Outsourcing — this term holds a promise of best-in-class service at low cost. But how do you realize this potential? Read this book, and you'll learn everything needed to decide on your own SAP outsourcing strategy: Which components or project types are best suited to outsourcing? Which outsourcing model is right for your company? How do you find a reliable and affordable partner? And how to define SLA's that really work? You'll benefit from the author's extensive experience in the field and the numerous examples from real-world projects provided throughout!

Making the Decision:
Find out whether your organization is the right candidate for an SAP outsourcing initiative, explore the benefits of different outsourcing models, and learn which components and projects are best suited.

Choosing a Partner:
They'll promise you everything, but will they deliver? Find out which information you should request in advance, how the screening process works, and what to consider when setting up a contract. Plus, benefit from real-life templates for Requests for Information and Request for Proposal documents!

Executing the Plan:
Whether you are planning an SAP implementation or upgrade, production support, or a global delivery, find out which tools and staff you need, how to set up a feasible schedule, and get familiar with your most important partner — the Integration Manager.

Real-life Case Studies:
Throughout the book, you'll find case studies with experiences other organizations made. Learn what they did right, but don't repeat their mistakes!

Highlights

• The Strategic Perspective
  • Company Culture and Processes
  • Components and Projects
  • SAP Outsourcing Models
    
    
• How to Do It
  • Implementation and Upgrade Projects
  • Production Support and Global Delivery
  • Tools and Staffing
  • Choosing a Partner
  • Timing, Transition, and Communication
    
    
• Templates and Case Studies
  • Request for Information
  • Request for Proposal
  • Statement of Work
  • Engagement Contract

About the Author(s)

Yosh Eisbart is a founding principal of NIMBL LLC (www.benimbl.com) — a nationally recognized SAP premier consulting firm. Beginning his SAP career in 1995, he has been part of countless global implementations and production support operations.

