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					             Project X
SAP Center of Excellence Benchmark
Contact Information

Technology Strategy

The Technology Strategy practice is focused on delivering innovative and practical solutions
that will help our clients maximize the value from IT. To that end, we leverage a broad set of
unique frameworks, methodologies and tools that are being updated regularly to reflect the
latest practices in IT management.
Objectives of this document


             The purpose of this document is to:
   Overall   • Provide benchmarks for SAP Center of Excellence (COE) Staffing Levels
   Context   • Present case studies from several clients who have already implemented a COE
             • Present Best Practices developed from other COE implementations



             For Client X, the study will focus on several key findings:
             •The structure and scope of COE
    Key
  Findings   •A directional staffing reference for Client X’s COE to be considered in the To-Be
             •Performance Metrics for the COE
SAP CoE benchmark



                                    Staffing Levels

               • Benchmark Analysis
               • Role of IS and Staffing Levels


                                     Case Studies

                                    Best Practices

                                Performance Metrics

                                Benchmark Summary
Benchmarking Approach


What does the Benchmark data tell us?
•The benchmark data presents a directional starting point:
     ‒ Client X’s unique requirements (applications, processes, organization, etc.) will determine the
       directional size around IS/IT staffing

•The data will also be used to develop the Conceptual Model for IS/IT staffing

What is excluded from the Benchmark data?
•Typically, the Help Desk and Super-users are not considered part of the COE and are therefore not
included in the benchmarks

•Other items that are not included in the Benchmark data include:
      Change Leadership
      Training
      Data Warehouse support
      Legacy system maintenance (Brand Management, Promotion Tracking, etc.)
      Technical Infrastructure not directly related to ERP (Networks, Desktops, etc.)
COE Standard Responsibilities



The COEs examined generally included the following support activities:
•Functional ERP support
•Basis, technical, and ABAP support
•Security & authorization profile maintenance
•System and process updates and documentation
•System monitoring


The COEs also included the following developmental (continuous improvement) activities:
•Business process improvement
•Rollouts to other business units
•Up-to-date knowledge of new releases and functionality
•New functionality implementation (and resulting changes to bolt-ons)
•SAP upgrade coordination and delivery
•Maintenance, co-ordination, and execution of training
•Change Leadership
Common COE Practices


The following practices were found in most of the COEs examined:
•The COE is separate from the IT helpdesk
•Includes a 3-tier support structure (Tier 0: Super Users; Tier 1 HelpDesk; Tier 2: COE; Tier 3 External)
•Super-users form the 1st line of support
•Help Desk is centralized and is the conduit into the COE
•Receive and log all user requests through the Help Desk
•Categorize and prioritize calls according to specified Service Level Agreements (SLAs) agreed to by
the business
•Record statistics for analysis and monthly reporting based on a core set of metrics
•Level 3 support is outsourced
•COE operates on core business hours (8-9 hour days)



 Note: In case of Client X final recommendation,, the support organization was separated from the delivery organization.
Client X Statistics
The following information will be used in the benchmarking exercise.

                                                          Information                                                                       Client X Data
                                              Total number of COE staff                                                                             13.1
                                        Total number of COE Project staff                                                                            7.7


                                       Total number of COE Support staff                                                                             4.5


                                                                                                                             3.7 (1.1 only ABAP Project and
                                Total number of development staff (All dev)
                                                                                                                                         Support)
                                                   Total SAP End Users                                                                   284 (incl. 79 RF)
                                         Total Average Concurrent Users                                                                  100 (incl. 30 RF)
                                      Number of official SAP Super Users                                                                               0
                                             SAP Modules Implemented
                                                                                                                              MM, PP, SD/EDI, CO, FI, WM
                                              (not across all functions)
                                        IT Helpdesk Size
                                                                                                                                                       3
                        (mainly IT/hardware requests but also filter for SAP)
 Notes See workload estimation file d0.6-Without Division A; From Person X:
 13.1 = PAD Support (3.0), PAD Project (4.1), Dev Abap Project (1), Dev ABAP Support (0.1), IT Basis Project (1), IT Basis Support (1), Maternity Support (No Dev: 0.4) , Maternity Project (No Dev: 1.6),
 BRM & PMO (0.9)
 7.7 = PAD Project (4.1), Dev Abap Project (1), IT Basis Project (1), Maternity Project (No Dev: 1.6)
 4.5 = PAD Support (3.0), Dev ABAP Support (0.1), IT Basis Support (1), Maternity Support (No Dev: 0.4)
 3.7 = All dev (ABAP and others), 0.3 is removed for MGT
 SAP End Users and Concurrent Users data obtained from Database Administrator, Adjusted by Person X
 3 = See workload estimation file d0.6-Without Division A; From Person X. no MGT
Benchmark 1 : COE Size to Total End Users
        Benchmark Ratios                                                                          Client X current situation




1 support FTE / 25 users (maximum)
1 support FTE / 50 users (average)
1 support FTE / 200 users (minimum)



                                                                               4.5


     Application to Client X

Total End-Users          284
Maximum:                 11.3
Average:                 5.7
Minimum:                 1.4


