7 Steps for a Successful SAP Centre of Excellence (COE)

What is a COE and why do I need it?

It is important to understand the purpose of the COE. For many companies, the COE provides business and application expertise to support an organisations global or domestic SAP implementation, by designing new processes, optimising current ones, managing complex implementation projects, providing user support and training, and keeping the complex SAP system landscape up and running 24/7. In addition, the COE helps optimise the use of all SAP products implemented in a cost-effective manner, contributing to the overall Company’s success. It involves operational support, application management and enhancements, infrastructure management and change management.

The first hurdle is to regain the best practices that were most likely employed pre-live. Once you go live, there is no reason to abandon the core success factors that were pertinent to the implementation. For example:

• Aligning business owners with IT
• Identifying value-added and non-value-added processes
• Benchmarking results from initial ROI projections
• Simplifying SAP instances
• Developing infrastructure and enhancement standards and procedures
• Committing to ongoing training and knowledge transfer
• Institutionalising change management

Key functions and benefits of the typical SAP COE

• A unique platform for creating global SAP solutions
• A standard vehicle for deployment of SAP best practices
• A central point of contact for all SAP-related matters
• Development of strong competencies in all SAP areas
• Enhance the value of the SAP Solution – More standardisation and better integration
• Improvements in User Productivity
• Reduced Cost of SAP Operations (TCO)
• Improved retention of key SAP personnel
• Improved Service Levels

Overall, the difficulty in implementing a COE will probably reside in how committed your organisation is to its successful deployment – from a budgetary, resource, and process perspective.

Just to reiterate, without a SAP COE, you will lack the necessary support ecosystem – including resources, funding funnel, and governance body – and more importantly, the strategy and roadmap that are required to launch and sustain a successful support organisation.

Step 1: Realign Business & IT After an SAP Implementation

In many companies, business and IT go their separate ways once the implementation project is “complete.” This is a mistake. To get enduring results, the Business must drive the ongoing improvements needed for the SAP platform. It is the Business – supported by IT – that needs to identify the process changes, reporting for decision-making and end-user needs on an ongoing basis.

To that end, you need to re-examine the current mix of your post-implementation support team. COE’s must include a mix of Process Owners – the “super-users” within the business community, functional application experts and technical experts for configuration and reporting. In addition, the team needs to include people focused on new initiatives, whether for additional rollouts or new modules, which will be inevitable, as business needs change.

Overall, The COE needs to be designed to break down the walls between IT and the business community, and establish a new way to provide sustainable support that remains business focused.

Step 2: Set up Governance

One of the most critical steps for COE set-up is establishing Governance for the support organisation. The goal of governance is to provide strategic direction, as well as accountability, for all SAP initiatives. Governance also provides a framework for the Business Units to work collaboratively, and in unison with IT, enabling process standardisation and business alignment across the enterprise.

Step 3: Define Functions and Organise the COE

No generic formula exists for the functions and roles that should be encompassed within the COE. At a minimum, you will need to map out the roles and responsibilities of The Executive Steering Team, PMO Group (Program Management), Support Services Team and the SAP Power Users.

Some of the key roles and functions of the COE:

• Business Support – Business Analysts are part of the teams that form the COE, working together with the
• Applications teams to support the users
• Project & Implementations – For small and large changes to the SAP systems
• Internal Marketing – COE coordinates participation in benchmark studies and other forums, whose results
• are used to drive the COE image internally
• Coordination of Development Requirements – All Development Requests are coordinated through the COE, as well as all messages to SAP
• Technical Support – Provided in conjunction with SAP Basis and Global IT Operations.
• Training – To transfer SAP knowledge to the user base
• Contract Management – Usually provided in conjunction with IT Global Operations
• Support Desk – COE interfaces directly with users and super users and to provide SAP support based on agreed upon service levels, which may vary by functional area and geography
• Information Management – COE is the central contact point for SAP related information, enhancements and new developments

Step 4: Implement Post Go-Live Process Analysis & Optimisation as the Foundation for Continuous Improvement

Reclaim ownership of your SAP business processes. Too often, the “to-be” vision turns out to be a one time exercise done early in the implementation process and then is cast aside post-live. This needs to be re-visited as streamlined business processes are as important in the post-live COE as it was in implementation.

The COE should perform or coordinate a review of what is working and what is not. Typically, the 5 areas that companies should address are:

• Broken or flawed business processes
• Deficient system design and configuration
• Inability or unwillingness to use system – Manual work-arounds present
• Insufficient training
• Data Management issues

Step 5: Mobilise for Post Go-Live Organisational Change

The business should have a regular stream of improvement requests to support operational changes. Inability to deliver this will create frustration and a sense of stalling in the improvement process.

Your COE should provide guidance on how best to manage change within the context of your SAP platform. An effective COE has the appropriate knowledge, skill and time to evaluate alternatives and implications, estimate the level of effort required and provide the necessary testing, training and documentation. Changes must be made in a controlled way to ensure that the live environment is not put at risk – and implemented effectively to exploit the business benefits of the improvements.

Step 6: Marketing the COE

One of the most forgotten aspects of setting up a COE is the marketing effort to publicise and promote the services offered. Only after users are aware of processes and services available, can widespread adoption of the COE occur within the organisation.

It would be a mistake not to expend the effort to launch an internal marketing campaign. The lifeblood and longevity of the COE depends on the perception and service it provides to its internal customers.

Step 7: Getting Started with Setting-Up Your SAP Centre of Excellence

Where to begin? Ideally, planning for your COE begins before you go live with your SAP business platform. This way, continuity is ensured and the likelihood of matching your ROI expectations is increased.

If you are in the initial stages, budget for it now – it’s a question of pay for it now, or pay for it later – and latter has higher costs. If you are in the midst of implementation, raise the flag now and address it. But if you are already live, it’s not too late. Take it step-by-step to identify and prioritise the areas to address.

See our related post – 5 Key Roles SAP Centre of Excellence or take a look our RunCentre Setup – we aim to get your COE fully operational in record time!