SAP Outsourcing (Part 3) – Tips and Strategies

In the previous article, I gave two examples where outsourcing cost way more than was apparent. In this article I will begin to delve into some strategies and tips you can use to make outsourcing work. Firstly, let’s examine some concepts and questions you need to answer for yourselves before you embark on the outsourcing journey. And it is a journey. I believe that getting clear on what you are trying to accomplish here is a key to outsourcing success.

Question 1.
Why are you thinking about outsourcing?

Some reasons may be:

  • To save costs (usually the reason)
  • To get some temporary resources. In other words leverage.
  • To outsource all SAP work. This is not your core competency, so makes sense to move it out of the company.

Question 2.
What are you thinking about outsourcing?

Some examples are:

  • Some customer specific enhancements
  • All your development
  • All your help desk and support
  • Just you BASIS support
  • Functional modules such as all the Financials
  • All your mailing and printing
  • Your distribution of your products
  • Fulfilment of rebates
  • The hosting of your SAP system (services based environment)

As you can see, the variety is large and the requirements for each area would be vastly different.

Question 3.
How are you planning to manage this?

This is key. This is the reason why most outsourcing fails. Many organizations have the illusion that outsourcing parts of their SAP system or implementation is like outsourcing the stuffing of envelopes. When you consider that the average implementation costs millions and affects every aspect of your core business, this is crazy.

SAP becomes your integrated business execution platform and the very survival of your business depends on it. It is in your best business interest to effectively manage your outsourcing teams. I will discuss this in more detail in a later article.

I want to make another key distinction here. There are actually 3 categories of outsourcing. It is vitally important that you do not confuse them because they differ in the level of involvement required by you.

  1. Out Tasking – Where you simply outsource a task. Once the task is complete, the relationship typically ends. Next time you needs some more work done, it will probably be done by somebody else. You manage this.
  2. Outsourcing – Longer term relationship where you use the same person or groups of people. You typically manage them.
  3. Out Teaming – Similar to Outsourcing. However, in this case you also outsource the management of the team to someone.

Answering these questions will help you get very clear on your needs.

That all for this now. In the next article I will discuss some typical issues and potential problems you need to consider.

Feel free to add comments to this article.

Best regards and keep warm.

– The SAPGuy –