                                                       Notes
• Total End-users refers to all SAP End-Users (Division B, Comp., Therm., Service Center) and includes R/F users.
• Benchmark includes ERP applications: SAP, APO, Vista, DSS but does NOT include legacy applications support,
  Super-users, or Help Desk staff
Benchmark 2 : COE Size to Avg. Concurrent Users
        Benchmark Ratios
                                                                                                  Client X current situation



1 support FTE / 5.5 users (maximum)
1 support FTE / 12.5 users (average)
1 support FTE / 25 users (minimum)




     Application to Client X                                       4.5


Concurrent Users         100
Maximum:                 18.2
Average:                 8.0
Minimum:                 4.0



                                                       Notes
• Total End-users refers to all SAP End-Users (Division B, Comp., Therm., Service Center) and includes R/F users.
• Benchmark includes ERP applications: SAP, APO, Vista, DSS but does NOT include legacy applications support,
  Super-users, or Help Desk staff
Benchmark 3 : COE Size to Users per Funct. Area

        Benchmark Ratios                                                                           Client X current situation




1 support FTE / 50 functional users
0.5-2 FTE / infrastructure role




     Application to Client X *
Total End-Users            284                               4.5
Maximum:                   35.5
Average:                   28.5
Minimum:                   21.5
See Table in next slide for detail


                                                       Notes
• Benchmark includes ERP applications: SAP, APO, Vista, DSS but does NOT include legacy applications support,
  Super-users, or Help Desk staff
** The number of this benchmark is over the others because, based on the data available, certain double counting of
  users by module was required (ex. a PP user might also use MM, etc.) (see next page)
Benchmark 3 : COE Size to Users per Functional Area
                                                                                                                                                         Application to Client X
                                             Roles                                              Users                                 Minimum FTE                          Maximum FTE
                   Functional Roles1
                   MM                                                                              246                                               4                              4
                   PP                                                                              179                                          3.5                                 4
                   SD/EDI                                                                          201                                               4                              4
                   FI                                                                               53                                               1                              4
                   CO                                                                               53                                               1                              4
                   WM                                                                               67                                               1                              4
                   Technical Support Roles 2                                                                                                   14.5                                24
                   System Administrator                                                                                                              1                              2
                   Developer/Programmer                                                                                                         3.5                                 4
                   Database Administrator                                                                                                            1                              2
                   Security Administrator                                                                                                            0                             0.5
                   Other Support Roles3                                                                                                         5.5                                8.5
                   COE Manager                                                                                                                       1                              1
                   Knowledge/Training Manager                                                                                                   0.5                                 1
                   Release & Upgrade Manager                                                                                                         0                             0.5

                   Administrative Assistant                                                                                                          0                             0.5
                                                                                                                                                1.5                                 3
 Notes:                                      Total                                                                                             21.5                                35.5
 1: Minimum FTE calculated with 1/50 ratio and a Maximum of 4, as rarely do more than 4 analysts support a single function
 2: Typically, 6-8 technical support roles provide all technical support (as a result, 5.5 and 8.5 were chosen to be closer to Client X’s reality)
 3: Other Support roles based on adjusted benchmark
 *: For full calculation of Users, See COE Functional Module Users Calculation File, embedded on the last slide
Benchmark 4 : COE Size based on workload
The workload can generally be looked at within 2 types:

         Type 1 :         the activities required to maintain the system at an optimal level and to support end users
         Support          (troubleshooting, minor changes requests, SAP patches, etc.)

         Type 2 :         the activities Client X chooses to pursue to improve the system and or business processes,
         Project          these could be projects or requests

       Other types        Other support roles have been identified in a number of COEs. These include: Training
      (not included)      coordinator, Change Leader, Data Warehouse, EDI or RF administrator

Best practice:
The in-house project capability (Type 2) should minimally be set to equal the support workload (Type 1) in terms of
FTEs

• The COE staffing level can be determined from the expected or planned workload of the permanent staff

• The staffing level required to provide adequate support can be calculated using some simple calculations
  (see next slide)

• The amount of development work depends on the goals of the organization (articulated through SLA)
‒Projects exceeding in-house capability (such as B2B, mySAP.com or global rollouts) should be funded separately
  and staffed from outside the COE (business or external) as required.
Benchmark 4 : Estimation of COE Size based on workload


    Total Annual
 Workload for Support
                             392.14 hrs / month * 12 months / yr = 4705.7 hrs needed


    Annual Available
   hours / employees
                             1253.9 hours available


   Total Support FTE
        Needed
                             4 705.7 / 1253.9 = 3.75 FTEs


  Total Support + Proj.
      FTE Needed
                             3.75 FTEs * 2 = 7.5 FTEs




                                                        Notes
• The Annual Workload was calculated via the PAD Request’s KPI Support file, with a monthly average of 219.6 hrs
  spent on support for Division B, which was adjusted for the entire company. (Division B represents approx. 56% of
  Total SAP Users, meaning 219.6/0.56 = 392.14hrs, “Train” File)
• The Available Annual hours were obtained from the PAD KPI Target Calculation Hours
Benchmark 4 : Estimation of COE Size based on est. workload

