Josef Necas

PROJECT MANAGEMENT OF SAP ERP IMPLEMENTATION

PROCESS

Thesis
CENTRIA UNIVERSITY OF APPLIED SCIENCES
Business Management
March 2016
ABSTRACT

CENTRIA UNIVERSITY OF Date Author/s

APPLIED SCIENCES March 2016 Josef Necas
Kokkola-Pietarsaari

Degree programme
Business Management
Name of thesis
PROJECT MANAGEMENT OF SAP ERP IMPLEMENTATION PROCESS
Supervisor Pages
Janne Peltoniemi [61 + 2]
This paper‘s aim is primarily to identify and analyze critical success factors of SAP ERP
implementation process. Secondary aim is to provide an overall summary of all topics directly
related to SAP ERP implementation, including project management. The overall target is to address
the issue of the implementation process management.

The theoretical part provides an overview of project management concepts as well as the specifics
of IS/IT implementation. SAP ERP system is presented. ERP systems, and particularly SAP, have
become a vital part of well-functioning businesses, ranging from SMEs to large businesses,
therefore an insight into this exciting cross-dimensional field is presented.

In order to reach the primary aim of the thesis, survey and interviews have been made. All
respondents have significant experience in SAP ERP implementation. The target of the research
was either to help support the theoretical outcomes or provide aditional first-hand knowledge. The
research brings value and understanding into the complex issue of cross-dimensional and
extensive SAP ERP implementation projects.

Key words
ERP, implementation process, project management, SAP
TABLE OF CONTENTS

1 INTRODUCTION 1

2 PROJECT MANAGEMENT 3
2.1 Definition 3
2.2 Project management 4
2.3 The iron triangle vs. the scope triangle 5
2.4 The Project Life Cycle 9
2.5 Specifics of IS/IT implementation projects 11

3 SAP ERP 16
3.1 Overview, history and development of SAP 16
3.2 Modules 19
3.3 Transactions 23
3.4 Client/server architecture 23
3.5 Client-system concept 25

4 SAP ERP IMPLEMENTATION PROCESS 27

4.1 Overview 27
4.2 Reasons for implementing SAP 28
4.3 Change Management 30
4.4 Implementation team and steering committee 33
4.5 Implementation methodologies 33
4.6 Accelerated SAP 34
4.7 Critical Success Factors 41

5 RESEARCH 46
5.1 Qualitative research 46
5.2 Quantitative research 48

CONCLUSION 57

LIST OF REFERENCES 59

APPENDICES
FIGURES

FIGURE 1. Iron triangle (adapted from Marchewka 2013, 10) 6

FIGURE 2. Scope triangle (adapted from Wysocki et. al 2014, 14) 7
FIGURE 3. Project life cycle (Adapted from Larson & Gray 2011, 7) 11
FIGURE 4. SAP ERP Overview (Adapted from Boeder & Groene 2014) 19
FIGURE 5. Cocktail of Three Disciplines (adapted from Galoppin & Caems 2007, 31) 31
FIGURE 6. ASAP 8 implementation road map (Adapted from SAP.com – ASAP 8 Methodology for
Implementation) 35

GRAPHS

GRAPH 1. What activities specifically were you responsible for? 50

GRAPH 2. What do you consider to be the easiest phase of the implementation process? 51
GRAPH 3. What do you consider to be the most difficult part of the implementation process? 52
GRAPH 4. In your opinion, what part of the implementation project is the most important? 53
GRAPH 5. What activities specifically do you consider to be the most important ones in the
implementation project? 54
GRAPH 6. In your opinion, what part of the implementation project is most likely to go wrong? 55
GRAPH 7. In your opinion, what is the most usual cause of problems/difficulties in implementation
projects? 56
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1 INTRODUCTION

Projects have become a common part of our lives. Already during elementary school education, students
are asked to work on complex assignments, both individually and in groups. In business world, projects
allow the realization and implementation of innovation activities and development of new products or
services. Furthermore, wide and complex structures are built in the form of projects and similarly,
process changes are implemented in organizations.

Using the methods and principles of project management, a project can be any nonrecurring, unrepeated
human activity, limited in time and needed to be planned and implemented with planned costs in a way
that supports the achievement of desired goals.

Project management in a specific information technology settings represents a variety of complex

activities, especially when ERP (Enterprise Resource Planning) systems implementation is involved.

ERP system is an information system which integrates and automatizes significant amount of processes
related to typical business activities. To be more specific these activities include production, logistics,
distribution, asset administration, billing/invoicing and accounting. SAP is an ERP system which has
the biggest share on the market.

SAP ERP implementation projects are an interesting mix of several fields with particular attention to
IS/IT (Information Systems and Information Technology) and project management. As ERP systems are
used to manage company’s resources, most business disciplines are involved as well.
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The aim of the thesis

The aim of this thesis is primarily to identify and analyse critical success factors of SAP ERP
implementation projects. Secondary aim is to provide an overview of all concepts directly related to
SAP ERP implementation projects. In order to reach those aims, it is firstly needed to provide an
overview and explanation of several concepts regarding the implementation projects.

Methodology used

To reach both aims of the thesis, it is firstly needed to present the theoretical part in order to explain and
provide a deeper insight into disciplines directly related to SAP ERP implementation projects. This
includes project management, where overall insight into project management and specifics of IS/IT
implementation projects is presented. The system itself is presented as well, including explanation of
concepts necessary to grasp the specifics of SAP ERP implementation process. Afterwards, SAP ERP
implementation process is presented in detail, followed by identification and analysis of critical success
factors using mainly publications like books and articles.

After presentation and explanation of all concepts, a research part of the thesis is presented. The research
consists of both qualitative and quantitative parts. The qualitative research consists of two in-depth
interviews with experts on SAP ERP implementation projects. The interviews were conducted in order
to assess and analyse the reliability of theoretical findings as well as provide practical insight into the
issue of critical success factors of SAP ERP implementation process.

The quantitative part consists of an online survey that included 10 question and has been sent to people
who have been working on various SAP ERP implementation projects. 30 professionals have responded
to the questionnaire, which yielded interesting and valuable results. The main purpose of the survey was
to support the qualitative research findings as well as theoretical findings and if possible, provide
additional information on SAP EPR implementation projects.
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2 PROJECT MANAGEMENT

In order to provide comprehension of SAP ERP implementation process, it is necessary to understand

that every SAP ERP implementation process is a project. Therefore, project management and SAP ERP
implementation process are closely related. This chapter aims at providing deeper understanding of
project management elements, such as project management processes, the usage of resources during a
project, project life-cycle and finally methods and techniques used in project management. Lastly, a
deeper insight into IS/IT projects will be provided in this chapter in order to grasp the concepts and
particularities of such projects.

2.1 Definition

There is an infinite amount of definitions for the term ‘project management’, but the term itself is mostly
used in the sense of a plan, a design or a solution of a problem or a task, no matter how difficult it is.
The meaning of the term basically includes all life cycle phases of a project, starting with innovation
phase, going through the creative phase and finally reaching the final phase. By this realization in the
past, the meaning of the term ‘project’ has been significantly expanded, as previously the concept of a
project was limited only to the final phase.

In previous project practice, the word project was used more generally as a theme, design, plan and
complex solution of the task at hand. Contemporarily, the meaning of this word includes activities such
as planning and managing extensive operations. The underlying meaning of this is that the ultimate goal
is not only about the result and project documentation, but most importantly it is a creative process.
(Němec 2002, 11.)

One way we could define the term ‘project’ is:

A project is a goal-oriented draft for realization of a specific innovation in established dates
of commencement and termination. (Němec 2002, 11)
 4

More detailed definitions can be found as well. In fact, there is a very specific definition for projects.
A project is a sequence of unique, complex, and connected activities that have one goal or
purpose and that must be completed by a specific time, within budget, and according to
specification. (Wysocki, Kaikini & Sneed 2014, 4)

However, the previous definitions failed to focus on the most important part of a project from business-
focused point of view, and that is the purpose of a project. The purpose of a project is to deliver business
value to the client and to the organization. An example of an intriguing business-focused definition of a
project would be:
A project is a sequence of finite dependent activities whose successful completion results
in the delivery of the expected business value that validated doing the project. (Wysocki et
al. 2014, 7)

2.2 Project management

Now that the term project is understood, project management can be described. Project management is
a complex field that has recently received a lot of attention.
Project management is the application of knowledge, skills, tools and techniques to project
activities to meet project requirements. (Project Management Institute 2013)

The task of project managers is to meet specific scope, time, cost and quality goals of projects. In
addition, they must facilitate the whole process to meet the needs and expectations of people affected by
or involved in project activities. (Schwalbe 2014, 9.)

It can be said that project management involves a mix of five interdependent project management
processes:
 Initiating (correct formulation of project objectives)
 Planning (how to manage the ‘triple constraint’)
 Executing (proper allocation, coordination and management of resources – human, material and
financial, output of this phase is referred to as project deliverables)
 Monitoring and controlling (actions and processes undertaken to observe the execution of a
project in order to intercept potential problems in time and take corrective action, measuring
ongoing project activities and monitoring project resources)
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 Closing (project acceptance and termination, finalizing all activities)

These processes also correspond to project management life cycle model, which will be discussed further
in this chapter. (Larson & Gray 2011, 16-17.)

The objective of project management is to secure quality planning and implementation of a successful
project. A successful project means that the project objectives were met in planned time frame and with
planned costs, and that the project implementation is not causing negative reactions among the staff.
Projects are very specific in a way that a project implementation causes change. Usually, the change is
not a direct effect of project implementation, but it is assumed that the project implementation will give
rise to the implementation of change. Quality project management comes from knowing that once the
scope, unfamiliarity, complexity, difficulty and riskiness of a project exceed a certain level, it is
necessary to use appropriate methods to manage the whole operation. Project management uses a wide
variety of methods in order to increase the probability of a successful project. These methods consist of
verified and described procedures which deal with the issues of project planning and implementation.
One of the key elements for successful projects is a quality work done by the project team, which is led
by an experienced project manager. (Larson & Gray 2011, 16-17.)

Project management has indeed evolved during the past couple of years, and currently there are powerful
forces contributing to the expansion of approaches of project management to various business problems
and/or opportunities. The key to effective project management starts with the selection and prioritization
of projects that are in line with the company’s mission and strategy. Successful execution of a project
requires both technical and social skills. The role of a project manager in this sense is to plan, budget
and properly use all of project resources. (Larson & Gray 2011, 16-17.)

If project management is high-quality and professional, the project objective will be completed in
established deadline and will not exceed planned costs. (Lewis 2000, 185.)

