SAP Business ONE Implementation

By Wolfgang Niefert
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  1. Getting Ready to Implement SAP Business ONE

About this book

SAP Business ONE brings the power of the SAP ERP platform to small and mid-size companies. It offers fast-growing companies the same ERP capabilities used in world-wide conglomerates and major corporations. SAP Business ONE is powerful, and to fully harness it takes careful planning.

This book will provide you with a guide to install and implement SAP B1 in your business. It starts with the basic tasks of installing and configuring, but moves at a fast pace and goes on to cover topics such as advanced CRM, e-commerce, and  modern Distribution Center configurations for inventory optimization and Warehouse Management.

The book is divided into two main sections. The case study starts out in section one with an ad-hoc implementation of a simple Lemonade Stand business. This section is focused on getting SAP B1 up and running quickly. In the second section the Ad-Hoc Implementation is taken to the next level , and we professionally expand this idea and develop a Beverage Distribution Center with outsourced production. This includes advanced inventory optimization. The workflow is optimized using existing functionality and also using Add-Ons to expand the standard functionality and transform the generic SAP Business ONE business engine into an Industry Solution.

The book is full of examples with detailed step-by-step explanations. We will be implementing a complete SAP Business System including add-ons as part of a case study.

Finally we connect SAP to the Web and introduce a solution that presents SAP features in a web interface with real-time integration. The book is completed with a chapter focusing on growth. Franchise architecture for SAP Business ONE is introduced and applied to the case study to help you learn how to get started with this.

Each chapter has a section that assists you with applying knowledge for your own project. You will have your business set up and ready to go by the time you complete this book.

Publication date:
May 2009
Publisher
Packt
Pages
320
ISBN
9781847196385

 

Chapter 1. Getting Ready to Implement SAP Business ONE

"That stinks!" I said after I picked up the dirty sock. "No," was the reply "it is the smell of victory." You see, it depends on how you look at things. What appeared to be a dirty sock was indeed a valuable sports artifact worth a lot of money.

"What does this have to do with the SAP Business ONE application?", you may ask. Well, SAP Business ONE helps you separate the unnecessary clutter from the success drivers of your business. The solution does this with real-time data for all departments. In case you thought that the sock example is a bit far-fetched, I would like to counter this and explain that there is a theory in quantum physics called the observer effect. It essentially states that an act of observation changes the phenomenon being observed. In our example, only a closer observation revealed the object's true value. The same thing goes for a business. It is only with the right data that you can observe and make decisions that leads your business in a successful direction. I will provide a list of examples where additional information can change your view on things and impact your decisions. I am not talking about the big picture here, but rather a detailed level where you can easily lose sight, though you shouldn't.

Have you noticed that there are managers who can pretty much run any kind of business and make it a success? How do they do it? Is there a specific way that we can follow to run our business? You may say that it takes a great idea. That's true. However, what about timing and operating the business? One thing is for certain, it is not enough to only have a great idea. You must also be able to develop it from the start to the end.

What do successful business owners have in common? Do they all use SAP Business ONE? No, but they are able to establish metrics and measure performance, which allows them to make the right decisions. This is where SAP Business ONE comes into play. It is designed to help you collect the right information and run reports in real-time.

In this book, I will introduce SAP Business ONE and show you how observing your business data in real time can lead to a multitude of subtle changes that will make the difference between failure and success.

At this point, all you need is a business idea, this book, and SAP Business ONE. This book is for any technically savvy entrepreneur with a vision to make his or her business a success. These entrepreneurs understand that technology can be used as an enablement platform for a business venture. In order to make this venture a success, the technology used must be challenged every day.

 

Setting the stage for the book—how does your business "tick"


This chapter introduces the core idea of looking at SAP Business ONE as a business engine. This business engine is designed to help you collect information about your business, where having the information versus not having the information can make the difference between success and failure. Let's say that a multitude of decisions are made on a daily basis, which can benefit from better information. Look at your own business, for example. I am certain that you have a system that manages your finances and is potentially a lead management solution. Maybe you also have some production that is industry-specific and handled by an industry solution. In this simple example, there are already many potential areas for improvement.

