SAP Rollouts: Opportunities and Threats

Many SAP system implementations carried out in branches of international companies use ready-made solutions originating from the head office of the given company. Projects of this type, defined as “rollouts” (i.e. expansion/extension of the existing solution by adding a new branch), are characterized by specific conditions.

Notable features include stronger formalization of the implementation process, emphasis on standardizing solutions and adjusting to the corporate core model of the system, and involving foreign consultants from the corporation.

The study below presents various models of SAP system rollouts, depending on the degree to which corporate standards are transferred to the Polish company during implementation, and with respect to the degree of the corporate consultants’ involvement.

This material also provides a description of typical threats connected to rollout projects, as well as the benefits that can be achieved by applying corporate standards.

We have also included certain recommendations: how to manage SAP rollout projects so that the work of three parties – company, corporate consultants and local implementation companies supporting the venture – can proceed efficiently and bring measurable benefits to the company.

What Does Rollout Implementation Mean?

The term “rollout” refers to ventures consisting of implementing the system based on a certain ready-made and already configured process within the system business model of a company. The model defines the established operation standard within the corporation, implemented with the participation of internal consultants who have worked out the model solution and deal with its migration to other companies in the group.

A standardized business model which then constitutes the basis for rollouts should encompass the following components:

• Documentation and configuration of the business processes flow in the SAP system
• SAP organizational structure and guidelines for modelling the local organizational structure of the company within the system
• A set of standard reports, forms, interfaces and other functional extensions
• A set of standard roles (user authorization profiles)
• Templates and examples of project documents to be used in other rollout projects, in order to ensure uniform documentation and project status reporting within all projects at a corporate scale

In the past, model solutions almost always came from the head office of a corporation; in recent years, there have been many cases when a different branch/country was chosen – quite often branches in Poland – for working out the model and its first implementation.

Participation in a rollout project at such an early stage allows for more influence on the target scope and shape of the worked-out model, however, it also means more intense work (instead of copying the solution, it has to be built from the beginning).

Such projects are therefore more similar to classic SAP implementations, and they are not the subject of this article.

Various Rollout Models

Several types of rollout project may be distinguished with respect to the approach to standard business models of a company operation:

• “Off-the-peg” rollout implementation, where a model solution is ready and, so to speak, preconceived, and the goal of the project is to adapt the company to the ready business model. The implemented system should comply with the standard as much as possible, and changes should be limited to those required by the local and absolutely binding legal regulations (concerning external reporting, taxes, remuneration, etc.). In the adjustment process “organization <-> system”, greater emphasis is placed on implementing organizational changes in the company than on adjusting the system.
• Rollout implementation with a ready model solution, yet the goal of the project is to implement a system that is a combination of the corporate requirements and the business practices of the company implementing the system. Despite the fact that such rollouts are different from the standard, they allow for achieving a competitive advantage on the local market.
• Rollout implementation with a preceding standard project, the purpose of which is to work out a common model of operation for a group of companies. Having worked out and implemented the model in a pilot company (or several) and introduced changes resulting from experience from the first implementation, the standard model is rolled out to other companies in the group.

With respect to the degree of corporate consultants’ involvement, rollout projects are divided into two types:

• Rollout implementation with the leading participation of corporate consultants. International corporations often establish their own implementation companies within the group. In such projects, the involvement of local implementation company consultants is mainly to ensure that particular local market conditions and legal requirements are considered during the implementation.
• Rollout Implementation with the leading participation of a local implementation company. The implementation company does the work, and corporate consultants mainly share their knowledge on the standard solution. At particular stages, the corporate consultants control the course of the work and ensure compliance of the implemented system with requirements resulting from corporate standards.

Methodology of Rollout Projects and the “Classic” Implementation

If a rollout project involves adjusting the corporate model to the specifics of a company, the implementation is carried out on the basis of methodology that differs from standard implementation methodology.
With the assumption that the standard business model is ready and available, the following changes appear at particular implementation phases:

Project preparation phase – at this stage, it is necessary to check whether the corporate solution includes its own implementation methodology and procedures. The local implementation partner (if the project assumes such partner’s involvement) should be granted access to the corporate methodology description in order to prepare its team for the working standards required by the corporation in advance (i.e. project documentation format, rules of configuration coding, program naming conventions, etc.).

Blueprint definition phase – as the blueprint solution is ready, the main role of the implementation teams is to check its compliance with the actual company’s operations. This allows them to identify differences and reach decisions concerning which fields adjustment (extension) of the model to make and in which fields the company will be adjusted (organizational changes).

Prototype development phase – includes the introduction of changes into the configuration and extensions for the differences between the standard model and the company’s operation model approved for implementation.

Final preparation phase – when preparing end users, ready (if such exist) training materials and instructions may be used. Most often, such materials require translation into the local language and supplementation with the differences stemming from local changes being introduced into the system. In most cases, the local branch of the company decides whether preparing instructions and providing training for end users should be entrusted to its own project team or to the implementation partner.