Table of Contents

• ... Foreword by Bridgette Chambers, ASUG CEO ... 15
• ... Preface ... 19
• ... Introduction ... 27
• 1 ... Who — Determining Whether Outsourcing is Right for Your Organization ... 35
• 1.1 ... Corporate Culture and Executive Influence ... 37
• 1.2 ... SAP Components Best-Suited for Outsourcing ... 38
• 1.2.1 ... SAP Operations ... 38
• 1.2.2 ... Project Work and SAP Staff Augmentation ... 39
• 1.3 ... SAP Components not Best-Suited for Outsourcing ... 41
• 1.3.1 ... Data Sensitivity, Security, and Compliance ... 41
• 1.3.2 ... Home-Grown SAP Environments ... 41
• 1.3.3 ... Services Providers/Service Level Agreements ... 42
• 1.4 ... Limits of Full-Time Employee Hiring/Quick Hit Temporary Project Work ... 43
• 1.5 ... Organization Size ... 43
• 1.5.1 ... Small Enterprise (SME) ... 44
• 1.5.2 ... Upper Midsize Enterprise (UME) ... 44
• 1.5.3 ... The Fortune 500 ... 45
• 1.6 ... SAP as Software: Its Complexity, Integration, and Inherent Challenges ... 46
• 1.7 ... Summary: The Perfect Organization Best-Suited for SAP Outsourcing ... 47
• 2 ... Why — Potential Reasons why Outsourcing Might Make Sense for Your Organization ... 49
• 2.1 ... Cost ... 49
• 2.2 ... Objectivity ... 50
• 2.3 ... Expertise ... 51
• 2.3.1 ... Shadowing (Premeditated Osmosis) ... 53
• 2.3.2 ... Emotional Component ... 54
• 2.4 ... Inherent Standardization Advantage ... 54
• 2.5 ... Specific SAP Initiatives ... 57
• 2.5.1 ... Assessments ... 57
• 2.5.2 ... Optimization ... 58
• 2.5.3 ... Audits ... 60
• 2.5.4 ... "GO — No GO" Gate Review ... 61
• 2.5.5 ... "Bulldog" Services — SAP Project Management Oversight ... 62
• 2.6 ... Focus on Internal Core Capabilities ... 63
• 2.7 ... Reasons Why NOT to Outsource your SAP Operations ... 65
• 2.8 ... Summary ... 66
• 3 ... What is SAP Outsourcing? The Various Flavors ... 67
• 3.1 ... Baseline: The Various Flavors of SAP Outsourcing ... 67
• 3.1.1 ... Onsite Resources ... 68
• 3.1.2 ... Offsite Resources ... 69
• 3.1.3 ... Nearshore Resources ... 69
• 3.1.4 ... Rightshoring ... 71
• 3.1.5 ... Offshore Resources ... 71
• 3.1.6 ... Hybrid Resources ... 72
• 3.1.7 ... Collocation ... 77
• 3.1.8 ... Partners-in-Projects ... 78
• 3.2 ... Specific SAP Outsourcing Models ... 79
• 3.2.1 ... SAP NetWeaver Basis Operations ... 79
• 3.2.2 ... SAP Hosting ... 81
• 3.2.3 ... Custom Development ... 85
• 3.2.4 ... SAP Centric Help Desk/Service Desk ... 86
• 3.2.5 ... Implementation ... 87
• 3.2.6 ... The Break/Fix to Global Delivery Services Pyramid ... 88
• 3.3 ... Summary ... 90
• 4 ... When — Timing and Transition ... 91
• 4.1 ... Choosing the Proper Timeframe ... 91
• 4.2 ... Timing for Post-Production Support Outsourcing ... 92
• 4.3 ... SAP Methodologies' Impact on Timing ... 95
• 4.3.1 ... ASAP ... 96
• 4.3.2 ... Run SAP ... 98
• 4.4 ... Managing Change ... 99
• 4.5 ... Control Advisory Board ... 103
• 5 ... Implementations and Upgrades ... 107
• 5.1 ... ASAP (Focus) Methodology ... 107
• 5.2 ... Outsourcing by ASAP Phase ... 111
• 5.2.1 ... Project Preparation ... 111
• 5.2.2 ... Blueprinting ... 113
• 5.2.3 ... Realization ... 115
• 5.2.4 ... Final Preparation ... 119
• 5.2.5 ... Go-Live and Support ... 121
• 5.3 ... Using SAP Solution Manager during Implementations ... 123
• 5.3.1 ... Maintenance Optimizer ... 124
• 5.3.2 ... Project Administration/Work Centers ... 127
• 5.3.3 ... Service Desk ... 129
• 5.3.4 ... Upgrades ... 131
• 5.4 ... Using the Custom Development Management Cockpit (CDMC) for Upgrade Preparation ... 135
• 6 ... Production Support ... 139
• 6.1 ... SAP Production Support Models ... 139
