Special Report


Special Feature: SAP Global Partner Hosting


July 1, 2005

SAP Managed Services: Avoid the Risks of Slapdash Outsourcing

Thomas Besthorn
Managing Director,
SAP Hosting
AG & Co. KG


Bring Large-Scale Integration to Your Medium-Sized Business

Optimize Your Business Processes with Advanced SAP Global Hosting

Judging by the current boom in outsourcing IT services, if you're not considering contracting out some of your organization's IT operations, you are missing an opportunity for lower costs, greater flexibility, higher efficiency, access to state-of-the-art technology, and shorter time to market.

META Group, Inc. analysts forecast that 80 percent of companies around the world will have outsourced at least one IT function by the end of 2005. IDC also anticipates a rise in outsourcing figures. As IDC Research Manager Mike Friend explains, "dragging along inefficient and underfunded support functions while at the same time fighting off lean and mean competition has obvious consequences in terms of cost of operations, customer satisfaction, and market share."

Though the benefits of outsourcing are many, SAP customers should avoid quickly leaping into hosting projects. Outsourcing involves careful planning - it doesn't mean haphazardly offloading problematic IT projects that chew up cost, time, and personnel resources. Done correctly, outsourcing can help you focus on your core business expertise and reap the benefits noted above. But done incorrectly, you can end up worse off than you started, doubling up on time and expenses invested in carelessly outsourced IT projects.

To increase cost transparency and planning reliability, improve systems performance, and reduce the total cost of ownership, SAP customers must keep the following four points in mind as they consider outsourcing:

1. Outsource Strategically

Before jumping into a contract with an external service provider, carefully consider which IT processes to outsource. To make this decision, many companies are quick to look to the bottom line, to the processes that are the most costly or that drain the most resources. Cost, of course, is a major factor. But outsourcing projects should not be chosen by costs alone - companies must first have a crystal clear understanding of their business processes before they hand control of an IT operation over to an external provider.

The main focus of outsourcing is to enable you to more fully concentrate on your core competencies, those strategic tasks and areas that provide you with the highest added value. These core competencies are precisely the tasks you should not outsource. Instead, organizations must strategically outsource non-core activities, ones that are not essential to making your company uniquely valuable to your customers. An automobile manufacturer, for example, could outsource its mySAP ERP upgrade, but wouldn't want to outsource its design and development systems.

By selectively outsourcing clearly defined business tasks (not core competencies), you keep your eye on your real objective: attaining profitable growth.

2. Choose the Right External Provider

To get to the top, companies need competent, stable partners and the best possible equipment, support, and staff. Here is where SAP Managed Services from SAP Hosting and SAP Systems Integration (SAP SI) come into play. The two SAP subsidiaries have combined their years of expertise in solutions and hosting to provide globally scalable hosting and application management services for SAP and SAP-related systems. SAP Managed Services operate and manage customers' systems in all phases of the IT life cycle. The key advantage, emphasized to clients, is the provision of fast access to market, thus reducing the total cost of ownership and enabling rapid return on investment.

Partnering with SAP Hosting and SAP SI, customers benefit from the latest SAP expertise and first-hand insights, advanced knowledge of SAP's long-term product and services strategy, and intense familiarity with the processes used by different industries. Who better than subsidiaries of SAP itself to host your SAP services and technology projects?

3. Plan for the Long Term

Outsourcing is not a short-term commitment — many outsourcing projects take years to complete. Since you're in this for the long haul, you need to be able to choose the appropriate solution, implement it quickly, and operate it smoothly.

Consider that the IT life cycle consists of three phases: plan, build, and run. With SAP Managed Services, customers are supported through the entire process — from software evaluation and implementation to live operation and release upgrade (see Figure 1). This is achieved through the establishment and support of suitable systems and by tailor-made Application Management services, which give customers security and flexibility.

Figure 1
SAP Managed Services from SAP Hosting and SAP SI

Given the long-term nature of hosting projects, you must also evaluate the support systems in place for your outsourced services. What happens if two years down the road, your system efficiency and user satisfaction levels are down, but there is no effective customer service center in place, or no continuous improvement strategy for optimizing existing processes and structures?

The support processes of SAP Managed Services correspond to the IT Infrastructure Library (ITIL), the de facto standard for securely managing IT support processes.1 Companies therefore benefit both from the security of clearly defined service-level and operational-level agreements, and from continuous system optimization and business improvement. What's more, each SAP Managed Services client is supported by a dedicated customer service manager, who is the point of contact for any issues they may have.

With their combined expertise and high level of personalized customer attention, SAP Hosting and SAP SI operate and manage their customers' IT systems throughout the entire IT life cycle.

4. Tailor Outsourcing Services to Your Company's Needs

SAP Managed Services are fully tailored to a company's individual needs. Selective outsourcing enables customers to decide how much IT they want to outsource and for how long. Additionally, SAP Managed Services can be either used individually or bundled as required. Companies are guaranteed to benefit from operational security, transparent costs, and increased flexibility.

SAP Managed Services can remedy the specific problems and concerns of your business. SAP Hosting and SAP SI identify cost drivers and draw up solution packages using profitability analyses tailored to your company, enabling the total cost of ownership of your hosting projects to be reduced.

