SAP Outsourcing – lets first understand what outsourcing is before going to talking about how does it helps the Organization to reduce the total cost Operation on IT processes? Outsourcing is the process of taking help from third-party vendors in the business vertical to let them manage a certain aspect of business operation. Typically used for short-term gigs or jobs, it is also utilized in the long-term to lay off ownership of certain processes and to focus the resources on something else.
SAP Outsourcing helps the Organization in increasing their performance and Reducing the time, effort and capital to complete certain jobs. The SAP Outsourcing marketplace gives opportunity to sign a contract with a consulting company which is experienced and capable enough to meet your business needs and give leverage to meet the business goals. It is difficult to hire SAP consultants with high in experience because of the talent demand and supply mismatch in the SAP Marketplace. People who are capable of meeting the business requirements as a permanent full-time employee are not cost effective! This is because that employee may not always be needed and the cost-to-hire of an employee in the competitive marketplace can be very high. So here comes the role of Outsourcer, who provides a pool of consultants, who are Experts with Experience to help Organizations attain their corporate goals.
A survey of the London Stock Exchange for the duration of three years, has discovered that a positive relationship between the organization and the Outsourcer can result in increased Stock market performance. SAP Outsourcing and Stock markets might not be directly related to each other, but the savings achieved from a well-defined outsourcing program and parallel benefits availed with improved business processes can do a lot for a company’s overall performance in terms of increased revenue and lower expenses. Well-orchestrated companies with a clearly drawn out strategy for their ERP see SAP outsourcing as great practice of management of their SAP Resources as they know what part of their processes they want outsourced.
SAP Outsourcing Done Right!
As per an ASUG survey conducted, it was founded that SAP Outsourcing decision is rated as positive by a very high percentage of organizations. The number of IT Decision makers satisfied with the SAP Outsourcing Gigs amounted to about 80% of the surveyed people.
According to the report, analysts report that there is the continuous trend of companies rated ’Free of Management Time’, which depicts that it allows the manager to put their time in core business process and focus on growth of the Organization.
SAP Outsourcing takes the IT processes at a new level of competence and helps achieve higher efficiency than the attainable within the business site. The major benefit of SAP Outsourcing is it help to covert the fixed cost of IT to variable cost because you only sign a contract with the outsourcer when it is needed and in case of SAP Outsourcing you don’t even need to arrange a different set up for the SAP Process because the requirement can be fulfill by SAP Outsourcing which leads to reduction in Total Cost of Ownership (TCO).
Benefits of SAP Outsourcing
QUALITY OF SERVICE (QOS) An average IT unit usually is not capable of meeting the business objectives of an organizations, because of the skill gap that exists between the personnel at hand and what is required. That’s why the outsourcers are there to provide the services to their clients and help them reduce unnecessary delays that cause transactional delays in everyday business.
In SAP Outsourcing, organizations have control over the Quality of Service, they can get the consultant as per their requirement and can gain leverage to reach their IT Goals at faster pace and cheaper price.
FOCUS ON BUSINESS PROCESS SAP Outsourcers always tend to improve the business process of their clients. They leverage their vast experience and domain expertise to get the best out of their client’s SAP Environment. A comprehensive audit and analysis of a client’s business processes and workflow in SAP is the first step towards this. The outsourcer manages IT effectively by managing the budget of development and controlling business expenditure. They gain an understanding of an accurate expenditure report of their client and try to minimize the it and help them achieve maximum Return on Investment (ROI).
SAP outsourcing reduces the total cost of operation by controlling the number of man hours required to complete an SAP job. It means that resources are being optimally utilized won’t be any employee who will be ideal or not doing any tangible work for the business.
Experienced SAP Vendors provide access to specialist and knowledgeable resources who sound in their field and have a deep knowledge of the industry. Their functional and technical knowledge helps organizations solve the most complex of problems. As the competition in the SAP outsourcing market place is increasing, outsourcers are also providing training to their consultants to maintain the pace of fast-growing competition. So basically, the clients get on-demand consultants with deep SAP domain knowledge of their modules. All in all, SAP Outsourcing might be the way forward for your organization’s ERP and IT Processes.
THINGS TO BE WARY OF WHILE OUTSOURCING TO A VENDOR An organization’s SAP, when outsourced in the right hands, can propel the business to another level but if it’s not in right hands, organizations can encounter failure in different ways. Sometimes the outsourcer does not take a strategic approach, which can cost them thousands of dollars in expenses and also prove detrimental for their business processes. So, it is important to note that any decision maker should discuss the strategic approach for SAP Outsourcing before hand-over and have a clear vision of Organizational Goals and Objectives.