2.3 The iron triangle vs. the scope triangle

The term ‘iron triangle’ refers to the relationship between time, cost and scope (see FIGURE 1 below).
These variables form the sides of a triangle and they are an interdependent set, which means that when
any one of them changes, one or more variables must be changed as well in order to restore balance to
 6

the project. However, Wysocki makes a point in his work that in fact more constraints should be
considered, and those are:
 Scope
 Quality
 Cost
 Time
 Resources
 Risk

Wysocki’s idea says that except for risk, these constraints form interdependent set, so if a change occurs
in one constraint, a change in one or more of the other constraints might be necessary in order to restore
equilibrium of the project. This means that in this context, the set of five parameters form a system that
has to remain in balance for the project to be in balance. These parameters are crucial to the success or
failure of a project, which is why every constraint will be further examined. FIGURE 2 below depicts
graphical representation of this idea.

FIGURE 1. Iron triangle (adapted from Marchewka 2013, 10)

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FIGURE 2. Scope triangle (adapted from Wysocki et. al 2014, 14)

Scope

The scope constraint in general corresponds with the initiating project management process. Scope is a
statement which basically describes what will be done and what will not be done in a project. This
statement is a foundation for all further project work and it is critical to make sure that the scope is
correct. However, a project’s scope can change and in fact, noticing the change and deciding how to
adapt the change into the project plan is one of the major project management challenges. (Wysocki et
al. 2014, 11; Bachelet.)

Quality

All projects have the following two types of quality constraints:

 Product quality – this concerns the quality of the project deliverables. In this sense, the product
includes tangible elements like hardware and software but also business processes. Traditional
tools of quality control are used in order to secure product quality.
 Process quality – this term refers to the quality of the project management process. The main part
of this term is focusing on how well the project management process works and how it could be
improved. In order to measure process quality, continuous quality improvement and process
quality management tools are in use.

A reliable quality management program that monitors the project work is always a good investment for
obvious reasons – it contributes to customer satisfaction and it also helps an organization to use its
resources in a more effective and efficient way. A solid quality management program raises the
probability of a successful project and client satisfaction. (Wysocki et al. 2014, 12; Bachelet.)
 8

Simply put, the objective of the quality constraint is to constantly monitor and if necessary redirect the
activities in the right direction by using multiple relevant criteria and indicators. (Corbel 2012, 9.)

Cost

The cost of implementing a project is one of the key elements that define the project. It is commonly
thought of as the budget that was created for the project. Cost is of course a major constraint and it is
one of the first things to be discussed. Cost of a project is also one of the factors which determine whether
the project is feasible. (Wysocki et al. 2014, 12; Bachelet.)

Time

A time frame or deadline date is specified and agreed to in the project preparation phase. There is an
interesting relation between cost and time. The time to complete a project is sometimes possible to
reduce, but as a result the costs increase. As for project managers, their objective is to use the future time
that has been allocated to the project in the most efficient way. Time also decides the pace of a project
– if some part of a project is falling behind, it is necessary to speed up, if possible, in order to meet the
deadline. (Wysocki et al.,2014, 13; Bachelet.)

Resources

Resources are all assets that have limited availability and which can be scheduled and organised, such
as people, equipment and various facilities and inventories. Resource management is crucial for
scheduling and organising project activities. The importance of different resources varies depending on
the business context in which the project is included. For instance, one of the most important resources
for IT systems development projects is computer processing time (for testing purposes). (Wysocki et al.
2014, 13.)

Risk

Risk is not really an individual part of the scope triangle itself, but it is present in all parts of the project
and inherently affects management of the aforementioned five constraints. Knowing all the constraints,
 9

we can now explain what exactly is behind the idea of the scope triangle. The area inside the triangle
relates to the scope and the quality of the project. The outer lines of the triangle represent time, cost and
resource availability. When we break down individual lines, time is the limited time within which to
project is set to be completed. Cost is the budget assigned to complete the project and resources are
basically any consumables which are used during the project, for example people and facilities.
(Wysocki et al. 2014, 13.)

During the planning process of a project, the main focus is on identifying the time, cost and resource
availability which is required to deliver the scope and quality of a project. At the end of this phase, the
project is in equilibrium. The scope triangle is particularly useful when considering how any changes,
however big or small, affect the project equilibrium. An example of a change would be a client making
additional requirements. As for who is control of the constraints, the project manager is in charge of
resource utilization and work schedules. Management is in charge of cost and resource usage. The client
is in charge of scope, quality and delivery dates. Another important aspect of the scope triangle is that it
enables the project manager to determine which party owns the constraints. The client and senior
management usually own time, budget and resources and the project team owns how time, budget and
resources are used. During a project, any of these may be moved within the project in order to address
issues that have arisen. Another important application of the scope triangle is as an assisting tool in the
preparation of Project Impact Statement. This document is a statement that describes some of the
possible ways of accommodating client’s scope change request. The scope triangle is used when
identifying the alternative ways of making the change possible. (Wysocki et al. 2014, 13-16; Bachelet.)

2.4 The Project Life Cycle

Every project has a very unique nature, however the concept of the project life cycle attempts to describe
project phases in more detail. For some project managers, it is common practice to use the project life
cycle phases as milestones for managing projects. (Larson & Gray 2011, 7.) The uniqueness of every
project makes determining the best number of life-cycle phases quite difficult, as it depends on the nature
of the project and the nature of the industry in which the project is being done. However, all project life
cycles will include a beginning, a middle and an end. The reason why breaking down projects into phases
 10

occurs is that it makes projects more manageable and it reduces risks at the same time. In the end,
whatever methodology is being used, it must include some level of flexibility in order to make client
adjustments possible. Kerzner proceeds to suggest on this matter that because of the uniqueness of
contemporary projects and new approaches in project management, it may be better to focus on processes
rather than phases or a framework approach that combines the best features of each. (Kerzner 2010, 172-
173.)

Standard and widely accepted project life cycle phases are illustrated in FIGURE 3, which can be found
below. The description of project life cycle phases is as follows:
1. Defining – this includes defining all specifications of the project, meaning establishing project
objectives, forming project teams and assigning major responsibilities.
2. Planning – in this phase as we can observe on the figure, the level of effort is increasing.
Activities in this phase include detailed plan development, scheduling, agreeing on the quality
level that is to be maintained and determining the budget.
3. Executing – as we can deduce from the figure, this phase requires the most amount of effort and
it is the phase where most of the actual project work is done. It is also the longest phase. This
phase requires a lot of controlling in terms of time and costs.
4. Closing – this phase includes three main activities. Firstly, it concerns the delivery of the project
product (or project deliverables) to the customer, which can include for instance training and
document transfers. Secondly, it involves redeploying project resources, which normally
involves releasing project equipment or project materials to other projects. The project team is
dissolved and new assignments are found for the team members. The last activity is post-project
review, which includes performance assessment.
(Larson & Gray 2011, 7-10.)
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FIGURE 3. Project life cycle (Adapted from Larson & Gray 2011, 7)

2.5 Specifics of IS/IT implementation projects

When talking specifically about SAP ERP implementation, it is necessary to stress that those projects
are not strictly IS/IT projects. As will be explained later on, SAP ERP projects are so diverse by nature
that they usually involve people from every department of the organization. They could be therefore
considered as a mix of business and IS/IT. However, much of the specifics in SAP implementation come
from IS/IT projects, which is why explaining the specifics is critical to understanding the nature of SAP
implementation projects. The diversification of IS/IT projects begins with acknowledgment of the fact
that IS/IT projects can be very diverse. An example of a smaller project would be a small number of
people who are in charge of installing purchased hardware and associated software. Other projects
involve hundreds of people who all analyse the business processes of the organization and afterwards
they develop new software to satisfy the needs of the business. In addition, a really wide array of
hardware and network equipment is often used. Software projects are by nature more difficult than
hardware projects, because they require higher amount of planning, coordination and overall effort. What
is really interesting about IS/IT project is that currently they are able to support every possible industry
and business function. It is precisely the diversity and the novelty the field of IS/IT Project Management
introduces that makes developing and following best practices in managing these varied projects crucial
 12

to the project success probability. The goal of IS/IT Project Management theory is to provide IS/IT
Project Managers with a common starting point and methodology that they can follow, if needed, in
every project. (Schwalbe 2014, 64-65.)

Even the characteristics of IT Project Team Members differ from other common project teams. As
explained in the previous paragraph, IS/IT projects are currently a multidisciplinary ‘bridge‘ because
contemporary IS/IT projects usually require not only IT expertise, but an expertise from various business
fields as well (finance, logistics...). In fact, very diverse project teams are highly appreciated, since they
are able to provide a significant advantage and a huge boost to the project’s success probability, because
they are able to analyse project requirements from a more robust point of view. There are even IT
companies who purposely hire people with different backgrounds, for example business or liberal arts.
The degree of interdisciplinary involvement varies depending on the project requirements. One of
contemporary issues in IS/IT projects is the rising amount of contract workers that company uses for
projects, which can create special challenges for an IS/IT project manager. (Schwalbe 2014, 65.)

As previously mentioned, new methodologies for IS/IT project management are being constantly
updated. One of these methodologies relates to interdependent project management processes, which
were Initiating, Planning, Executing, Monitoring and controlling and Closing (see Chapter 1.2).
Marchewka used a description matching these processes, except the description is adapted to fit the
specifics of IS/IT project management. The phases will be now reviewed:

 Phase 1: Conceptualize and Initialize

When it comes to IS/IT project methodology, the first stages put emphasis on the overall
definition of the project objective. A project is always performed for a specific purpose,
and the purpose is usually to add tangible value to the organization in question. Defining
the goal of the project is the most important step in IS/IT project methodology, since it aids
in definition of the project’s scope and assists in decision making throughout the project.
It can also be used after the project has concluded to evaluate the project’s success. The
next step is to analyse costs, benefits, feasibility and risk. From these analyses, a specific
amount for project budget can be recommended. (Marchewka, 2013, 27-28.)
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 Phase 2: Develop the Project Charter and Detailed Project Plan

This phase involves working with a document called the project charter. This document is
a key deliverable of the second phase. Its goal is to define the organisation of the project.
In fact, the project charter also gives another opportunity to review the project’s goal and
objectives in terms of scope, schedule, budget and quality standards. It also enables to
define in detail the project’s scope, schedule, budget and quality objectives. The project
plan includes all details concerning who will carry out the project work and when.
Basically, the project charter and plan are designed to answer the following questions:
 Who is the project manager?
 Who is the project sponsor?
 Who is on the project team?
 What is the scope of the project?
 What are the costs of the project?
 How long will it take to complete the project?
 What are the required resources and technology?
 What approach, tools, methods and techniques will be used to develop the
information system?
 What tasks or activities will be necessary to perform the project work?
 How much time will these tasks or activities take?
 Who is responsible for the performance of these tasks or activities?
 What is the benefit that the organization receives for the time, money, and resources
committed to this project?
(Marchewka 2013, 28-29.)

 Execute and Control the Project

This phase is focused on execution and control of the project – that means carrying out the
project plan to deliver the IT product or solution and paying attention to the processes of
the project in order to achieve the project’s goal. Additionally, in this phase the project
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manager must ensure that the environment and infrastructure to support the project
includes:
 Workers with appropriate skills, experience and knowledge
 Technical infrastructure for development
 IS development methods and tools
 Proper work environment
 Monitoring and controlling of scope, schedule, budget and quality
 Detailed risk, quality and change management plans
 A procurement plan for vendors and suppliers
 Communications, testing and implementation plans
 A human resource system for evaluation and rewards
(Marchewka 2013, 29.)