To make the point, I will ask you some questions about your business. You may call this the Observer Effect in Business. The questions range from sales to inventory and service. Basically, I am focusing on the entire value chain. This is a key idea in an integrated software package such as SAP. The added value of having an integrated process versus disparate systems that require synchronization.

Sales leads and follow-up

Do you have a sales process, and is it organized in stages?

Can you run a report and get information about the stages, and thereby forecast the expected sales?

What happens if one of your best sales people leaves? Can you continue the sales and manage the customers?

Are you using Act!, salesforce.com, Microsoft CRM, and need to synchronize with your finance back-end?

Delivery

Can you provide tracking information for customers?

Do customers need to call you to get tracking information, or do they get an updated email once the order leaves your warehouse?

Will you get a notification about a successful delivery that can be opened from the sales order?

Inventory

Do you have excess inventory?

Do you also run into situations where there is not enough inventory for an important order?

Do you manage inventory shortages by overstocking?

Are you using an Excel spreadsheet to manage your inventory reorder times and quantities?

Warehouse

Do you have a method to verify the deliveries before they leave and enter the warehouse?

Do you know the cost of any mistakes?

Service and support

Can you relate a large sales opportunity to incoming service calls? For example, can you manage a service call for a customer with large proposals on the table differently than for a customer who has not ordered in a long time and is behind in payments?

Can customers check the tracking numbers via a web portal?

Can customers review past orders and re-order easily?

Is it possible to place service calls via the Web?

Are sales people aware of the current sales calls for large opportunities?

Manufacturing

Can you easily replace a component in a BOM (Bill of Material) with a new one?

Can you trace any item from the sales to the initial purchase of parts, assembly, and delivery?

E-commerce

Does your e-commerce provider charge an extra fee for taking credit card orders?

Do you have to synchronize your web orders with your accounting system?

Can you track customer activities on the Web?

Can you send customized newsletters to customers based on their buying behavior?

Do you receive an alert once a new web order is placed?

Do you have newsletter tracking information for customers that you can evaluate during the sales process?

Can you contact customers based on their newsletter reading activity and past purchase history?

Is your web intelligence integrated with your customer management system? For example, it would be good if a customer calls and you could see his or her open quotes, open service calls, newsletter activity, and order history.

How long does it take you to start a web site with e-commerce? Just think about it for a second. This should be an automated process. You should be able to have dozens of sites up and running, send out newsletters, track feedback, and measure success. In a later chapter, I will introduce you to the concept that is based on the SAP Business ONE Engine.

Industry

Are you using form fields in your system for different purposes because it does not provide the right naming based on your industry?

Are you using an industry solution for one part of your business and have a standard finance package that does not quite integrate?

ROI and budget for your own system

All of the above questions address common business issues, which result in additional time and money spent. Essentially, by automating the processes and providing the right information where it is needed, you can save money and make better decisions. Therefore, for your own business, you can ask yourself the questions above and assign a monetary value to each one. The monetary value is either a plain number, or a calculation based on the time you spent to get the information. For example, if you indeed manage your inventory re-order quantities in an Excel spreadsheet, imagine this could be done automatically without your manual intervention. Once you add up all the numbers, you have your budget for a potential new system that overcomes these issues.

 

What this chapter will cover


During the course of this chapter, I will cover the following areas and lay the groundwork for the hands-on chapters that are to follow. However, what would all the hands-on exercises be worth if you can't apply them to your own business? That's why I have taken a dual approach to cover this. I will introduce a toolbox that will help you identify the main areas of your business, which may benefit from an integrated system. Then, a case study is used to explain the new features with an example.

  • Toolbox for your business – Wouldn't it be nice if you had a toolbox that could help you improve your business? I will introduce you to a simple concept that will help you create your own toolbox. It's simple, and it works.

  • The case study – What's the simplest entrepreneur-style business out there? It's the Lemonade Stand. Even kids can run it. What if we take it to the next level? In this section, I will explain what your business has in common with the Lemonade Stand.

  • Start with a piece of paper – We will never lose touch with the real world. That's why you will be included in all the chapters as we move along. In this section, you will use the toolset to identify issues with your own business.

  • SAP Business ONE, a business engine – Now you know the issues of your own business and you have a toolset. At this point, SAP Business ONE is introduced as a business engine. What does this mean? Read on and you will see why SAP Business ONE is different.

