Prepackaged SAP Best Practices—Are They for You?

Introduction

In October of 2005, SAP released twenty-eight new versions of SAP Best Practices, its series of fixed-scope, predefined packages of software and services. These prepackaged solutions address the demands of midsize enterprises in diverse industries. However, are they right for you?

SAP claims that the preconfigured offerings are enhanced with new tools designed to help customers achieve faster implementation times and higher business flexibility while lowering risks.

Available in fourteen different languages, and for industries as diverse as automotive, chemicals, consumer products, fabricated metals, mining, retail, professional services, and water utilities, these packages are based upon mySAP ERP.

The vendor claims that SAP Best Practices include a clear, step-by-step methodology; reusable documentation, and complete pre-configuration settings that provide everything needed to run specific key processes "out of the box" with minimal installation effort. SAP Best Practices offers end-to-end business process scenarios for specific industries, such as warranty processing with returnable parts for the automotive industry and prototype development for the high tech industry. SAP customers can use industry-specific SAP Best Practices in conjunction with cross-industry scenarios for customer relationship management and supply chain management.

Additional industry-specificity is gained by having SAP partners utilize SAP Best Practices to build micro-vertical mySAP All-in-One solution offerings that leverage their unique industry expertise and service capabilities.

We looked at several examples of SAP Best Practices offerings. The chemicals packaged solution is tailored specifically to the chemicals industry. It appears complete for the business processes available and should prove to be an attractive option for mid-sized chemicals companies. SAP offering for chemicals combines

• Core business processes
  
  
• Consulting services
  
  A defined-price offer by local SAP consultants to set up the software to support selected business processes from the best practices template
  
  
• Optional services
  
  Allow you to work with SAP on hosting and training needs, including twenty-four hour a day, seven day a week support with guaranteed response times
  
  Tailored configuration

The vendor claims that the packaged solution for chemicals can be implemented in as little as fifteen weeks.

We also looked at a partner offering. Deloitte Consulting LLP worked closely with SAP to develop its own offering for the food manufacturing industry, which, contains the key business processes, prepackaged for its targeted industry. Deloitte claims that its approach offers a number of advantages over traditional enterprise resource planning (ERP) implementations:

• Fast, focused benefits—Designed to accelerate time to value, SAP ERP Packaged Solutions feature pre-configured, yet flexible, SAP applications based on SAP Best Practices and Deloitte Consulting's implementation experience in the food and beverage industry.
  
  
• Reduced integration risks—SAP ERP Packaged Solutions can be introduced into your existing operations at minimal cost and with minimal disturbance to your business.
  
  
• Defined price and time—SAP ERP Packaged Solutions are clearly designed to avoid surprises. They can be implemented quickly for a defined package fee.
  
  
• Easier compliance—Deloitte's solution is fully compliant with new traceability legislation enacted in the European Union and the United States in 2005 and supports adoption of radio-frequency identification-based (RFID) technology for tracking and tracing.

Recommendations

The prepackaged SAP Best Practices solutions should be of interest to midmarket companies in the targeted industries. Before you make a decision, we suggest you examine a few of the following issues:

• Without the packaged solution, is SAP the best product for your business? Rapid installation a product that does not meet your needs, or is "second best", may not prove to be a long-term bargain. Remember, you will have this software for years; quick implementation is not as important as long-term value.
  
  
• Are the business processes, as packaged, in the SAP Best Practice solution right for you? If the business practices do not fit your business needs, the advantages of a prepackaged approach may become disadvantages. As one Deloitte partner told us, "If the packaged solution does not fit 60 percent of the requirements, it may actually take longer and cost more than a more traditional implementation approach."
  
  
• SAP Best Practices do not cover all functions available from SAP or needed by specific companies. With SAP Best Practices, you may be looking at a partial implementation. Investigate what business processes are not addressed by the packaged solution, and get a reliable estimate of the cost of implementing those processes to determine total cost.
  
  
• SAP and their partners correctly state that the packaged approach takes less time and money. However, they are comparing the packaged approach of installing SAP to the non-packaged or traditional approach of installing SAP. Will the packaged solution for installing SAP take less time, and cost less, than installing a different solution? No generalizations can be made in this area; if time and cost of implementation are critical to solution selection, only specific comparisons with the alternatives can resolve this question.

About the Author

Olin Thompson, a principal of Process ERP Partners, has over twenty-five years experience as an executive in the software industry, with the last seventeen in process industry related ERP, supply chain partnership (SCP), and e-business related segments. Thompson has been called the "Father of Process ERP." He is a frequent author and an award-winning speaker on topics of gaining value from ERP, SCP, and e-commerce, and the impact of technology on industry.

He can be reached at Olin@ProcessERP.com.