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Consolidating, Upgrading, or Reimplementing SAP? The Missing Step That Can Save You Millions (Sponsored Content)

by Tom Kennedy | SAPinsider

January 1, 2010

Many SAP professionals rely on the ASAP methodology to manage SAP. But by adding just one additional step to this methodology, most SAP projects can save not only time, but also money and man-hours. BackOffice CTO Tom Kennedy explains how in this candid interview.
 

 

Q: Your view is that the ASAP methodology — and its various incarnations in use by systems integrators (SIs) — has a missing step that, if added to any SAP consolidation, implementation, or upgrade effort, would shave months and millions off the project’s timeline and costs. Can you explain? 

A: The missing step is a baseline data audit, or data assessment. Every SAP implementation, upgrade, or systems consolidation project is predicated on the idea that you will transform your business for the better. Targets are set. The project hurdles down the ASAP roadmap or a systems integrator’s variation of that roadmap. But a data assessment is not done, and a real-world picture of how your business operates is never established.

As a result, the new setup is almost always over-configured, under-configured, or ill-devised, and the data load, which takes place just eight weeks prior to go-live (per established ASAP doctrine), fails. 

Ask the financial controller of a large corporation how many different terms codes they use. Ask a warehouse manager about bin locations. Ask a CMO about the total number of active customers and vendors. I guarantee that the answers gleaned from interviews routinely conducted by SIs at the outset of all these projects won’t match what you’ll find in a data audit. And yet, it’s this anecdotal information that steers the target configuration. The mismatch between the new system design and operational reality causes the data load to fail and, in turn, leads to significant project delays and cost overruns. 

The surest, most cost-effective way to effect the transformation you’re seeking is to start with the facts. Don’t just look at where you want to be. You also have to look at your master data and your transactional data. Look at sales orders, for example, and you discern the precise number of active customers. Look at terms codes and you find some that are widely used, some that don’t warrant reconfiguration on the new system (so why go through the time and expense?), and some that raise questions about the way you want to do business. 

There are upwards of 50,000 tables and five million fields in an SAP system. You and your SI only need to focus on a fraction of them. Do a data audit, map your data to these SAP settings (see Figure 1), and you whittle the number of settings you actually have to contend with down to something much smaller and more manageable. Instead of documenting tens of thousands of fields you’re not even going to use, all you may need to document is a much smaller, more manageable number of fields.

Figure 1 The data mapping process: We pull all of your legacy data into our mapping tool and tell you what it will look like — and how it will behave — in your SAP systems before it’s ever loaded into SAP. This provides a holistic view of your business, your data, and your processes; by loading 100% of the data in raw form, you Let the Data Speak for Itself™

One large customer with multiple instances of SAP had paid for the configuration and testing of more than 1,000 terms codes globally. Through a data audit, we found that only 250 were in use, and of those, 142 of them were duplicates. Another hundred were used so infrequently (typically, just once) that it became clear that the business should not maintain them. We discovered that just eight terms codes could support 95% of this company’s customers without making any changes to their business. If they went to 12 codes, they could cover 99% of their customers.  This represented a 99% reduction in configuration. They didn’t have to pay for the configuration, testing, or training of people for 1,000+ terms codes. Instead, there were just eight.

Besides the time and cost savings this confers, a data assessment helps you:

  • Better gauge the efficacy of the targets you give to your SI for the new system. Will they actually promote the transformation you’re looking for or cause unintended consequences?
  • Ask better questions. Why pose questions to your controller and other executives that can be answered via an audit? Instead of asking your financial director for a list of terms codes he thinks are in use, get this list from your data audit. Then you can present the facts — the list of terms codes you mp;rsquo;re actually using today and their frequency distribution in descending order. Use the data as your starting point, and ask the controller if he does or does not want to configure the new systems for all of these terms — and where he wants to take the business. He may say, “No. It would be better for the business to no longer offer some of the outdated payment terms. Instead, we need to renegotiate certain contracts.”  
  • Know, in advance, what parts of your operation (shipping, purchasing, production, pricing, materials management,collections, GL account numbers, bin locations, and so on) will be affected by your proposed changes. All of those things are the reality of how you’re doing business, and if you ignore them, you will encounter problems.
  • Avoid the all-too-frequent unsuccessful data load. Fail to get the terms codes or materials configured correctly, and you’ll find that you can’t load a good portion of your vendors.

