The Dos and Don’ts of Application Outsourcing: Best Practices from SAP Managed Services by Gary Fromer | SAPinsider

Outsourcing can be friend or foe; it can be a beneficial, cost-effective experience that leads to maximum end-user satisfaction, or it can be fraught with frustration and disappointment.

Where organizations land on this spectrum depends on their initial expectations, project planning, and execution tendencies for the length of the outsourcing project. As IT organizations are continually mandated to do more with less — to increase service levels while maintaining or decreasing costs, for example — they are considering outsourcing both the hosting and support of enterprise applications to achieve these objectives.

SAP Outsourcing - Scopeweaver

These dos and don’ts apply to customers embarking on new outsourcing projects, as well as those already executing an outsourcing plan.

The Dos — Best-Practice Strategies for Successful Outsourcing Results

1. Clearly define your IT and business objectives before you begin

Before you start your outsourcing project, make sure that your service provider clearly understands both your IT and business objectives. Your service provider is your partner in this initiative, and the more specifically you identify and involve that provider in formulating your objectives, the greater the likelihood that you’ll both be able to meet them.

On the IT side, clearly articulate exactly what services you will outsource, how these services will be delivered, the roles and responsibilities for all parties involved, and the detailed service levels required. Ensure that both parties understand and are held accountable for meeting these objectives.

2. Maintain control of your SAP systems, including strategic decision making and a key user network

When outsourcing some or all of your SAP systems, remember that these systems are mission-critical; you must maintain control of all strategic decisions that involve them.

We often see that once customers turn to an outsourcing partner, they stop developing their own key user network — a group of “super users” with system competence and expertise. Maintaining this network of key users in house — so they can collaborate with IT and business stakeholders and end users, and fully understand the business processes, needs, capabilities, and limitations of the systems — is critical to ensuring that your systems can evolve with business change and that you get the maximum value from them.

3. Take advantage of an integrated offsite and offshore strategy, as well as the economic and delivery efficiency such a strategy can provide

When many IT professionals think of outsourcing, they immediately think of low-cost, offshore service providers. While popular, pure offshoring is not the only engagement model for outsourcing. Today’s service providers offer much more flexibility in where and how outsourcing services can be delivered.

When developing your outsourcing strategy, make sure you leverage an intelligent mix of delivery resources with one model — and make certain that model meets your specific project requirements and goals. Remember, you get what you pay for! Focusing solely on the cheapest alternative won’t always guarantee cost-effective results.

4. Realize the benefits of shared resources

One of the greatest advantages of outsourcing services is shared resources. For companies leveraging the full SAP landscape, having the in-house expertise to cover the breadth and depth of the system can be overkill. Through the outsourcing offerings of SAP Managed Services, a company can benefit from having dedicated experts in all technical and functional areas of SAP without having to hire a team of full-time, in-house resources to provide this expertise. This enables IT organizations to keep mission-critical applications operating cost-effectively and at peak performance. This also provides the flexibility to pull in people with the right skills and expertise for individual projects, ramping resources up and down as needed.

The Don’ts — How to Avoid Jeopardizing Your Enterprise Application and Outsourcing Projects

1. Don’t operate and support your SAP system alone if you don’t have the in-house resources and expertise to do so

Finding and retaining fully trained and skilled SAP experts may be a challenge based on your location, industry, or specific competency requirements. And often our customers do not want to maintain these resources in house because of training and turnover costs. Many outsourcing providers offer incredible flexibility in the services and terms delivered, allowing IT organizations to leverage the experiences and best practices of others. You don’t need to do it alone; you can turn to outsourcing service providers for the long or short term, for new SAP implementations and upgrades, or for ongoing, daily operations.

2. Don’t let your SAP operations and support depend on only a few individuals

Many companies that manage their SAP operations and support in house are fully dependent on a few “key” individuals, without whom they would have major SAP technical and functional gaps in critical process and support areas. This resource structure could put your mission-critical business systems at risk if, for example, a key individual is out sick, takes a vacation, or resigns and you’re not able to replace that person immediately.

3. Don’t expect to outsource your responsibilities

When companies form outsourcing relationships, they often expect that they can forgo responsibility for the outsourced services. This is the biggest mistake we see businesses make. While a reliable and responsible outsourcing provider can give your organization peace of mind, you should never fully relinquish responsibility or control.

In your outsourcing relationship, your management team must clearly define roles, responsibilities, and expectations and maintain control of the delivered services. Your management team must also institute a process to continually monitor and measure these services to ensure that they are meeting the defined objectives. Otherwise, your outsourcing relationship may require more people, time, and resources than you originally bargained for.

4. Don’t strand yourself without top-level SAP expertise when tackling top-level issues

Most IT organizations don’t have an in-house “Level 3 SAP expert,” someone with the depth of knowledge in a particular area of SAP who can research or access the resources needed to address a high-level issue — a production-interruption or design-enhancement issue, for example. Yet this kind of resource is critical to successfully managing system operations.

By outsourcing your SAP system support to an experienced service provider, you can access Level 3 expertise whenever you need it, to help ensure the continued operations of your SAP systems.

Source: SAPinsider


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