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SAP for CIOs - Jon Reed's analysis

This section of JonERP.com contains pieces Jon Reed specifically wrote for CIOs, including for ERPtips. If you're interested in more content Jon publishes for SAP leaders, Jon is now the Editor in Chief for The ERP Executive - Panaya's Magazine for SAP Managers. See Jon's ERP Executive articles here. You can subscribe to ERP Executive content and check out the original content Jon and his team create each month for SAP managers.
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Ma pressed on, determined to find a consulting partner that would be willing to work on a fixed price basis and serve as an advisory role on the project. They found the right partner in MyITgroup. Dr. Bjarne Berg, the Director of Business Intelligence for MyITgroup, signed on as the main point of contact with Ma’s team.

Ma’s team had a very specific approach to how they wanted to run and fund the project. Most firms were reluctant to get involved, but MyITgroup turned out to be a good fit. “We had a set price and we told them, ‘This is how much money we think we’re willing to spend,’” said Ma. The agreement with MyITgroup stemmed from a timely introduction to Dr. Berg during a trade show. “Dr. Berg’s presentation on Managing an SAP Project, put together by SAP Insider, was the first conference I attended after I took the ERP Director job, and his session was the first one,” recalled Ma. “They were talking about the A- to-Z guide for project managers doing a BW project. How timely was that for somebody like me.”

One key to the good fit between Ma’s team and MyITgroup was the presence of an external project manager who also had relevant hands-on skills. “Dr. Berg is not  a typical project manager,” says Ma. “He knows the technology side inside-out, and he worked with the first version of BW. He’s a true expert; there’s not much he cannot do. In the cases where he couldn’t do a particular piece of the work, or didn’t have the time, he’d call in other resources to make it happen.”

Dr. Berg served as what you could call a trusted advisor, providing higher-level advice as well as being a referral source for subject matter experts to fill any skills gaps on the Sedgwick project. Dr. Berg was perfect for this kind of advisory role, because he had the project management know-how but also the technical background in BW. “They were willing to give us whatever kind of help we needed at that time,” says Ma. “From project management and overall project design guidance, all the way down to the hands-on ETL and data modeling work, systems configuration, and performance tuning.”

To structure this different type of consulting relationship, Sedgwick combined an “on call” approach with regular on-site meetings with Dr. Berg. “We had some pre-determined meeting frequencies that whenever his schedule allowed, he would pop in for a couple of days for up to a week. Then we would assess where we were and he would train our team members on anything we would need. There were occasions where I didn’t bring up something that we needed, and he would point out a gap and say ‘you may not see this yet but several months down the road you may run into this kind of issue, and here are the options you may want to take.’”

This “trusted advisor” role worked well for this particular project, and it allowed Ma to revive the level of enthusiasm for SAP while coming in at $125,000 for the consulting budget. A typical training budget would have been around $100,000, and they did end up spending $200,000 on training, but the team had no regrets, especially when the training investment had such beneficial results to empower the team for the longer term.

Ma’s training philosophy fit in with the changing nature of the skills that would be needed on his project. He didn’t want his team to have to call in someone from the outside every time something needed to be tweaked. “It’s not just like your general ledger, where once you have the structure set up it’s going to stay there for at least seventeen years without any change,” says Ma. “With management-by-KPI, new issues pop up, new expectations pop up. And we have to be able to be in the position to change whatever is required. It’s not acceptable to call in a consultant every time we need to make some changes. When people feel like SAP is very easy to use, we can change it if we want to, and we can change it with our own staff. With strong in-house teams, there are no obstacles to making the implementation a real success.”

4. Keep Talent In-House By Rewarding Performance

There is one major downside to a well-trained internal SAP team: you run the risk of losing team members to other companies. Sedgwick County is not the first SAP user to provide “SAP skills pay” to its project members in an effort to retain their talent, but I have not seen as many “dot orgs” that aggressively reward skills and performance.

There are three components to Sedgwick County’s talent retention plan. The first is during the initial hiring process. A country governance budget cannot pay the kinds of rates that you can get in the private sector, so Ma’s team intentionally recruited people who were motivated by more than salary. They hired people who believed in the mission of serving the taxpayer with improved governance.

The second tactic is boosting the salaries of those with SAP skills. For the Sedgwick County team, the chosen approach is to boost the base salaries of those with “special skills” like SAP. Some companies opt for “hot skills bonuses,” but at Sedgwick, they boost base compensation for SAP team members.

The third aspect of talent retention at Sedgwick is rewarding performance. Each department has established performance guidelines. Those who achieve their performance goals are rewarded accordingly. However, I was still surprised to learn that there wasn’t more resistance on the part of team members to having their performance exposed and measured in more than 800 different KPIs. But Ma had an interesting point: he told me that users were receptive to these KPIs precisely because they were not subjective, but were actually honest and fair indicators of performance, brought out into the light for everyone to see. People were willing to be evaluated by what they considered to be objective results.

