SAP Change Control ROI – Calculating a Total Economic Benefit CIO’s Can Believe and CEO’s/CFO’s Can Appreciate: Part II of IV
Last month I kicked off a new series on uncovering the ROI (both hard and soft returns) of SAP change control projects. We showed why automation is a lynchpin for savings that ranged from eliminating risk due to human errors to gaining competitive advantage from speed improvements. Now let’s look a bit closer.
The more automated your change process, the more complete your documentation will be and the shorter your audit times, resulting in reduced audit support costs. You can easily show the value of audit-ready documentation by using pre-automation support costs as your baseline. The right change control tool will improve system governance and its faster responses will help the business side stay nimble as markets evolve, increasing their confidence in your IT team’s support.
What about guys at the top? They want to see hard numbers for ROI – how much faster, how much more nimble? For that, focus first on change control automation. Available technologies vary in both the degree of automation and how you access or apply it. How do you detect or initiate change? How and when may you deploy transports? How do you detect transport sequencing errors, what actions kick off workflow alerts and how can you automate the approval process? All these questions tie directly into flexibility.
There are many ways to measure automation’s benefits but I’ll look here only at Velocity and Accident Prevention.
Velocity: Approval of new IT functionality is based on projected business ROI. Let’s consider a million-dollar project with a projected 6 months to ROI (i.e. time to productive use). You won’t expect to see positive ROI until months 7 or 8.
If automation can deliver the project several months sooner, you’ll save a sixth of the $1 million cost, or $166,637, for each month eliminated. Repeat the calculation for each planned project and total them to see how much automation could save you in project acceleration alone. The dollar savings are the hard ROI; soft ROI will be the flexibility and additional confidence built up between the business side and IT.
Accident Prevention: RSC consultants with many years of field implementation experience have developed some numbers based on experience + data + assumption for a medium sized 8 landscape SAP environment, 5 landscapes that are N+1 (3×2), plus 3 landscapes that are simple (contain 3 systems each), and typical accident frequency and resource involvement. The goal is to attempt to demonstrate the projected annual savings with Rev-Trac.
Here’s what they found for just 3 of the 7 or so areas where ROI can be found.
|1. Workflow and automation benefits||$141,000|
|2. Preventable accident reductions||$215,000|
|3. Change tracking automation||$165,750|
|4. Development productivity||$119,250|
|Total cost savings||$638,000|
By the way, if you would like see the details behind the calculations, let me know and we will forward them to you.
Testing and ITSM workflows also save through automation, making open integration a very important capability for SAP change control. The right tool will automate, enforce and facilitate change by integrating with your current test, service desk and other key ALM technologies so you leverage, not lose, other software investments.
The degree of automation and the ability to integrate with existing processes bear significantly on how much your change control technology can reduce human effort (cost and risk). I’ve only described a few examples of ROI for automation and integration. Let me know if you’re interested in drilling down to more details or projecting ROI for your own organization.