  • Introducing key terms – Before we continue, some commonly used terms will be introduced. For example, real-time and profitable growth will be explained

  • SAP Business ONE 100-word definition - This will summarize the SAP product message with the official SAP definition for their product.

  • Why projects fail – Did you know that in soccer you need to practice with your left foot if you want to improve your right foot? Let's find out why projects fail and hope we will learn something about doing them the right way.

 

Toolbox for your business


Maybe you have a toolbox in your garage which is filled with many different tools. You never use most of them. However, once you need a tool, you are likely to find the right one in there. In order to establish a toolbox for your business, we first need to identify the required tasks that need to be completed. Based on the tasks at hand, the tools will be designed. Basically, we will follow this sequence:

  1. Identify the problem areas – Asking the right questions

  2. Solutions for problem areas – Paper and pencil

  3. Proven examples – Case study

  4. Fix It – Project plan and tips

Based on the previously mentioned observer effect, I would like to call this concept the Business Observer Toolbox for Operational Xcellence—in short, BOTOX. Many successful businesses are already using it. However, nobody will admit to it.

Identify the problem areas—asking the right questions

Before we can fix a problem, we first need to identify it. It sounds obvious. However, it's easier said than done if it's your own business. You may be tangled up in a series of competing interests that need to be balanced. Or, maybe you are just blind. Asking the right questions is the key element to bring problem areas to light. Therefore, the first element in our BOTOX system is a set of questions. Please review the questions I asked in the beginning of the chapter. They are focused on identifying a potential disconnect. As you go through the questions, make a note every time you have to access more than one system. Be aware of the repetitive steps and synchronizations that you need. You need to be demanding! Demand a solution that can do it all in a simple workflow.

Solutions for problem areas—paper and pencil

Based on the questions asked, you may find surprising answers that will reveal the problem areas. How do you think these problems can be solved? As a business owner, you are the expert. Write down your ideas. The second element in our toolbox is a piece of paper and a pencil. Your goal should be a simple, integrated solution. That's why you should document all the different systems you are using. Make a circle for each system and create an arrow connecting it to the next system. For example, create a circle for your web site, CRM, finance system, email, newsletters, and so on. I will help you a bit more later in this chapter.

Proven examples—case study

Using the example provided in this book, you can select proven techniques and workflows that will help you achieve end-to-end processes. End-to-end essentially means that all the information is integrated and transparent. The case study serves as a platform to present how you use the tools and techniques introduced in each chapter. Therefore, an important aspect of our toolbox is a structured set of examples. Alongside the case study, I will also provide some tips and tricks which you can use for your own project.

Fix It—project plan and tips

The final elements in our toolbox will help you translate the concepts and ideas into action. Namely, a template-style project plan is used as a step-by-step instrument to move forward with the implementation. As the implementation is organized into sections that represent common departments, the project plan is also structured into sections. Therefore, you can take the parts you need for your own project.

 

The case study—why your company is like the "Lemonade Stand"


The purpose of the case study is to provide an easy-to-understand example for the new techniques that are presented in each chapter. In order to challenge the simple aspect of SAP Business ONE, which is advertised as simple yet powerful, I choose what is commonly known as The Lemonade Stand as our case study. During the course of the case study implementation, this simple example reveals surprising challenges that are similar to those that most small- and mid-sized businesses are facing on a daily basis. Basically, your business may have surprising parallels with The Lemonade Stand.

Here are the main characteristics of the Lemonade Stand that may also be a driving factor for your business:

  • Ad-hoc operation – The Lemonade Stand is characterized by its ad-hoc concept, where the key players gather some money and invest in the basic ingredients to sell the product for immediate profit.

  • Local coverage – The ad-hoc concept is further enhanced with the local coverage, where a good location for sales is selected based on local expertise.

  • Growth is virtually impossible – The concept does not allow for growth. The Lemonade Stand makes a profit, but has no growth plan. Basically, it incorporates the challenge to run it professionally, because it seems advantageous to run it on a let's-get-things-done basis, while any professional approach appears to be nothing more than a burden.

  • Short-term focus – The concept is based on a short-term focus only. There is no long-term growth plan.

If you think about it, many of the above factors can be found with small- and mid-sized businesses. After all, you need to make money and cannot focus on long-term strategies.

