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Running IT Like a Business: How SAP’s Technologists Unleash Their Inner MBAs

/wp-content/uploads/2011/08/business1_138709.jpgToo often, organizations treat the IT function as a cost center – a part of the company’s overhead.

In recent years, however, SAP Global IT has adopted a different approach; one that treats information technology as a business that is fully accountable for its contribution to the company’s overall success.

This approach begins with the basics of the Global IT mission, such as ensuring the availability of all mission-critical systems. It extends into working as efficiently and cost-effectively as possible while striving for operational excellence.

But once those foundational priorities are met, SAP Global IT believes that the ultimate goal is to enable the business and its transformation, and to showcase SAP’s solutions and best practices – also known as “SAP runs SAP.” This is where information technology works as a full partner in the strategy, innovation, and differentiation of the enterprise.

To pursue that goal, SAP’s technologists have tapped into their inner MBAs and applied well-tested business principles.

Business Principle #1: Streamline key processes

The SAP Global IT environment includes global shared services running SAP ERP, SAP Human Capital Management, SAP Supplier Relationship Management, and one of the largest instances of SAP Customer Relationship Management in the world. It also includes more than two million users in the SAP Community Network, which runs on the SAP NetWeaver portal.

“At this scale,” says Matthias Haendly, VP Marketing, Line of Business IT, “the Global IT team needs an efficient way to ensure optimal performance. Like many SAP customers, it relies on SAP Solution Manager, which is the centerpiece of our company’s application lifecycle management (ALM) strategy and IT Management solution.”

Much more than simply a traffic regulator, SAP Solution Manager provides tangible business value when it is used to support core IT processes, as well as third-party solution extensions. For example, SAP Global IT uses it to integrate and manage:

    • SAP Test Data Migration Server (TDMS)
    • SAP Test Acceleration and Optimization (TAO)
    • SAP Landscape Transformation
    • SAP Central Process Scheduling by Redwood
    • SAP Extended Diagnostics by CA Wily
    • SAP Experience Monitoring by KNOA

“SAP Solution Manager is really the backbone of our operations,” says Michael Golz, SVP and CIO Americas at SAP America, Inc. “We have connected all our major system landscapes to a central solution manager, which provides us with reports on specific program status, test status, what’s in process, ticket status, and many other aspects of our performance. I know I can always go directly into the system to review the status of a project to see whether or not we’re good to go.”

In all, Michael says, SAP Solution Manager has enabled the Global IT team to manage more than 400 projects, and more than a quarter of a million documents – including test results, blueprints, and support documentation.

SAP Solution Manager even works proactively to help the team identify potential problems before they occur. “At each of our locations,” Michael explains, “we run an agent that simulates actions on the part of an end user. We measure the response time that an end user would experience in that location to see where we lose time and where we can improve. For example, if a network is congested, we see it right away and can take corrective action.”

Business Principle #2: Monitor performance and demand accountability.

To further improve alignment with the business, and to respond more quickly to system issues, SAP Global IT developed the CIO Dashboard. The dashboard gives senior IT executives a consolidated view of Global IT processes and system performance, as well as any actions taken toward improvements.

Eva Vorster, IT Transformation and Management Office, explains, “The CIO Dashboard clearly prioritizes performance thresholds by color. Green, yellow, and red issues are raised at monthly meetings, where team members are expected to explain how they will be solved – and when.”

Accountability for yellow and red performance issues is assured by the use of Atlassian JIRA, a global IT issue management system tool. Says Eva, “The Atlassian JIRA tool clearly tracks when you had the problem, when it would be solved, and what the current status is.”

The combination of real-time tracking and no-excuses follow-up is a powerful motivator, Eva reports. “The first step is to have clear insight,” she says. “Then, we act on that insight.”

Oliver Bussmann, SAP Global Chief Information Officer, adds, “The CIO Dashboard is an excellent solution for any information executive. It provides an ideal balance of at-a-glance information, from which you can drill down to find the specifics you need. I can no longer imagine what it would be like to manage without it.”

Business Principle #3: Measure results

According to Michael Golz, Global IT’s focus on operational efficiency has delivered big returns. These include:

    1. *Performance gains: *“We’ve seen a 30% reduction in efforts for regression testing,” Michael reports, “and are expecting another 20% reduction in time using business process change analyzer. That translates to roughly a 50% time savings in total.”
    2. *Productivity gains: *The Global IT team has also demonstrated an 84% reduction in effort for non-ABAP (Advanced Business Application Programming) changes.
    3. *Success rate gains: *In a before-and-after comparison, the team recently posted a significant reduction in failures and human errors while moving projects into production.
    4. *Incident resolution gains: *Global IT uses End-user Experience Monitoring (EEM) to recognize a software-related incident automatically, and respond proactively – even before end users themselves are aware of it. Over the past six months, EEM has helped SAP Global IT produce a 50% reduction in incident-to-resolution time.
    5. *Uptime gains: *Even as it pursued a more complex list of business-related objectives, the Global IT team improved on its fundamental responsibility of ensuring availability of the company’s core SAP ERP application – which recently rose from approx. 99.9% to 99.97%, excluding planned downtimes.

This performance has not gone unnoticed. The accounting firm KPMG recently conducted an audit of SAP’s IT operations and concluded, “SAP benefits from a highly centralized IT environment which provides SAP with a consistent IT strategy, thereby minimizing overhead costs and reducing duplicate work.”

Business Principle #4: Continuously improve

Having proved the value of process automation and continuous measurement, the Global IT team is expanding its reach into other aspects of IT-related performance.

Christoph Uhl, Global IT’s project manager for the rollout of Solution Manager, comments on the plans for further adoption and rollout: “We’re currently rolling out business process monitoring and analytics. We’ll soon be tracking how our business processes are running in the system, and how documents are generated – not just from the technical side but also from the business side.

“For example,” he says, “we monitor how many shopping carts are in our system, and the age distribution of those carts. That helps us ensure that orders are being processed quickly. We can also measure KPIs on the velocity of business processes, so we can manage better from a business perspective.”

As one of the world’s most experienced users of SAP Solution Manager, the Global IT team is also assisting with the ramp-up of release 7.1, providing feedback to the developers on features that enterprise customers may want. “Our job,” says Michael Golz, “is to anticipate customer requirements before the release is finalized.”

A Unique Position

SAP Global IT is aware of its unique ability to combine leading-edge technology and the latest best practices from the world of business – the two pillars that have made SAP a global software leader. And the team looks forward to offering its solutions and techniques to customers who share its philosophy of running IT like a business.

Author: Bill Kozel

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