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THE MAGAZINE FOR SAP MANAGERS

Checklist: 5 Tips for Getting Started with SAP Benchmarking

If youre looking to implement a new SAP installation, upgrade an existing one or are just trying to maintain the status quo, at some point the questions will arise, What are my peers doing with respect to SAP and how do I compare? Coming up with answers requires you delve into benchmarking. Benchmarking requires you to assess the performance of other companies that are similar to yours with respect to how they run their SAP environment and, perhaps, the benefits they get. Thats no mean feat, but here we offer 5 simple steps to get you on the right track.

Establishing the rationale for benchmarking

The chief rationale for benchmarking is to set realistic expectations with respect to costs. Its unlikely youll be able to anticipate all the potential issues that will cause costs to increase during an SAP implementation or upgrade. But through the process of benchmarking, you can determine how much over budget your peer companies tend to go and plan accordingly.

Determine who to benchmark against

Compare your firm against the best-in-class player, the industry average and two companies that are similar to yours. Vendors and consulting firms should be able to provide you with information on companies of the same size and type as yours, albeit without divulging any specific names.

Ask other CIOs and IT pros to share their experiences

The best source of benchmarking information comes from your peers at other companies. Seek out and join CIO-level organizations in your area that encourage such information-sharing. Just be careful to glean information from companies of about the same size as yours for an apples-to-apples comparison

Determine what elements of the implementation to benchmark against

In terms of a new SAP implementation or upgrade, three elements are most important: Timeline, meaning the calendar time it takes to realize value from the implementation Cost of the implementation Mix of on-site and off-shore resources required, which is actually a sub-set of cost

Get reliable cost data

For best results, get data from at least two sources. Ask SAP and other vendors to give you cost data for other customers. Then take that and run it by a consulting firm for a reality check. They will often give you numbers that are quite different from what the vendor provides perhaps providing ammunition for negotiation with the vendor. In addition to its benchmarking resources, SAP also has an IT benchmarking program that customers can participate in for free.

ERP Executive thanks Vijay Vijayasankar, Associate Partner for SAP Business Analytics with IBM Global Business Services, for his help with this article. As with his blog at the SAP Community Network, the opinions expressed here are his own, not IBMs.

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THE MAGAZINE FOR SAP MANAGERS