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Introduction With a colossal focus on the technology progression, today’s corporate world is characterized by swiftly evaluating new advancements, justifying their adoption from a business perspective, and finally embracing them. While it usually makes sense to adopt the new technological advances as soon as possible, an important facet of this espousal is properly evaluating the changes and making sure that they make sense to you as a business at the time.  This article discusses some of the factors that need to be considered before making the decision to embrace some of the latest technological advancements in SAP, delivered via its newest mySAP ERP releases. The purpose is to discuss the value of the upgrade and the evaluation process involved. The article draws from my personal experience of evaluating an upgrade initiative from 46C to the latest mySAP ERP release. It contains arguments from my discussions with folks at Forrester, SAP, and various implementation partners and customers of SAP.  Value of upgrade As pointed before, the technological advancements/upgrades usually come bundled with a number of business benefits. And this definitely applies to SAP’s mySAP ERP releases. Some of the benefits are summarized below:

  • mySAP ERP helps customers take an important step towards Enterprise SOA (ESA). It would serve as the basis for future SAP and partner applications. Considering the dynamic nature of the businesses, it makes perfect sense to have a system in place that allows for greater flexibility, and seamless business integration. And ESA exactly enables this. As part of the new releases, SAP has delivered ready-to-use services that address some of the common business functions. E.g. services available in the area of supplier collaboration and credit management. SAP is planning to add a number of services in the future to further strengthen this offering.
  • New functionality in all SAP Netweaver components has been added. Be it tighter integration capabilities with third parties via XI or the delivery of preconfigured business content with portal enabled roles, mySAP ERP 2005 has it all!
  • About 300 functional enhancements are available with mySAP ERP 2005. Most of these enhancements are in Employee Self-service, Manager Self service, FI-CO and Internet Sales areas.
  • All industry-specific solutions are available in the same core SAP system. The new Switch framework totally replaces the old concept of add-ons.
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  • mySAP ERP being powered by Netweaver (NW) 2004s, the various NW components like XI, BI, EP, etc. are built into the core system. As a result, the landscape design needs to be given due consideration in the new releases.
  • Specific solutions like mySAP CRM and mySAP PLM are a part of the core mySAP ERP, thus enabling huge cost savings from not having separate licensing for them.
  • The new alternative user interfaces, Duet (SAP integration with Microsoft Office) and Project Muse, sound very interesting. The idea is to provide a simplified user interface. Initially, SAP enabled Duet for only a few business applications, and they are adding more to the list with the new versions of Duet.
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  • People productivity is a major focus area in the new releases. The emphasis is on automating the routine work, role based usability and enabling exception-based work processes.
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  • mySAP ERP also helps businesses comply with legal requirements such as the Sarbanes-Oxley Act.
  • The fact that SAP has announced that mySAP ERP 2005 would remain the latest version in place through 2010, adds to the list of advantages. Moving forward, all new functional enhancements to mySAP ERP through 2010 will be made available as extensions to mySAP ERP 2005, eliminating the need to upgrade in the next few years.

The Evaluation Process Before committing to take on an upgrade project, it is extremely important to understand the new environment and decide which components you want to enable in the new release. Some of the areas that need to be considered and evaluated are as under:

  • It would be a good idea to understand and explore the functional enhancements available in the new releases and short list a few of them that would have the most business value, if implemented. Even if the upgrade is determined to be a pure technical one, this exercise would still facilitate in creating a strong business case and help management see a clear ROI. SAP has a come up with a tool called Solution Browser (available on the service marketplace) that lets you compare the functional enhancements based on the source-target version and the functional area you would like to investigate.
  • Since the new releases are based on the Netweaver platform, it makes sense to invest some time in exploring this platform, and determine which of its components you would like to implement and how quickly. If based on your IT roadmap, you plan to adopt the new features quickly, then you should plan to upgrade as soon as possible.
  • Your existing hardware might not support the new technological framework. As such, infrastructure requirements should be determined upfront and included in the project cost.  SAP’s Quicksizer can be used to arrive at these requirements.
  • Initial planning needs to be done to arrive at the timeline of the upgrade project. It needs to be scheduled in a manner where you do not have a lot of developmental activity going on when the upgrade is being implemented. Also, make sure that if you have some other projects in pipeline, upgrade is given a priority over them since otherwise, it would mean double testing or re-training.
  • An important decision in the whole process would be deciding on the target release. For a business running on 46C, there are three different versions one could upgrade to. While upgrading to the latest version would seem like the default option, it would be worthwhile to investigate the pros and cons of doing so. Of the total SAP customer base, about 16% have moved to mySAP ERP. Among them, 5-8% is on ECC 6.0 while the rest of 92-95% is on ECC 5.0. Even though we do not see a lot of customers moving on to the newest release, but it is believed to do with the ERP fatigue. ECC 6.0 is perceived as a stable and the default go-to version.
  • On a cost-benefit side, maintenance windows need to be given consideration during the evaluation. The mainstream maintenance for 46C is ending on Dec 2006 and customers will have to pay an additional fee for extended maintenance after that.

   To summarize, the new functionality and features in mySAP ERP appear to be very promising. By spending time upfront in the evaluation process, you would be better prepared to march towards the new technology zenith and at the same time, establish the business value you would derive out of it.

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  1. Anonymous
    SAP Customers should also be prepared for change in functionality compared to older releases. Not only is new functionality added but existing functionality is changed. Many customers I deal with dont understand that this happens and they seem quite shocked by it. I would really advise customers to read the release notes. It can provide some serious headaches and surprises in the future.
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  2. Michael Eacrett
    Hi,

    Nice blog and very thought provoking however I notice one comment in that blog that might be misunderstood we should clarify:

    You state:
    “Specific solutions like mySAP CRM and mySAP PLM are a part of the core mySAP ERP, thus enabling huge cost savings from not having separate licensing for them.”

    Clarification:
    mySAP ERP, mySAP CRM and mySAP PLM are part of the mySAP Business Suite (with mySAP SCM and mySAP SRM). While there are a large number of synergies between the mySAP business solutions, you do not get all of mySAP CRM and mySAP PLM within mySAP ERP.

    I hope this helps,
    Mike.

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