Dieter SteigerDieter Steiger The Cost Drivers for SAP

11/04/2010 by Dieter Steiger

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.

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