 Close Project
After the development, testing and installing of the information systems, a transfer of
control from the project team to the client or project sponsor takes place. Such transfer is
called ‘formal acceptance.’ The project team’s activities in this phase include preparing a
final project report and presentation, in order to document and verify that all the project
deliverables have been completed as it was defined in the project scope. It is also a suitable
time for determining the final cost of the project. Other closing activities are closing all
project accounts, archiving all project documents and filing and releasing project
resources. (Marchewka 2013, 29-30.)

 Evaluate Project Success

This phase includes feedback to and from all parties regarding the project. Some
publications suggest a project review by an outside third party might be of interest. This
phase includes all varieties of post-project reviews, which should aim at answering these
questions:
 What was the probability of the project achieving its goal?
 Did the project meet its scope, schedule, budget and quality objectives?
 Was everything that was promised to the project sponsor or client delivered?
 15

 Is the project sponsor or client satisfied with the project work?

 Did the project manager and his team follow the processes outlined in the project
and system development methodologies?
 What risks or challenges did the project team face? How well were the risks and
challenges handled?
 Was there cooperation between the project sponsor, project team and project
manager? If there were any conflicts, were they well addressed and well managed?
 Did the project manager and team act in a professional and ethical manner?
The last but very important part of this phase is to evaluate the project in order to determine
if the project provided value to the organization. As for IS/IT, the value of such projects
might not be clearly discernable immediately after the completion of the project, which is
why time and resources should be allocated in order to determine whether the project met
its intended objectives. (Marchewka 2013, 30.)
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3 SAP ERP

Before the SAP ERP implementation process is discussed in detail, it is important to understand the
specifics of SAP ERP system, its environment and its functionalities. This chapter aims at improving
readers’ understanding of SAP ERP system by providing valuable and crucial information and
background details about the SAP EPR system.

3.1 Overview, history and development of SAP

SAP (Systems, Applications & Products in Data Processing) is a German multinational software
corporation established in 1972 by four former IBM employees. SAP was focused on developing
enterprise software to manage business operations and customer relations. A year later, their first product
was designed for the purposes of accounting. This product formed a basis for SAP R/1 system (the letter
R stands for Real Time Data Processing). (SAPa; Maassen 2007.)

The successor of this system was system R/2, which can be labelled as the first ERP (Enterprise Resource
Planning) system. The system was substantially expanded, however its usage still required big
mainframe computers located in one big room. (SAPa.)

In 1992, SAP started to distribute the next version of the system, called SAP R/3. In comparison to
previous versions, this product had been completely reworked, based on client-server architecture
(explained further in this chapter) and the usage of relational databases. In addition, the system had been
adjusted for usage of hardware produced by various hardware producers. SAP R/3 server was also able
to be installed on computers with different operation systems. Since the introduction of this system, SAP
has become the world’s leading vendor of standard application software. One of the main reason for
such a success is that SAP is a standard package, which means that it can be configured in multiple areas
and adapted to the specific needs of different companies in various industries. The flexibility (SAP leaves
room for further functionalities and enhancements) and adaptability to the changes of business practices
(SAP system is configurable and customizable) means that SAP manages to solve the information
management problems of businesses, which is why the R/3 system is the clear market leader in the
development of standard applications. (SAPa; Hernández 2000, 4.)
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Since 2004, newly arranged components are distributed on the market by SAP, while the central product
has become mySAP Business Suite. Technological components were completely separated from
application components and are referred to as SAP NetWeaver.

SAP ERP is a part of SAP Business Suite, which is a bundle of business applications that provide
integration of information and processes. SAP Business Suite so far constitutes of SAP ERP, SAP CRM
(Customer Relationship Management), SAP SRM (Supplier Relationship Management), SAP SCM
(Supply Chain Management), SAP PLM (Product Lifecycle Management), SAP BW (Business
Information Warehouse), SAP GC (Governance and Risk Compliance) and SAP MII (Manufacturing
Integration and Intelligence). (Boeder & Groene 2014, 1-5.)

The SAP R/3 system is targeted and tailored for most industries, for example manufacturing, retail,
health care, transport, automotive, chemical… In order to give an idea how ‘big’ SAP actually is, it is
important to state that all major hardware vendors and producers, with no exception, are fully engaged
to partner with SAP (Acer, Dell, Fujitsu, Hewlett-Packard, IBM, Siemens and other companies have
supported and certified SAP R/3 platforms). In fact, most of major companies in any sector use SAP.
(Hernández 2000, 4.)

In 2015, SAP has launched a new product called SAP S/4 HANA, which is the new generation of SAP
Business Suite. It is built on in-memory computing platform called SAP HANA. It offers cloud, on-
premises and options for hybrid deployment in order to provide more choice to customers. The
advantages of this system are for example a smaller data footprint, faster analytics and reports,
multitenancy (this means that a single instance of an application runs on a server and serves multiple
users) and faster access to data. Analysts have been saying that S/4 HANA can help companies reduce
the complexity of their systems, because the HANA platform integrates people, devices, big data and
business networks in real time. There are also claims that SAP HANA platform can potentially save up
to 37% across hardware, software and labour costs. (Forrester Consulting 2014.)
 18

As mentioned previously, a big part of business processes is very similar in most organizations. It would
probably be very costly to completely develop a new information system for each company.
Contemporary IS include several options of adapting to specific demands of a specific enterprise. The
same applies for SAP.

Customizing

Customizing basically occurs when the system’s settings recommended by SAP have to be adjusted. In
customizing process the business structure, material types, document types and other parameters
required for full functionality of the system are set. It is the most used tool in SAP implementation
process. The main advantage is that during system upgrade, these parameters which have been
customized are not rewritten. In the whole system, there are so-called ’blank spaces’ (Customer Exit or
User Exit). These are blank spaces in source codes, where the customer or user can input their own code.
When system upgrade takes place, these blank spaces are not rewritten. In any case, it is necessary to
verify the functionality of this code after the upgrade.

Own development possibility – a change of SAP standard

SAP system offers the option of own development. With the aid of development tools the existing
database structured can be extended. It is of course possible to create your own database tables. With the
use of ABAP (Advanced Business Application Programming – created by SAP company) programming
language, individual transactions and even whole modules can be created. This tool can be even used to
alter the standard functionality of the system, however this option is not recommended. Currently, even
Java programming language can be used.

Recommended organisation of development environment

For the run of SAP system it is recommended to install several systems (clients). SAP company
recommends to create three systems – the first one for development, the second one for testing and the
final one for productive run. The development and customizing processes are done in the development
system. The changes are transferred to the test system with the aid of transports. After thorough testing,
the changes are transported to the productive run client. Some SAP implementation experts recommend
 19

to use two clients for development, one of which contains only customizing and the other one contains
only data.

3.2 Modules

FIGURE 4. SAP ERP Overview (Adapted from Boeder & Groene 2014)
 20

Sales and Distribution (SD)

Sales and Distribution module handles all activities related to sales. It involves all processes starting by
the creation of sales orders through subsequent delivery and billing/invoicing. Additional logistic
parameters like availability check are possible. Factors such as transport time, loading time and material
preparation are taken into consideration when the system is processing the sales order. The whole process
can also be accompanied by sales price lists, which automatically suggest sales price according to
previously set criteria. It is also possible to track business partner’s credit. Master records of suppliers
are recorded in SD module.

Materials Management (MM)

Materials Management is an extensive module the purpose of which is to record materials, goods and
semi-finished products in a warehouse. Also non-stock inventory can be recorded, such as office supplies
and packaging. Records for services are also possible to maintain in MM module. The module evaluates
the aforementioned items not only from the perspective of quantity, but also from the perspective of
financial value. The basic organizational unit from the perspective of MM is plant. A plant can be a
branch of a company or a production factory, possibly even other logistical structures. On the plant level,
all activities of purchasing, production and sales are done. Every plant is assigned to one or more
warehouses. A very important part of the MM module is master material data. Master material data
describe the materials from several views.
 Basic data: general data such as number, measure unit, site, weight
 Accounting: keys or account numbers are entered for the purposes of accounting
 Production planning: this perspective serves for semi-finished and finished goods production
 Availability: emergency stocks, planned delivery time, goods
 Purchasing: purchasing measure unit, buyer
 Calculation: planned costs, bill of materials
 Classification: other material descriptions not already mentioned
 Plant/storage data
 Plant/storage supplies
 Forecasting of material needs
 Quality management: inspection data, inspection intervals
 Sales: data for sales and distribution
 21

It is important to mention that every department in an organization needs to work with some views only.
A rule applies here which states that individual views are independent. Individual departments are
responsible only for their views (for example accounting is responsible for accounting data, logistics for
quantities, measurements etc.).

Another part that the MM module handles is purchasing records. That usually starts with purchasing
order and goes through picking to purchasing invoice settlement. Every process uses master supplier and
material records as primary data. (Boeder & Groene 2014, 3; Maassen 2007.)

Production Planning (PP)

Production planning module’s main task is to produce finished goods from materials or semi-finished
goods. The product is accurately described in bill of material. Routing defines the workspaces where the
actual production takes place. The production process is guided by production orders.

Financials (Financial module)

The main component of every ERP system is the register of accounting records. The FI (Financial
Accounting) component records, summarizes and classifies the company’s financial transactions. In this
module, all financial aspects and business transactions are being recorded and registered, such as
invoices, payments, clearings and financial documents. Based on transaction figures and balances in the
processed documents, financial analysis such as cash flow, balance sheet and statements of profit and
loss are being done periodically. This module is also important in terms of tax records. Next items found
in this module are cashbooks, investment assets accounting and accounting of liabilities and receivables.
(Boeder & Groene 2014, 3; Maassen 2007.)

The management accounting (CO) component is used mainly for in-house accounting. The main purpose
of this component is to prepare data like product costing, cost of goods sold, overheads and inventory
costing. This data is further used in business analysis in order to support management decisions. (Boeder
& Groene 2014, 3; Maassen 2007.)
 22

Other component of Financials is Financial Supply Chain Management (FSCM). This part is in charge
of processing accounts payables and accounts receivables in order to procure smooth funding of business
operations. It also contains additional functionalities, such as collection management, dispute
management, online payment facilities for customers and vendors as well as credit management. (Boeder
& Groene 2014, 3; Maassen 2007.)

The last part of Financials is a set of applications called Treasury. These applications main tasks are
monitoring the company’s liquidity and cash flow. These applications are also able to manage other
financial assets of companies, such as funds, derivates, loans, stocks and securities. These applications
are also able to manage market risks. (Boeder & Groene 2014, 3.)