        Benchmark Ratios                            FTE’s



COE Size = (Support FTE x 2) + Core
Technical FTE                                                                   Temporary,
                                                                                Project Staff


                                                       12


                                                                                  Project
     Application to Client X
                                                       7                         Permanent,
                                                                                  COE Staff

COE Size = (3.75 x 2) + 3.1 = 10.6                                               Support

                                                                                                          Time

                                                     Notes
• Core Technical FTE = Current ABAP Development team (1.1) + IT-Basis Administrators (2)
• Benchmark includes ERP applications: SAP, APO, Vista, DSS but does NOT include legacy applications support,
  Super-users, or Help Desk staff
Benchmark Data Summary
The main line below is an average of the COE Sizing benchmarks




                                                                                       1




                                                                                        2


                                                                                       3
                                                                                      4




                                       Min                           Average                    Max

   Benchmark Summary                    9.4                           13.3                      18.8



                                                             Notes
• Benchmark includes ERP applications: SAP, APO, Vista, DSS but does NOT include legacy applications support,
  Super-users, or Help Desk staff
Other Supporting Roles and Final FTE Numbers
Other supporting roles also need to be considered for the total benchmark:
                                                                         Application to Client X

                                   Roles                      Minimum FTE                      Maximum FTE

               Additional Support Roles1

               Training Coordinator                               0.5                              1.0

               Change Leader                                      0.5                              1.0

               Data Warehouse                                     0.5                              1.0

               RF Administrator                                   0.5                              1.0

               EDI Administrator                                  0.5                              1.0

               COE Administration (BRM, PMO)                      0.5                              2.0

                                   Total                          3.0                              7.0

               1: Support roles based on adjusted benchmark

To obtain the final FTE numbers:



                                                      Min               Average                     Max




                 Benchmark Summary                    9.4                13.3                       18.8
                    Supporting Role                   3.0                 5.3                        7.0
                      Total FTEs                      12.4               18.6                       25.8
Comparing Client X Now v/s Benchmark

                                   Client X Now                               Benchmark              As we compare Client X to the
                                                                                                     Benchmark for each type of role, we
    Types of
                           Details*             Number of FTE        Min FTE         Max FTE
                                                                                                     observe we are generally closer to the
     Roles
                                                                                                     minimum number of FTE
                    3.0 PAD Support FTE
 Functional                                                                                             Client X current situation
                    4.1 PAD Project FTE
 (delivery                                           9.1               6.3                15.7                             9.1
                    0.4 Support Maternity                                                             6.3                                                      15.7
 support)
                    1.6 Project Maternity
                                                                                                      MIN                                                       MAX
                    1.1 ABAP (Project                                                                FTE                                                       FTE
                     and Support)
 Technical                                           3.1               5.5                8.5        3.1
                    2 IT-Basis Admin                                                                  5.5                                                      8.5
                   (excluding help desk)
                                                                                                      MIN                                                       MAX
                                                                                                      FTE                                                       FTE
 Supporting
 (other and         0.9 FTE BRM, PMO                3.4               3.0                7.0
 admin)             2.5 EDI administrator                                                                   3.4
                                                                                                       3.0                                                      7.0

                                                                                                      MIN                                                       MAX
                    Removing 2.5 FTE of
                                                                                                      FTE                                                       FTE
      Total        EDI since it is already in        13.1              12.4               25.8
                     Functional SD/EDI                                                                         13.1
                                                                                                      12.4                                                      25.8

                                                                                                      MIN                                                       MAX
                                                                                                      FTE                                                       FTE
 Notes:
 *: See Workload Estimation File d0.6 – Without Division A f rom Person X f or f ull breakdown, embedded on last slide
 *: Role of COE Manager is not accounted f or
 6.3 to 15.2 Range: See previous slide f or benchmark summary (9.4,13.3,18.8), using only the min and max and subtracting the current core technical FTE (3.1
 of both min and max)
 5.5 to 8.5 Range: See slide 11; using data f rom a specif ic benchmark
 12.4 to 25.8 Range: See previous slide
Client X now vs COE Common Practices
Client X does not apply most of the COE common practices.
                                                                                                    Client X COE
                                   COE Common Practices
                                                                                                    Comparison
 The COE is separate from the helpdesk
                                                                                                         
 Includes a 3-tier support structure
                                                                                                         
 Super-users form the 1st line of support                                                                
 Help Desk is centralized and is the conduit into the COE
                                                                                                         
 Receive and log all user requests through the Help Desk                                                 Partial

 Categorize and prioritize calls according to specified Service Level Agreements (SLAs)
                                                                                                         Partial
 agreed to by the business

 Record statistics for analysis and monthly reporting based on a core set of metrics
                                                                                                         
 Level 3 support is outsourced
                                                                                                         
 COE operates on core business hours (8-9 hour days)
                                                                                                         
 COE provides application support work and not project work
                                                                                                         
                                                                                  Legend:   : Applied      : Not Applied
SAP CoE benchmark



                                   Staffing Levels

               • Benchmark Analysis
               • Role of IS and Staffing Levels


                                    Case Studies

                                   Best Practices

                               Performance Metrics

                               Benchmark Summary
Role of IS
As part of the business interviews and with the matrix below, each interviewee was asked to articulate the role of IS right n ow and where it
should be heading in 3-5 years.