It is interesting to note that in today's economy, short-term profitability and seasonal flexibility are important success factors. However, short-term profits need to be made not only today, but also in a year, and maybe in five years.

Therefore, we will use the case study to overcome these issues. We will essentially implement the SAP Business ONE system for the Lemonade Stand and wrap the entire thing into a long-term strategy.

 

Start with a piece of paper


At this point, I would like to engage you a bit. As you know, the case study serves as an example for the information that is presented in each chapter. Therefore, we can take the characteristics of the Lemonade Stand listed above and see if you can find them in your business. Take a piece of paper and a pencil to write down the different departments you have in your business. For example, write down Sales and make a circle around it. Start with Sales on the top left of your paper and arrive at Purchasing at the bottom left. You can use arrows to connect the circles. For example, from Sales to Inventory, Delivery and Purchasing. On the right side of the paper, write down the main functions that each circle performs. For example, next to Sales write down what needs to get done in your business as a part of the sales process. You may have a list such as the following: sales stages, forecast, pipeline, inventory check, proposal, order entry, and so on.

The idea is to establish a circular flow-type representation of your business where one department provides information to the next department.

Now that you have the main components of your business written down, you can identify where the actual data is stored. For example, is all of the data in one system with access for the department that needs the data? You potentially have multiple systems that need to interact and synchronize data. Those will be the aspects that we will target as they hold the greatest potential for improvement.

 

SAP Business ONE—a business engine


At this point, you may argue that there was sufficient reason to establish specialized systems for a dedicated purpose. Indeed, this approach is called the best-of-breed implementation. However, it is the very reason for the disconnected enterprise. In this book, SAP Business ONE will be used to overcome this challenge by means of industry-specific add-ons that are fully integrated with the software. Essentially, SAP Business ONE is a business engine which provides the most common business management and financial features. This engine can be transformed to seamlessly represent industry-specific requirements.

 

Introducing key terms and concepts


In this section, I will introduce the key terms and concepts related to the SAP world. The following areas will be covered in the process:

  • Real time and islands of data

  • Positioning SAP Business ONE against other SAP products

  • Profitable growth

  • Establishing metrics

  • Prototyping

  • The virtual enterprise

  • SAP 100-word definition

Real-time information instead of islands of data

The SAP Business ONE system provides better information in real time. Therefore, it helps to minimize the risk involved with the daily decisions the entrepreneur or business owner has to make.

Many business owners have taken a don't-fix-it-if-it-is-not-broken approach and stay put with their solutions that are already in place. The solutions are most often a combination of a small accounting package and some home-grown software to fix a business need. As their business evolves, new solutions are added, which will lead to a patch-worked solution. In order to make the right decisions, usually Excel reports are created to analyze data for reporting. You may also consider license requirements, different platforms, and programming languages that ultimately lead to a scattered environment with a high cost.

In this environment, manual steps are often required to synchronize data. Extra effort is needed to prepare the reports and they are never 100% accurate. This is not exactly a 360-degree view of a business. However, a complete view of the key performance indicators of a business is precisely what is required to make the best decisions.

The patchwork approach of managing a small business facilitates the status quo environment. However, in today's business world, change is a permanent factor. The scenario mentioned above most commonly leads to islands of data and inadvertently tends to paralyze the business as key information is not obtained. This happens because the existing system produces not enough or too much information in multiple locations.

The aforementioned scenario, which is described as islands of data, also surfaces in the best-of-breed approach. The best-of-breed, also known as the best-in-class approach, is a valid strategy for larger companies where software solutions are selected on a departmental level in order to meet the needs of every individual in a department.

The departmental level that contributes to the value chain of a business is described as an enterprise resource. Traditionally, enterprise resources were highly specialized and disparate systems. Companies were faced with systems that could not easily communicate. It was virtually impossible to obtain real-time reports because the information was hard to integrate and analyze. On the one hand, the systems produced a massive amount of information, and on the other hand, the information could not be used as it was impossible to integrate the data with the other information sources.

SAP is founded with the vision to overcome the disparate islands of data, and therefore, enable the analysis of the right information. This vision has lead to the early development of the SAP R/2 and R/3 systems. The R/2 System was mainframe-based. With the continuing trend towards client-server architecture, the R/3 Solution was developed by SAP. The R/3 System established the term ERP (Enterprise Resource Planning). With this approach, real-time reporting became a reality and enabled the companies which were formerly paralyzed with their status quo system to grow their businesses.

