Enterprise Optimization = Simplify
Author:By Jonathan Ebsworth, global head of CSC’s SAP Practice
Companies using enterprise systems almost invariably struggle with a lack of overall agility from their IT estate, often because initial implementations ended up with significant customizations, many of which offered limited strategic advantage. This has been compounded by many years of further customization and rushed upgrades, exacerbated through merger and acquisition (M&A) activities and geographic expansion.
The result is an overall IT landscape that costs too much to maintain and exhibits significant resistance in the face of critical business change.
We frequently find clients with dozens of productive SAP instances as part of those landscapes, often with hundreds of customizations. Most organizations, which aim to reduce the number of instances in an effort to simplify the IT estate, struggle to even begin the journey. The business cases are often tenuous, the costs excessive and the benefits uncertain. Of the businesses that embarked on these ambitious transformations, many have failed because of scope creep, along with escalating costs and elongated schedules.
Generally these unenviable circumstances result from the combination of a misguided need to replicate elements of the historical status quo in terms of business operations, a lack of time and money to address the IT elements of business change in a strategic manner, and no understanding of the long-term consequences of these large-scale customizations. The one-time enablers for growth have in fact become the inhibitors.
So what changed to make 2014 the right time for “Simplifying SAP” to be the headline theme of the annual SAP Sapphire conference? For one, the business environment has changed significantly. The convergence of multiple disruptive technologies, combined with unprecedented competition and rougher economic times, demands a new enterprise technology strategy that fundamentally changes the way these systems are developed, enhanced and maintained
First, the broad and growing acceptance of cloud computing in general and the hybrid cloud in particular has changed the business case for enterprise systems. One of CSC’s clients, a large Asian bank, saw dramatic benefits from migrating to a hybrid cloud infrastructure. It experienced a 97 percent reduction in time to market for provisioning standardized infrastructure services; an 84 percent operating cost savings for IT infrastructure services; and a 78 percent reduction in time to market for provisioning custom enterprise platforms. It also saw an increase in IT innovation investment by 48 percent, while keeping the overall IT budget constant. These outstanding results demonstrate the magnitude of change that is possible with hybrid cloud technology.
The combination of the on-premises data center with public and private cloud, along with third-party Software as a Service (SaaS) applications, is what we refer to as the service-enabled enterprise. We believe that in order to deliver competitive, agile business-relevant IT at the right cost, the enterprise landscape needs to be migrated aggressively to this architecture. Arguably, the most significant components in the corporate landscape are the various ERP solutions, their associated components and technologies.
Tools are available now that can assess these components reliably, quickly identifying the variations between them, and helping develop a comprehensive roadmap to standardize and simplify the core enterprise system backbone. These tools go further, offering significant time, cost and risk savings to deliver that consolidated roadmap through semiautomated conversions. Our experience shows that using these tools will save more than 30 percent of the overall effort on this kind of transformation.
When this approach is coupled with a comprehensive range of hybrid cloud solutions, provisioning and management tools, these true next-generation modernization programs at last offer a credible way forward for hard-pressed CIOs. Organizations that choose this path will see dramatic benefits through cost reduction, greater agility and an IT estate that can truly support business goals and growth.
When we talk about simplifying SAP, we are delivering more-consistent business solutions with fewer “sticky” customized elements. But we want to go much further than that. We want to move the newly simplified solution onto an appropriate cloud infrastructure, combining with the right mobile components, integrating in an agile, service-based manner inside and beyond the boundaries of the enterprise. We see that it is now possible to move the historically change-resistant core enterprise solution components into this new world, delivering the IT core of a true 21st century enterprise.
The benefits of enterprise optimization are now available to every organization, but not without some measure of compromise among your operating groups. The new calculus of cost vs. benefit resulting from standardization in enterprise systems must be made clear to the organization. Business leaders need to be ready for compromise to stay competitive on a time-to-market and cost basis.
Jonathan Ebsworth is the U.K.-based global head of enterprise solutions and services at CSC. He is the global head of CSC’s SAP Practice and has consulted to SAP clients during the past 20 years. He has advised on and delivered SAP solutions across a wide range of industries including consumer products, manufacturing, telecom, financial services, life sciences, oil and gas. Much of his work over the past 10 years has focused on developing effective strategies for managing complex SAP-rich IT estates. He is leading the development of CSC's cloud-centric SAP solutions.