SAP Implementation – 5 Main Challenges
Table of contents
- What Is SAP Implementation?
- The key challenges of businesses that are posed by SAP Implementation
- Challenge #1 – Lack of Enterprise Customization in SAP Implementation
- Challenge #2 - SAP Demands Specialized Expertise for Design, Implementing, and Optimizing
- Challenge #3 - SAP Management is An Ongoing IT Resource Demand
- Challenge #4 - The Obstacles of Hardware Have a Significant Impact on SAP Performance
- Challenge #5 - SAP does not exist in isolation
In today’s fast-paced and interconnected business landscape, organizations strive to streamline their operations, enhance productivity, and gain a competitive edge. To achieve these goals, many enterprises turn to Enterprise Resource Planning (ERP) systems – a comprehensive suite of integrated applications that centralize and automate various business functions. Among the leading ERP solutions available, SAP (Systems, Applications, and Products) stands out as a powerhouse in the industry, offering a wide range of functionalities tailored to different business needs.
While implementation promises many benefits, it is essential to acknowledge that the path to a successful deployment is not without its challenges. To grasp the idea of SAP implementation fully, it is crucial to first understand ERP implementation and the obstacles it presents. By exploring ERP implementation challenges, we can better appreciate the unique hurdles that arise specifically in the realm of SAP implementation. So, let us embark on a journey through the world of ERP systems and delve into the challenges they pose, paving the way for a comprehensive understanding of the hurdles faced in SAP implementation.
What Is SAP Implementation?
Let’s start exploring SAP implementation by firstly understanding what is ERP implementation. It refers to the series of activities involved in the installation and enterprise resource planning (ERP) software manufacturing within an organization. It encompasses three primary phases:
- Installing onsite software: Deploying on-premises software or engaging with a Software-as-a-Service (SaaS) provider are common approaches adopted by organizations. In many cases, businesses turn to the vendor itself or collaborate with a specialized implementation partner who possesses expertise in ERP solutions, specific vertical industries, or specialized use scenarios.
- Transferring data from your existing system(s) to the new ERP solution.
- Training the team to effectively use the new software: This entails a variety of approaches. This may involve sharing knowledge from employees who were familiar with the previous system or providing formal training through your implementation partner.
The implementation of an ERP system in your organization brings forth a lot of advantages. By automating operations and consolidating data from various departments into a central repository, these systems boost productivity and efficiency across the entire company. The good news is that the success rate of ERP implementations is on the rise, thanks to a heightened emphasis on user experience. This entails the adoption of simpler interfaces, enhanced configuration flexibility, mobile functionality, and increased automation.
When selecting an ERP solution, it is vital to guarantee seamless integration with existing financial systems, as well as those utilized by your crucial partners. Additionally, aiming for a swift implementation timeframe, preferably within 90 days (about 3 months), is essential. Lastly, it is crucial to align your finance policies and procedures with the new system to maximize its potential benefits.
The main Reasons Behind ERP Implementation Failures
Effective risk management is crucial to the success of ERP implementations. It is imperative for leaders to proactively identify potential pitfalls and devise comprehensive plans to mitigate them. Without adequate risk management, ERP projects run the risk of failure.
For instance, a multinational distributor faced a monumental failure, causing significant shipping delays and revenue losses. This failure shed light on the operational challenges that existed even before the implementation commenced. The distributor had recently acquired another company and encountered difficulties in integrating the operations of the new subsidiary with its own. To mitigate this risk, it was imperative for the company’s leadership to identify and address these operational issues prior to initiating the ERP implementation.
The key challenges of businesses that are posed by SAP Implementation
Organizations opt for SAP due to its ability to fulfill their specific business requirements. Actually, anyone who has implemented an ERP system, such as SAP S/4HANA or its predecessor SAP ECC, knows all too well: ERP functionality alone is not sufficient. The expertise and capabilities of the implementer or service provider, whether it is SAP themselves or a third-party, significantly impact the success of the implementation. In our experience of hosting SAP S/4HANA instances, we have encountered five common challenges that warrant attention.
