As organizations grow, they often try to increase their presence by expanding existing operations locally or into the global market. As they make this move, technical infrastructure plays a vital role in supporting these operations, a fact that more and more organizations are becoming aware of.
Because of this increased role for IT, many organizations are rolling out an SAP ERP system to support operations across entire regions or countries, or around the world. This allows for a standardized solution for all business entities. Instead of having different business processes and operations, organizations can rely on more accurate and consistent business processes at any given time in any given area.
In this article, we’ll discuss the challenges of an SAP Rollout, how to minimize those challenges, and best practices to consider.
The Challenges of an SAP Rollout Project
Although a rollout project has its benefits, it’s worthwhile to be aware of its risks and challenges, especially when executing a global rollout. Here are some factors to pay attention to when planning an SAP rollout.
For a local or regional rollout, regulations (i.e., tax and compliance regulations) are unlikely to be different.
On the other hand, a global rollout will be a major challenge because every country has its own regulations regarding organizations’ business activities. Since the objective of the rollout is to establish standardized international operations, every business unit has to follow the organization’s own internal global standard, while, at the same time, complying with the local regulations of the specific country it operates in.
This standardization and regulatory compliance is often related to auditing, a process needed to ensure that the system’s security access and regulatory laws have not been violated. Without a standardized system and business operation strategy, both internal and external audits will be very challenging. Read how Etablissement Français du Sang (EFS), a semi public subsidiary of the French Ministry of Health used Panaya technology to accelerate testing and be audit-ready at all times.
Characteristics of the Organization
One of the most important, yet often forgotten, issues at stake is an organization’s own characteristics. Organizations that are homogeneous in terms of business process activities will have no difficulty adapting to new centralized operations because they are already used to dealing with internal standardization across all units.
However, for organizations with globally diverse units that have the autonomy to manage their own business processes, it might be difficult to transition to a standardized process on a global scale. Moreover, due to different languages and cultures, these organizations will also have to implement varying approaches and strategies to fulfill the standardization needs of units in different countries.
Time and Cost
A rollout project requires management and key users from all business units to collaborate in order to ensure a smooth transition. However, this can be difficult when units are spread across different countries in different time zones. Even when they are in the same region, challenges can still arise, as stakeholders have to simultaneously fulfill their daily responsibilities and focus on the rollout project.
Budget should also be considered. For example, when delays occur due to conflicting schedules, there might be additional costs, depending on the agreement between your organization and the SAP consulting company.
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Minimizing the Challenges of an SAP Rollout
No matter how difficult the challenges are when undertaking an SAP rollout project, there are always ways to overcome them. Below are several approaches that can help minimize these challenges.
Define the Scope of the Project
Defining the scope of a project is critical. In order to properly plan a project and estimate a timeframe and budget, organizations need to have a clear breakdown of what solutions should be developed, which processes should be standardized, and which processes can be tailored to local needs. If a specific customization is needed (i.e., a certain form should be designed to fulfill local tax regulations), make sure that this additional development is included in the project scope.
Organize a Diverse Team
Choosing the right people for the team is essential for achieving your project’s objectives. An SAP rollout project requires a diverse team of people—from those who have deep skills and an understanding of the whole process across all business units to those who are able to collaborate with different stakeholders (i.e., key users and developers).
Define a Global Template
A global template contains basic information about the standard operation or process that will be used by all business units and entities, regardless of geographical location. In order to ensure that all business units meet an organization’s global standards, a global template is required. An organization needs to define what should be standardized globally and what will be allowed on a local level to cater to the unique needs of each business unit.
Find the Right Tool to Support Your Testing Process
Testing often becomes a major bottleneck when rolling out a new SAP development. One of the reasons for this is lack of a testing sequence and procedure. Thus, preparing a structured testing solution and using the appropriate tool for testing are critical steps in achieving a successful new SAP rollout.
Best Practices for Your SAP Rollout
In general, executing an SAP rollout involves four phases: requirements gathering, design, testing, and deployment. In this section, we will discuss best practices for each phase, which will help you achieve a successful rollout.
First, identify your requirements, such as business process, integration flow, and testing scenarios, and then analyze the impact those requirements will have on your organization. For example, when you plan to release a certain global standard in your organization’s financial reporting, each unit may have to create a specific financial transaction/process in SAP to meet that standard requirement. In this case, you’ll need to be aware that there are regions/countries that might have to simplify, or even add more processes, in order to follow this new rule.
It is critical for every unit to be able to identify the risks of implementing standardized operations and how to mitigate those risks at the earliest stage possible. If a transaction has to be modified on a local level, your organization must make sure that any such modifications will not affect the global standard. Therefore, careful planning and effective strategy are vital to which requirements can be easily standardized and which will have to be modified locally. This will ensure a smooth SAP rollout on a global scale.
During this phase, you will be transforming the strategy into a detailed project plan and design. As mentioned above, defining a global template is critical during an SAP rollout. In this phase, your organization should define the content of its global template in detail to confirm the new global standard of its business operations.
Here are some examples of the components of a global template:
- Business process blueprint
- Technical architecture (e.g., system requirements, data integration layer)
- Documentation for the solution (e.g., configuration, functional specification, master data)
- Roles, authorization, and compliance framework
- Testing procedure
- Training documentation
- Data conversion tools
Build and Test
In this phase, the development team will build the SAP system based on the design and template that were created in the previous phase. In order to ensure that the system is built accordingly, testing should be done iteratively. System errors that occur when an SAP rollout goes live are most often due to lack of testing, and failing to test the relevant transactions during development will have a negative impact on the deployment process.
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Therefore, designing and conducting the most relevant test scenarios is critical. It is also imperative to follow the testing scenarios carefully, from unit and integration testing to system performance testing. Note that using real data is one of the key attributes of successful testing for your SAP rollout.
Deployment and Optimization
As a final step, a detailed go-live plan and schedule is necessary to ensure a smooth and effective deployment. It’s also vital to determine the proper approach when implementing the rollout. An organization has several options to choose from when deciding how to do this: a “Big Bang” approach (doing it all at once), a rollout by geographic location or business unit, or a combination of the two.
Several factors, such as business case, resource availability, and technical considerations, should be taken into account when selecting an approach. Moreover, you should also carefully consider support for each option after the SAP rollout is live, as it can be quite costly to have parallel go-lives in multiple sites.
The global market offers many opportunities for organizations to expand operations. However, to fully capitalize on this, you need the appropriate technical infrastructure. It is also imperative to have a global standard of operations in order to ensure that every business unit is meeting local and international regulatory compliance. Therefore, as you pursue the path of expanding internationally, consider the key points mentioned in this article before starting a rollout project.
Watch this webinar to learn how Panaya can help manage your SAP rollout project on time and risk-free.