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1 7 must-answer questions The SAP Center of Excellence A practical guide for leaders setting a strategy for an SAP COE 1

2 Good question(s) For organizations with large SAP investments already in place, or those that are about to go live with their first SAP implementations, whether or not to have an SAP-focused Center of Excellence (COE) capability to support the investment in SAP isn t really a question. But there are lots of questions about how best to establish such a COE and what its scope should encompass. Should the COE be a function of a larger COE with a broader mandate, or should it stand on its own? Should its scope be narrow, focused only on supporting SAP, or should it strive to address process improvement and technology strategy? We ve helped scores of organizations select and pursue approaches to their SAP COEs that fit the unique business demands of their companies and industries. Along the way, we ve identified a handful of questions that come up time after time questions that must be answered, no matter what. This guide is a collection of the critical questions any organization setting up an SAP COE must answer, including some thoughts on the considerations that go into answering them. For your next big meeting on your SAP COE, consider making these questions the agenda. About this guide This guide was written for senior business and technology leaders who are looking to establish or reset the strategy for an SAP Center of Excellence. These insights are drawn from interviews with leaders at large organizations that have mature SAP COEs in place today. Our conversations with these leaders touched on everything from the structure of the COE to talent management, metrics, and beyond. For readers who recognize their insights here, thank you. The SAP Center of Excellence Guide 2

3 What should our COE be when it 1grows up? The SAP Center of Excellence Guide 3

4 1. What should our COE be when it grows up? Once you go live with SAP, you will be on the receiving end of a host of demands from the business some predictable, and some you d probably never guess. Without clearly defining the mission and scope of the COE, you may find the mission and scope decided for you by the business, by senior executives, or by other forces at work in the organization. That s why it s important to know from the start what the mission, scope, and goals of the COE are, as well as have a vision for how the COE should evolve over time. Tactically, this is important because it gives the team a set of criteria for fielding, and in some cases rejecting, requests. It can also have a big impact on other considerations such as hiring. Do you want to provide only basic SAP support, or will this serve as a full COE? The answer will affect all of the above. The options: Basic SAP support Keep the systems up and running, fix bugs, make enhancements as needed. Center of continuous improvement (CCI) All of the above plus process improvement responsibilities. This requires a team that understands business processes. SAP COE Has embraced a process improvement methodology and is considered a seamless part of the organization. Strategy, process, and technology COE Addresses technology and business strategy in addition to process and technology issues. The SAP Center of Excellence Guide 4

5 What should we 2measure? The SAP Center of Excellence Guide 5

6 2. What should we measure? Our interviews revealed a common lament among leaders at the helm of successful COEs. Many said that shortly after the launch of the COE, project metrics indicated that they were off to a solid start. Meanwhile, their counterparts in the business were reporting little or no real results from the COE. The problem? The COE was initially measuring its progress toward technology goals rather than business goals. Minimum is an important word in this context. Many COEs find themselves stuck measuring too much, too often. For example, every SAP project begins with a business case and many COEs find themselves measuring their progress against the business case long after launch. That s really a job for the CFO. The lesson? Don t get slowed down by the desire to measure everything all the time. Choose only what s most important, and stay on course. So what and how much should the COE measure? At minimum, there are four key measurements: SAP system uptime Status of open and closed fixes Time and budget milestones for enhancements Business requirements being met The good news is that we are starting to realize what really matters to the business in what we need to do to support them in using SAP. We now frequently share with them how we measure ourselves. They appreciate the transparency if we mess up. SAP COE director, large utility The SAP Center of Excellence Guide 6

7 How will we make the COE a career 3launching pad? The SAP Center of Excellence Guide 7

8 3. How will we make the COE a career launching pad? The COE is only as good as the people running it every day making talent acquisition and development a key factor in its success. And it doesn t take an HR expert to know that if the COE is viewed as a dead-end career path, the type of talent it will attract won t be up to the challenge of serving as a strategic sparring partner with the business. The COE should be a must visit stop for IT professionals, and some in the business, especially since SAP is one of the most important applications in the business. Just because COEs aren t typically part of the organization s standard IT career path doesn t mean a strong case can t be made for building a career there. Consider that, in a COE, employees have access to a wide swath of the organization and an equally broad portfolio of challenges. That level of access can provide an education on the business that is difficult to replicate elsewhere. Rotational programs that cycle resources through the COE can provide a much-needed business education for those focused on bits and bytes. But before you start implementing rotational programs, it s critical to refer back to your core strategy. (You have that, right?) If your COE has a fairly limited, technology-focused scope, having people who know the business may not be as important as you think. In our organization, many folks that are considered business process experts have spent time in the SAP COE. They see it as a real career boost. They advance technically but talk most about their greater understanding of the organization. Program director, large aerospace firm The SAP Center of Excellence Guide 8

