SAP optimization harbors great potential for lowering costs over the long term. Implementing and operating SAP applications ends up being more expensive than necessary in most cases. Interests within the SAP community ensure that the operating costs for SAP remain high. Meanwhile, many SAP customers have lost a general overview of their SAP systems, rendering them dependent on SAP itself or a consulting firm specializing in SAP. Architecture errors often require systems to be more complex than necessary, and as a result, overly expensive to operate. Licensing and operating costs sometimes accumulate as well – for systems that companies often only use in part or not at all. SAP optimization harbors great potential for lowering costs over the long term.

Based on our experience, we have identified the following three main areas as cost drivers:

SAP Architecture

Experience has regrettably shown that fundamental architecture errors are often made during the initial SAP R3 project. These errors are then expanded further with each additional project, and the successive costs keep on rising. And the entire SAP consulting market unfortunately plays along here. Offering SAP consulting services from the outside as a non-SAP consultant is a sheer impossibility. If consultants don’t speak the SAP dialect, they don’t even have a chance from the outset. That’s how the SAP community protects itself from outside influences.

As a CC manager, guiding optimization efforts with a critical eye towards targeted and long-term results is crucial. However, companies often lack sufficient experience and resources. The complexity of SAP R3 has resulted in most customers remaining at the level of the 3.0 release (from 13 years ago) with regard to architecture and technology usage. But the evolution from SAP R3 is enormous. So the question is whether companies did well by following the development – because the high level of complexity leads customers to a naive dependence. It is common knowledge that SAP itself struggles with the complexity – SAP ABAP versus SAP Java, strategic changes by top management, etc.

But the problem is really very simple to address. As optimization specialists, we have developed a method of identifying this potential. We analyze the architecture and concept, the implementation and operation. Once we have identified the pain points needing optimization in the SAP architecture, then we can delve into the underlying SAP infrastructure level and the overlying SAP ALM (SAP Application Lifecycle Management) level.

SAP Infrastructure

It becomes obvious time and again how the complexity of SAP has evolved over the years. We analyze all servers utilized for SAP and take a look at precisely how these servers are used. Our many years of experience have shown that, in almost every case, the SAP infrastructure is cumbersome and as a result more expensive to operate than it should be. Further, we have determined that targeted optimization of SAP licenses, maintenance and operation are also worthwhile.

SAP Application Lifecycle Management

For our customers, managing implementation projects and upgrades alongside daily operations is a real challenge. SAP has taken a clever approach here as well, launching methodology initiatives such as Accelerated SAP (ASAP) in the past, and Run SAP more recently. But in our experience, these very tools benefit SAP more than the customer and are once again responsible for even higher costs. With this scenario, it makes sense to analyze precisely which tools actually help the customer and optimize their targeted usage to manage costs arising from external consulting and maintenance.

SAP Quick Check – lowers costs by up to 30%

During our many years spent consulting on SAP projects and with companies that run SAP, we have learned where these pain points lie and can identify them with a quick check. In our experience, we can reduce costs for SAP customers by 10-30% at little expense to them. But we don’t just perform an analysis, we support our customers in exploiting the potential we have uncovered. Because we are completely invested in our customers’ success, we will also consider performance-based agreements.

Experience shows that implementing and operating SAP applications typically costs 10-30% more than it should. SAP cleverly positions new systems on a regular basis that offer questionable benefits to customers within the overall context, and do not really contribute to an SAP optimization. Examples include Accelerated SAP (ASAP), SAP Netweaver and of course the Run SAP initiative with SAP Solution Manager.

All of these systems tend to increase costs for the complete SAP solution. In many cases customers don’t even need to implement the recommended solution because they only utilize part of it, or none of it at all. This is precisely where the greatest potential lies in an SAP optimization as a whole: primarily in the SAP architecture underlying the entire system.

There were heated protests when SAP maintenance costs increased two years ago. But maintenance comprises only a small portion of the total cost. Why don’t companies and organizations systematically and consistently resist the constant, massive cost increases with SAP systems? Most customers are probably not even aware of the opportunities they have for SAP optimization. The optimization of SAP systems offers a hefty savings potential. You just need to detect and identify the pain points. It is interesting that no one seems particularly willing to tackle the subject of SAP optimization and cost management. User groups primarily share technical experience and usually focus very little on the business-related and financial optimization of SAP systems.

Interests within the SAP community ensure that the operating costs for SAP remain high, which is fine with the software producer and SAP service providers. SAP regularly delivers products and methods for SAP optimization under the guise of cost management. Unfortunately, this often achieves the exact opposite – SAP operating costs rise even faster. The main problem lies in the existence of the SAP “ecosystem.” The different players stick together in regular interaction, mutually generating new projects to secure their existence. Everyone wants to jump on the bandwagon. The more concepts and solutions SAP launches on the market, the more work there is for the ecosystem’s beneficiaries. But is that really the best thing for customers? The fact is, the investment and operating costs of SAP continue to climb all the time. In a cost analysis, SAP is compared with SAP – what else, of course. New cost drivers can be generated this way. Thanks to the complexity of SAP systems, many customers have lost their overview and become increasingly dependent on SAP. As a non-expert, recommendations from the SAP community need to be taken with a grain of salt anyway. You sometimes even encounter a certain arrogance in the SAP consulting world. Many consultants guard their expertise by not providing any specifications/documentation for their customization work. This practice seems to be standard in the SAP consulting environment, but such practices are considered simply unprofessional outside the SAP world!

The Run SAP methodology – one of SAP’s newer initiatives – is an example of a cost driver introduced by SAP. Certified consulting services usually based on SAP technologies are provided to SAP customers. SAP skillfully convinces customers to invest in and implement the Run SAP methodology. But if you take a critical look at the Run SAP methodology, you recognize fairly quickly that Run SAP primarily helps SAP – as the quintessential ERP standard software producer – retain its customer base with regard to SAP standard changes. SAP integrates new concepts for administering and managing solutions developed in-house (only ABAP, naturally) in the SAP Solution Manager. In our opinion, however, impact analyses of SAP customization would be more useful. After all, it is well known that customization comprises the lion’s share of effort in an SAP implementation.

Summary
The potential for optimization in SAP environments is enormous. A cost reduction of 10-30% is a realistic expectation for most SAP users. Members of the SAP community protect each other and are often not even interested in an optimization.

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