Are you a victim of the SAP-Paradox? We have the solution!

Are you a victim of the SAP-Paradox? We have the solution!

Organizations tend to implement ERP-systems in order to gain multitude of different business advantages. But in many cases ERP-systems, of which SAP is the most predominant one, will not generate the desired results to organizations. They may even make life harder for some. We call this the SAP-Paradox. And we have an solution for it.

The heart of our business is to assist organizations to develop and streamline their business processes. In order to do this, we must keep an “ear to the ground” and follow all relevant research related to business development and business processes. Earlier this year I bumped in to an ERP study, commissioned by Panorama Consulting Solutions. And it piqued my curiosity.

The study was about ERP-implementations and it was quite comprehensive. The study had surveyed a total of 562 respondents, all of them working in an organization that had gone through an ERP implementation during last two years.

Surveyed organizations

The surveyed organizations were quite large. 72% of the organizations had revenue of more than $50 million, 17% more than $1 billion.

Reveneu-of-surveyed-organizations

Source: Panorama Consulting Solutions

SAP was clearly the most desired ERP vendor, as the top choice for 27% of organizations surveyed. Oracle came second with 19% and Microsoft third with 13%. The reasons for ERP implementation were mostly replacing current systems and standardization.

Reason-for-erp-implementation

Source: Panorama Consulting Solutions

 Challenges with implementations

According to IBM, the following were key challenges encountered by their 30.000 SAP consultants during implementations:

  • Inflexible functionality
  • Exessive customization
  • Rigid processes
  • Inadequate visibility
  • Inadequate control
  • Slow adoption and maturity
  • Poor return on investment

Inflexibility of ERP systems leaves the organizations using them with two choices. Either they have to change their own way of doing business to suite the ERP system, which is quite counterproductive, or they must customize their ERP system. And we all know how expensive customizing an ERP system is. 93% of surveyed companies had to customize their ERP. More than fifth had to do significant customization.

level-of-customization

Source: Panorama Consulting Solutions

Customizing an ERP system leads to new challenges. 55% of ERP implementations went over budged and 75% over schedule. Less than 10% of implementations reached at least 80% of planned benefits. Most of the implementations did not reach their goals.

How to respond to these challenges?

Business process management, or BPM, is a management approach that is focused on optimizing business processes. It is also a comprehensive approach that aims for an efficient and successful organization without forgetting innovation and flexibility.

BPM can be implemented manually, but there are also technologies that help in reaching the goals set by BPM initiatives. We live in a golden age of technology and it is not sensible anymore to do anything major manually. BPM technology brings together processes, people, knowledge and systems. It also gives management valuable information on how the processes work, where the bottlenecks are and shows the possibilities for process optimization.

You-Get B.V. is an IBM Premium Business Partner and we have noticed that IBM BPM is a great fit for our customers that are struggling with their SAP challenges. Based on our extensive experience, we have developed our own 360° Business Services Approach™ to carry out these BPM projects. In addition to IT, 360° Business Services Approach™ also takes into account the business needs of BPM projects.

The principal idea is to let SAP do what it is good in – the premier ERP platform in the market with robust and complete transactional capabilities. IBM BPM brings a process layer on top of the transactional layer of SAP – IBM BPM is the premier BPM platform where configuration of business processes is easy and functionality is simple and flexible.

Picture: On the left, environment without BPM layer and on the left, environment with a BPM layer.

Simplified SAP installation “surrounded” with IBM BPM enables:

  • Stronger business case
  • Smaller ERP expenses
  • Reduced customization
  • Better visibility to business
  • Faster and easier adoption
  • Faster user training
  • Better business flexibility and agility
  • Deeper control

Our client Vitens is an excellent example of successful integration of BPM and SAP. Vitens, the largest water industry company in Netherlands with over 5 million customers decided to become the best customer service company in the country. One significant part of the project was to reduce Vitens’ dependency on SAP and to improve the flexibility of their business substantially. You-Get assisted Vitens by carrying out a BPM project that followed You-Get’s 360° Business Services Approach™. Vitens chose IBM as their BPMS vendor. The results were staggering:

  • IBM BPM provided an simple user interface
  • Training time for new employees reduced by 90%
  • Higher user satisfaction
  • Up to 12 x faster transaction times
  • 40% reduction in activities
  • Almost 20% FTE reduction
  • Project was delivered on time and on budget

If you continued to read this far, I bet I managed to pique your interest. You can read more about combining ERP and BPM from our white paper (download link below), in which we tell more how these two systems combined can bring greater benefits for business.

Veli-Pekka Mustonen, BPM Consultant

You-Get Finland Oy