9 How will we 4keep up? The SAP Center of Excellence Guide 9

10 4. How will we keep up? Keeping up with changes to SAP technology is a difficult challenge on its own. For COE leaders who have decided to take on supporting business process improvement in addition to SAP-focused activities, the task of keeping up with the changes to the business can make things even more challenging. Training in the fundamentals of IT is an important part of the answer. But many leaders told us that they didn t initially recognize the stark difference between the standard training provided by their organization and the specialized training and development needs of those within the SAP COE. COE staffers should be attending a rigorous regimen of SAP conferences, classroom training sessions, webinars, online trainings, and more. Standard, off-the-shelf corporate IT training isn t enough, and it can t be depended on to stimulate the development of COE talent in all the ways required to deliver value as the business and technology environment evolves. To keep up, COE leads must allow their people to get out there. Your people will appreciate your investment in them, and the business will find more value from the COE in the long run. The SAP Center of Excellence Guide 10

11 How should we staff the COE over 5the long haul? The SAP Center of Excellence Guide 11

12 5. How should we staff the COE over the long haul? Among the leaders we interviewed, a heavy reliance on consultants is standard operating procedure in the leadup to the go-live date. But what happens after go-live? Keeping an army of consultants on hand to sustain the COE isn t a realistic or desirable option. But don t stop there in your planning. From the beginning, develop a vision for the mix of staff you ll need to drive the COE you re building. If you make it up as you go along, you re likely to need contractors on hand to help far longer than you may have hoped. As a result, these leaders reported that they had to work through a host of tough questions on how to find the right employees for the COE: Should we keep those who are already on the project, retaining them as COE staff? Do we hire aggressively from our industry and consulting firms? And how do we make this an inviting career path? Time after time, we heard one key insight: Start early. Because cracking the code on staffing won t be easy. Plan on beginning with a mix of contractors and employees: A full year before go-live, we started conversations with our SAP leads on possible COE roles. With so many daily fires to put out with the project, it seemed like a huge investment of time but turned out to be well worth it. COE director, large consumer products company Full-time employees who have the institutional knowledge and business insight needed to keep the COE on track Contractors to round out the staff in specialized and emerging areas such as mobility, usability, cloud solutions, and SAP HANA Contractors for defined projects for which internal teams are unprepared, such as implementing a new component of SAP The SAP Center of Excellence Guide 12

13 How should we 6use consultants? The SAP Center of Excellence Guide 13

14 6. How should we use consultants? While a reliance on consultants may be a given for the initial project, exactly how you use them in the COE may vary considerably over time. Outsource the wrong function to the wrong contractor, and the resulting problems can resonate throughout the COE. Some companies have decided to place the job of staffing a COE solely in the hands of a single contractor an approach that can work if there are contracts in place that balance cost reduction incentives with those designed to secure a high level of service. Instead, outsourcing contracts often include strong cost reduction incentives that improve margins but ultimately end in frustration. Infrastructure and core technology roles such as BASIS and ABAP development Implementation of HANA Analysis and implementation of new technologies offered by SAP, especially those obtained through an acquisition or merger (such as Ariba and SuccessFactors) Remember: Outsourcing isn t always the answer. Plan for plenty of instances in which it will make more sense to go in-house, increasing as the COE matures. In our experience, what works is assigning contractors to handle discrete SAP support challenges in areas such as infrastructure, helpdesk, and testing. Here s a look at the tasks the COE leaders we interviewed typically assigned to consultants: The SAP Center of Excellence Guide 14

15 How important is 7certification, really? The SAP Center of Excellence Guide 15

16 7. How important is certification, really? At the individual level, certification can play a vital role in the success of the COE not just because it helps ensure that COE employees remain up to speed with the latest SAP developments, or because it inspires confidence among their colleagues, but because it can be a powerful recruiting tool. When it comes to certifying individuals, the decision usually comes down to budget and time. Meanwhile, COE organizations themselves can be certified by SAP and that raises some bigger questions. For starters, SAP offers two levels of organizational certification: primary and advanced. While primary certification is relatively easy to achieve, advanced certification can take more than a year and requires significant investments in SAP tools and processes. In fact, many organizations hire outside consultants to assist in the certification process. Is it worth it? The increased efficiency that comes with advanced certification is real and so is the credibility it can earn with clients. But in our view, it s just as important for the COE to find its footing before moving on to organizational certification. In short: Don t rush it. The SAP Center of Excellence Guide 16

17 Pencils down Think about how much your business has changed over the past five years. The past year. Even the last quarter. Now think about the SAP environment you re running today compared to the one your organization had in place just a few years ago. Our point? Things change fast. And your COE has to be flexible and adaptable enough to roll with the punches. While the questions in this guide certainly aren t all the questions you should expect to answer along the way to setting up a COE, they ve proven to be a great starting point for many of your peers. Just as important, the right answers to these questions can make for a more adaptable COE. One thing is for sure: If you don t ask the tough questions now, you re likely to be grappling with them in the thick of the action. So start now and get ready to start delivering some serious value to the organization. The SAP Center of Excellence Guide 17

18 Contacts If you would like to discuss this guide in more detail, please contact: Robert Wicke Director Deloitte Consulting LLP Contributors Ben Dollar Aimee Boudreau Sandra Medina Alexandra Zack Grant Luckey About Deloitte This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication. As used in this document, Deloitte means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2013 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited

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