System start and operation phase – the new system operations support is mainly carried out by the internal corporate structure of a help desk (if such an organizational unit exists within the group). Usually, a certain time window is chosen for handing over project support to the central support organization after closing the first month-end period in the new system (i.e. 6–8 weeks after startup).

Tasks of Corporate Consultants

In SAP rollouts, assuming it is possible to adjust corporate standards to the operations model of the local company, corporate consultants provide added value through the following activities:

• Sharing knowledge on the manner of operation of other companies (branches) within the corporation – based on the experience of branches that have already implemented the corporate solution
• Sharing knowledge on the model solution available in the system (blueprint documentation, configuration, functional extensions)
• Managing or carrying out particular implementation activities and tasks (especially in the blueprint phase, less often in the phase of prototype development and final preparation for the production start-up)
• Sharing knowledge on experiences from implementation in other companies within the group (problems and methods of solving them, corrective and preventative actions)
• Controlling and auditing the achieved implementation results and ensuring compliance of the system implemented in the company with the standard solution

Benefits of Rollout Projects

Implementing a rollout may be a chance for a company to take advantage of already worked-out best practices, as well as to limit the costs of implementing and maintaining the system. Benefits of rollouts usually include:

• Standardizing ways of operation and reporting results of particular companies within the corporation
• Facilitating communication between different branches and between branches and the head office thanks to the introduction of common terminology and result assessment criteria (as above)
• Streamlining the flow of processes and functions of the local company according to the best business practices of the international corporation
• Limiting costs of implementation – reduction of the total number of consultancy days in the project by using the ready-made blueprint solutions as well as configuration and extensions of the system
• Reducing the implementation time (as above)
• Reducing costs of system maintenance by using central servers for the entire group of companies; corporate consultants support production work and system development; using advanced solutions whose implementation would not be cost-effective at a smaller scale (i.e. secondary data centers, advanced backup and data recovery solutions, 24/7 technical support for the system, etc.)

The aforementioned benefits stemming from rollout implementation are achievable with the following assumptions:

• There is a group of companies with a similar operations model within a corporation/capital group, and the aim of the corporation is to standardize operations of particular companies according to a uniform business model.
• A standard business model is available in the form of an already configured IT system or it will be worked out within the current project (based on a selected existing company within the corporation or on a target vision of model company operations).

If any of the above-mentioned criteria have not been met, it is recommended to involve a local implementation company as a national advisor for the company’s branch before starting the implementation. This will ensure proper communication with the corporate head office at the level of detailed solutions and requirements concerning the SAP system.

Threats Related to Rollouts

SAP rollouts are connected with certain threats – the smaller the decision-making independence of a company (local company of the corporation) compared with the head office deciding on the manner of implementation, the bigger the threat.

The following possibilities are worth mentioning:

• A corporation imposing solutions that operate well abroad but that, due to various reasons, may not be suitable for the local market; standardization of processes without taking account of differences constituting the competitive advantage of a particular enterprise on the local market
• Insufficient participation of consultants who could ensure that all the regulations and requirements of the local law are considered in the system
• Meeting the reporting requirements for the corporation is the implementation’s main objective, whereas streamlining business processes of the company is treated as a secondary objective
• The implementation of a foreign language system and documentation by foreign-speaking consultants, without adequate translation into the local language; a lack of support by local consultants who could serve as “translators” between the business language of the company’s employees and the foreign language terminology concerning the IT system (translators who do not know the specifics of the SAP systems and its terminology are not able to provide appropriate communication and correct understanding between all parties)
• An unclear, imprecise breakdown of competencies and responsibilities between corporate consultants, the company’s employees and the local implementation partner.

Managing Rollouts

At present, rollout implementations constitute about half of all SAP system implementations carried out in Poland. This is why it is even more important to work out an operations model that will enable the company to meet the corporate requirements, and, at the same time, achieve (or at least maintain the existing!) business benefits.

Utilization of a ready-made model in the SAP system, standardization of business processes within the group, and the ability to limit costs and reduce the implementation time are undoubtedly advantages of rollouts.

Nevertheless, in order to successfully avoid the described threats, it is necessary to clearly define the roles performed by each of the parties in the implementation project – i.e. corporate consultants, the company’s employees and local implementation partners.

Projects involving at least three parties (and not two, as it is in the “classic” implementation) bring additional challenges concerning communication and decision-making processes (i.e. formalized implementation scope change approval as compared to corporate solutions).

Experience shows that companies which decided against the support of a local implementation company or were not able to use such support due to the decision of their corporation, have difficulties with system start-up, use and development.

Therefore, it is important for the people managing a rollout to ensure the participation of a competent local implementation company, which, thanks to its experience in rollout implementations in the country in question, will be able to assist in the success of the rollout.