAP has done the development leg-work — saving your maintenance dollars — so you might as well take advantage of it.

Resources

Articles

Innovation Without Disruption: A Deep Dive into SAP’s Enhancement Package
Strategy for SAP ERP

by Thomas Weiss and Christian Oehler (SAP Insider, January-March 2009)

The SAP Business Suite 7 Revolution: Saying Goodbye to Traditional Upgrades
by Joshua Greenbaum (SAP NetWeaver Magazine, Spring 2009)

Business First: SAP Transforms Itself Again
by Joshua Greenbaum (SAP NetWeaver Magazine, Spring 2007)

Helpful Links

As an SAP Associate Practice Director at Fujitsu America, Ranjan Baghel oversees and influences projects from numerous geographies and clients, and he has experience delivering large-scale transformation programs. Throughout the past seven years of his experience across multiple industry verticals, he has applied strategic insight, balanced with results orientation to deliver global change through the application of technology, business process re-engineering, and continuous improvement programs. Consulting nationally and internationally, Ranjan has substantial experience in consumer packaged goods, retail, manufacturing, hi-tech, and professional services. Being an SME on topics such as composite applications, SOA, and the evolution of SAP ERP, he regularly publishes on these topics and frequently presents at SAP events. You can contact him regarding this article at Ranjan.Baghel@gmail.com.

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