              High
                               Innovative Partner                                Strategic Enabler
                              “Introduce new ways of doing                  “Use IS to gain market share and
                                   business through IS”                    sustainable competitive advantage”

                        IT Investments                                     IT Investments
                        Risk Tolerance*                                    Risk Tolerance
                        IT Innovation                                      IT Innovation

    Market
Differentiator                                                                 Operational Enabler
                                  Cost Optimizer
                           “Maintain current states efficiently”           “Achieve and maintain parity in the
                                                                                     marketplace”

                        IT Investments                                    IT Investments
                        Risk Tolerance                                    Risk Tolerance
                        IT Innovation                                     IT Innovation

              Low
                      Low                                 Mission Criticality                                    High

         *Note: Risk Tolerance is for Risk on Operations (e.g.
         running the business)
Role of IS : As-Is and To-Be States
As of now, IS is perceived to be a Cost Optimizer overall. As Client X strives for its goals, all parts of the business agree that IS needs to
take a larger role. This role slightly differs within Division B and Division A.



                    High
                                              Innovative Partner                                                     Strategic Enabler
                                           “Introduce new ways of doing                                      “Use IS to gain market share and
                                                business through IS”                                        sustainable competitive advantage”


                                                                                                                                                    To-Be
                                                                                                                                                    States
    Market
Differentiator                                                                                                    Operational Enabler
                                                 Cost Optimizer
                                       “Maintain current states efficiently”                                 “Achieve and maintain parity in the
                                                                                                                       marketplace”



                                                                       As-Is
                                                                       State
                     Low
                                 Low                                              Mission Criticality                                                            High        Legend:
                                                                                                                                                                               Tracks & Systems
Note: The To-Be state expressed by members of the Executive Committee were also taken into account by slightly adjusting the overall To-Be State of both groups.               Polymer Solutions
2: From Cost Optimizer to Innovative Partner and/or Strategic Enabler, will involve an increase in budget (potentially over benchmark average), more tolerance to risk and     Shared
structure to enable Innovation (e.g. formal role of innovation management with associated forums, etc.)
Key To-Be Considerations and Staffing Levels
In order to reach its business goals and considering the desired future role of IS , Client X will have to increase the size of its COE.
The number of FTEs currently approaches the minimum level (13.1), readjusting the staffing levels more towards the maximum le vel will
be needed, between 18.6 and 25.8 FTE

                             Division B:
                             • will double the size of its business by pushing OEM sales and expanding in the aftermarket
                             • will entirely transform its supply chain by aligning it with the new worldwide logistic aftermarket
   Facts about                 requirements and enhance global order process
    the future
   state of the              Division A:
    business                 • is planning to replace it legacy system (potentially over 100 new SAP users)
     directly
  impacting IS               Client X:
                             • will continue its aggressive expansion via acquisitions




                                                      Staffing Levels
 Staffing Levels                                              As-Is                                To-Be
 will need to be                                       12.4                        18.6                        25.8
    adjusted
                                                       MIN                         AVE.                       MAX
  accordingly                                                 13.1                                  20.4*
                                                       FTE                         FTE                        FTE
                                                                        Staff is currently struggling       Between 18.6 and 25.8




 * See organizational recommendations f or details.
Additional Staffing Levels Considerations



Other factors that could have an impact on the required staffing level
•Scope of the COE
•Support Model Chosen
•Organizational Structure Chose
•Service Level Agreement
•Hours of operation : core hours vs. extended support (e.g. 9 to 5 or 24/7)
•Number of experienced staff
•Staffing turnover
•Continuous Improvement objectives
•Company long term strategy
Help Desk Benchmark for SAP
        Benchmark Ratios

1 support FTE / 35 End users (max.)
1 support FTE / 75 End users (aver.)
1 support FTE / 160 End users (min.)
                                                               Client X current =
                                                               3.4 (mainly
                                                               Infrastructure)




     Application to Client X

Total End-Users          284
Maximum:                 8.1
Average:                 3.8
Minimum:                 1.8



                                                       Notes
• Since the helpdesk represents a separate entity than the COE, these numbers were not included in the previous
  staffing pages. They will be taken into consideration within the support structure discussion
Super User Benchmark
        Benchmark Ratios

1 support FTE / 8 End users (max.)
1 support FTE / 24 End users (aver.)
1 support FTE / 50 End users (min.)
                                               Client X current =
                                               0




     Application to Client X

Total End-Users          284
Maximum:                 35.5
Average:                 11.8
Minimum:                 5.7



                                                          Notes
• Since the Super Users are end users and outside the COE, these numbers were not included in the previous staffing
  pages. They will be taken into consideration within the support structure discussion
SAP CoE benchmark


                      Staffing Levels

                       Case Studies

                      Best Practices

                    Performance Metrics

                    Benchmark Summary
Case Studies – Introduction
  We examined the support organized of twenty-four companies.

