In my first Community Corner post, I revealed three secrets for how customers should approach a partnership with a vendor who plays in the vast SAP ecosystem.

Now I’m offering three SAP opportunities for you, as an existing (or aspiring) IT leader, to save your business significant money. Big money.

Perhaps some of these might not seem prophetic or revolutionary to those of you with decades of experience. But for those new to the SAP world, these three strategies can be very beneficial for many reasons. (Picture your mug shot on your company’s wall of fame. Yup.)

For starters, know that the realized cost savings from these three tactics come easy. And while perhaps the savings will get those in the corner offices excited the most, it’s the value and better quality of service that are the most exciting part. Imagine lower TCO with higher ROI. Should I continue? Thought so. Here are my three secrets.

Secret #1: SAP Hosting Is a No-Brainer

Let’s be honest here: Effectively managing SAP environments can be expensive. The cost of simply keeping the lights on can be daunting. People, knowledge, SLAs (among others) all contribute to the basic requirements of in-house SAP support must-haves. Let’s examine some of the variables:

Personnel: From an internal resourcing perspective, an organization must ensure that the broad range of both SAP and non-SAP expertise is covered—operating systems, database administration, networking, Netweaver, Basis, Solution Manager and on and on.

Hardware Infrastructure: Costs associated with the capital expenditure including servers, superdomes, routers, telecom, fiber, proper facility requirements (such as raised floors and cooling equipment) may all be riveting discussion to the Star Trek crowd—but CFOs lose serious sleep over the price tag.

Business Support: Off-hour support is a requirement for any respectable production support mechanism. Getting calls at three in the morning because a business-critical background job didn’t run is no fun and isn’t the best use of your employees’ time.

Knowledge: Technology is constantly evolving. Keeping up with the IT Jones is expensive: new products, upgrades to existing products, name and terminology changes. Whether via training (actual cost) or employee research (still a cost), it takes time to understand how to keep up with—let alone stay ahead—of the IT infrastructure curve.

Enter SAP hosting. This commoditized and packaged service addresses all of these concerns and more. It literally takes away the operational support headache along with the underlying infrastructure maintenance costs; turns capital expenditure into an operating expense; allows your organization to offload mundane (albeit tremendously important) infrastructure activities to a specialized SAP hosting provider.

In the process, you can move internal resources from tactical activities to strategic thinking and planning, replace numerous resources with a single internal resource, and provide higher levels of services and SLAs to your business.

Secret #2: The Solution? Solution Manager

During a recent conversation with a client (who specializes within the financial sector), I asked how the company was leveraging Solution Manager. Without hesitation, the development manager said “as little as possible.” This response is both unfortunate and pervasive. Based on my experiences talking up the values of Solution Manager to clients, not much is truly known about its features.

Solution Manager exists as the only way for SAP customers to receive meaningful patching; create logons/S-USER IDs; eliminate bugs via SAP fixes; connect directly to SAP for Enterprise Support; and obtain valuable maintenance-included support services such as Health Checks. But there’s a whole host of other valuable components that can make your life easier.

Solution Manager is also a “suite,” an evolutionary set of components. It starts with more “technical-administration-monitoring-focused” tools and then moves toward more “business-process-oriented-aligned” components. The former offers easy opportunities for your Basis team to move some manually managed tasks to proactive Solution Manager monitoring—for example, monitoring CCMA agents, background job monitoring, CSA team responsibility activities and other low-hanging fruit. Alternatively, it could allow your team to do much more with fewer resources.

Furthermore, if you already use a third-party hosting provider or Basis AMS services (i.e. following Secret #1), you can ensure that they are truly performing the activities that they should be delivering. Adding Solution Manager Central System Administration along with its proactive reporting capabilities could not only hold your vendor’s feet to the fire, but it could potentially identify opportunities for big savings opportunities.

Secret #3: Outsource

While not always the water-cooler favorite topic, tapping outsourcing providers to support your SAP production support is an excellent opportunity to lower overall spend. Areas ripe for production-support outsourcing include break/fix and minor enhancements meant to not only keep the lights on but improve upon your existing SAP investment.

