"SAP services offers flexibility
to meet its customers' needs… For
instance, SAP hosting and application
management services allow companies to
hand over their SAP instances for hosting
and/or management. Typically, current
customers of the services are either
new SAP shops that don't want to
invest in growing significant in-house
expertise, or are established customers
looking for support of transitory environments
to test new functionality. With these
services, SAP is also able to present
a single view of total cost of ownership
(TCO) to new clients, encompassing licenses,
implementation, hosting, and support."
— Lance Travis, "SAP Services: A Strengthening
Alternative," AMR Research, May 2005
Your enterprise chose SAP because it doesn't
want to be in the software development business;
it wants to leverage the applications, expertise,
and best practices of a reliable, world-class
enterprise software company so its employees
can focus on core business.
Taking this a step further, to maintain your systems
at current service levels while freeing IT resources
to focus on core competencies and reduce costs, your
IT organization, and IT organizations worldwide, inevitably
explore the possibility of outsourcing. In the past
few years, the market has seen a dramatic increase
in demand for outsourcing services, leading to a variety
of providers entering the market — ranging from
large systems integrators to hardware vendors and third-party
application service providers. As the number and variety
of outsourcing service providers has increased, so
has confusion in the market about different providers' offerings,
strengths, and weaknesses. What follows are seven myths
you may encounter as you consider outsourcing your
Myth #1: SAP Does Not Provide Application Outsourcing
For some, outsourcing mission-critical systems can
be a source of anxiety or dread. Should an outsourced
system fail, or if performance falls below expectations,
you can see an immediate negative impact on revenue
and the operations of your business. Outsourcing these
mission-critical systems becomes not only a question
of the value outsourcing can provide, but of confidence
that the partner you choose will be as committed
to the health and success of your company's
systems as you are.
This is why SAP developed SAP Managed Services: so
that customers who have the need to outsource can do
so with great confidence, leaving the management of
their investment in SAP to the most qualified SAP personnel — members
of an organization that has over 30 years of experience
designing, developing, deploying, and managing SAP
applications and services. SAP Managed Services supplies
the means to empower your IT personnel to focus their
time and energy on providing value to your enterprise's
lines of business — to increase revenue, reduce
operating costs, and increase market share — rather
than maintaining IT systems. And with SAP Managed Services,
you obtain specific service level agreements (SLAs)
that your company would have to manage very diligently
to cost-effectively achieve on its own.
Myth #2: Outsourcing to SAP Is Too Expensive
No matter what level of IT resources your company has,
SAP can provide a managed services solution that meets
your needs within your budget. Utilizing SAP best practices
and ITIL tools, methods, and processes with established
service levels, SAP Managed Services can deliver a
package of specific services — at defined monthly
rates — tailored to meet your enterprise's
individual requirements within the timeframe and resources
promised. Not only can this significantly reduce your
costs, but it also creates predictability in the expenses
associated with running and managing your SAP solutions.
Myth #3: SAP Is Not Flexible Enough to Meet Our Needs
Depth of service coupled with tremendous flexibility
is what distinguishes SAP Managed Services in the industry.
SAP Managed Services' delivery models cater to
a variety of technology strategies and to any of the
stages of an SAP solution (evaluation, implementation,
production, enhancement, and upgrade).
With SAP Managed Services, you can transfer some or
all of the tasks required to manage your SAP systems.
Not only does this allow your internal staff to focus
more on directly supporting their lines of business,
but this enables you to leverage the expertise SAP
has accrued from supporting thousands of SAP production
SAP Managed Services is made up of two main service
areas: application hosting services and application
management services (AMS). These two service areas
can be used separately or in tandem to manage some
or all of your IT organization's application
outsourcing needs (see Figure 1).
|SAP Managed Services Portfolio
Application Hosting Services
SAP Managed Services provides global application hosting
services that enable your company to strategically
source your entire application infrastructure to SAP.
This includes data center facility, power, hardware,
telecommunications, database, operating system, and
basis administration, all with guaranteed service levels.
With application hosting services, your enterprise's
IT organization no longer needs to be concerned with
security, operations, backup/restore, media provision,
and technical management of your SAP infrastructure.
SAP takes care of these issues to ensure that the systems
that run your SAP applications operate consistently,
smoothly, and efficiently.
Application Management Services
Application management services can be used separately
or in conjunction with application hosting services.
AMS represents a long-term custodial relationship
delivering post-implementation application support,
application enhancement, and application innovation
for some or all of your SAP solutions.