Positioning SAP Business ONE against mySAP—All-In-One and Business ByDesign

The foundation of this concept is that though each department has unique requirements which need to be met. There are also similarities that are industry independent. The R/3 system provided workflows and business processes for the most common industries.

During implementation, the relevant processes are selected, activated, and then adjusted for the business. Today, those available processes can be selected via interactive solution maps.

At present, the R/3 System is called mySAP ERP. A new, enhanced functionality is added by SAP to the mySAP solution. Traditionally, the R/3 System required massive consulting power to implement. In order to meet the requirements of companies with an industry focus, SAP established the SAP All-In-One Solution. This is a template-based version of the standard SAP R/3 System. The all-in-one templates are usually represented by SAP Partners who have a key expertise in a specific industry.

SAP Business ONE takes those concepts and applies them in a compact package. Therefore, if your company is using multiple systems and struggles with Excel reports and manual data synchronization, then SAP Business ONE is the ideal solution to integrate all those disparate islands of data into one system with real-time data.

Consequently, what was once available only for large enterprises is now at the fingertips of small- and mid-sized businesses.

However, it is important to note that the SAP Business ONE System, unlike the SAP All-In-One Solution, is not based on the R/3 system. The SAP Business ONE Solution is a new development that does not use any code base from R/3. Previously, SAP was mostly able to service large corporations. In order to move to a smaller business, the template version of R/3, called All-In-One, was established. However, since All-In-One is actually using the same code base, it requires significant resources to implement and manage.

The SAP Business ONE Solution is positioned at the other end of the scale for small- to mid-sized businesses. This leaves a gap, which is filled by SAP, with another solution called Business ByDesign. Business ByDesign is a solution that can be accessed via a browser and is used as a service.

Therefore, the SAP Solution scale starts with SAP Business ONE to SAP ByDesign, continues to SAP All-In-ONE, and ends with SAP mySAP. However, there are overlapping areas and the selection of the right package must be based on individual requirements.

Real-world note

I recently talked to a family owned furniture business and they explained that they tried to grow their business. The business owners intended to manufacture a custom furniture set and distribute it via wholesalers. However, they ran into some problems and were not able to cope up with the results. They learned their lesson and now are happy to be back where they were before. Consequently, they established the notion that they do not want to grow anymore as it imposes a big risk on their business and family.

The frustrated owner explained that they had the following key problems:

In order to meet the projected demand, they kept a large inventory of their products. They also hired an additional sales person to manage the new sales activity. The previously working systems suddenly slowed down and caused major hiccups during operation. They were not able to provide an accurate delivery status for customers. Their inventory was too high on the one hand, and too low for urgent deliveries for important wholesale customers. Then, the sales person left and all their contacts and communication was lost too.

An important law of nature is that you either grow or die, and this furniture business certainly tried to grow. However, they almost ruined their business over it. Their system was designed for status quo and could not handle growth. Their entire operation ended in chaos due to the addition of a bit of change.

This example showcases the importance of an integrated approach with a system that is ready to grow from the outset. The only foundation for growth is to keep it simple and leave room for expansion.

Business hell versus profitable growth

Ultimately, a business owner who seeks to grow his or her business may realize that the current system which appeared to be working was actually not working. Without the right information, growing a business is like trying to grow for the hell of it. Mostly, people get what they ask for. Therefore, if you grow your business for the hell of it, you may end up getting business hell. The key is to accomplish profitable growth.

If you believe your business is any different, then consider the following list of islands of data:

  • QuickBooks accounting system

  • ACT! CRM system

  • Excel reports

  • Access inventory database

  • Web presentation with newsletter subscription

  • Web e-commerce store with online orders

  • Outlook emails

  • Office documents on the server

Please evaluate the following screenshot that shows a fairly standard situation with too many Islands of Data:

Now, please review the most obvious communication channels and workflow situations:

It is obvious that there is no room to grow.