“When I initially approached everybody about this, I assured all the department heads that the public has the right to know,” says Ma. “Also, in today’s world, you have a professional obligation to show how successful you are. Absent those kinds of active displays of your management information, you are subject to other people’s opinions. By having a dashboard in place, you are actively getting the truth out. It turns out that everybody was okay getting the truth out.”

5. Good Results and Next Steps

The results of making these 800 KPIs available to county officials is a push towards even greater transparency. There are plans to make the KPIs available to the public soon, though that will need to be approved by the elected officials. The exposure brought about by the KPIs has led to some important clarifications, not all of them expected.

For example, a KPI dedicated to monitoring the effectiveness of Emergency Medical Services (EMS) turned up some surprising results. They learned that adding just one EMS crew doesn't measurably improve the overall performance of the EMS department. So, from a taxpayer's perspective, county officials know that to show an improvement in EMS performance, they should hold off on adding one crew to an EMS staff and wait until there is a budget for three or four additional crews.

mafigure2.jpgFigure Two: Comparison of Urban and Rural EMS Response Times

Another interesting example involved firefighter responsiveness. Fire response is often measured by “room of origin” metrics, which measure the extent of fire damage from the room the fire started in. The problem is that in rural areas such as Sedgwick County, it’s much more difficult to get to the source of the fire as quickly as in an urban area. This room of origin KPI was not sufficient. “The room of origin measure created some misunderstanding. Based on that, people tend to draw a conclusion that the Sedgwick County fire department is less professional than some urban city departments. And that’s not the case at all.” Ma’s team responded by adding a floor of origin and a “total loss of structure” measurement. While not all of these results were positive, they helped to better illustrate the difficulties of fighting fires in rural areas.

So what’s next for Ma? He has a fun project on the way: it’s time to take the lessons learned from the first BW project and extend it to a similar one, this time to measure the performance of elected and appointed officials. These folks don’t work directly for the county manager, so the level of top-down buy-in will be different. There is sure to be new pressures and political dynamics, but for this greater challenge, Ma can bring with him the track record of a well received (and cost effective) project under his belt. When the elected officials saw the demo, they were encouraged by the fact that all the information in the system is automatically populated there by SAP. There is no human manipulation of the data they will be evaluated by. 

Ma also has his eyes on SAP’s Business Objects (BO) acquisition. The BW back-end is working seamlessly, but he would love to have more flexibility on the presentation layer. Ma is hopeful that BO will eventually provide this. “The front end of the tool we use, which is SEM presenting on SAP Portals, it’s getting the job done using the provided structure, but we wish we had more flexibility,” says Ma. “We wish the end users could influence the presentation in a more significant way. It looks like BO is going to offer that approach. So once SAP has the necessary work done connecting BO in a major way with the BW back end, I think we need to start evaluating that and take the dashboard to a much higher level.” Ma is also hopeful that SAP-BO integration will result in more flexibility for open text, keyword-based searching, another feature that his users are asking for.

Conclusion

SAP has come a long way, both in terms of its implementation methodology and the availability of experienced consultants. Still, it’s rare to hear of such a feel-good story in three areas that are often pain points for SAP users: change management, team training, and consulting expenses. I hope that this view of the Sedgwick County project has offered some useful tips in these areas that can be applied to other projects. No, it’s not realistic to save 90 percent of consulting costs on a typical SAP project. But what is realistic is to develop a user-centric approach to SAP implementation. To accomplish that, you have to start somewhere. Renfeng Ma started out with a vision of greater transparency and better service to his constituency, and he found a way to see it through.

Jon Reed would like to thank Renfeng Ma and Dr. Bjarne Berg for reviewing this article for accuracy.

Site Editor’s Note: This article was originally published in a modified version in the August/September 2008 edition of SAPtips. SAPtips is a subscription-based publication, but you can obtain a free sample issue from the SAPtips web site, as well as information on all previously published articles.

SAPtips Bio: Jon Reed, JonERP.com. Jon Reed is an independent SAP analyst who writes on SAP consulting trends. He is the President of JonERP.com, an interactive Web site which features Jon’s SAP Career Blog and his podcasts for SAP professionals. Jon has been publishing SAP career and market analysis for more than a decade, and he serves as the career expert for SearchSAP.com's "Ask the Expert" panel. From 2003 to 2006, Jon was the Managing Editor of SAPtips.

Jon Reed was recently named an SAP Mentor. The SAP Mentor Initiative is a highly selective program which recognizes those individuals who are making an outstanding contribution to the SAP community. Jon is one of 70 mentors who are playing an active role in SAP's online ecosystem, which includes the combined 1.3 million members of the SDN and BPX web sites.



 

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