  The following slides present four companies of the twenty-four with various COE
  size and/or scope for the case studies in order to outline different models
Case Study 1
                                                                    COE Framework:
                                                                                                    CIO
 Banc Tec, Inc.
 Industry:                High Tech Manuf acturing
 Company/Division Size:   $400 Million, 1700 employees
                                                                                     Project                    IT Help
 Culture:                 Centrally directed                                         Manager                     Desk
 COE Size:                20-30 peak, plus 4 on technical team
 Number of users:         400
 Environment              3 tier Client/Server, HP servers, PC
                          desktops, UNIX, Oracle, SAP R/3, Novell
 Scope:                   SD, FI, MM, other modules planned           FI        SD             MM   Technical    LAN




 Process                                                            Metrics
 • Users e-mail or call help desk or enter in logging tool          • Hours of operation: 7-7 * 5
 • Help Desk responsible for recording activity                     • Number of calls/week
       ‒ reports statistics to team leads and CIO                   • Open calls over 2 days old, target 0, average
       ‒ prioritize requests based on standard questions              less than 20 (excludes those escalated to
       ‒ routes requests                                              SAP)
 • Process/Technical Teams research and resolve or                  • # open/closed each week by team
   escalate to SAP                                                  • Classifications: Configuration errors,
 • Charge Business Units for enhancements including                   user/training errors, SAP bugs, enhancements
   new modules and interfaces
 • Business units expected to prioritize and fund
   developments
Case Study 1



                  • End-user training is critical. Poorly trained users cause and excessive amounts of
                    work for the support organization
 Observations
                  • Use of e-mail as a method of contact for the Help Desk tool leads to Xer issue
                    prioritization and more accurate Issue Management




                  • Develop both external and internal Service Level Agreements
                  • Effectively communicate COE policies on priorities and resource allocation
 Best Practices
                  • Create well defined escalation procedures for both internal and external SLA’s
                  • Identify Root Causes on recurring issues
Case Study 2
                                                                          COE Framework:
 Pharmacia & Upjohn                                                                              CIO

 Industry:                Pharmaceutical
 Company/Division Size:   $3.5B
                                                                                                Project                      IT Help
 Culture:                 Functionally oriented; centralized
                                                                                                Manager                       Desk
 COE Size:                15
 Number of users:         700
 Environment              3 tier Client/Server
 Scope:                   FI, CO, AM, MM, Division A                           FI/CO       AM             MM   Division A   Technical




 Process
 • Tier 0 : Super-users                                        • Tier 2 : Customer Competency Center Support Teams --
         ‒ skilled in transactional activity and current        Business & Technical
           functionality, provide primary on site assistance            ‒ managed as common organization within IT.
           to end users                                                 ‒ integrated with projects for new SAP applications.
                                                                        ‒ Business Team provides second-level usage
 • Tier 1 : Global Customer Support Center (Help                          problem resolution and assist in training and
  Desk)                                                                   planning of new functionality.
         ‒ provides 24x7 coverage to log problems and                   ‒ Technical Team responsible for managing SAP
           provides simple solutions                                      system landscape including integrity of production
         ‒ serves as “traffic cop” for routing problems and               system during configuration/release mgt, security,
           escalation to Tier 2                                           and database administration.
Case Study 2




                  • Charging the Business Units for support received and enhancements is a viable
 Observations
                    method for differentiating the desires and requirements of the business




                  • Support organization must be in place at least one month prior to cut-over.
 Best Practices   • Develop and communicate processes for the phone system, call processing, email,
                    bulletin boards, and an Intranet web site to foster user autonomy
Case Study 3                                                         COE Framework:                              User

 Monsanto                                                                                                   Power User &
                                                                                                 Tier 0
                                                                                                             Super-user
 Industry:                Chemical/Pharmaceutical Products
 Company/Division Size:   $Multi-Billion                                                         Tier 1    Local Help Desk /
 Culture:                 Centralized                                                                       SAP Specialist

 COE Size:                200+
 Number of users:         500 initially, eventually 8000                                         Tier 2     SAP Production
                                                                                                            Support Center
 Environment              Unix, Oracle, SAP R/3
 Scope:                   FI, CO, SD, MM, PP                                 Tier 3
                                                                                  Platform   BASIS        Database      Application    Network      Production
                                                                                  Support    Support       Support       Support       Support       Control



                                                                                  Computer                                            WAN Circuit
 Process                                                                 Tier 4    Vendor
                                                                                             SAP AG
                                                                                             Support
                                                                                                          Oracle
                                                                                                          Support
                                                                                                                          SAP
                                                                                                                         America       Supplier
                                                                                   Support