SAP Business ONE is a single package that can cover all of the Islands of Data above and integrate them into one data source for real-time reporting. In the chapters to come, we will showcase how SAP Business ONE is simple. In addition, as outlined above, complexity may surface even in a simple environment if the dots are not connected in the right way.

Consequently, the key is not to grow your business because it may grow into a business hell. It is rather a profitable growth. What is profitable growth and how can we get there?

What is profitable growth

Analyzing past and present data based on a real-time integrated system, such as SAP Business ONE, provides the starting point for profitable growth. SAP Business ONE provides elaborate reporting and analysis functionality to satisfy the changing information needs of the business.

It sounds very straightforward. However, it is the key problem in today's business solutions. In order to get the right reports, the system must be designed to automatically gather the relevant data that will be used for reports.

When designing an integrated system, it is crucial to plan ahead. The most critical step to get started is knowing the design of the Chart of Accounts. It provides the foundation for all of the transactions that will be managed later in the system. Each transaction generates financial data, which flows into the previously designed chart of accounts.

The CoA (Chart of Accounts) design is often overlooked. However, it may also lead to overdesign once attention is given to its design. It is considered a good practice to follow a simple design. In addition, it is worth noting that the CoA is strictly meant for financial data compliance. Therefore, the data collected here is the basis for tax filing. However, an integrated ERP system should also provide an information system for internal controlling.

Consequently, we utilize the CoA that follows a simple design and also implements a controlling system that will collect data for reporting. It is the controlling system that will provide information for all departments on a daily basis.

ERP systems are only as good as the data entered into them. Therefore, the initial design and setup to create the framework that will hold the data is important. The collected data will be in all the right places for further analysis and decision making. SAP Business ONE will provide all of the reporting data in real time.

What is real time

The term real time is used in different areas of Information Technology. In production environments, real time describes a guaranteed response time within a given time frame. In the ERP world, real time means that there is no synchronization or separate programming required to obtain all of the information. Every report in the system has access to all the information immediately.

Establish metrics—the cost of no investment

Once the information skeleton with the CoA and controlling is implemented, the business is ready for growth. At this point, it will be possible to continuously collect data and make all the right adjustments.

It will be the end of growing for the hell of it, and the starting point of profitable growth. It is important to quantify each potential problem area, and therefore, document the monetary improvement as that is the ultimate goal to streamline the business operation in the most efficient way.

The following are some example questions that can be answered with the collected information:

  • How much inventory waste do we have?

  • How many returns do we have? What is the cost of each return?

  • How is picking managed? Is the picking route automated?

  • What happens if my key sales person leaves? Do we have all the contacts' information and notes?

  • Do we have a sales methodology? Do we have a sales pipeline?

  • Can we plan for material requirements based on received orders?

  • Do we consider common lead times for ordering important parts, or do we just keep excess stock?

  • How many service calls do we get from customers?

  • Who are the most profitable customers?

  • Does our e-commerce store integrate with our inventory?

  • Do we have an automated self-service portal to take care of common customer questions?

The list above is also a reference to sample questions for businesses that are too busy for an integrated system. It clearly shows the potential cost of no investment. It may be worthwhile to calculate the cost of no decision in case you are on the verge of deciding on a new system. The purpose of a new SAP system is to save costs, which will enable a profitable growth.

By assigning a monetary value to each non-efficient process, the business owner will be able to justify the relevant improvements.

With the right reporting data, this change management is a part of the system operation. What is called total quality management in larger companies is a consequential side effect of an integrated system.

Designing "metrics" for your own business

The following items summarize the process you can use to design metrics for your own business:

  • Design Financial Skeleton – This is the CoA design which will hold all of the financial information based on the transactions performed in the system.

  • Design Controlling Data Skeleton – This is the Data Collection Framework you establish on the actual SAP forms. It is used to collect the information you need for making informed decisions for your business.

Therefore, before we apply this knowledge to our case study in the next chapters, you may want to review your own system and see if you have a CoA and a separate Controlling system that allows collecting data as the system is used.

What is prototyping

Prototyping is the iterative process of designing a system based on user feedback. In software development, there are similar flavors for this to address the specific user type. These flavors are called rapid prototyping and extreme programming. Extreme programming uses an iterative design approach to gradually add one feature at a time to the initial prototype, and attempts to minimize irreducible complexity.