Challenge #1 – Lack of Enterprise Customization in SAP Implementation
While it may seem tempting to customize an ERP application, such as the renowned SAP system, the reality is that customization is far from a straightforward task. In fact, the level of customization offered by SAP can make it more susceptible to misconfigurations, resulting in application failures and potential security vulnerabilities. Furthermore, once the system is initially configured, ongoing recalibration becomes necessary to align it with the evolving requirements of the business. This process is particularly crucial whenever an updated version or enhancement is released, ensuring that the system remains optimized and aligned with organizational needs.
At ITP, we approach SAP customization with meticulous attention to detail. Our expert consultants thoroughly assess the unique requirements of each organization and tailor SAP solutions accordingly. We prioritize configuration over customization wherever possible to ensure long-term stability and easy adaptation to future updates.
Challenge #2 – SAP Demands Specialized Expertise for Design, Implementing, and Optimizing
SAP i mplementation as a mission-critical business application will put your entire company infrastructure to the test. From the underlying infrastructure to the application architecture and even cloud services, every element plays a crucial role. Additionally, it is important to consider other application dependencies that may be part of your SAP implementation, such as a third-party CRM or supply chain planning application. These dependencies need to be carefully considered and accounted for during the implementation process and subsequent upgrades.
ITP boasts a team of SAP-certified experts with extensive experience in designing, implementing, and optimizing SAP solutions. Our comprehensive approach ensures seamless integration of SAP with other critical applications, and our dedication to ongoing training and development keeps us at the forefront of SAP innovations.
Challenge #3 – SAP Management is An Ongoing IT Resource Demand
SAP implementation system is a complex endeavor, and SAP S/4HANA is no different. The intricacies of managing the technical aspects of SAP S/4HANA alone can consume a significant amount of time and resources. Moreover, the system’s daily application needs to add another layer of complexity. One crucial consideration is the sensitive data stored within the ERP system, making it an enticing target for cybercriminals. From data theft to ransomware and Distributed Denial of Service (DDoS) attacks, the risk of cyber threats looms large in the ERP landscape.
Including patch updates as a fundamental component of a comprehensive IT security strategy is crucial. However, ERP systems administrators often face the temptation to postpone patching activities in favor of addressing more urgent and pressing issues due to their overwhelming workload.
At ITP, we understand the significance of robust SAP implementation, management and cybersecurity. Our team proactively monitors SAP systems, ensuring that they remain up-to-date with the latest security patches and enhancements. We implement best practices in IT security to protect sensitive data, and our 24/7 support ensures that any critical issues are promptly addressed to minimize downtime.
Challenge #4 – The Obstacles of Hardware Have a Significant Impact on SAP Performance
Assessing hardware needs and ensuring optimal solution performance is a crucial aspect for enterprises. However, determining the appropriate capacity requirements poses a challenge for many organizations. On the one hand, they aim to avoid tying up capital by overinvesting in hardware. On the other hand, when an IT team is already stretched thin, they may not immediately recognize declining SAP performance caused by capacity issues. This situation can have detrimental effects on the business, as it may hinder the organization’s ability to rapidly scale up its IT infrastructure to seize unforeseen market opportunities.
ITP provides comprehensive SAP implementation services, including infrastructure assessments and performance monitoring services. Our team works closely with clients to identify their unique hardware requirements and recommend scalable solutions to ensure optimal SAP performance. We leverage cloud-based options like Microsoft Azure to offer flexibility, cost-effectiveness, and the ability to adapt to changing business needs.
Challenge #5 – SAP does not exist in isolation
In the event of an unforeseen disruption, an organization’s vital SAP system may go down, leading to severe consequences for the entire company. However, it is important to note that unplanned periods of system downtime are not always attributable to the application itself or its provider. External factors, such as a loss of connectivity by the service provider or the failure of an untested disaster recovery plan at a critical moment, can also contribute to such incidents.
At ITP , we adopt a holistic approach to SAP system management. We design robust disaster recovery plans and implement high-availability configurations to minimize downtime risks. Our focus on redundancy, failover mechanisms, and real-time monitoring ensures that SAP systems remain operational even during challenging situations.