Human Capital Management

The most important resources of most companies are their human resources, which is why SAP ERP
gives an option to manage this part of business as well. This module gives a possibility of managing the
company’s human resources. This module can be actually deployed separately from other SAP Business
Suite solutions in order to protect potentially sensitive data. This module actually uses an interesting
data model called "infotypes." Infotypes are used to define data structure in the database for related data.

One difficulty this module encounters are the legal limitations and geographically differentiated HCM
processes. This is also where infotypes come into play, as they enable various country-specific variations
of user interface’s logical arrangement.

As for the module itself, it is divided into three layers. The basis of SAP ERP HCM consists of core
components which integrate the most important HR processes – organizational management, personnel
administration, payroll, personal development and time management. These processes then provide data
and functions that is later on used by SAP ERP HCM extension components. These are components that
support secondary processes, such as e-recruiting and enterprise learning. The last, upper layer, is
referred to as SAP ERP HCM service delivery. This layer actually enables user interaction with SAP
ERP HCM components through various channels, for example self-services, employee interaction center
and different online forms. (Boeder & Groene 2014.)
 23

Project System (PS)

The importance of projects in business has already been mentioned, so it should not come as a surprise
that SAP system allows project management as well. The PS module is optional and is a part of SAP’s
solution for Project and Portfolio Management. It helps project managers manage all aspects and
resources of their projects along the entire project life cycle. It contains features such as setting up a
project structure, drawing detailed plans and executing and completing the project. The PS module is of
course fully integrated with other modules. (Dowling 2008, 4-8.)

3.3 Transactions

Launching applications and displaying the applications’ related views is run by so called transactions.
The term transactions denotes a chain of dialog steps that relate to each other from the viewpoint of
business economy.

The execution of one transaction involves all dialog steps including the final update. Each dialog step is
represented by a graphical representation (a view) and a related application logic, providing for example
a check of information in the view or an update in the last dialog step. The combination of these two
elements (views and related application logic) is referred to as dynpro (Dynamic Program). (Herzog
2006.)

3.4 Client/server architecture

The SAP R/3 system is based on client/server technology. In this case it means, above all, logical
separation of an application from presentation and database. The result of this technology are basic
services running in three layers - application layer, presentation layer and database layer. Presentation
services refer to the services that are closest to the user. Using these services, input/output functions of
SAP R/3 system are realised. These functions are made available to the user with the aid of GUI
(Graphical User Interface). SAP’s GUI is referred to as SAP GUI. The main task of presentation services
is transferring commands/requests from the user further to the application layer, receipt of answers (or
data) from the application layer and the subsequent display of the answers/data on the interface. The
presentation layer contains all parts that the user interface is made of. Examples of such parts would be
 24

online help, control elements (checkboxes, switches, and buttons), menu lists, toolboxes, shortcuts etc.
The GUI, sometimes referred to as frontend, can, in the case of SAP, run on computers with basically
any operation system. The separation of presentation and application layer in practical terms means that
in order to visualise an application, a variety of means can be used. The result can be user interface
displayed in web browser or the other way around – an interface that was developed by the business
itself. (Boeder & Groene, 2014.)

The application layer transfers descriptions of views to the presentation layer, independent of the
platform. The transfer of these view descriptions to the GUI takes place in the computer which is running
the presentation layer, depending on the interface that is running at the moment. Except for graphical
interface, SAP GUI serves other purposes as well, for example facilitating connection of office suite
applications (for example Microsoft Word or Microsoft Excel) with SAP R/3 system. It is important to
mention that without connection to the application layer, SAP GUI is not functional. The SAP GUI is
connected to the application layer at all times via user logon. The data transferred is in small volumes
(2,6 to 5,3 kB per transaction/view change), which is why connection by the means of wide network
(WAN) connecting geographically remote locations is possible. This means that the GUI and application
layer version do not have to be identical. There is, however, a condition that the GUI version has to be
the same or higher (newer) than the application layer version. SAP GUI is retrospectively compatible,
which in practical terms means that SAP GUI version 4.5 can be used to access application server SAP
R/3 version 3.1. For alternative client platforms (MacOS, Motif or OS/2), specific interface version were
developed up until SAP GUI version 4.5B. Since 4.6D version, these specific versions were replaced by
one, written in Java, meaning that it is relatively independent of the operation system in use. Aside from
this, SAP GUI for HTML exists, which is a special version meant for displaying the SAP system user
interface in a web browser. (SAPa)

The middle layer of client/server architecture, the application layer, is mostly concerned with creating
an environment for running SAP R/3 system applications (core and basic services). For the application
run, SAP R/3 system creates its own infrastructure (ABAP programming language, compiler, libraries,
runtime environment etc.). Since the applications are run in their own environment, they are relatively
independent of the hardware and operation system in use, they are not, however, able to be run outside
this specific SAP R/3 system environment. The runtime environment has three main purposes.
 25

 Running applications in virtual machines (software processors)

 Administration of users and processes
 Database access management (this is because the applications do not directly access the database)

In general, one application server is enough to run SAP R/3 system. In the case where more application
servers are used, another server called message server becomes a part of the application layer. Its purpose
is to manage mutual communication of the application servers. It is also possible to use this server to
manage the application server load – the user logging in is redirected by the message server to the
application server that has the least load at the moment. Even in this environment each application server
runs SAP R/3 system core along with basic services. The application server can be said to perform a role
of a broker between the user and the database. (Hernández 2000; Boeder & Groene 2014; Massen 2007.)

3.5 Client-system concept

The client is the highest hierarchical level in SAP R/3 system. All data used in multiple modules are
saved on the client level. When preparing system solutions it is necessary to secure the integrity of the
whole SAP system. This means separating activities related to system development and enabling simple
data exchange between modules at the same time. Each client has its own data and parameters separated
from other clients. At the same time, there are objects in the system that are independent on the client.

Every system standardly (as a part of installed database) includes these clients:
 000 – SAP reference client that contains default settings for all tables and serves for comparison.
It cannot be changed by users and is regularly updated when upgrading.
 066 – Early watch. It serves for consulting service SAP Walldorf regarding system performance.

The SAP R/3 system includes tools for data transfer, for example settings, data and applications, both
between clients of one SAP R/3 system as well as different SAP R/3 systems. This tool is called
correcting and transport system. This method allows to perform settings and full testing of these settings
in one client (or system) and subsequently transfer these to a different client (or a system) for live run
by the means of transport requests. Corrections system made in this way can be used multiple times in
order to perform settings of other clients if needed.
 26

SAP R/3 also includes user authorization concept. The basis of this concept is clear and unambiguous
identification of every user. In SAP R/3 system, this is dealt with by user account concept. These
accounts are password protected. The clear user identification enables monitoring of system users’
activities as well as determining who and when performed an action – for instance a system change, if
necessary.

When assigning access rights, two general ways of approaching this issue exist – restrictive and
permissive (benevolent). When using restrictive approach, users are assigned with minimal rights which
are extended only if necessary. Permissive approach grants wider and more extensive rights to the users.
The rights are limited in case when problems or difficulties arise. The permissive approach is suitable
for test systems, where possible data loss is not very painful. For system in use, restrictive approach is
the best one.

When assigning user rights, the persons responsible for individual modules hold the decisive power. The
implementation team can make suggestions and recommendations, but the final decision is taken by the
persons responsible. The implementation of defined user rights (creating user roles) and assigning of
these to the users is done by the system administrator. (Hernández 2000; Boeder & Groene 2014; Massen
2007.)
 27

4 SAP ERP IMPLEMENTATION PROCESS

This chapter aims at providing wide range of information and concepts regarding SAP ERP
implementation process. Critical success factors for the success of SAP ERP implementation process
will be identified, described and analysed, firstly by using theoretical knowledge. The outcomes of this
process will then be compared to the results of qualitative and quantitative research.

4.1 Overview

When talking about SAP ERP implementation process, it is necessary to understand that the process in
itself is a very wide and difficult process, the result of which is often organization-wide transformation
of business processes and systems. It is not only a software installation, as it might seem. For this very
reason, SAP ERP implementation process is closely related to change management – the successfulness
of the implementation project is often determined by how well the organizational change management
is addressed during the project.

Another important issue to address is that although there are very specific methodologies and life cycles
of implementation processes, every implementation will be different, even if they are being done for the
same company and in the same country, but different plants. Earlier the SAP customizing and the change
of SAP standard has been explained. These processes are used to address the particularities and specific
requirements of different SAP ERP implementations.

Therefore, the SAP ERP implementation process methodologies never specifically address the changes
and particularities that are needed to be included in the final solution. There are no SAP solutions that
are identical to each other. As was already explained in Specifics of IS/IT implementation projects, SAP
ERP solutions are used to solve business problems that occur on all sides of the business, which is why
SAP ERP implementation process is not only technology change and a mere software installation. The
involvement of all personnel from both technology-oriented departments and business-oriented
departments is necessary in order to maintain good quality of the project. Another important concept to
understand that SAP ERP is meant to provide solution for extremely difficult enterprise problems. The
SAP solution has the potential to affect every process in the company, based on its function as an
 28

enterprise application and its ability to integrate historical data and functions. In order to provide an
effective solution of the business issues at hand, further hardware and software technology requirements
may arise, which could lead to more complications in SAP implementation. (Anderson 2003, 23-24.)

The implementation of SAP has a deep impact on mission-critical business functions. Before the
deployment of applications that support financials, supply chain and inventory management processes
and other important business processes, it is crucial to ensure that enough attention is paid to the creation
of extra SAP environments that support development, testing and integration. (Anderson 2003, 23-24.)

One of the most important aspects of SAP implementation is related to transformation – SAP affects the
way company will conduct business in the future. The current processes and procedures will undergo
change. It is critical to ensure that the organizational community will embrace these changes in order to
make sure the implementation process is successful. (Anderson 2003, 23-24.)