In the SAP Business ONE project environment, a combined approach has proved to be successful. It has proved important to get users up and running as soon as possible. Therefore, the SAP Implementation guide covers the essential steps to get the system up and running quickly. Users go through this wizard-style interview process and provide the configuration parameters. The system is then ready to be adjusted in the prototyping mode. Therefore, a project starts with a quintessential analysis based on a questionnaire and is followed by a Prototyping phase.

This goes in line with other IT-related project management methodologies. For example, in software development projects, the so-called waterfall model historically gathered a complete set of requirements for a software project. Once complete, the software development process would start. This led to the same problem as described above for the SAP projects. In order to follow this analogy, we may consider the latest software development principles as a guide to where the SAP project management may go.

Extreme programming is a practice to create immediate results for the end user and add features as the user actually works with the quickly assembled solution.

The virtual enterprise

Another dominant trend is described as virtualization and service orientation. The enterprise of the future is a virtual enterprise. How does SAP address this trend? The virtual enterprise is characterized by disparate entities that work independently, but exchange information to produce integrated services and products. SAP has developed the Enterprise Service Architecture (ESA). This architecture provides a platform for independent systems to produce and consume services on a single integration platform.

Therefore, the future system will allow large-scale SAP systems to be integrated with services produced by other vendors. In turn, this will extend the integrated business workflows further into specialized solutions that address industry-specific requirements.

Interestingly, the foundation of the ERP system was to overcome disparate, specialized solutions and integrate them into a single system. Today, again the market requirements force businesses to consider specialized solutions for a specific need. However, with the knowledge acquired in previous iterations of this process, the platform for integration is already established as the ESA.

In order to adapt this to the small business owner, we are using the template concept for SAP Business ONE in this book. This way, the entrepreneur will have the toolset to cope with changing market needs and set the foundation for growth.

SAP 100-word definition of SAP Business ONE

100-word business positioning statement:

Designed exclusively for small businesses, SAP Business One is a single, affordable business management solution that integrates the entire business across financials, sales, customers, and operations. Combining with additional industry-specific capabilities, SAP Business One can adapt to your unique and fast-changing business needs. With SAP Business One, small businesses can streamline operations, act on instant and complete information, and accelerate profitable growth.

SAP® Business One is delivered by experienced local resellers and is trusted by thousands of small businesses around the world.

Why projects fail?

Now, a final word about why projects fail which may help to understand the possible factors that may lead to a failing project. With this knowledge, potential issues can be addressed in the early phases of an implementation project.

The key problem with ERP implementation projects is to manage the right expectations. Since the SAP Business ONE system has a complete feature set for all of the departments in a company, it is easy to underestimate the required service for an implementation. Therefore, a proper project plan should include a set of specifically defined services and the configuration. However, a proper project specification should also define what is specifically not included.

It is vital that the ROI for a planned project has a monetary value associated with each section of the implementation. It is also vital that each section of the project implementation is measured against a timeline, available resources, and a budget.

This leads to the ultimate problem area in each project—the budget. For obvious reasons, the budget must be right. Therefore, the implementation partner and the customer must complete their due diligence to make sure that a project is not underestimated. The infamous fixed priced proposal with rather undefined specifications is almost guaranteed to lead to problems down the road.

Finally, a key success factor for a successful project is to have the support of C level and all the departments that are involved or affected by the implementation.

 

Summary


In this chapter, I introduced you to a toolbox designed to help you identify the common issues related to business management. Once the issues are identified, you can select the tools to resolve them. The toolbox provides you with the right tools to address common SAP Implementation challenges.

You learned why the simple Lemonade Stand case study is of great relevance for your business. Finally, the introduction of the most common terms found in the SAP project world has prepared you for your own project and enabled you to talk the SAP language.

About the Author

  • Wolfgang Niefert

    Wolfgang Niefert studied "Wirtschafts-Informatik" at the European Business School in Oestrich Winkel – Germany. The international management program included programs in London and San Diego with focus on Computer Science and Economics. He has more than 15 years experience with international SAP Implementations. A certification for SAP Production Planning allows him to relate larger SAP solutions to SAP Business ONE. Wolfgang also designed the N2ONE Portal for SAP Business ONE that allows the real-time management of e-commerce functionality.

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SAP Business ONE Implementation
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