• 6.1.1 ... Break/Fix Model ... 140
• 6.1.2 ... Production Support Plus ... 143
• 6.2 ... SAP's Run SAP Methodology and its Advantages ... 144
• 6.2.1 ... Why is Run SAP Important for Organizations? ... 145
• 6.2.2 ... Run SAP Advantages for your Production Support Environment ... 146
• 6.3 ... SAP Enterprise Support ... 148
• 6.4 ... SAP Business Processes and Technical Areas that Work Well for Outsourced Production Support ... 151
• 6.5 ... Tools to Optimize your Production Support Center ... 153
• 6.5.1 ... Central System Administration ... 154
• 6.5.2 ... Central System Monitoring ... 158
• 6.5.3 ... SAP Solution Manager and SAP NetWeaver BW Integrated Reporting ... 160
• 6.6 ... Managing Work Effort ... 163
• 6.6.1 ... Managing the Work Effort Process ... 163
• 6.6.2 ... Formalized Proven SAP Work Effort Processes ... 164
• 6.6.3 ... Tracking Tools ... 165
• 7 ... Global Delivery ... 171
• 7.1 ... The Basics ... 171
• 7.1.1 ... Advantages of Global Delivery ... 172
• 7.1.2 ... Disadvantages ... 173
• 7.2 ... Center of Excellence (COE) ... 175
• 7.3 ... The Rise of the Customer Competence Center and the Center of Expertise ... 178
• 7.4 ... Summary ... 182
• 8 ... Engagement Construct ... 183
• 8.1 ... Primary Models ... 184
• 8.1.1 ... Offsite: "Three Wise Monkeys" ... 184
• 8.1.2 ... Manager to Manager Integration Model ... 186
• 8.1.3 ... Hybrid ... 190
• 8.1.4 ... Dynamic Resourcing ... 193
• 8.1.5 ... Pure Onsite ... 194
• 8.2 ... The Role of Key Management ... 196
• 8.2.1 ... Integration Manager (Internal or Outsourced Resource) ... 196
• 8.2.2 ... Offsite Delivery Manager (Outsourced Resource) ... 197
• 8.2.3 ... Technical Architect (Typically Internal Resource) ... 197
• 8.2.4 ... SAP NetWeaver Administrator (Internal or Outsourced Resource) ... 198
• 8.2.5 ... Business Process Leadership (Internal Resources) ... 198
• 8.2.6 ... Executive Sponsor (Internal Resource) ... 198
• 8.2.7 ... Project Governance (Both Internal and Outsourced Resources) ... 199
• 8.3 ... Conclusion ... 201
• 9 ... Selecting a Partner ... 203
• 9.1 ... Understanding What You Need (not Want) ... 204
• 9.2 ... Overview of Various SAP Partner Types ... 204
• 9.3 ... Establishing Baseline Criteria ... 207
• 9.3.1 ... Common Baseline Criteria ... 207
• 9.3.2 ... Baseline Criteria Unique per Initiative ... 208
• 9.3.3 ... Scoring Allocation ... 211
• 9.4 ... The Selection Process Lifecycle ... 213
• 9.4.1 ... Request for Information (RFI) ... 214
• 9.4.2 ... Vendor Summit ... 214
• 9.4.3 ... Request for Proposal (RFP) ... 216
• 9.4.4 ... Oral Presentations ... 216
• 9.4.5 ... SOW/Final Negotiations ... 217
• 9.4.6 ... Partner(s) Selection ... 217
• 9.5 ... The RFX — Structured Deliverables Used in the Selection of a Partner ... 218
• 9.5.1 ... The Request for Information (RFI) ... 218
• 9.5.2 ... The Request for Proposal (RFP) ... 220
• 9.5.3 ... The Statement of Work (SOW) ... 223
• 9.5.4 ... Contract Negotiation ... 225
• 9.6 ... SAP Accreditations ... 226
• 9.6.1 ... SAP Services Partner ... 227
• 9.6.2 ... Business Process Outsourcing (BPO) ... 228
• 9.6.3 ... SAP BusinessObjects ... 228
• 9.6.4 ... Channel ... 228
• 9.6.5 ... Education Partners ... 229
• 9.6.6 ... SAP Hosting ... 229
• 9.6.7 ... Software Solution Partners (Powered by SAP NetWeaver) ... 230
• 9.7 ... Screening Process ... 231
• 9.8 ... Alternative Sourcing Models ... 234
• 9.8.1 ... Contract-to-Hire ... 234
• 9.8.2 ... Build-Operate-Transfer (BOT) ... 235
• 9.8.3 ... Vendor Management Systems ... 235
• 9.8.4 ... Acquisition Strategies ... 238
• 9.8.5 ... Direct Hire ... 238
• 9.9 ... Exit Strategy ... 239
