Crafting the mySAP

The ERP solution vision must address the following: -

How an enterprise solution will better enable the core business to be successful
Identify the shortcomings of the systems and processes in place today.
For example, is it difficult, expensive or cumbersome to customize the system? Are employees forced to duplicate entries in multiple systems?
Clearly define the value that you believe those system should provide to the business. Should it tie together different functional and business areas or enable real-time decision-making?
Refine and document the characteristics and capabilities of a mySAP solution that can be customized and implementation should support the business objective.

Analysis of the solution characteristics

The upgrade from R/3 to mySAP 2004 ERP is largely a contract change with a little bit of additional technology available. However, the upgrade plan to mySAP 2006 or 2007 is more pervasive technology upgrade as well as the ability of the enterprise service architecture i.e. BPP [Business Process Platform] which will be one of the most important technology upgrades and strategic decision that one can make. Flexibility drives the emergence of the Business Process Platform, which will enable business process creation, deployment and monitoring using service-enabled applications.
Net Weaver is redefining SAP’s role in the technology market from a pure packaged business applications to a one-stop-shop provider of flexible business process components and the supporting technology to orchestrate business process i.e. BPP as per definition of Gartner as mentioned above. In order to take the advantage of Net Weaver component the organization necessarily doesn’t have to upgrade to mySAP. The organization will be required to upgrade to enable business process composition through a business process platform.
The organization should look beyond using components for integration in order to understand the impact of Net Weaver. It should not be focused as a user adoptation of Net Weaver component just because SAP has repackaged Net Weaver as a part of mySAP Business Suite Contract. The organization will need to adopt SOA and build plans for the cultural change required for Net Weaver to enable business composition.
SAP Net Weaver Project – tactical guideline: - [as recommended by Gartner]
Review the current SAP license agreement to check platform and integration component are included
Clear understanding of the Java content and new system management skills that will be required to run each component.
Review of the current operating system and database infrastructure standard to ensure that the exact releases are supported by SAP
Careful planning of system landscape
Review of the full impact of Net Weaver 2004 on the enterprise architecture standards.


Upgrading to mySAP ERP 2004 – strategic planning assumption

SAP has provided a four-year evolution path for mySAP ERP users to transition to Enterprise Service Architecture [ESA] The ultimate goal of ESA and Net Weaver is to enable users to implement a business process platform [BPP] environment.
Gartner suggests that users only consider mySAP ERP 2004 or later releases in upgrade justifications. Users should upgrade after creating a plan that is based on need, and which balance risk and reward. Understanding long-term business strategy is a critical step in this process. Additionally, educating the enterprise on how to take advantage of SAP’s strategic plan is also critical. Effective planning will make the difference in investing at the right time and avoiding costly risk.
Impact analysis of mySAP ERP on the organization is very important in terms of the vision and the strategy behind SAP’s push to service – oriented architectures [SOA] and BPP. Point to be noted at this juncture is that 50% of the SAP installed base will not have actually performed the upgrade from R/3 to mySAP. This will primarily be because of a lack of knowledge about how to justify the cost and benefit of upgrading; because the user organization lacks an overall SOA strategy.

Long-term & Short-term benefit and risks

· SAP plan to productize the BPP, allowing user a ‘ one-stop shop’ for traditional business applications and technology and business process components to build differentiating, end-to-end and dynamic business processes.
· SAP will use the elements of the BPP to enable an ecosystem of partners to build custom and packaged extensions that meet customer-specific requirement. But many of the technologies and services have not yet been delivered, SAP has already begun to build the ecosystem.
· The tools and technology to fully enable user-oriented business process modeling are still emerging and in many cases, real end-user-process does not exist. Although SAP has articulated this vision to the installed base, many user do not understand how it will directly affect their environment either positively or negatively.
· SAP is in the transition and as a result of which users have to work at separating the vision from reality and in many cases, must develop an internal competency to understand how to make the most of the BPP environment before SAP’s promised delivery date of 2008.
· In short-term technology –related enhancements will overshadow and may in fact replace investments in traditional enhancements that are specific to business area such as supply chain or an industry. While there is value in technology-driven enhancements that result from the integration of Net Weaver with the applications and then to ESA, many users will still need core enhancements to achieve industry-or domain-related benefits.
· The execution side of SAP lags in their own understanding of how the long-term strategy impacts short-term decisions. Users will also begin to see impacts of SAP service and support capabilities as these areas will be tested most as users begin to take advantage of uncharted waters such as support ecosystem vendor products, use of services in a new business process or use of Net Weaver components in areas that are external to SAP business applications.

