On July 25, 2012, SAP received the prestigious iCMG Enterprise Architecture Award. By establishing an effective Enterprise Architecture function, SAP has a very successful way of putting business strategy into action, and we are very pleased to see that this is now recognized with the iCMG Award.
In light of this award, I’d like to begin a brief series of blogs on the impact of Enterprise Architecture, beginning with this overview:
Bringing senior architects under a single leadership
In 2009, SAP established the Enterprise Architecture (EA) function as part of the internal IT organization, bringing senior architects under a single leadership. At that time, IT investments were very tactical, and the IT organization was seen more as an order taker rather than a strategic value enabler. With the introduction of Enterprise Architecture, SAP wanted to:
a) Adopt a more strategic planning approach so that all IT investments are directly linked to SAP’s 2015 strategy
b) Reduce overall total cost of ownership by leveraging existing platforms and systems
c) Avoid siloed solutions, overlaps, and gaps across all line of businesses
d) Drive innovation and create an incubator for new SAP solutions
A multi-year roadmap
In close alignment with the lines of businesses and SAP’s IT experts, the team began a six-month exercise with an as-is analysis of SAP’s current business application landscape, followed by a two- to three-year business roadmap for each line of business. The results of this exercise include:
- A holistic view of all planned initiatives and how they are linked to SAP’s strategic goals
- Heat maps that show overlaps, white spaces, degree of change for impacted processes, involved data objectives, and other factors
- An inventory of all internal applications and systems, including how they need to be changed in order to meet business needs. This may include upgrade roadmaps, system landscape roadmaps, etc.
- A view of the overall demand and skills needed to fulfill IT requests, based on the mid-term initiative roadmap. This will help the IT organization position its workforce based on the demand from the LoBs.
With this, SAP has now a defined target architecture and a multi-year transition roadmap based on what the lines of business need and how they want to contribute to SAP’s overall success.
By conducting de-duplication workshops with IT experts and subject matter experts from the involved lines of business, we were able to avoid unnecessary costs by eliminating overlaps and gaps across the different board areas. As a result, the EA team has streamlined processes and applications based on synchronized business requirements. In addition, it has actively leveraged SAP’s product portfolio. This is directly contributing to SAP’s TCO and its margin objective.
A new governance framework
In parallel, we have implemented principles and standards and an effective architecture governance framework. This will help ensure sustainability, while ensuring that all IT activities fit into the target architecture. Quality gates supported by self-assessments along the project lifecycle will also help ensure architecture compliance for all IT projects – and will help us recognize any deviations at a very early stage.
A commitment to innovation
Innovation is another important pillar of our Enterprise Architecture approach. In 2010 we initiated the “SAP Runs SAP” initiative. With dedicated funding and resources, the EA team drives co-innovation activities together with SAP’s product development specialists and experts from the lines of businesses.
The SAP Runs SAP team drives the early adoption of new SAP solutions in a co-innovation approach, six to 12 months before they are released to other SAP customers. And, as the first productive customer, we provide important feedback to our product development and lines of business in order to:
- Improve maturity and quality before the product is released to other customers – helping to ensure customer satisfaction
- Drive innovation and help SAP’s lines of business adopt new products in an agile and effective way
- Transform IT into a value enabler and trusted advisor
- Demonstrate the business value of new SAP solutions
SAP Runs SAP in action
To cite a few examples:
- In 2011, SAP became the first productive customer of SAP HANA – SAP’s new in-memory computing platform. With the new platform, we are now able to deliver real-time insights to our sales organization through our advanced mobile platform.
- The new profitability (CO-PA) accelerator based on SAP HANA is boosting the performance of critical profitability reports while providing full insights into all details. As a result, we have significantly reduced our month-end and quarter-end-closing process times.
- Since 2011, SAP has been running its business warehouse application on SAP HANA. This has helped us improve the performance of existing reports, shorten data upload times, and enable real-time reporting in a classical BW environment using a virtual info provider.
- The new SAP Travel OnDemand solution – implemented in 2012 – provides a great end-user experience and helps SAP drive its people agenda.
Overall, SAP currently runs more than 120 innovation projects– with many more to come. The feedback we’ve received has been extremely positive, and innovation has become part of our DNA.
Transparency and agility, along with operational excellence, innovation, and a focus on business benefits, are the key success factors of the EA function at SAP. Our goal is to help SAP put its strategy into action so that we can achieve our company’s ambitious goals for 2015.
In Part 2 of this series, we will take a closer look at our architecture artifacts.