This opportunity especially holds true for the midmarket. Lean organizations with small IT organizations make prime targets where outsourcing SAP operations can not only save an already cost-sensitive company the expenditure of properly maintaining an SAP support mechanism (such as a minimum of three to four full-time employees), but outsourcing can provide improved services at a lower overall cost.

One of our clients—a midmarket oil and gas drilling company—decided during its initial SAP implementation to fully outsource the entire IT department with the exception of a single IT employee: the IT director. Acting as the captain of the IT ship, the IT director successfully managed the IT outsourcing provider to ensure that the committed SAP production support services were delivered per the contract. Not only did the level of service meet the needs of the customer, but the overall cost for this support was a fraction of outfitting a similar internal structure.

Of course, this tactic might not boost team morale. But it might actually be the right choice for your organization in this economy. Saving money with increased services is not only the right choice but perhaps the only choice to survive.

Inquiring Minds Want to Know

So there you have it: Three cost saving opportunities that could make you a legend within your company. So what are you waiting for? Please feel free to comment on this post or e-mail me directly at yosh.eisbart@benimbl.com, or follow such diatribes via @NIMBLNews. Happy SAP’ing!

Yosh Eisbart is a principal and cofounder at NIMBL LLC, an industry-recognized SAP professional services firm focused on agile delivery and maximizing customer SAP investment by doing more with what clients’ already own. Headquartered in Denver, Colo., with offices in Los Angeles and Chicago, NIMBL serves both Fortune 500 organizations and midmarket companies across North America. Yosh began his SAP career over 17 years ago in the days of R/2, has lead SAP initiatives across the globe and believes strongly in actively contributing to the SAP ecosystem. Driving NIMBL’s strategic business initiatives, he proselytizes the importance of value and mutually beneficial partnership between customer and vendor.

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2 Comments for SAP Confidential: 3 Best-Kept Secrets for Saving Money

Martin English

no sales pitch, honest, and no vendors named. For a start, I could be totally wrong

Anyway, I make my living out of each of the three items you mentioned above. I can not stress enough that you must do due diligence on the hosting and support partners you choose, including talking to existing and prior customers. An example of why is something I’m working on today….

The previous support partners of my Customer did not do a test of the backup and restore capabilities of the SAP landscape after replacing the backup / restore software earlier this year. I am (or rather, was) unfamiliar with the new software, but trusted in their professionalism, or at least the professionalism of their documentation.

On Thursday, the Customer asked for a refresh the test system from a backup of the production database. Under normal situations, starting at 4PM, I would be able to start the restore to write over the test system, get a normal night of sleep, and spend an hour reconfiguring the target system the next morning, with the ‘new’ target system ready by mid day at the latest.

Unfortunately, control files were misconfigured, parameter names in scripts were syntactically incorrect, and so on. In fact, the only syntactically correct refresh scripts we could find were for the previous tools. So I’m working my way through the documentation and using the weekend to learn about this particular backup / restore tool.

The customer is on what is basically a fixed price support contract for BASIS DBMS and OS support – we estimated the annual workload by adding up the weekly load for a year, adding the workload associated with patching, system refreshes, DR testing etc, then dividing by 12 to give a monthly average for billing – so they won’t wear any extra cost. And I haven’t spent a lot of billable time on it anyway; you start a backup or restore and walk away for a few hours, plus I’ve learnt a few new things about this backup / restore tool (the tool vendor has a very good site btw for what is essentially a very mature product).

So what IS the cost ? Well, the Customer is coming to the conclusion that the previous incumbent lied about the level of testing they did on the new infrastructure. And they will tell other potential customers. But that’s what they (the previous incumbent) deserve.

The Customer is lucky, as we haven’t had to do a production database restore. ? Where would the Customer have been if we had to do a Disaster Recovery restore ? Who knows what state that will be in, compared to the documentation ?

The cysnical view is that idiots like ‘them’ help keep my employer in business as we fix their mistakes. The idealist in me wonders why people idiots like ‘them’ exist.

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Yosh Eisbart

Thanks much Martin for the passion, candor, and personal perspective. I most definitely agree with your assessment and unfortunately – no all vendors are created equal. That being said – we don’t throught the baby out with the bathwater due to one bad apple; instead – we have the responsibility to perform our due dilligence as best as we can.

Please keep the comments going (both Martin and others). Happy SAP’ing!

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