 • User contacts Power User and then Super-user within strategic
   business unit
 • Super-user escalates to local HELPDESK
 ‒ Local issues passed to appropriate team for local resolution
 ‒ Issues outside local environment passed to Production Support
   Center                                                                    Metrics
 • Production Support Center logs call in tracking system, assigns
   priority, assigns staff
                                                                             • Hours of operation: 7-7 * 5
 ‒ Monitor system status, network, system performance
                                                                             • Hours of operation: M-F, 7-7 + staff on call
                                                                             • # open, closed, & outstanding calls (by
 • Production Center technical support resources
                                                                               problem type)
 ‒ Take ownership of calls
                                                                             • Average time to resolve calls
 ‒ Contact business users for more information
 ‒ Update call status in tracking system
                                                                             • Network availability
 ‒ Close call when solution found and confirmed by user
                                                                             • Application usage
 • Vendor Support
Case Study 3



                  • Daily Support Status reviews help the Support Manager understand where problems
                    lie, and when support can be phased down.
 Observations     • “Scorecards” for Super-users which track type and volume of calls they resolve
                    without COE assistance will help with End-user training and with focused coaching
                    for the Super-users




                  • Before Go-Live, take a dozen scenarios of problems and simulate the support walk-
 Best Practices
                    through that would have taken place for each
                                                                          COE Framework:
Case Study 4                                                                                                            Champion
                                                                                                                        “Level 0”

 Owens Corning                                                                                USER
                                                                                                                                                        Adv. 2000
                                                                                                                                                        “Level 2”

 Industry:                Production of insulation & exterior materials
 Company/Division Size:   $3 B                                                                                                                    Business
 Culture:                 Centralized; Process Oriented                                                                                          Application
                                                                                  Phone/
 COE Size:                225                                                      Voice                          BPE/UK
                                                                                                                 Help Desk
 Number of users:         2 000 currently, eventually 18 000                                                     “Level 1”
 Environment              HP Unix, Oracle, SAP R/3
 Scope:                   All Modules

                                                                                           Messaging
                                                                                                       Site Support          LAN/WAN   Legacy System
                                                                                                                                       •Application
                                                                                                                                       •Technical
                                                                                                                                       •Operations




 Process                                                                        Metrics
 • User contacts Super Users for support/resolution                             • Hours of operation: 7-7 * 5
 • Either user or champion calls Level 1 Help Desk                              • Hours of operation:
 ‒ Screens calls, resolves simple issues                                                ‒ Level 1: (7x24x365)
 ‒ Forwards call to Level 2 as appropriate                                              ‒ Level 2: M-F 7-7 plus off hour pagers
 ‒ Gathers info. & monitors status through Call Tracking                        • # calls per month, closed, & outstanding calls
   system                                                                       • Average response time per trouble report
 ‒ Initiates communication and escalation process as                            • Resolution time per report and per
   appropriate                                                                    configuration request
 • Level 2 Support                                                              • Business Unit Feedback
 ‒ Notifies end user of super call hand-off
 ‒ Responsible for resolving/tracking request through
   resolution
 ‒ Contacts third-party vendor support if appropriate
Case Study 4




                  • Clear direction must come from senior support leads in order to motivate and enroll
 Observations       project team members who would rather be working on the next release than
                    providing support




                  • Limit the dual “Support & Integration” roles. Individuals providing support should not
 Best Practices
                    have large developmental duties
SAP CoE benchmark



                      Staffing Levels

                       Case Studies

                      Best Practices

                    Performance Metrics

                    Benchmark Summary
COE Best Practice (Strategy)

  Position the COE as a new, business-focused organization
  •Process-oriented focus operates better than unconnected function-oriented support services within
  the integrated ERP environment
  •Process accountability should be with Process Owners

  Have a clearly defined Service Level Agreement between the COE and the business
  •Make sure the business understands the call prioritization model
  •COE size, support, and future development should be based on SLAs

  Super-users or the Help Desk should be the first point of contact for end-users
  •These groups are typically not considered part of the COE
  •User training is crucial, as it helps reduce calls. All support calls should come to the COE through
  the Help Desk to allow more effective call tracking and service level reporting

  Make sure everyone in the organization is aware of the COE and its processes

  Outsource level 3 support
  •This ensures support as needed and cost containment
COE Best Practice (Strategy) cont’d

  To get the most out of an ERP implementation, a COE should be proactive in the support that
  it provides
  •Baseline support will only maintain the current system whereas developmental support enables the
  COE to lead the business forward

  Staffing levels should be set at a level that can meet the support requirements of the business
  AND at least an equal amount of development (continuous improvement) work

                                        FTE’s
                                                              Temporary,
                                                              Project Staff

               Projects
               Upgrades
           Business Rollouts
        Major Change Requests
        Continuous Improvement
                                                             Project
               Support
                                                              Permanent,
           Trouble Shooting
        Bug/Configuration Fixes                                COE Staff
        Minor Change Requests
          System Monitoring                                  Support
COE Best Practice (Strategy) cont’d

  Centralize as much as possible to maintain a high degree of quality and to reduce costs
  •Primary responsibility of organization is to ensure that ERP integrity is maintained
  •Defined lines of communication offer more effective control of system integrity
  •Reduce cost by creating economies of scale – no duplication of functions across business units
  •Central repository of knowledge – access to skilled SAP resources that have a combination of
  business and IT skills. Replacement of these skills is expensive and time consuming.
  •Cross-disciplinary team representing business and IT, reduces risk of mismanagement of SAP
  production environment
  •Better management of COE resources – less likelihood of competing requirements and
  reassignment
COE Best Practice (Strategy) cont’d