4.2 Reasons for implementing SAP

Now that there is a familiarity with general concepts of SAP ERP implementation, it is a good time to
explain why companies actually decide to implement SAP. Anderson gives a list in his publication of
the tactical reasons he has learned during his career from his customers:
 Supply-chain and logistics related issues – improvement of product quality or availability,
reducing total product inventories and increase inventory turns in warehouses and distribution
centres
 Customer service related issues – an increase in the knowledge of customer trends, increased
turnaround on returns, analysis of customer purchasing trends, customer demographics,
reduction in customer billing time
 General issues – addressing of government regulations by integration with standard tax systems,
improvement of enterprise resource planning and allocation, responding to changing conditions
of markets by trend analysis
 29

These are more specific reasons for SAP implementation. From these reasons, it could be deduced that
more strategic goals are of interest here:
 Application integration – this achieves numerous benefits. For example reducing data
redundancy by using a single point of data entry. This results in saving time of employees
previously required to input the data, which further reduces labour and overhead costs (Lau 2005,
127 [Jacobs & Whybark, 2000]). Further benefits include increase in efficiency of operations
and productivity and in more coordination between different business units (departments,
divisions, regions, or countries), which is especially beneficial for multinational corporations.
This is enabled by the fact that SAP centralizes information and supports decision-making. (Lau
2005, 127.)
 Improved operational reporting – SAP enables online transaction processing (OLTP). This
means that day-to-day processing activities and huge volumes of transactions are addressed by
SAP. Further SAP functionalities enable aggregated reports. With the possibility to further use
this data in other systems (for example Executive Information Systems – systems used by top
management) and/or Business Warehouse, the SAP makes for an ideal platform that supports
organizational decision making. (Anderson 2003, 29.)
 Improved strategic reporting – This is also supported by other components from mySAP
Business Suite, for example SAP Business Information Warehouse. The focus in this type of
reporting is on reports and analyses that are not usually available from simple transaction
processing or aggregated reports. Therefore, the implementation of data warehouse is available.
This allows the management to access and analyse information that supports decision making
process. (Anderson 2003, 29.)
 Flexible business process support – this concept closely related to business process re-
engineering (BPR). BPR says that every way of an organization doing business should constantly
be questioned in order to ensure maximum efficiency. Anderson mentions that simply by
performing BPR exercises during SAP planning process, some organizations were able to
actually introduce business process changes to the systems currently in use before the
implementation project went live.
 30

4.3 Change Management

Change management is one of the most important parts of every SAP ERP implementation project. As
previously mentioned, SAP ERP implementation is not merely a software installation, it is a process of
business transformation and by default brings all sorts of changes along with it. Galoppin & Caems
addressed this issue in their book and made an excellent comparison regarding this issue. They compared
leading the organizational change to driving across a new territory. Sure, there are multiple maps
available, but they will not make you reach your destination. If you want to get there, you have to get in
the car and start the engine. Some environmental factors will slow you down, for example weather and
accidents. It is your driving skills, experience and improvisation that will determine in what manner you
will get there. Managing organizational change during SAP implementation means harmonizing the
interaction between the hard systems and the soft systems approaches. (Galoppin & Caems 2007, 21.)

The actual execution of a change goes only as fast as the people’s ability to absorb and make sense of
the changes. It is actually not the transition from previous systems to SAP that makes people disrupted,
it is the change of integration of processes that is required to make these systems work. The efficiency
of an organisation is determined by the alignment of processes, systems and people with each other. This
is why implementing SAP is not only a technological change and is not only an issue of IT department.
It affects the organization as a whole on all levels. It brings together three disciplines that seemingly
don’t have anything in common – software engineering, business administration and organizational
psychology. The issue is that if one of these elements is not handled correctly, the other elements are not
able to make up for the difference. As suggested by FIGURE 5, the organizational change during SAP
implementation happens where technology, processes and people meet. (Galoppin & Caems, 2007, 31-
32.)
 31

FIGURE 5. Cocktail of Three Disciplines (adapted from Galoppin & Caems 2007, 31).

SAP implementation does not require only an IS/IT systems change from the technological point of view
(technology), but also a turnaround of the way business processes are handled (processes) and as a result
a change of knowledge, skills and behaviours of employees (people). The most common mistake that
occurs during SAP implementations and that leads to failed implementation projects is the inclination of
people to mistakenly believe it is merely a software installation. Galoppin & Caems suggest that it is the
companies that present the project as a fundamental business initiative that will transform the whole
company that in the end profit from implementing SAP. Software installation is only a small part of the
whole process. The successful implementation projects have one thing in common – they realize that the
nature of the problem is organizational, not technical. (Galoppin & Caems 2007, 31-32.)

SAP has the potential to increase efficiency of business processes, thus fundamentally change the way
a company does business. The SAP implementation depends on sharing information and increasing
cross-functional communication. It is typical for software projects/implementations to focus on elements
such as analysis of requirements, configuration and development, hardware requirements, system
performance, user training and so on. These factors are of course necessary, but it is by far not enough
to make sure the SAP implementation project is successful. Galoppin & Caems identify change
management from soft systems perspective as a key ingredient to SAP implementation success.
 32

The following are keys to success of SAP implementation from change management point of view with
particular regard to soft systems approach:
 Presenting the project as a strategic business issue
 The project teams have dedicated resources available from the whole organization
 The key decision makers regarding customization and SAP standard change are not managers
but process owners.
 Methodical and persistent work, sticking to the project plan
 Concentration of effort, keeping momentum in the project
 The implementability of the design is ensured by extensive participation of the company
 Realistic scopes and scales
 Appropriate management
 Serious focus on milestones
 The commitment of company leadership and executives
(Galoppin & Caems 2007, 36 [Michael Hammer, 2005].)

There are many approaches to organizational change management and as long as there will be enough
emphasis on change management during SAP implementation and as long as change management will
be thoroughly addressed through all the steps of SAP implementation process, the organizational change
should be smooth. An example of a particular change management approach would be an eight-level
process. Firstly, a comprehensive change vision is created and the vision is made operational. As a
second step, a change strategy is defined in order to evaluate the readiness towards the change within
the organization and to select optimal change configuration and to establish change governance. Thirdly,
leadership of the change program will be developed. Fourth step involves building commitment from all
people involved by communicating, managing resistance and transferring of knowledge and skills. The
fifth step involves managing the performance of employees and stakeholders by the means of needs
establishment, performance management implementation and by people practices. As a sixth step, it is
important to build a business case out of SAP implementation and deliver business benefits through it.
The seventh step is developing the organizational culture that will favour the change instead of making
resistance. Finally, the organization is designed by understanding the state the organization is currently
in, designing the new organization and finally implementing the organizational change. (Lau 2005, 130
[Diese et al. 2000].)
 33

4.4 Implementation team and steering committee

The project team should ideally be a blend of employees already working in the organization and external
SAP consultants. The composition of implementation teams vary from project to project, however, some
commonalities are observable.

Every project will certainly have a project manager. Also, every project will have module experts, who
are experts in their respective fields and are able to model business processes based on the business
process requirements. At this stage, a cooperation between these people and key users appear. Key users
(or sometimes called process owners) are people from inside of the organization who are responsible for
their respective modules. Let us say that for example a key user is an expert in Finance, probably works
in the department, and has knowledge of the organization’s business processes. These people will work
with the module experts during the implementation and will participate in business process modelling,
as they are the ones with internal knowledge of how the organization works in their field.

Every project will also have external SAP consultants. External SAP consultants are people with deep
technical knowledge of SAP. The consultants usually handle customization and more technical issues.

The steering committee members are project sponsor, the project manager and some other members of
management or executive group of the organization. The project sponsor and the steering committee’s
responsibilities are setting objectives, establishing scope and timing, defining key business requirements
and monitoring the implementation and resolving any scope issues.

4.5 Implementation methodologies

As previously mentioned, there are currently many methodologies suggested by SAP as well as
consulting companies. These methodologies have been developed over the years as a result of various
implementation projects. Examples of those methodologies would be Step-by-step implementation,
which focuses on implementing the software in small steps. The area of focus in this methodology is
very narrow, which is on one hand beneficial, because the projects using this methodology generally
 34

take longer, which means the people throughout the organization have more time to adapt to changes.
On the other hand, the longer span of time that comes with using this methodology doesn’t suit every
organization. Some organizations intend to capitalize on the change as soon as possible, and in step-by-
step implementation, the return on investment is generally delayed. The very narrow area of focus also
sometimes causes the implementation team not to see the big, organization-wide picture. (Baloglu, 21.)

Another example that exists on quite the opposite side of the spectrum is Big Bang implementation. As
the title suggests, this type of implementation is very fast. All or most of existing systems are replaced
in a single operation with the new software. Although this methodology is the most cost-effective, it also
bears the most amount of risk. (Baloglu, 21-22.)

4.6 Accelerated SAP

The methodology that will be further examined in this thesis is the Accelerated SAP (ASAP)
methodology. The ASAP implementation methodology was developed by SAP and it focuses on rapid
implementation and ongoing optimization, therefore ensuring the project stays cost effective. ASAP
includes a roadmap which is linked to configuration tools in the SAP system. Initially, ASAP was
developed for SMEs and smaller implementation projects, but this approach proved to be very successful
in bigger implementation projects as well, which is why over the years the methodology was adopted
and perfected for bigger projects too. The benefits of this approach include scalable and flexible
methodology that is suitable for different project types. This includes the possibility to tailor the
implementation to meet customer and project specific requirements. More importantly, this methodology
takes into account all parts of the implementation life cycle, meaning not only the implementation project
itself, but post-project support as well. One of the latest versions of ASAP methodology, version 8
(ASAP V8) will be used in this thesis. (Kale 2000, 270; SAPb.)
 35

FIGURE 6. ASAP 8 implementation road map (Adapted from SAPc)

Project preparation

The initial phase of the project, the project preparation phase, defines all aspects and parameters of the
project. This phase corresponds to stage one and two in project life-cycle (see chapter 1.4). The purpose
of this phase is to set up the right environment and context for the upcoming SAP project. In accordance
with project management, the goals, objectives, scope and plans are discussed in this phase. Teams, roles
and responsibilities are assigned, the project infrastructure is established. The SAP TSO (Technical
Support Organization) is established. The SAP TSO is the most valuable resource in SAP
implementation project. It is a team of people charged with addressing, designing, implementing and
supporting the SAP solution.

The planning phase of the project deals with preparation and finalization of the project charter,
implementation strategy and planning of activities throughout the project. Budget, timetables and
resources are determined as well. The project charter is a very important document and its aim is to build
foundation for a successful project. It can also be used as a tool to manage the expectations of the project
sponsor and other stakeholders. One way to think of the project charter is to think of it as a contract,
because it basically represents a formal agreement between the project manager and the project sponsor.
Another purpose of the project charter is to help the project manager with vital aspects of the project. It
provides a clear statement of the project’s mission and purpose and what the project team is committed
to deliver, it helps with defining the roles and responsibilities of people involved in the project. One
aspect that is often underestimated is that it makes the process and approach that will be used throughout
the project visible, which helps with providing clear goals for the people involved in the project. Lastly,
 36

it provides some basis for the scope of the project and it assists in managing expectations. (Baloglu, 47;
Kale 2000, 289; Anderson, Nilson & Rhodes 2009, 140-141.)

At the end of this phase, the project can officially commence with a kick-off meeting, which is attended
by the members of the executive and steering committees, project team members and of course SAP
consultants.

Business blueprint

The purpose of this phase of the implementation project is to reach understanding of the company’s
intentions to run SAP to support their business. The result is the document called Business Blueprint,
which is a detailed documentation of the intended implementation, which takes into consideration the
particular requirements the company might have on the SAP system. In other words, it documents the
business process-related requirements. Another way to look at the business blueprint is that it contains
the details about the desired functionalities. Earlier customization and SAP standard change was
discussed. This idea is quite close to it, as to meet the business process requirements, these actions will
often need to take place. The assessment of the business process-related requirements is done by the
implementation team based on business analysis and customer requirements. The Business Blueprint
itself shout contain executive summary, enterprise process area scope document, organization structure,
completed business processes questionnaires, justification for enhancements, conversions and interfaces
and completed technical questionnaire. (Baloglu, 58-73; Kale 2000, 304-327; Anderson et al. 2009, 142-
145.)

