The SAP Center of Excellence: Phases and Delivery Models

By building a center of excellence (CoE) around its SAP solution, an enterprise can go from simply running SAP to leveraging the software’s full power. Organizations can implement a CoE through a variety of methods, but the result of increased value from SAP remains consistent.

This post is the first in a series about the different considerations a company should weigh as they decide the right approach to building a CoE for an SAP environment. To start off, let’s consider the SAP-support options open to companies, as well as timelines to consider when planning a CoE prior to an SAP go-live.

When planning the SAP CoE, the enterprise CIO must first consider whether to build or buy—or to combine the two. We will explore the pros and cons of each a bit later. Another factor is the stabilization period that will be required to get the company from go-live to a steady state. This aspect of a system transformation is far too often overlooked.

Regardless of the approach ultimately decided on, all companies go through a period after go-live that requires intense support and focus as the business users and IT team start to fully adopt the IT and process changes made during implementation.  This phase typically requires significant support from SAP experts to coach end users, capture ‘new’ gaps, and continue to resolve low-priority issues that were determined less critical prior to go-live. This phase will vary in length (typically 3-9 months) depending on a number of factors, including master data, the amount of testing and training performed prior to the go-live, and the complexity of the overall design.

When considering the best approach for covering this stabilization phase and the support phase that will follow, you should consider several models. These models include: build the CoE entirely in house; completely outsource it; or have a blended delivery model. Here are a few pros and cons for the in-house and outsourced models:

In-house SAP Centers of Excellence

Pros:

• Direct control over resources
• Immediate access to personnel when needed
• Accumulated knowledge of the SAP system over time
• Resources with deep company knowledge and relationships

Cons:

• Expense of a full-time team with potentially multiple members with backups
• Turnover risk of key team members
• Coverage model (vacation, sick time)
• Lack of resource elasticity
• Limited understanding of SAP / industry best practices (They only know how your company does things in SAP.)

Outsourced SAP Centers of Excellence

Pros:

• Mitigates resource risk
• Guaranteed service-level agreements (SLAs)
• Cost-effective (Allows you to access various SAP skills on demand without the need for full-time equivalents.)
• SAP best practices and deep expertise

Cons:

1. Requires BPO ownership and accountability
2. Requires detailed project and support resource planning, both mid- and long-term
3. Potential for the organization to push SAP ownership to outsourced partner

A blended model often gives CIOs the best of the in-house and outsourced options. CIOs can leverage a partner for the stabilization phase, a decision that provides knowledge transfer for the support phase. By hiring an internal team to support key functional and technical areas in SAP, and combining these new folks with current internal-process experts, the CIO creates a good mix. In this instance, a strategic outsourcing partner like NTT DATA Business Solutions can really deliver the value of SAP.