These are the reasons why I recommend an adjustment to the ASAP methodology. Do a data audit and map your data to the new system. (We refer to the adjusted ASAP methodology as “ASAP+”.) Start with a set of facts rather than a set of anecdotes. We’ve been doing these types of projects for 14 years. We’ve done some of the largest, most successful SAP implementations around the globe. What we’ve found is that — unless you first do a data assessment — you spend a year getting all this design work done, but when you go to load your data, it won’t load into the system. Why? Because the design doesn’t match up to the reality.

Q: What’s the basis for your claim that an SAP customer stands to save millions? What’s the cost of the data loading process going awry? How much time and money is lost?

A: Every systems integrator stipulates in the contract that data quality is the full responsibility of the customer. You may tell your SI that you use terms codes 30, 60, and 90, for example — but when the SI attempts to load customer data, it turns out that you use other codes, and the data doesn’t load. This happens all the time. The SI is typically retained for another 90 days to help sort things out. If you have a year-long, $72 million project, then this three-month overrun costs you an additional $18 million. 

Q: How long does a data audit typically take?

A: For BackOffice Associates, 90% of the data audit is completed in one week. Depending on the complexity of the landscape, the remaining 10% can take another week or so.

Once you’ve concluded the data audit, you’ll want to map your data to SAP. (This also takes place during the blueprinting phase.) We use a data mapping tool called EZMap. The tool comes with all the mappings for JD Edwards to SAP, EDS to SAP, Oracle Financials to SAP, legacy systems to SAP, and many others. We can take a JD Edwards system, for example, and map it to SAP in a matter of days. It’s through this mapping process that we can tell you which of the 50,000 tables and which of the five million fields you’re going to be using in your SAP implementation. (Again, see Figure 1.)

Q: At what point in a project should the data audit and mapping happen?

A: This is done within the ASAP planning and blueprinting phases. If you use our tool set, when you exit the blueprinting phase, you can load all of your data into your new SAP system within four to six weeks of starting the project. You don’t need to wait to load it during the last eight weeks of the project. (See Figure 2 and Figure 3.)

Figure 2 ASAP methodology: First data load eight weeks prior to go-live
Figure 3 ASAP+ methodology: First data load eight months prior to go-live

What are the benefits of loading your data so early in your project?

  • You actually see how SAP operates with your data for eight months.
  • You can learn how to use SAP functionality with your data in it.
  • You can verify early on whether or not you can price, pick, pack, ship, manufacture, and cost all the standard and custom orders that come in. You can compare costing data through SAP to your old costing data, for example, and find out what the deltas are so that you can resolve them.
  • You have sufficient time to address errors. If you don’t load the data until the last eight weeks, which is a traditional SAP project approach, you’ve only got eight weeks to fix hundreds or perhaps thousands of errors. This is why the projects that BackOffice Associates are involved with don’t typically experience delays.

Most SAP projects are about how a customer wants to run the business. But to get there, you have to know how your business actually runs. The DNA of how companies do business is in their data. Knowing that DNA from the beginning can help you achieve the best outcome and potentially save your SAP project millions of dollars. 

About Tom Kennedy and BackOffice Associates

Tom Kennedy is co-founder and CTO of BackOffice Associates, a US$100 million software and consulting services company focusing exclusively on large companies that implement or run SAP solutions.

Tom has been designing and building technology since 1978. Throughout the 1980s and 1990s, he developed groundbreaking fourth-generation languages (4GLs), as well as suites of fully integrated financial and accounting applications built using his 4GLs. He’s also built emerging technologies like engines that directly render Web pages, including fully integrated Web-based applications for Fortune 100 companies. 

Tom was formerly CEO of Kennedy & Associates in Richmond, Virginia; he sold the company in 1992. Kennedy & Associates provided 4GLs, as well as integrated accounting and custom-developed applications for Johnson & Johnson, UPS, Otis Elevator, Citrus World, and many other global corporations. Fourteen years ago, he co-founded BackOffice Associates and focused on the SAP data quality market. His vision and design have led to industry-leading tools and methodologies that provide a high value proposition and have enabled BackOffice Associates to fully exploit one of the highest growth markets in the technology arena. 

Tom holds bachelor’s degrees in mathematics and economics from the University of South Florida.

BackOffice Associates, LLC, is a leading provider of SAP data migration and SAP data governance solutions for global SAP customers. Concentrating on SAP data quality for more than a decade, BackOffice Associates’ products and services are a recognized best practice for companies implementing SAP software. BackOffice delivers the industry’s only Boring Go Live® process for the uneventful implementation of SAP solutions. For data governance solutions, BackOffice is the choice of SAP customers that require Business-Ready Data Every Day™. BackOffice Associates is headquartered in South Harwich, Massachusetts, with offices in Europe, Australia, India, and Mexico. 

Visit www.boaweb.com to learn more.

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