  Ensure that the business understands the costing model
  •Incorporate the SLAs where possible (eg. % of High Priority calls)

  Keep the costing model for support as simple as possible
  •Traditional method is Cost Center but moving toward Charge-back system

  Fund development items (upgrades, etc.) separately
  •These should be treated as individual projects allocated to the business as appropriate

                                  Different Costing Models                                              Description
    COE Absorbs Costs                                                              Simple administration
    COE treated as a Cost Center and does not charge costs back to the business    No record of actual costs




    Maintenance Charge per End-User                                                Simple administration
    Fee charged according to number of users                                       Approximate ref lection of actual costs




    Fixed Charge per Support Call                                                  Requires more monitoring
    Fixed f ee charged f or each call into the COE                                 Truer ref lection of actual costs
    Variable Charge per Support Call                                               Requires detailed time tracking
    Fee charged f or each call into the COE depending how time to resolve issue    Actual ref lection of costs
COE Best Practice (Process)

  Establish a simple, 3-tier support process
  •If a working support model is not in place, users will circumvent it

  The COE should be the single point of contact for external (vendor) services

  Support processes, roles and responsibilities need to be developed and
  communicated to the end user as early as possible (preferably prior to Go-live)

  Frequent changes to the business require that Competency Centers be cross-
  functional and flexible – many companies do not reach a stable state in enterprise
  applications for a long time

  Create “scorecards” for Super-users which track type and volume of calls they
  handle; it helps management give the Super-users focused coaching
COE Best Practice (Process)
  Establish a call prioritization model that is agreed to by the business
  •Establish targets for responding to and completing support calls based on priority
  •Make the business accountable for the number and type of support calls being place

  All other call and requests should be considered new development items




            Call Severity*                                                           Description                                                           Target



                                             System is unavailable or problem prevents business f rom running. No practical
                 High                                                                                                                                      5-10 %
                                             workaround, situation causes signif icant economic impact



                                             System/process has f ailed but recovered. Immediate attention is required. Usage is
               Medium                                                                                                                                     15-25 %
                                             severely limited. Workaround is awkward or inef f icient


                                             Work can be accomplished with minor inconvenience or loss of ef f iciency.
                 Low                                                                                                                                      65-80%
                                             Workaround is available



   * Priority should be based on business requirements and SLA. A business relationship manager could help to establish priority and service level agreement with the business.
COE Best Practice (People)
  Staff the COE with both IS and business people (if COE doesn’t exist)
  •Business staff provide the subject matter expertise to drive the business
  •IS staff provide system knowledge and integration knowledge

  Staff the support organization, especially SAP support, with a wide variety of skill
  sets
  •Problem resolution will involve integration of many different skills

  Transition original implementation team members into your support organization
  wherever possible

  Budget a cushion for staff turnover
  •Replacement support will be less experienced and will need training

  SAP skills are in demand. Diversify resource training across modules. It is better to
  train more people and spread the knowledge.

  Competency Centers provide access to skilled SAP resources and provide an
  appropriate staffing model to retain them
  •Review and proactively communicate incentive and retention policies of COE staff
COE Best Practice (Technology)
  Keep all the technical environments as close to the same as possible
  •Keep non-SAP landscapes in-sync
  •Closely manage other development platforms

  Develop a plan to decide which upgrades to apply and which to skip

  Design, test and implement a disaster recovery plan

  If there is no cross-disciplinary team in place (representing functional and
  business), there is a risk of mismanaging the ERP production environment
SAP CoE benchmark


                      Staffing Levels

                       Case Studies

                      Best Practices

                    Performance Metrics

                    Benchmark Summary
Performance Metrics
  Performance Metrics have several key uses:
  •Provide a foundation for the Service Level Agreement (SLA)
  •Focus work on areas that have the greatest impact on business and COE objectives
  •Shape behaviors (of the COE and the business) to help align the COE with the business
  •Verify that the COE is performing efficiently
  •Highlight problems areas in the COE early (workload, staffing, etc.)


  SLAs being developed now focus on the COE’s contribution to the business
  objective rather then IS efficiency
  •The SLA is a critical element of any service organization and should be used to drive the
  COE in aiding the completion of business-oriented objectives
Performance Metrics – Best Practice (as reference)
  Good Performance Metrics meet the following criteria:

  •Consistent with Business Strategy - Metrics must be linked to business drivers and
  goals and continually checked for alignment
  •Related to Business Performance – Performance criteria should be established and
  agreed upon jointly by business process owners and COE
  •Drive the right behavior - Alignment with metrics must led to the changes that improve
  business performance
  •Simple - Metrics must be easily understood by their audience as well as easy to collect
  •Repeatable - Metrics must be duplicable
  •Meaningful - Metrics must have significant purpose and must relate to their audience

