— written by Erich Jacobs, Program Manager Process Consulting, itelligence AG —
A merger can truly be compared to a marriage: two “living” systems are intended to cooperate with one another and, ideally, should function better together than they did independently. Instead of plunging into the unknown, as is done in many marriages, with IT systems it is better to carefully and painstakingly plan the next step: the move. As a process consultant for itelligence I have some previous experience in merger projects, and have compiled for you a list of the most important considerations for customers involved in system mergers. Of course, they cannot replace direct consultation with an experienced consultant, but they can give you an idea of how the move can be managed, and what to expect. Good luck!
Initial situation and crucial questions before the merging of SAP systems
Within the parameters of increasing globalization and the associated consolidation of corporations, the subject of the merging of the software solutions which they use has taken on added significance.
The reasons for the conflation of the IT systems in company mergers become self-evident in the process of buy-ins and fusions, and there is then a need to act expediently. A clear benefit is demonstrable for companies which are already connected. The practice is especially important with companies already joined, which may expect synergies to result.
The following positive effects are examples:
- Reduction of maintenance costs
- Harmonization between locations and standardization of processes
- Implementability of Shared Service Centers, e.g. for core data
- Reduction of complexity
- Rollout capability through procedural setup of the solution
Nothing is as simple as its theory. And that is also true for the simple theoretical representation of a planned system merger showing what must be done to achieve maximal benefits. The devil is in the details, and the merger can only be successful if the many decisions involved are made correctly down to the last detail. There are important issues to be resolved on many levels:
- Processes: Adaptation of the operational structure and optimization potential
- Technical Systems: How can the systems and interfaces be standardized and consolidated
- Data: Adaptation of the core data and consolidation of the transaction data
- People and Organization: Adaptation of the responsibility distribution and the company organization structure
- And last but not least – what is the ratio of the implementation complexity to the benefits envisioned?
itelligence has developed a proven methodology for the consolidation of SAP systems, and has applied it repeatedly in customer projects.
Procedure in the consolidation of SAP systems
At the beginning of the project all relevant framework parameters must be ascertained. What is the goal of the individual project and what are the strategic priorities for the customer? These issues are dealt with in the itelligence AG Process Consulting division, and produce an initial foundation for the project. Parallel to the strategy determination, process experts in the individual departments begin the analysis of the existing processes. This is carried out using SAP Best Practice Processes, the standard by means of which the systems’ nature and characteristics are examined. Every system is observed in detail and strengths and weaknesses of the processes in use are documented, but possible future advantages are also identified; in particular, challenges within various processes are meticulously recorded. Thus, following a series of workshops, a proposition regarding the “process map” and its various detailed characteristics can be produced.
By the same token, the technical “givens” of the SAP systems are analyzed elsewhere and evaluated in view of the capacity which will be required. Release versions, data banks, hardware, interfaces etc. come together to make the system map.
Which data will be needed in the future? The data migration of core and transactional data, as well as assumption of historical data, are basic themes – however, they must be addressed not only under the rubric of “what is technically possible” but rather in conjunction with “what is legally required and what is not permitted”.
In SAP as well, new organizational structures arise from the consolidation of organizations, and here too, legal questions must be clarified. Questions such as “Are these two legally independent organizations or, in the future, will they be one?” have fundamental consequences in the big picture.
Every consolidation has its accompanying process on the “human resource” level too. How do the company cultures mesh? Where will organizational units need to be newly structured? Who will adjust or adapt to whom?
With the resulting overall picture, which is of course documented in detail as a preliminary status report, the next step can now be undertaken – resolving the issue of the migration strategy.
In order to develop the migration strategy, it is first necessary to establish the assessment criteria.
In addition to itelligence’s standard applied criteria, at the project’s beginning an important role is played by the customer’s individually developed goal-setting.
To begin, the general range of conceivable and possible migration options are developed and described.
Then in the next step, these options are evaluated with regard to the evaluation criteria, whereby each criterion may be given its priority “weight”.
The scenario elaboration yields a migration recommendation, which must be discussed in the subsequent project duration. Ultimately, a migration decision must be arrived at, in order for the project to continue on track toward its objective.
Now, in the realization phase, crucial subjects come to the forefront, which must be addressed through corresponding project management:
ISSUE: How should we proceed? Which individual project phases will be involved in the sequence?
ISSUE: What does an appropriate Project Team for a Realization Project look like?
ISSUE: How will the planned “Software Map” look – above all, with regard to the necessary interfaces?
ISSUE: Which roles must be filled in the project?
ISSUE: What additional challenges will arise in the course of a Realization Project?
ISSUE: And finally, of course, there is the issue of what an SAP system merger costs.
Study conclusions and prospects
When all procedural steps have been carried out, the customer receives an implementation concept which is custom-tailored to his individual needs. All issues relevant to the project which can be answered in advance of its commencement, have been dealt with.
The resulting Project Plan represents a solid basis for the preparation and execution of an SAP consolidation or fusion. The study results have been processed and put in a manageable format, and provide the required depth in all facets.
This is the point at which the actual project, with all its specific features and specialized tasks, begins. The technical side of a system merger is often easier than the organizational and process unification, but the latter is supported by a unified ERP system: that means that eventually the combined elements will grow together.
And here I must return again to a personal look back: the move was accomplished with ease, but I had no inkling of all the things that were coming my way – an important reason why, to this day, I enjoy my work.