At this point, since the project team now has some idea of how the implementation will look like, user
training and documentation plans can be established as well. This includes user analysis (what is the
number of users and what are their positions in the company), what will be the type of user
documentation and training materials. The user documentation and training materials will be prepared
and resources required for the training will be determined, as well as training schedule. (Baloglu, 58-73;
Kale 2000, 304-327; Anderson et al. 2009, 142-145.)
 37

The final stage of this phase is the business blueprint sign off, which means the project is cleared to
move on to the next phase. It is crucial to get the sign off, because the Business Blueprint is the basic
building block of the implementation project. (Kale 2000, 327.)

Realization

The purpose of this phase is to implement the business process requirements from the Business
Blueprint. Basically, the goal of this phase is to create a system prototype which reflects the business
process and procedures requirements. The activities of this phase are centered around customization,
configuration, testing and addressing change management. (Baloglu, 74-81; Kale 2000, 330-45; SAPc.)

As far as it is now known how exactly the solution will look like, there is further development in user
training and documentation, more specifically the content is defined, developed and preparations for
user training and documentation delivery are made. (Baloglu, 76-7.)

The methodology of system configuration is divided into two packages – Baseline Configuration (also
referred to as Major scope) and Final Configuration (Remaining scope). The baseline includes the
functions and processes that are priority requirements of the company. These commonly make up for
approximately 80%. Final configuration are all business processes that were not included in the Baseline
configuration. These processes usually require more amount of customization. After the Final
configuration, the system is prepared for testing. (Baloglu, 74-81; Kale 2000, 330-45; SAPc.)

The tests are conducted in three ways referred to as functional, integration and regression testing. Testing
is a vital part of the project, as the solutions that were previously developed and realized are now being
thoroughly tested to ensure their functionality. The tests are focused mainly on business process testing,
which means that the processes are executed as is required and the outputs created by the processes are
as expected. The testing stage is very demanding in terms of resources, especially time. (Anderson 2003,
543 – 546.)

Functional testing, as the title suggests, focuses mainly on verifying that the business process actually
works, meaning all options included in the interface like drop-down menu selection, checkboxes and so
 38

on. The functional testing must also be performed after every change, therefore it is recommended to
limit the number of additional changes beyond this point, if possible. (Anderson 2003, 543 – 546.)

Integration testing is more complicated than functional testing. The purpose of this testing is to validate
the functionality between different business processes. This includes processes in the same functional
areas as well as multiple functional areas. It is not uncommon to maintain a system dedicated solely to
integration testing. (Anderson 2003, 543 – 546.)

The aim of regression testing is to make sure that a specific set of data and business processes produces
consistent and repeatable results, including the case when subset of the data or process changes.
Regression testing can be then seen as focused on testing integrity of business processes. The most
important part is that regression testing makes sure that the business processes which are currently
implemented will continue working after other business processes are changed. (Anderson 2003, 543 –
546.)

Final Preparation

This phase of the implementation process has two main targets – getting the system ready for the
implementation as well as the company. All the previously done activities are now consolidated, such
as testing, end user training and system management. This phase is crucial for the success for the go-
live phase, as proper preparation enables the go-live phase to go as smoothly as possible. (Kale 2000,
358; SAPc.)

Systems tests are conducted as well. The purpose of these tests, unlike previously mentioned tests, is not
to determine the functionality of the business processes, but to determine the system’s ability to perform
with the full load of business operations, transaction processing, postings and printing in the production
system. Many types of tests are conducted, however the most important ones are System Administration
Tests, Volume and Stress Tests, Backup and Restore Procedure Tests and Disaster Recovery Tests. (Kale
2000, 363.)

The purpose of System Administration Tests is to make sure that all of the system administration
processes and procedures are correct and complete. (Kale 2000, 363.)
 39

Volume and Stress Tests are designed to test the system’s infrastructure. Volume Tests are conducted to
determine whether the system is capable of performing satisfactorily with the full load of transactions
and other data that are anticipated in the production system. Stress Tests are designed to test whether the
current configured system is able to perform well with the full load of business operations, transaction
processing, postings and printing in the production system. (Kale 2000, 363.)

Backup and Restore Procedure Tests are conducted to verify that the database backup and restore
procedures are correct and complete. These procedures vary depending on the used database and
operating and hardware systems. (Kale 2000, 363.)

The purpose of Disaster Recovery Tests is to ensure that the disaster recovery processes and procedures
are correct and complete. All components of the system’s technical infrastructure are covered in this
test, including the storage disks, networks, databases, user authorizations etc. Tolerance for downtime,
adequacy of service and maintenance level vendor agreements and the effectiveness of escalation
procedures and communication paths are verified as well. (Kale 2000, 363.)

The final phase before going live (the Final Preparation phase) is often called the cutover phase. Cutover
is the process of transitioning from an old system to a new one. Some examples of cutover activities
would be assigning ownership of functional processes in SAP to individuals (this refers to process
owners), reviewing and updating all systems-related operations such as system monitoring and backup
policies. The system is then subdued to a GoingLive check, which checks the system configuration and
performance. After that, the system is locked down, which means that no more changes are made in the
system. (Anderson 2003, 621 – 624.)

User training is conducted as well. The training is conducted in a training client. It is crucial to ensure
that all the end users are able to conduct the routine tasks they will be handling in the future confidently.

Last but not least, one of the final parts of this phase is data transfer. Data transfer is often referred to as
the most critical part of the project. The data transfer should always be given a high priority, it is very
time-consuming process and the project manager must not forget to assign enough time to complete this
 40

process as well as check the completion afterwards. As almost everything, the transferred data must be
fully tested in every detail. It is good to keep in mind that the transfer should be done at the latest possible
moment, which helps keeping the manual transfers to the minimum. Data transfer is a highly technical
issue. (Baloglu, 88.)

After conducting all the activities, the readiness of the system to go live is assessed. The completion of
requirements is checked. The requirements are that end user documentation as well as end user training
is complete, the R/3 system administration is in place, the technical setup is complete, the conversion of
customization settings, master data and transaction data is complete and that the production cutover and
support plan is in place.

After verifying that all the requirements are met and getting approval from management, verifying that
the users are ready and making sure that the security system is fully operational, the system goes live.

Go Live

Go Live signifies the start of a new system usage. The purpose of this phase is to move from a project-
oriented environment to live production run. In other words, the system goes live. Involvement of all
project team members is necessary at this point, as sustained support to business users is provided. Help
with transition into the new environment should be secured as well. (SAPd.)

However, at this phase, the implementation process is far from over. Some errors might still occur in
day-to-day operations or issues reported by end users. Main activities in this phase include addressing
and correcting these issues. The corrections could include altering the business process, modifying the
ABAP code, configurations or training on additional modules or functionalities. SAP system and daily
transactions are also monitored for possible optimizations. (Kale 2000, 370 – 372.)

It is also critical to setup a help desk and Customer Competency Center. The purpose of both is to provide
sufficient support for end users. Project implementation and support, business support, technical support
and information services are some examples of activities undertaken by both entities. Setting up a help
desk is especially important right after go-live period. Some users are still confused even after their
training and help desk helps them overcome this issue. (Kale 2000, 381.)
 41

At this phase, communication between all people involved in the implementation project is crucial. It is
critical to ensure that everyone is on the same page and knows what is happening with the solution and
knows what errors and issues have occurred. The project moves to so-called hyper care phase. This phase
usually lasts around one month. The system is delivered to the hands of the users and system support
transitions into routine support. (Anderson 2003, 644-647.)

Operate

This phase was first added to version 7 of ASAP methodology and is therefore rather new. This step was
basically previously covered by the fifth phase - hypercare (Go Live). The purpose of this step is to
optimize the application life style standards, processes and procedures and align them with operation
needs. The system is operated with the help of the central operation platform (SAP Solution Manager)
with the documented solution, which is based on the transferred project documentation. (SAPc.)

4.7 Critical Success Factors

In most contemporary publications and articles, 11 factors are recognized as critical success factors
critical to ERP implementation success. Those are:
1. ERP teamwork and composition
2. Change management program and culture
3. Top management support
4. Business plan and vision
5. Business process re-engineering and minimum customization
6. Effective communication
7. Project management
8. Software development, testing, and troubleshooting
9. Monitoring and evaluation of performance
10. Project champion
11. Appropriate business and information technology legacy systems

(Gargeya & Brady 2005, 503-504.)

 42

ERP teamwork and composition

This factor means the cooperation and effort of all people involved not only in the implementation. As
previously mentioned, the implementation team should be balanced or include people from various
departments and functions, and that is because in SAP implementation, both technical and business
knowledge is important. The team members should be a mix of external SAP consultants and internal
staff. The best staff should be assigned to the project. The level of interaction between project team
members and consultants has a direct impact on the SAP implementation’s success. That is because it
allows the internal staff to develop technical skills for design and implementation. (Ful-Hoon Nah,
Zuckweller and Lee-Shang Lau 2003, 12; Ful-Hoon Nah & Lee Shang-Lau 2001, 289; Gargeya & Brady
2005, 510-511.)

Change management program and culture

It was already mentioned that a change so extensive such as implementing SAP EPR system requires
proper change management. The users of the system must be trained properly and any resistance or
concerns must be addressed through regular communication, the work of change agents and
identification of job support tools for different users. It is especially important to pay enough attention
to the user trainings, as this will enable the transition from the old system to the new system to go more
smoothly. It is crucial to ensure that staff understands how the system will change different business
processes. Establishing help desk or some sort of support organization is critical. (Ful-Hoon Nah et al.
2003, 11; Ful-Hoon Nah & Lee Shang-Lau 2001, 293; Al-Mashari & Zairi 2000, 162; Aladwani 2001,
269-270.)

Top management support

This particular factor is one of the most important ones on the list and is closely related to change
management. The staff will not have enough faith and willingness for the change if the implementation
is not fully supported by company’s top management. In order to express their support, top management
should publicly and explicitly announce that the project is a top priority. New goals and objectives should
be made legit by managers. The role of the new system should be communicated to employees clearly.
It is important to ensure that new organizational structures, roles and responsibilities are established.
 43

Possibly the most important aspect of top management support is the fact that enough quality resources
are allocated to the project (this includes staff, time as well as budget). One way to ensure top
management support is by tying management bonuses to project success. (Ful-Hoon Nah et al. 2003, 14-
15; Ful-Hoon Nah & Lee Shang-Lau 2001, 291.)

Business plan and vision

This particular factor relates to change management, because for successful change management it is
important to put emphasis on business plan and vision throughout the change process. The business plan
and vision serve to guide the ongoing organizational effort related to the change. The business plan is
supposed to include proposed strategic and tangible benefits, resources, costs, risks and timeline. The
business plan containing such information will then assist in steering the direction of the implementation
project. Specific and measurable goals should be included as well, since reaching the goals will sustain
organizational commitment to ERP implementation. (Ful-Hoon Nah et al. 2003, 10; Ful-Hoon Nah &
Lee Shang-Lau 2001, 291.)