Myth #4: We Can't Outsource Because We Have Too
Much Invested in Our Data Center
You don't have to give up your data center. SAP
Managed Services offers an extremely flexible set of
service offerings that can be customized to your organization's
needs. If your enterprise wishes to continue to utilize
its own hardware infrastructure, you can still use
remote application management services to outsource
the management of your applications to SAP. This enables
your company to maintain its own hardware while leaving
the management of the application layer to SAP. In
addition, SAP offers implementation and upgrade hosting
services that allow you, on a temporary basis, to leverage
SAP's data centers during these transitional
phases of your applications.
At the same time, many companies who have invested
in their own data centers are starting to get out of
the "data center business" to reduce the
associated maintenance, capital infrastructure, and
personnel costs and risks. As you perform new implementations
of SAP applications, acquire new companies, or start
obsolescing hardware, you can turn to SAP Managed Services
for data center services that reduce the number of
systems that need to be maintained.
Myth #5: SAP Only Assists Companies with Long-Term
Although application hosting is most often associated
with production systems, the reality is that often
enterprises choose to use these services on a temporary
basis during transitional phases. Some enterprises
may decide to use application hosting during implementation
and then take the solution in-house when implementation
is complete. Other enterprises may prefer to use hosting
when performing upgrades or when moving a new division
over to SAP. SAP Managed Services can augment your
own IT teams for whatever timeframe and services meet
your specific needs.
Myth #6: We Will Lose the Ability to Make Changes to
Our System in a Timely Fashion
Many customers choose SAP Managed Services specifically
because it will enable them to perform implementations
and make changes to their systems faster than if they
were to do it themselves (see sidebar below). SAP Managed
Services provides the rapid response of a state-of-the-art
application outsourcing organization combined with
deep expertise in SAP applications and an inside
perspective on new product releases and implementation
Not only can SAP respond rapidly to simple changes
to your system, but our unique experience enables
us to react quickly to highly complex changes or
modifications. For any type of changes or enhancements,
SAP can tap into and leverage its deep system and application
knowledge to identify best practices and potential
pitfalls. By partnering with SAP for both the implementation
and ongoing support of your systems, your organization
benefits from our experience with thousands of SAP
implementations, which in turn enables us to respond
faster to the changes your enterprise needs.
Sauer-Danfoss is a $1.4 billion manufacturer
of hydraulics and hydraulic-related systems.
Based in Illinois, the company has 8,000
employees in 26 factories around the world.
The company recently upgraded from SAP R/3
4.6 to mySAP ERP, and in the process, chose
to host its SAP R/3, SAP Business Information
Warehouse (SAP BW), SAP NetWeaver Exchange
Infrastructure (SAP XI), Internet Sales,
Supplier Workplace, and Electronic Data Interchange
(EDI) systems with SAP Managed Services.
Why did Sauer-Danfoss select SAP Managed
Services? Because of speed of implementation
and enhanced service levels. "If
you are thinking about rapid implementation,
you just cannot afford to waste your
very valuable time in implementing the
system in-house," says Krish Kumar,
Vice President of Information Technology
at Sauer-Danfoss. "We chose to
host our global instance at SAP with
SAP Managed Services. All of our systems,
a single large global instance, are hosted
at SAP. That also brings us a significant
advantage to linking the applications
side to the new components and new applications
that we will be launching in the future."
Sauer-Danfoss linked 22 plants and
52 locations with the SAP Managed Services
facility. "We don't have
to worry about the operating system.
We don't have to worry about the
hardware. We let SAP do that function," says
Kumar. "They have very good, dedicated
professionals who can manage that side
and participate actively as members of
our project teams."
Myth #7: We Will Lose Our IT Expertise in SAP
Some companies fear that if they outsource the management
of their SAP applications, they will lose their expertise
in working with SAP. The truth is that rather than
lose your in-house SAP expertise, you will gain a partner
with the most in-depth knowledge of SAP systems and
best practices in the world.
When SAP Managed Services handles the operational execution
of your SAP applications, your in-house IT resources
and deep knowledge of your own business become even
more valuable. Rather than concentrating on application
maintenance, these resources can now operate at a more
strategic level, within the lines of business, to facilitate
increased business efficiency and innovation.
Whether choosing SAP hosting and application management
services to support the initial implementation, production,
or transitional phases of their SAP solution life cycle,
enterprises have learned that SAP Managed Services
provides a great deal more than just outside assistance
with the management of their SAP solutions.
SAP Managed Services provides a partner that is fully
committed to and accountable for the success of your
SAP systems — no myths about it. In partnering
with SAP Managed Services, your enterprise is ensuring
that you receive the highest quality of service possible,
at a low, predictable cost, coupled with the knowledge
that your SAP solutions are being run by personnel
with the most experience using SAP systems in the world.
For more information on SAP Managed Services, please