I have written a lot on the cost of implementing Brazil Nota Fiscal, especially the hidden costs. However, in this blog, I wanted to discuss the often overlooked cost of change management. Remember that the Brazil Nota Fiscal legislation is a living and constantly evolving mandate. This means that someone has to
- monitor the government
- monitor the SAP system
- understand how to implement the updates in their SAP system with all of their optimizations and customer specific configurations
- implement the SAP updates
- implement the middleware PI updates
- implement the NFe solution
- test in QA – all end to end scenarios
- move to production
This is the standard amount of project work that hits a company at least a few times a year in Brazil. There are solutions out there by specialized SAP managed service providers that eliminate all of this work, so make sure you understand your real cost of change management. Here are a few specific examples of issues I have seen over just the past month.
Example 1 – Just one Service Pack update to SAP GRC for Nota Fiscal – took 6 weeks, from initial planning, implementation of GRC SP14 in the QA, integrated testing of all critical scenarios (this took about a week), preparation and execution of the Go-live (GRC application of SP14 in production) and follow-up after application.
- Now remember that it is 6 weeks of time for the following staff
- SD specialist
- MM specialist
- FI specialist
- SAP Basis Team to do the transports throughout the environments
- PI Middleware expert
- GRC expert
- SAP Smart Forms expert
- Business users for the week of testing
- Project Manager overseeing the deployment
- Take all those people and multiply that by their daily internal rates or the SI you have to hire, and now you see why more and more multinationals and SAP COE are turning to solutions that can dramatically lower their cost of change management
- Take into account that these changes happen a few times a year – approximately 2-3 updates a year. The costs are considerable
Example 2 – There were two issues for this customer. The first was the upgrade process for SAP at the Center of Excellence. Major upgrades only happened twice a year, so Brazil constantly had to go through the fast track approval process – this took 8 to 10 weeks from request to deployment of the OSS notes. This didn’t include the 5-6 weeks of testing or issues that arose if they found out they need additional changes to the SAP system. What should have taken days – took months of time and put the local business at risk. And by risk I mean – their operations/shipping was stopped for 4 days – how much money does not shipping for 4 days cost you, let alone customer satisfaction issues. The second problem was they had multiple pricing and discount configurations customized in their SAP deployment – this lead to over 150 hard codes changes that created constant regression testing nightmares for both the local SAP team and the COE.
Example 3 – this one is pretty simple to see the issue. The new Eventos test systems were available in August of 2012. Actually, we had all of our clients (over 250) migrated by November 2012. This company used a local vendor:
- As of July 17th they are still waiting on a customized upgrade to their system for the inbound validations. They are managing manually because they have been unable to get this from their current software provider. Not to mention, they didn’t get the OSS notes until April when the test systems were ready in August.
In a constantly changing environment, with unique SAP ERP installations at virtually every multinational due to internal process configuration and external customer requests, combined with the fact that the changes and issues can shut down your operation; you should be looking at the real cost of operating SAP in countries including Brazil, Mexico, Argentina and Chile. There are solutions in the market that eliminate all of this risk, work, and costs.