  Some other key learnings:
  •Start small – implement rough measures until the COE is stable
  •Don’t over measure – there are diminishing returns in measuring
  •Gradually increase precision as needed, possible and valuable
  •Tie measures to rewards in order to really change behaviors
  •Continually revise the performance metrics
External Performance Metrics
   Core External Metrics are those metrics that form the foundation of the SLA

   Examples of External Performance Metrics are:

            Performance Metric                                  Grouping                                            Rationale                       Breakdown*


                                                                                            Determine current work load
 Number of Calls logged by Severity                  Productivity
                                                                                            Forecast required work ef f ort                        User Groups
 Level                                               Cost
                                                                                            SLA compliance

                                                     Cost                                  Determine current work load
 Average Resolution Time by Severity
                                                     Client Satisf action                  Forecast required work ef f ort                        User Groups
 Level
                                                     Quality                               SLA compliance



                                                     Quality                               Identif y procedural errors
 Percentage of Misrouted/Lost Calls                                                                                                                 Not Applicable
                                                     Client Satisf action                  SLA compliance




                                                                                            New processes or f unctionality introduced to the
 Innovations Introduced                              Client Satisf action                                                                          User Groups
                                                                                             business and benef it thereof




 System Availability                                 Client Satisf action                  Minimize downtime f or the business                    User Groups



  * Breakdown is at the business groups level (Division B/Division A) at the moment there is no need to be more granular (i.e. by business unit).
Internal Performance Metrics
   Core Internal Metrics are those critical metrics that are required for the continual
   efficiency of the COE

   Examples of internal performance metrics are:

            Performance Metric                Grouping                             Rationale                       Breakdown



                                    Productivity            Determine current work load
 Support Call Performance                                                                                         User Groups
                                    Cost                    Forecast required work ef f ort



                                    Productivity            Determine current productivity
 Staff Utilization                                                                                                User Groups
                                    Cost                    Forecast required work ef f ort




                                                             Maintain Process documentation accuracy
                                    Quality
 Documentation Review Timeliness                             Continually evaluate appropriateness and            User Groups
                                    Client Satisf action
                                                              ef f ectiveness of current processes




                                    Quality                 Reduce deviation f rom most current standard
 SAP Upgrade Timeliness                                                                                           Not Applicable
                                    Client Satisf action    Reduce amount of testing required during upgrades
Problem Severity Levels
   All support calls should be prioritized according to the problem severity

   •These categories form the basis of the SLA and COE staffing

              Severity Level                                    Incident Description                                      Percent



                               System is down or problem impacts system availability and integrity. No practical
 Severity 1                    workaround, situation causes signif icant economic impact. e.g. data corrupted, process    5-10%
                               error, abnormal termination of jobs or user sessions




                               Application/process has f ailed but recovered. Immediate attention is required. Usage is
 Severity 2                                                                                                               15-25%
                               severely limited. Workaround is awkward or inef f icient. E.g. misleading output




                               Work can be accomplished with minor inconvenience or loss of ef f iciency. Temporary
 Severity 3                    workaround available. e.g. individual end user id does not have the correct                40-50%
                               authorization to execute a process




 Severity 4                    Minor problem. No loss of f unctionality. Permanent workaround acceptable to user          25-35%
Problem Response Time
   For each severity level the SLA would identify set times for key milestones as
   well as the target compliance rate

   •These should be measured and reviewed with the business regularly

                               Service Element                    Response Time   Compliance


                                                  Severity 1    30 min.
                                                  Severity 2    2 hours
 Response Time                                                                       90%
                                                  Severity 3    4 hours
                                                  Severity 4    1 day


                                                  Severity 1    1 hour
                                                  Severity 2    4 hours
 Update Frequency                                                                    90%
                                                  Severity 3    8 hours
                                                  Severity 4    2 days


                                                  Severity 1    4 hours
                                                  Severity 2    1 day
 Workaround Development Time                                                         95%
                                                  Severity 3    2 days
                                                  Severity 4    4 days


                                                  Severity 1    1 day
                                                  Severity 2    5 days
 Planned Time-to-Resolution                                                          95%
                                                  Severity 3    20 days
                                                  Severity 4    100 days
SAP CoE benchmark


                      Staffing Levels

                       Case Studies

                      Best Practices

                    Performance Metrics

                    Benchmark Summary
Summary of Benchmark Findings
  Strategy
  •Organize the COE around the processes implemented in the organization with a process
  owner for each major process (similar to ERP project)
  •Adopt a centralize model while answering business requirement of IS proximity
  •Implementing a Service Level Agreements with the business is critical
  •Staff for an amount of development work to be handled internally

  Staffing
  •Based on average of several benchmarks, approximate size of COE for Client X in the
  future should be between 18.6 and 25.8 FTEs
  •Specific design objectives and scope will impact final staffing levels
  •Staff with business people for process roles

  Process
  •Employ a simple 3-tier support process
  •Level 0 support should be provided by Super-users
  •Outsource Level 3 support

  Performance Metrics
  •Use simple performance metrics at first while the organization is stabilizing
  •Identify core metrics for external (SLA) and internal use

				
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Description: Project Center of Excellence document sample