Business process re-engineering and minimum customization

These factors have been previously mentioned. Basically, BPR should occur in order to fully benefit
from the best practices offered by the system. The business processes should be adapted to the highest
extent possible to fit the processes used in the system. In other words, the organization should try to
make their business processes fit the software. This will decrease the amount of customizations needed,
which in turn decreases the possibility of mistakes and problems. (Ful-Hoon Nah et al. 2003, 10-11; Ful-
Hoon Nah & Lee Shang-Lau 2001, 293-294; Al-Mashari & Zairi 2000, 162-164.)
 44

Effective communication

Communication is a subject that has already been touched multiple times. The importance of effective
communication and feedback, especially when it comes to change management, cannot be
underestimated. Effective communication should occur throughout all implementation phases and
especially during activities such as training and user input. Company vision needs to be communicated,
as well as project benefits and the commitment and support of top management to the project. Clear and
effective communication helps companies to achieve continuous improvement in SAP ERP
implementation. (Ful-Hoon Nah et al. 2003, 11-12; Ful-Hoon Nah & Lee Shang-Lau 2001, 291.)

Project management

The whole Chapter 1 was dedicated to project management. For the project’s success, it is crucial to
ensure that responsibilities and roles given are clear and specific, the scope of the project needs to be
thoroughly considered and controlled. Project milestones should be defined, schedules and budget needs
to be realistic and project deliverables should be clearly defined as well. (Ful-Hoon Nah et al. 2003, 13-
14; Ful-Hoon Nah & Lee Shang-Lau 2001, 292.)

Software development, testing and troubleshooting

This factor refers to the technical parts of SAP ERP implementation. The development and testing should
be thoroughly considered and managed. The general architecture of the system should be established
before the deployment phase while considering the implementation’s requirements. All testing done
needs to be very thorough and needs to address the given tested process/infrastructure from every
possible angle. As for troubleshooting, the most important aspects are quick response, patience,
perseverance and problem solving capabilities. (Ful-Hoon Nah et al. 2003, 14; Ful-Hoon Nah & Lee
Shang-Lau 2001, 294.)

Monitoring and evaluation of performance

This includes setting proper, measurable and attainable milestones during the project preparation phase.
This helps to keep tabs on progress in the implementation. These milestones can be then used as a
measure against the goals of the project. The monitoring of performance involves the exchange of
information between the project team members and taking into account feedback received from end
 45

users, which in the end relates to effective communication again. A tool that helps to monitor and
evaluate the performance could be the usage of regular reports and project updates. (Ful-Hoon Nah et
al. 2003, 13; Ful-Hoon Nah & Lee Shang-Lau 2001, 294-295.)

Project champion

This idea is important in ERP implementations in particular, because of the tendency of such projects to
include company-wide changes. The idea here is to select a respectable member (usually high-level
executive) of the organization to "champion" the project throughout the organization, which includes
advocating for the system and promoting its benefits. The champion acts as a "resistance manager",
which aids the project a great deal, especially from change management perspective. (Ful-Hoon Nah et
al. 2003, 13; Ful-Hoon Nah & Lee Shang-Lau 2001, 292.)

Appropriate business and information technology legacy systems

Legacy systems refer to the system that was in use before SAP ERP implementation. These systems
actually determine the level of IT and organizational change that is needed for the success of SAP ERP
implementation. The more complex the legacy systems are, the more technological and organizational
changes are required. This critical success factor refers to the fact that the amount of stability and success
in the particular business setting determines the success of SAP ERP implementation project. All parts
of the organization play a role in this, including existing business processes, organizational structure and
company culture. Success in these areas is directly related to success of ERP system implementation.
(Ful-Hoon Nah et al. 2003, 9-10; Ful-Hoon Nah & Lee Shang-Lau 2001, 292-293.)
 46

5 RESEARCH

This part provides an assessment and analysis of theoretical findings on the issue on SAP ERP
implementation projects with particular attention paid to the assessment of critical success factors.
Qualitative and quantitative research outcomes are considered and compared to theoretical findings.

5.1 Qualitative research

As qualitative research, two in-depth interviews were conducted. The aim of these interviews was to get
a comprehensive insight into the issue of SAP ERP implementation process which can be shared with
readers. Interview questions can be found in Appendix 1.

First interviewee is an IT manager, ERP manager and SAP Competence Centre manager for Schneider
Electric. His involvement in SAP ERP implementation projects was mainly project management and PS
module expert.

The interviewee found the easiest part of the implementation process to be final preparation, as the tests
in this phase are being finalized and preparation for cutover is not as demanding as the other parts,
although the data preparation for cutover might prove to be quite difficult too. Also he suggested that
after years of practice, project assessment in the project initiation and planning phase has become quite
easy. This, as will be revealed in the following section, is supported by the survey results.

The interviewee proceeded to identify the hardest parts of the implementation process. According to
him, key user training might prove to be very difficult, as it is very hard to make the key users truly learn
the system and communicate everything that needs to be in the system so that the implementation team
can implement the process in the right way. He also mentioned the importance of key users’ participation
in testing and proceeded with an example. There was an incident where all the testing was done by the
implementation team, so after the team left, the key users didn’t know what to do. Also, change
management was identified as one of the crucial elements of SAP implementation process. Other
difficult yet crucial part of the implementation process that has been identified is correct documentation,
 47

especially blueprints. The key users should actually make their own documentation for end users,
because after the implementation team leaves, it is the key users who train the end users.

The critical part of the implementation process that has been identified is integration tests. In business
blueprints, it is described how the process will look like, the consultants then customize it and module
tests are done. After that, integration testing is done, so the whole solution is taken and simulated in
order to see how the process will work and look like in the target system. In this step, you can often see
if the people working with modules did a good job, if everything aligns, because this is the step where
you see for the first time the integration of all modules. Other critical parts identified were testing,
integration, interfaces and data preparation. As will be revealed in the survey section, the survey’s results
support these findings, as well as theoretical results.

The last part of the interview was dedicated to identifying where exactly most of the projects go wrong.
The interviewee’s answer was interfaces, data transfer, data integrity and change management. The usual
problem in this case is inadequate description of interfaces. Interfaces aren’t paid enough attention to
because most of the focus goes to the main processes. For example invoicing process, they know how it
works, but sometimes it slips your attention that you need to send the invoice through EDI (Electronic
Data Interface). Interfaces are difficult to customize, you need testing environment for it and sometimes
that could be a problem, because you don’t get to test it before going live. As for data, the main issue is
data integrity, because for example it is not possible to create a material for storage location that hasn’t
been created. Sometimes the current system doesn’t support things like that, so it needs to be created in
order to work for SAP. Also measurement units are tricky – it is possible to purchase in metres, store in
kilograms and dispatch in centimetres. So if the units aren’t set and aligned correctly, it can cause damage
in the warehouse. Change management is often not paid enough attention to and it is supposed that the
employees just have to adapt, because it is their job. Anyhow it is a very important part of the
implementation process that is often underestimated or incorrectly managed. The results of this question
are also supported by the theoretical findings as well as survey findings.

The second interviewee has two decades of experience dealing with ERP systems, including SAP, and
was working for big international companies, such as Tetra Pack and Nokia. According to the
interviewee, the parts of the implementation project that might be considered as easier than the rest is
 48

planning and setting up the rollout teams. One of the reasons is that in the beginning of a project, the
employees and team members are usually motivated and excited about the project, but when the project
encounters difficulties, the motivation and overall mood in the organization goes down and is hard to
maintain. Also, when there is no necessity for customization and there is a possibility of using the
standardized SAP package could be considered to be easy, relative to the other parts of the project.

The interviewee proceeded to identify the hardest part of the implementation process. According to him,
one of the hardest parts is when you have to deal with scope changes due to the inability to deliver the
requested deliverables. But the hardest part is change management – people, especially in big companies,
have become used to working in a certain way, so from that fact arises the necessity to internally sell the
project to people throughout the organization and explain why it is necessary to implement the change.
Change management was also identified as the most critical part of the implementation process, due to
the reasoning that nowadays, the technical issues are more easily solved than dealing with resistance
against change inside of the organization. When dealing with change management, the interviewee
mentioned several ways of doing so, including proper planning and communication, top management
support and clear and effective vertical communication. All of these have been previously identified in
the theoretical part and are now verified. Another method the interviewee suggests is fingerprints – that
means involving the people in the project in seemingly small ways, such as accepting one more column
in a table, which helps with getting their acceptance. Another fact to take into consideration is that when
the change as big as SAP implementation occurs, senior employees of the company might feel threatened
by junior employees, because the junior employees are generally more open to the change, which
threatens the positions of senior employees.

5.2 Quantitative research

The quantitative research was done by the means of an online survey. It contained 50% of open-ended
questions, for one simple reason. The respondents of this survey are people that were/have been involved
in multiple implementation projects and therefore what they have to say to the issue of SAP ERP
implementation process is valuable and can potentially bring valuable findings to the research. The total
number of respondents is 30. More detailed results and graphs of the survey can be found in Appendix
2.
 49

The first set of questions aimed at providing a deeper understanding of the respondents. Most of the
respondents work in IT department, IPO (Information Process and organization) which is basically IT
department as well but not concerned only with IT, and SAP Competence Centre. SAP Competence
Centre is basically a department focused on SAP application support, like help desk functions, trouble
shooting, system stabilizing etc. Most of the respondents are business analysts, business process
managers, project managers or key users. Business Analysts are people who analyse organizations and
documents the organization’s business processes and systems in order to assess the organization’s
business model and its integration witch technology. They may also contribute in business process
modelling. Business Analysts often work with SAP, as SAP is essentially a bridge between the business
side and the technology side of a business. Business Process Managers are people who are in charge of
everything related to business processes, like evaluating, designing, measuring, monitoring and
controlling. As SAP implementation is about understanding and correctly designing and implementing
the specific business processes of an organization, these people are crucial when it comes to SAP
implementation projects. The outcomes of these questions revealed that the respondents are experts and
people involved in crucial operations and activities regarding SAP ERP implementation process.

Another revelation about the respondents was provided by answers to a question that asked what
activities the respondents are/were actually responsible for. This is illustrated by GRAPH 1 below. The
results are quite standard. As training is very important and usually a lot of users are trained, both key
users and end users, a lot of respondents were responsible for that. Blueprinting requires a lot of
manpower as well, as most processes in the organization is being assessed and evaluated in order to
figure out how to exactly implement it. Blueprinting basically goes hand in hand with business process
assessment and modelling, however as previously explained, that is not the only thing blueprint is about,
hence the smaller amount of people responsible for business process assessment and modelling. Testing,
as also found in the interviews, is a crucial element of SAP implementation projects, which is why a lot
of respondents were responsible for that activity as well. One interesting finding is that only 4
respondents were directly handling and addressing change management, or at least admitted to it. Every
project manager should keep that in mind and with 7 project managers during the respondents, the
number should be higher, as we will find out in the next question, change management is considered to
be one of the most important activities in SAP implementation projects.
 50

DATA MIGRATION 8

BLUEPRINTING 14

CUSTOMIZING 6

TESTING 13

TRAINING (END USER OR KEY USER) 20

OVERALL PROJECT MANAGEMENT 7

CHANGE MANAGEMENT 4

BUSINESS PROCESS ASSESSMENT AND MODELLING 10

GRAPH 1. What activities specifically were you responsible for?