• 10 ... Large Enterprise ... 243
• 10.1 ... Unique Large Enterprise advantages and their Maximization ... 243
• 10.1.1 ... Deep Pockets ... 244
• 10.1.2 ... Deliverable-Based and Fixed Pricing ... 246
• 10.1.3 ... Building Relationships ... 247
• 10.2 ... The Role of SAP in the Large Enterprise World ... 248
• 10.3 ... Strong SAP Alignment ... 250
• 10.4 ... Bleeding-Edge SAP Technology ... 251
• 10.5 ... Large Enterprise Consultant Modeling ... 253
• 10.5.1 ... Build-Operate-Transfer (BOT) ... 253
• 10.5.2 ... Global Center of Excellence ... 254
• 10.6 ... Summary ... 255
• 11 ... The Midmarket Space ... 257
• 11.1 ... Unique Midmarket Challenges ... 258
• 11.1.1 ... Limited Resources ... 258
• 11.1.2 ... Limited Funds ... 259
• 11.1.3 ... Midmarket Multi-Tasking ... 260
• 11.1.4 ... Lack of Market Appeal ... 261
• 11.1.5 ... Lack of Executive Management Focus ... 262
• 11.1.6 ... Unfamiliarity/Inexperience ... 263
• 11.2 ... The SAP Super-Super User Alternative ... 263
• 11.3 ... Stretching your SAP Dollar: Outsourcing Options ... 265
• 11.3.1 ... Application Management Services ... 266
• 11.3.2 ... Full Service Application SAP Outsourcing ... 269
• 11.4 ... Summary ... 273
• 12 ... The Value of IT Standardization ... 275
• 12.1 ... Why bother with standardization? ... 276
• 12.2 ... Implementing Strong IT Practices — IT Process Frameworks, Industry Standards, and Other Tools ... 277
• 12.3 ... A Simple, Common Sense Approach to IT Process Standardization and Improvement ... 283
• 12.3.1 ... Adopt an IT Service Management Framework and Start Speaking a Common Language ... 283
• 12.3.2 ... Initiate a Project to Adopt a Common Approach to IT Service Management and Document Key Processes ... 284
• 12.3.3 ... Assess your Organizational Process Maturity Level ... 285
• 12.3.4 ... Determine Process Maturity Goals ... 286
• 12.3.5 ... Identify Improvement Initiatives and Define an Implementation Master Plan ... 287
• 12.3.6 ... Launch Improvement Projects and Execute ... 287
• 12.3.7 ... Compare Results Against Original Objectives and Start Again ... 290
• 12.4 ... Standardization in SAP Environments ... 290
• 12.5 ... IT Processes — Where to Start ... 292
• 12.5.1 ... IT Processes — Context Diagram ... 293
• 12.5.2 ... IT Process Documentation ... 294
• 12.6 ... Other Tools for IT Process Standardization ... 297
• 12.7 ... Summary ... 300
• 13 ... The Role of the Integration Manager ... 303
• 13.1 ... The Integration Manager: A Definition ... 304
• 13.2 ... An Integration Manager's Persona: Characteristics and Attributes ... 306
• 13.3 ... The Role of the Integration Manager and the Relationship to the Control Advisory Board ... 307
• 13.4 ... Necessity versus Nicety ... 311
• 13.5 ... The Integration Manager from your Offsite Partner ... 313
• 13.6 ... The Integration Manager's Counterpart: The Offsite Delivery Support Manager ... 315
• 13.7 ... Summary ... 315
• 14 ... Service Level Agreements ... 317
• 14.1 ... Establishing SLAs ... 318
• 14.1.1 ... Primary Components ... 318
• 14.1.2 ... Defining the Correct SLA Amount ... 322
• 14.2 ... SLA Supporting Tools ... 323
• 14.3 ... SLA Guidelines and Determining Factors ... 325
• 14.3.1 ... SAP Landscape ... 325
• 14.3.2 ... SAP Technologies ... 327
• 14.3.3 ... SAP Business Scenarios ... 327
• 14.3.4 ... Type of Initiative ... 328
• 14.4 ... Summary ... 329
• 15 ... Conclusion ... 331
• A ... Sample Request For Information Document ... 339
• B ... Sample Request for Proposal ... 347
• C ... Sample Statement of Work ... 361
• D ... SAP Screening Process ... 369
• E ... The Author ... 371
• ... Index ... 373