The crux of an Oxford Economics study, ‘How Finance Leadership Pays Off’ was that over 70% finance leaders believe that automation enhances their function’s efficiency, resulting in an increased bandwidth that can be used for other tasks. The study, sponsored by SAP, was aimed at understanding the impact of evolution of technologies on IT resources, efficiency, risks, and profitability. SAP ERP was going through a shift that had to incorporate the latest advances in data analytics, artificial intelligence, and machine learning. It could not remain just an enterprise application that attempts to connect various business functional departments. SAP had to adapt and integrate with an array of third-party applications to exploit its full potential. The changing landscape of enterprise applications and the symbiotic existence it has created with a host of innovations, brought on by an increasing demand for more timely and ad hoc reporting, has created a need for a role that can understand this surcharged dynamic and not only make sense of it but also predict the future. If not predict, at least pre-empt it.
The success of an SAP implementation begins and ends at the office of the CIO, because the ultimate vision of this large-scale implementation rests there. The CIO stands at an unenviable crossroad where he not only has to be able to make sense of the requirement for an increasing set of reports, but also be able to meld this need with the latest innovations in the market that can be integrated with the SAP ERP.
It all begins with a plan. The four important aspects of planning that a CIO needs to be involved in are:
- Selection of a vendor
- Identification of scope
- Estimation of implementation costs &
As a CIO, identifying the implementation partner is paramount to the success of the project. The abilities you will look for in an implementation partner include a detailed analysis of their capabilities, number of successful projects implemented, technical abilities, experience across industries and verticals, etc.
Equally important to the success of the project is identifying the scope. To understand the scope you must also be very clear about what is not in scope. A well-planned scope can help avoid cost overruns, increased costs, multiple changes in scope after the commissioning has started, etc. If a change in scope is mooted during implementation, the CIO is responsible for taking a call.
The other important aspect you will need to keep an eye on is cost. SAP ERP is aimed at increasing efficiency and make accessing reports faster. So obviously, you wouldn’t want to work with a slow system. You will have to take a call on the following:
- All existing systems and resources
- Whether to go with cloud-based services that are cost-effective
- Address concerns around data security and software customizations
- By how much customizations will increase implementation costs
The final aspect of planning is the schedule and timelines. SAP ERP is designed to make it easier for decision-making by being able to provide reports across functions. This will mean the implementation will take a long time as the SAP system has to integrate with other third-party vendors. This is a long and laborious process that involves data migration and information dissemination. Having said that, the CIO will decide the project timelines and milestones, which are closely tied to various business functional needs. The CIO must not only be prudent about the challenges with respect to SAP implementation, but also be aware of business needs that are ultimately the reason.
Apart from the 4 major aspects of an SAP implementation, the CIO must also have a vision on how the users are being readied for this shift. Most times, the complexities of the SAP system will mean preparation of training materials and other artefacts that will help the users across the spectrum. Executive management look at reports and understand how the company is doing with respect to its stated goals and the warehouse managers are involved in day-to-day logistical planning. SAP implementation is not just a UI change and will affect almost all the employees and it will require extensive training to get all the employees up-to-speed with the change. The office of the CIO must work with the training department to develop course materials required to up-skill the existing employees.
Apart from the focus on process, the office of the CIO has one major challenge that is actually at the core of any SAP integration project, handling data and data migration during and after implementation. The CIO must have a good handle on the technical challenges during an SAP implementation project and must be able to leverage automation to not only reduce the manual effort, but also make it less time consuming. Today SAP integrates with various third-party tools and external SAP solutions to automate the process of data migration from the non-SAP to SAP systems, while retaining data quality. There are tools such as data loaders and extractors that can help with data conversion and data migration. These tools completely replace SAP LSMW & custom programs. With a, SAP data migration tool in place, SAP transactions, business APIs, and table extractions can be automated without programming, scripting and coding, helping the user with limited SAP knowledge. Integration between Excel and SAP is the key, to upload and download data as well as having easy data cleansing options available.
For the CXOs including the CFOs an automated reporting tool presents an opportunity to take real time decisions based on real time reporting. For them an SAP system is like a magic wand, but again writing an SAP query is no easy task. SAP standard reports and SAP Financial Reporting are the backbone of an enterprise. The CIO with a deep understanding of the company’s goals and a good understanding of the latest advances in tools and technologies that can be integrated with the SAP system, is the central nervous system of the enterprise. They will provide the ability for the employees to be able to access real-time reporting. They decide the design, the architecture, and the complexity of the integration with an eye towards what they hope to realize with the integration. To match the business process with the SAP system, some customization are unavoidable. These customization lie at the heart of an SAP integration project. The ability of the CIO to understand the demands of the CXOs and work around the technological challenges, represents the core of the role of the CIO. A CIO aware of these challenges and who can leverage the innovations happening in today’s dynamic world, will ensure the success of the SAP integration project.