LACK OF EXPERIENCE AND UNCLEAR METHODOLOGY In case of SAP outsourcing, you should have lucid information about the outsourcer before going SAP Outsourcing because it can hammer the whole organization at once. Today there are plethora of experienced consultants and enterprises to help steer the fledgling around the dangers and it is pertinent to consider certain things before you go ahead and sign a contract with an SAP vendor.
- Previous Experience in the industry
- Customer Retention Period and Rate
- Consultant Experience Bandwidth
- Comprehensive audit of environment
- Ability to provide flexible and scalable solutions
Earlier, SAP Outsourcers were working without any standard method for approaching the requirement of the company but companies like Microsoft and some others have developed a standard and formal method of approach such as IT infrastructure library (ITIL) that is widely being followed in the Gig Market now.
INABILITY TO UNDERSTAND INTERRELATIONSHIP AND EMPLOYEE FACTOR Sometimes, SAP vendors ignore the importance of the relation between business processes and their offerings. Rather than understanding the intricacies of a system, they go ahead with standard services for all their clients. This can hamper the organization’s process flow and response time. Processing within the system is often not optimized in such cases. IT processes and other business processes are often tightly woven. Some SAP outsourcers fail to understand this and the customer consequently suffered.
When it comes to customer satisfaction, it is very important to integrate the team of consultants into the organization. They may be there for the short term but an understanding of how the company’s operations work will only prove to be beneficial to the consumer.
FAILURE DUE TO HIGH COST Sometimes, the organization opts for the SAP Vendor which provides cheaper rates as compared to its competition. But their contracts are inflexible and have lack of competency. Consultants do not carry enough experience, the right attitude and knowledge to meet the business goals and requirements. The screening process isn’t thorough and this leads to a lot of tensions between the vendor and the organization during the serviceability period.
There are some common mistakes with SAP Outsourcing.
- Imperfection in determining the motives, goals and objectives of SAP Outsourcing
- Centralization on cost reduction rather than benefits and the value-added benefits
- Sub-standard corporate governance of the outsourcing program over time
- Appointment of staff who are not capable of manage the relationship and contract
But these risks of failure and common mistakes can be reduced by taking proper measures and precautions at very initial level. There are SAP Outsourcers who have a great understanding of the industry-specific business and how to meet their Objectives of the business.
SAP outsourcing and its best practices help organizations to overcome tough challenges related to their IT. For better understanding of the same, there are a lot of SAP Outsourcing Success Stories and referenceable client testimonials that help an organization in the process of evaluating vendors.
Professional Services Case Study: Orane Consulting and Metso
Metso is a world-leading industrial company offering equipment and services for the sustainable processing and flow of natural resources in the mining, aggregates, recycling and process industries. With our unique knowledge and innovative solutions, we help our customers improve their operational efficiency, reduce risks and increase profitability. Metso employs over 12,000 people in more than 50 countries.
THE CHALLENGE Due to the expanding need for new functionalities and insights by the business had put the IT function under continuous strain to manage the talent pool for SAP resources. As the business demand followed its own patterns or lack of it predicting the right resource type, size and composition was also very difficult.
Metso implemented SAP across the global footprint of more than 60 countries. This was a full scope implementation, wall to wall solution for finance, administration, manufacturing logistics, sales and service. At a conservative approach 92% of Metso global revenues pass through SAP. With such a deep penetration and impact on the business not finding the right resources at the right time was not a solution that the IT team would be fine with. As the demand was not static managing a pool of expensive resources was also not a solution.
THE SOLUTION Metso explored the market for SAP professional services providers but finally zeroed on Orane Consulting. Metso was looking for a partner who could offer a mix of onsite, offshore and managed services to augment the internal IT team and be an extension of the team. They were looking for a partner who had a large pool of SAP resources and has worked with global clients across geographies and time zones.
Orane consulting provided onsite resources for MDM, Episerver, PP and offshore services for Power BI. Through its proprietary managed services methodology Orane is also supporting the global footprint across 65 countries for PP, QM and FI.
- On demand availability of resources when they are needed.
- Optimization of resourcing cost
- Avoiding delays because of non-availability of critical resources
- Improvement in the process methodology
- Better control over composition of SAP team
- Specific Industry Vertical Experience
- 9+ Years, 10,00,000+ Hours Of SAP Experience
- Pool Of Consultants Who Possess The Most In-Demand SAP Skills
- We Follow Sound Best-Practices In Industry
- Appropriate Frameworks For Service Level Management
- Consultants With Rich Blend Of Domain Expertise And In-Depth Technical Knowledge
- Scale And Modify Methodology To Meet Your Organizational Needs
- Expertise With Integration To Third-Party Software And Applications