Unlocking value from your ERP service organization*

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1 Consulting Application Managed Services Technology Unlocking value from your ERP service organization* Application Support Effectiveness Assessment can help you identify and dismantle the roadblocks that prevent you from realizing ERP benefits. How can poor service performance affect your organization s investment in ERP? 65 percent of 1,150 CEOs interviewed for PwC's 11th Annual Global CEO Survey cited technological innovation as a source of competitive advantage. Poor service performance can hinder your organization s innovations. Companies are under tremendous pressure to ensure continuity of key operations with fewer resources. Many companies look to their enterprise resource planning (ERP) systems to find efficiencies, improve processes, reduce complexity, integrate systems, and eliminate redundancy. Even in an economic downturn, leading companies invest in ERP as a strategic costreduction tool. ERP provides the foundation for streamlining, standardizing, and automating the processes that define the way your organization operates. Many companies can quickly realize value from their investment in a new or improved ERP system, which can enhance planning and reporting capabilities and provide greater effectiveness and better information for leaders, managers, and other decision-makers. But what happens if the people in your organization cannot tap into the power of an ERP system? This can happen when the IT service organization cannot meet users needs. When this happens: Users become frustrated with the ERP system because they cannot get timely or appropriate assistance The enterprise does not reap the full, intended benefit from the ERP system Leaders and stakeholders lose confidence in support services and system effectiveness, and the data produced comes into question When users become frustrated with ERP, business units and individual users may develop their own solutions and methodologies for buying, managing, and tracking resources. These solo strategies can negate the benefits that an ERP system provides, including centralized planning, procurement, and financial reporting. If users or business groups do not participate by submitting up-to-date data, the ERP may not be able to generate accurate, timely information for dashboards and other reports for leaders and other decision-makers. pwc

2 13 percent of the average IT budget supported innovation in business process of products. When the enterprise does not reap as large a return from its ERP investment as planned, leaders may come to doubt all aspects of the initiative: the original business case, the decision-makers, the implementation, and the service methodology. This can lead to a loss of confidence throughout the enterprise. Realizing ERP value by identifying and addressing application support issues PricewaterhouseCoopers (PwC) has developed a detailed methodology to help companies identify the IT service organization challenges that may reduce productivity and effectiveness. The PwC Application Support Effectiveness Assessment is a six- to eight-week exercise conducted with business users and IT service organization members. The Application Support Effectiveness Assessment is designed to be prescriptive, practical, and outside of any proprietary solution. It is designed to unlock value in your ERP investment and is based on a proven PwC methodology. PwC practitioners collaborate directly with your company s system users and service organization to identify challenges. How well does your IT service organization support the enterprise in each of these four areas? Organizational Break-fix support Enhancement Performance measurement Are resources aligned between the business and IT? Is there a clear reporting that allows responsive support services? How are incidents accepted and triaged? Are these processes effective, efficient, and aligned to business expectations? How are enhancements accepted, tracked, prioritized, and delivered? How are new functionality requests managed? Are processes efficient, effective, and aligned to expectations? How are key performance indicators (KPIs) tracked, measured, and reported? How does your organization create an environment of continuous improvement?

3 The members of PwC s assessment team understand ERP application support systems and the Information Technology Infra Library (ITIL) framework. They also have experience managing ERP support teams and systems, and will be familiar with the situations your company is facing, including any backlog of trouble tickets and enhancements, growing frustration with complex applications, lack of visibility, tracking challenges, and ownership of issues. The assessment experience A typical assessment follows four steps: A transformational IT budget is focused on shifting the mix of IT spending so that about 40 percent is spent on keeping the lights on and 40 percent is focused on innovation. Current state baseline Initial assessment of current support organization, service level agreements, reporting processes, and procedures Process scorecards Identifies strengths, gaps, and improvement opportunities Builds on baseline review Uses ITIL definitions Organizational recommendation Key observations of organizational Validates organizational Roadmap Blueprint for driving improvement Includes specific action steps Addresses near and long term improvement The PwC team customizes the roadmap created in the final step of the assessment for each service organization. It is designed to advance the maturity of the organization, and it details action items for both immediate and long-term results. PwC designs the roadmap to help IT service organizations shift away from ad hoc solutions and improvisation, and toward: Repeatable, proven, and d support processes and procedures, in alignment with IT functions Alignment with business needs A clearly defined organizational and governance framework Timely and accurate information to manage and monitor the services provided A framework for continuous improvement As IT service organizations improve response times, efficiency, integration, and other performance measures, ERP support should become more predictable, and users should gain more confidence and comfort with the system. Companies should also find it easier to forecast support costs, both as an operational unit and on a per-ticket basis. The assessment helps companies realize the value locked in their ERP systems.

4 Application Support Effectiveness Assessment in action Transforming the support organization into a trusted, efficient partner for the enterprise The client s challenge A global foodservice company needed to improve the support capabilities for its complex and evolving Oracle Financials environment. Its existing support organization provided poor customer satisfaction to users, did not resolve issues quickly and consistently, and had limited focus on application and enhancement issues. In addition, the organization s staff and resources were not aligned, and the company did not properly monitor and track performance. PricewaterhouseCoopers solution PwC s assessment team helped the client evaluate the current-state environment, focusing on the support organizational, people (roles and capabilities), core support processes and functions, and the use of tools and technology. The team collected and reviewed documentation and raw data about the client s environment to analyze its support approach, support staffing and alignment, policies, procedures, and base performance metrics. The team also interviewed more than 70 people within the client organization to understand how support worked on a day-to-day basis, where support was doing well, where support was falling short, how support performance was measured and evaluated, and where support might be improved. By working closely with the client, PwC was able to deliver a thorough evaluation of current operations with insight into providing value-based support to the company. PwC evaluated 14 core support process areas covering all aspects of organizational, application break-fix activities, application enhancements activities, and support performance evaluation that rated each area against a maturity standard. The team identified observations, strengths, gaps, and improvement opportunities, and used this information to create recommendations for improvement. Recommendations included a proposed support organizational, job roles and definitions, and detailed process by process improvement actions. The PwC team provided prioritization and grouping of all recommendations to build an actionable roadmap to mature ERP support operations from an informal task- and function-based support environment to a business-led, agile, and responsive support organization focused on providing valuable support services. Impact on client s business The client has a significantly greater understanding of the strengths of the current ERP support function, as well as inefficiencies and obstacles to performing exceptional application support services. Utilizing the results of the Application Support Effectiveness Assessment, the client has a clear-cut plan to improve support operations, including better alignment with business needs, more effective delivery processes, more d interaction between multiple support teams and vendors, and identified requirements to properly measure, communicate, and continuously improve performance.

5 About PricewaterhouseCoopers PricewaterhouseCoopers provides industry-focused assurance, tax, and advisory services to build public trust and enhance value for our clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience, and solutions to develop fresh perspectives and practical advice. To learn more For a deeper conversation about the Application Support Effectiveness Assessment, please contact: Jeff Baker (313) jeffrey.m.baker@us.pwc.com Todd D. Amsley (717) todd.d.amsley@us.pwc.com Gary Hart (817) gary.e.hart@us.pwc.com 2010 PricewaterhouseCoopers LLP. All rights reserved. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.