SAP Center of Excellence

COE Overview

Whether your company is just going live with SAP or has been live for quite some time, its never to late to put the proper infrastructure in place to effectively support your SAP environment.

One of the biggest hurdles for COE set up is to get company's (management) to view SAP as a long-term commitment and to manage the SAP platform as a business asset.

Given the lifespan of the SAP business platform (analyst estimates range from 15 - 25 years), and the financial investment made for the software and implementation, it is clear the emphasis of SAP planning needs to shift from "wow, we are live, what do we do now", to crafting a SAP Support strategy, which incorporates a COE.

The next hurdle is to regain the best practices that were most likely employed pre-live. Once you go live, there is no reason to abandon the core success factors that were pertinent to the implementation. For example:

• Aligning business owners with IT
• Identifying value-added and non-value-added processes
• Benchmarking results against initial ROI projections
• Simplifying SAP instances
• Developing infrastructure and enhancement standards and procedures
• Committing to ongoing training and knowledge transfer
• Institutionalizing change management

Lastly, it is important to understand that there is no universally accepted standard for COE's, as it will vary from organization to organization. Accordingly, there is no off-the- shelf solution or silver bullet for implementing a COE within an organization.

Before discussing an approach for implementing a COE - which I will do in Part II - it's important to understand some of the characteristics and objectives of a COE. Based on my experience, many people in IT/SAP Support can not properly define a COE or describe some of the key components or objectives. So, lets put some context around COE's. Hopefully, these will resonate with your particular situation.

What is a COE and Why do I need it?

First, it's important to understand the purpose of the COE. For many companies, the COE provides business and application expertise to support an organizations global or domestic SAP implementation, by designing new processes, optimizing current ones, managing complex implementation projects, providing user support and training, and keeping the complex SAP system landscape up and running 24/7. In addition, the COE helps optimize the use of all SAP products implemented in a cost-effective manner, contributing to the overall Company's success.

Meta Group defines the critical functions as:

• Operational support
• Application management and enhancements
• Infrastructure management
• Change management

Some of the key characteristics of a functional COE:

• Business-led
• IT-supported
• Possibly virtual organization
• Varies according to enterprise size & organization
• Optimization of current system usage (business and IT levels)

It is true that every company will have different objectives or goals in setting up a COE, so it is impossible to capture the entire spectrum of what the COE is meant to accomplish. Having said that, however, I think it would be beneficial to state some of the key functions and benefits of the typical SAP COE. These include:

• A unique platform for creating global SAP solutions
• A standard vehicle for deployment of SAP best practices
• A central point of contact for all SAP related matters
• Development of strong competencies in all SAP areas
• Enhance the value of the SAP Solution - More standardization and better integration
• Improvements in User Productivity
• Reduced Cost of SAP Operations (TCO)
• Improved retention of key SAP personnel
• Improved Service Levels

Recommendation

I mentioned at the beginning of this article that establishing a COE is critical to support success. On the flip side, however, many companies mistakenly believe that having a COE in place will guarantee support success, and enable business value from SAP to be achieved. This philosophy is fundamentally flawed as COE set up is only the first step. The support environment must be managed properly and optimized in order for business value to be unlocked downstream.

To that end, establishing a COE should be the first step, but it doesn't have to be perfect on Day 1. I would suggest letting it grow, evolve, and 'morph' in unison with the business objectives. This is a key concept that is often overlooked, as companies are far too rigid in the COE's infancy stage. Overall, flexibility and agility to adapt to changing end user, business, and company requirements is critical for the COE to drive value to the organization, and is paramount for the COE's long term success.