Reap the Benefits of Smart, Strategic Hosting

Successfully outsourcing an IT project requires months of preparation, precise planning, and the finest equipment. Yet success does not depend on an individual company alone, but rather on the outsourcing team as a whole. Reliable partners — like SAP Hosting and SAP SI — are indispensable in all phases. They divvy up the tasks to reduce the burden on your company and to make it easier for everyone to reach the specific goals of your enterprise. SAP Managed Services enable strategic hosting and application management, so SAP customers can focus on core competencies while augmenting existing resources and lowering TCO.

For more information on SAP Managed Services, please visit

1 For more information on the ITIL standard for outsourcing services, visit

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Bring Large-Scale Integration to Your Medium-Sized Business

Oliver Schreiber
Director, Business Unit
Outsourcing and Services,
itelligence AG

Innovative integration technologies, such as SAP Exchange Infrastructure (SAP XI), enable medium-sized companies to exchange data and integration information between both SAP and non-SAP systems. An SAP XI implementation, however, along with its resulting operations and maintenance, is a significant IT project for a medium-sized company, requiring added time and cost investments, personnel resources, and knowledge ramp-up.

To efficiently and cost-effectively realize an IT initiative like an SAP XI implementation, medium-sized businesses should look to outsource their SAP solution operations to an external service provider. itelligence, a qualified SAP Global Partner Hosting, provides technical and organizational support for your outsourcing processes, from takeover to installation and administration.

Demand for Increased Integration

Consider, for example, a manufacturer looking to improve integration capabilities to better meet the needs of its customers and suppliers. The manufacturer exchanges commercial documents and business messages for the import and export of all its materials and supplier products in accordance with the EDIFACT standard.1 To avoid introducing cost-intensive software components to convert data from their SAP system to EDIFACT messages, the manufacturer outsources this data conversion process to itelligence. With itelligence's it.x-change EDI converter, the manufacturer enjoys improved data exchange processes and easy integration with its existing SAP systems.

it.x-change from itelligence — a Special Expertise Partner for SAP XI — converts EDIFACT messages into compliant SAP R/3 IDocs or XML formats, and converts outbound IDoc messages into the EDIFACT standard (see Figure 1). Messages are converted without an additional adapter, improving data exchange and integration between SAP customers and business partners.

Figure 1
it.x-change Functionality from itelligence

Supporting Medium-Sized Business Needs

itelligence is an IT service provider with 34 branches in 15 countries, with services and solutions geared specifically to medium-sized SAP customers and their business needs. A member of the SAP Operation Quality Initiative, itelligence guarantees its customers support for all facets of an IT project (including call center and project management solutions).

With its extensive data and shared services centers, itelligence cost-effectively provides state-of-the-art technologies — such as SAP XI — to medium-sized companies that otherwise lack the infrastructure and resources to tackle such comprehensive IT projects. Outsourcing services with itelligence enables medium-sized companies to compete on a large scale.

For more information about services and solutions from itelligence, please visit

1 EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) is one of the first information standards created for e-business transactions.

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Optimize Your Business Processes with Advanced SAP Global Hosting

Johan Duim
Global Director,
ERP Services,
Atos Origin ICA NV

Maintaining effective and efficient operations requires continuous adjustments to ensure that your business applications align with your business demands. As an SAP customer, you need to manage a variety of applications, technologies, and their integration; meet high user requirements; and adapt to dynamic business needs. Moreover, you must strive to decrease your IT costs while ensuring your people focus on strategic innovation.

Giving a trusted, reliable service partner responsibility for some, if not all, of your operational management tasks is the solution to these challenges. But before you jump into a contract with a third-party provider, you must find a service partner that has a proven track record and knows exactly how important managing business-critical SAP applications and environments is to your business.

Atos Origin, a qualified SAP Global Partner Hosting, has established a wealth of knowledge, experience, and skills in mySAP Business Suite, SAP NetWeaver, and the underlying information and communication technology (ICT) infrastructure by implementing and managing complex, integrated solutions for some of the largest corporations in the world.

Advanced SAP Global Hosting Service

At Atos Origin, we have applied our expertise in SAP applications and technology and delivered to our customers the Advanced SAP Global Hosting Service, which includes project-related service activities, to ensure effectively managed operations for mySAP Business Suite and SAP NetWeaver. Many of our customers are already tapping into this rapidly growing service, which features:

  • Hosting and related project services for mySAP Business Suite, SAP NetWeaver, and SAP R/3

  • 24x7 worldwide support

  • Access to a pool of over 4,400 SAP consulting specialists

  • Value-add service options for SAP environments

  • High quality of service based on a service-level agreement

  • Predictable, stable total cost of ownership (TCO)

What to Expect from Atos Origin

Atos Origin's Advanced SAP Global Hosting Service delivers highly available, reliable, and productive SAP operations. It provides proactive, day-to-day supervision and operational management of the SAP environment and related databases. We use sophisticated system tools to effectively manage, monitor, and secure all the major components in your SAP environment. You can expect:

High-quality setup of your SAP environment for effective managed operations

Ongoing availability and performance of a robust technical SAP environment

Physically consistent and secure business data

Access to Atos Origin SAP-certified professionals

Ability to adapt to amended business processes in a controlled way, by implementing additional mySAP Business Suite or SAP NetWeaver components into an existing SAP landscape

Excellence in SAP Hosting and Application Services

With Atos Origin's extensive SAP experience and know-how, customers can free up resources for more strategic projects, improve TCO, reduce the risk of disruption to critical applications, and better meet the rapidly changing needs of your business.

For more information about Atos Origin, please visit

by SAP and Partners SAPinsider - 2005 (Volume 6), July (Issue 3)

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