Upgrade benefits to consider

· Functional enhancements – Users should consider two types of enhancements in mySAP ERP 2004; core functionality changes and technology-related enhancements. The core enhancement will only benefit one part of the enterprise. Technology-driven enhancements will more likely exists across the application set and apply to many scenarios and many parts of the enterprise. Users should calculate the benefits of both of these types of enhancements based on functional need and enterprise fit. Note that xApps will contain both types of enhancements. Access to xAPP and other mySAP Business component should also be part of any upgrade justification exercise.
· Enabling a BPP – It is impossible to assign a number to this because delivery will not be achieved for at least three more years. But the users who have an SOA strategy or have begun to enable a BPP will have a better understanding of how their organization will benefit from the ability to orchestrate new processes.

Upgrade strategy

· When considering an SAP upgrade, it is important to consider the drivers for the upgrade and use them to determine the best path forward. The cost and risk vs. the rewards will depend on the functional enhancement that can be leveraged from the technology.

· Upgrade directly to mySAP 2004 :-

Pros – ECC [ Enterprise Central Component] is fairly similar to R/3 Enterprise and access to Net Weaver components is included as part of the license. It includes a portal-based user interface for ease of use, analytics and enhancements to specific functionality

Cons – The primary risk with this version depends on how much of the new functionality one choose to implement and how much of Net Weaver one choose to deploy. Implementation of Net Weaver will require an investment in technology skills and the possibility of a more-complex landscape with more databases to maintain and higher operation costs. The latter will depend on how the product is deployed. But the users of some industry add-ons may be required to wait until mySAP ERP 2005 is available, because all industry add-ons will be synchronized with a mySAP ERP release. This means that in future, industry add-ons will be Industry Extensions and will be shipped with mySAP ERP.

Recommendation – In case new functions extend beyond mySAP ERP, then this component will be more integration-ready for operations with other SAP Business Suite component. However, if no new functions are needed, then this path will be similar to the R/3 Enterprise upgrade path with exception of re-licensing costs.

· Alternative upgrade option is to perform a technical upgrade to R/3 and plan for an upgrade to mySAP ERP by 2009. This option is more driven by the fact that the ESA version of mySAP ERP will be available in 2007 at the earliest, with stability occurring for most users in early 2008. The combination of ESA and Net Weaver will have evolved at this point to support a user business process platform.
However, the migration to this version will become more complex and costly.
This option of upgrade will enable the organization to extend the useful life of application at a nominal cost while waiting for mySAP ERP to mature and for ESA to become real. In case the upgrade is more aligned towards ESA functionally, need to wait unit 2009 when ESA and Net Weaver are expected to reach maturity levels for mass-market adoption.

Upgrade costs / risks to consider

· Release – level availability – Industry solution users should check with SAP on availability of new releases of these solutions. Many solutions are available with MySAP ERP 2003 (as it was largely similar to R/3 Enterprise) with no new enhancements available with my SAP ERP 2004. mySAP ERP 2005 will be the release through which industry components will be synchronized. Because mySAP ERP 2005 will not be generally available until early 2006, user should not expect more significant enhancements until the release of mySAP ERP 2007.
· Maintenance cost – Increase in maintenance cost should be measured against increased costs to support older releases of the R/3 products. There is also more risk with SAP support and services offerings as users expend into “ newer” area like working with Ecosystem vendors and new Net Weaver components.

Recommended decision framework to estimate upgrade path :-

Gartner has developed the following methodology to estimate the appropriate path.

· First, estimate the level of effort and cost assigned to move to a specific release.
· Second, estimate the business value that the organization will receive from that release.

Current implementation enabled with planning & collaboration tools and XI for ecosystem and multiple ERP integration backed by Biz intelligence through BW

To be:
Value added components to be introduced – both SAP & non-SAP.
Leverage the platform to support the extended enterprise through A1 / B1
Enable outsourcing through integration with partner systems (shared services, BPO opportunities) which has re-usability & replicability across the enterprise