Pitfalls in SAP hosting Contracts

Many IT sourcing managers and CIOs can recognize this scenario as familiar: “our good old local SAP installation has become insufficient, costly, obsolete, unfit to the new corporate requirements - so here comes a new corporate SAP strategic project and dark suited consultants...”. Wow! larger footprint, new release, more modules, big software customization and development. Not to forget a brand new infrastructure, i.e. the data center solution to host everything – and a reliable network to enable the service.

The right choice of the underlying infrastructure is of course a critical success factor for SAP implementations. The most interesting option today is perhaps to rely on virtual pay-per-use application hosting services provided by a world class partner. This solution implies a very tight client-provider partnership in the definition of: requirements and assumptions, service model, service levels, architecture, risk management and pricing model.

Before the infrastructure contract is signed and deployment starts, in addition to good practice and accurate program management, it is wise to put in place an appropriate pitfall-avoiding strategy. In the impossibility to mitigate all risks and anticipate all problems, let’s try at least to avoid falling into known pitfalls…

Here is a list of some common pitfalls:

  • The two deployment plans of the application and of the infrastructure, initially synchronized, start changing independently and their synchronization is jeopardized (too early / too late). Additional unnecessary costs arise for infrastructure ready before time, and/or suitable infrastructure environment may not be ready on time for go-live of some SAP modules.
  • Last minute changes on deployment cause stress and conflicts among the teams. Infrastructure people are perceived as rigid, application team as uncontrolled.
  • Performance problems observed during tests – or early operations phase - bounce between different teams (application, database, servers, network…)
  • Some initial assumptions or requirements are contradicted by real operations, especially in terms of SAP volumes (transactions, volume of data). Client and supplier might not find an easy way through without modifying the contract.
  • Network performance and reliability could result as the weakest ring of the chain for some sites (or the whole system), and upgrade could impact on time and cost.

And this list is not complete. But the good news is that there are effective strategies, to be put in place in advance, to control and mitigate each of the above pitfalls.  It could be interesting to go in detail through some of them in next view points.

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