The next set of survey questions was aimed at assessing the difficulty of different phases of the
implementation process. GRAPH 2 below shows that final preparation phase was identified as by far the
easiest one. This quite makes sense, as in timeline it is one of the shorter phases and involves less
activities than other phases. Most testing is done in the realization phase and the final preparation phase
only consists of infrastructure and system load testing. No one found sizing and blueprinting easiest,
which suggests it is one of the most critical phases in ERP implementation.

The results are consistent with the interview results, where the critical activities were found to be
integration testing and one of the most difficult parts was correct documentation (including blueprints).
 51

PROJECT INITIATION AND PLANNING 4

SIZING AND BLUEPRINTING 0

REALIZATION 7

FINAL PREPARATION 20

GO LIVE 4

GRAPH 2. What do you consider to be the easiest phase of the implementation process?

GRAPH 3 below shows that the respondents found the most difficult phases of the implementation
process to be project initiation and planning and blueprinting. As theory suggests, these are indeed the
critical parts of any SAP implementation projects, as it is crucial to get the scope requirements and
documentation right at the beginning of the project, because those are the activities and documents that
the entire project is based on.

The results are consistent with interviews conducted, as it was found that correct documentation and
blueprinting is one of the most difficult parts of the implementation process.
 52

PROJECT INITIATION AND PLANNING 20

SIZING AND BLUEPRINTING 23

REALIZATION 6

FINAL PREPARATION 1

GO LIVE 3

GRAPH 3. What do you consider to be the most difficult part of the implementation process?

GRAPH 4 below shows what part of the implementation process the respondents found to be the most
important one. The results of this question also correspond with other theoretical framework and
concepts, as the project is mostly based on documentation and decisions made in the initial phase of the
project as well as during the blueprinting phase. Most of the business process requirements analysis and
assessment is done in the blueprinting phase, which is why it came on top. It is quite surprising that no
respondents answered with Go Live and very few respondents answered with Realization and Final
preparation. A possible explanation could be that successful management of the first two phases is indeed
crucial and determines the success of SAP implementation, whereas the other phases are mostly based
on the first two phases.
 53

PROJECT INITIATION AND PLANNING 25

SIZING AND BLUEPRINTING 26

REALIZATION 3

FINAL PREPARATION 1

GO LIVE 0

GRAPH 4. In your opinion, what part of the implementation project is the most important?

GRAPH 5 below illustrates the results of one of the key questions – What activities specifically do you
consider to be the most important ones in the implementation project? The findings of this question
correspond with theoretical part of critical success factors, as well as the interviews. It has been found
that testing is considered the most important activity in SAP implementation projects, followed by
blueprinting and training. Change management, project preparation and planning and correct
understanding of business process requirements share the same amount (13%). This question revealed a
nice correlation between theory and practice, as it supports the ideas presented in the theoretical part.
 54

BLUEPRINTING 14

CHANGE MANAGEMENT 9

TRAINING (KEY USERS AND END USERS) 13

PROJECT PREPARATION AND PLANNING 9

CORRECT UNDERSTANDING OF BUSINESS

PROCESSES REQUIREMENTS 9

TESTING 17

GRAPH 5. What activities specifically do you consider to be the most important ones in the
implementation project?

GRAPH 6 below shows the respondents’ answers as to what part of the implementation project is most
likely to go wrong. The first two phases of SAP implementation are also the most likely to go wrong.
As it will be revealed in the next question, correct understanding of the business requirements and correct
scope estimate/assessment is critical to the success of SAP implementation, therefore if anything goes
wrong, the project will encounter scope changes, which as was found out from the interview is not
viewed positively. Scope changes require a lot of explanations and may cause delays and confusion in
the projects.
 55

PROJECT INITIATION AND PLANNING 21

SIZING AND BLUEPRINTING 26

REALIZATION 3

FINAL PREPARATION 3

GO LIVE 2

GRAPH 6. In your opinion, what part of the implementation project is most likely to go wrong?

GRAPH 7 below illustrates the results of the last question. The last question turned out to be probably
the most interesting one. The four most common causes of problems or difficulties in SAP
implementation projects, according to the respondents, were poor training, project teams not 100 %
dedicated to the project, insufficient change management or lack of focus on change management and
wrong understanding of business requirements. As explained previously in the theoretical part, these 4
elements are also one of the critical success factors, which is why improper handling might cause issues
during the project. The findings also correspond with interview findings, where all of these factors were
identified. Other common cause is negative attitude towards change, which indirectly corresponds to
poorly addressed change management. If change management is insufficiently addressed, the negative
attitude will prevail. This cause also corresponds to employee overload and not 100 % dedicated project
teams. Sometimes, employees are just assigned to the project, but keep their daily responsibilities as
well. This is usually done by assigning 70 % of employee’s time to his daily responsibilities and 30 %
of the project. This causes him to make difficult decision regarding the project and possibly being
overloaded as well. This is particularly disruptive for key users, whose daily responsibilities interfere
with them really learning and understanding their trainings. This then causes disruptions for end users,
who are not getting trained well enough from key users, because they were overloaded. This then causes
negative attitude throughout the organization, therefore harming the acceptance of change. As we can
observe, it is not a particular issue that causes disruptions during the SAP implementation projects, but
 56

rather a sequence of events. It is therefore necessary to address all aspects equally and treat them as they
are equally important. This should maintain balance within all stages of the project.

CHANGE MANAGEMENT 10
MASTER DATA ERRORS 3
LACK OF TOP MANAGEMENT SUPPORT 5
TEAM NOT PROACTIVE 3
PROJECT TEAMS NOT DEDICATED 11
WRONG UNDERSTANDING OF BUSINESS … 10
NEGATIVE ATTITUDE TOWARDS CHANGE 6
COMMUNICATION ISSUES 5
POOR TRAINING 11
EMPLOYEE OVERLOAD 3
INCORRECT SCOPE ESTIMATE/ASSESSMENT 5

GRAPH 7. In your opinion, what is the most usual cause of problems/difficulties in implementation
projects?
 57

CONCLUSION

Project management of SAP ERP implementation process is a complex activity lead by a project
manager and done by the project team. It brings a whole set of issues and problems that need to be dealt
with and at the same time, meet the expectations of project sponsor. Oftentimes the projects are done on
an international basis, which brings a whole set of other issues.

The aim of my thesis has been to provide a general overview of theoretical knowledge related to SAP
ERP implementation process, which has been done in the theoretical part. Critical success factors have
been identified and discussed in the theoretical part followed by analysis and discussion of both
qualitative and quantitative research findings.

In terms of identifying what particular critical success factors are the most important, the simple answer
is that it depends. Every organization is unique and operates on different principles in different
environments. The business processes of every organization are unique as well, which presents a certain
amount of difficulty when identifying what critical success factors are the most important ones. It is
advisable to not underestimate any of the critical success factors in order to achieve smooth course of
the implementation project. However, the thesis points to some critical success factors and activities
which deserve special attention due to their importance.

In the thesis, it has been found that the theoretical part related to theoretical framework of SAP ERP
implementation phases is true and correct. Blueprinting and Project initiation and planning was found to
be the most crucial phases during the implementation project, because basically every activity done
further in the project is based on activities conducted in these two phases.

Testing, training and change management were found to be the most crucial parts of implementation
projects by both qualitative and quantitative research. Testing allows to confirm that customizing and
business processes are adapted to fit the particular needs of the organization in question and the
implementation of the processes works well within the system and is aligned with the other processes.
It also allows to make sure that the organization’s infrastructure is prepared to handle the load of the
system which is to be implemented. Training aids in making sure that people in the organization will be
 58

able to handle and manage the system after the project team departure. Change management is a chapter
on its own and several books have been written on that particular subject, which proves and demonstrates
the importance of this concept. The theoretical part supported and confirmed these findings.

The aforementioned finding also relate to the parts where most projects go wrong – poor training, change
management, wrong understanding of business requirements and project teams not dedicated enough.
Further recommendations and deductions can be made regarding these issues, such as putting enough
focus on training and making sure it is done thoroughly and correctly. Change management should not
be underestimated. The most common mistake is that employees are just supposed to adapt to the change,
instead of providing framework for employees to deal with the change. Wrong understanding of business
requirements has its roots in poor communication, wrong project scope estimate and bad blueprinting.
In order to fix that, forming official communication and feedback channels can be done. This will
achieve that all relevant communication will reach important persons. Wrong project scope estimate and
bad blueprinting also stems mostly from poor communication. It is therefore necessary to confirm the
reliability and correctness of all modelled business processes as well as making sure the project scope
requirements are well understood both on the project manager side as well as on the project sponsor side.
 59

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Anderson G. W. 2003. SAP planning: best practices in implementation. Indianapolis, Ind.: Sams

Anderson G. W., Nilson C. D. & Rhodes T. 2009. SAP implementation unleashed: A business and
technical roadmap to deploying SAP. Indianapolis, Ind.: Sams

Bachelet R. Cours de gestion de projet - L’essentiel des outils d’organisation de projet – Chapitre 1:
Clarifier les objectifs. Accessed 15.2.2016. Available at: http://gestiondeprojet.pm/bases-organisation-
projet/

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Eyrolles

Dowling K. N. 2008. SAP R/3 PS (Project Systems) Handbook. New York: McGraw Hill.

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IN: Sams Publishing.
 60

Kerzner H. 2010. Project management best practices: achieving global excellence. 2nd edition. Hoboken,
N.J.: Wiley.

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Idea Group Pub.

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Marchewka J. T. 2013. Information technology project management. 4th edition. Singapore: Wiley

Nemec V. 2002. Projektový management 1. Grada.

Project Management Institute. 2013. A Guide to the Project Management Body of Knowledge. 5th
Edition. Newtown Square, PA: Project Management Institute.

Schwalbe K. 2014. Information technology project management. Seventh edition. Boston, MA: Course
Technology, Cengage Learning.

Vidyaranya B. G., Brady C. 2005. Success and failure factors of adopting SAP in ERP system
implementation. Business Process Management Journal, Vol. 11 Iss 5 pp. 501 – 516

Wysocki R. K., Kaikini S. & Sneed R. 2014. Effective project management: traditional, agile, extreme.
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Electronic sources:

SAPa. Accessed 15.2.2016. Available at: http://go.sap.com/index.html

SAPb. Implement SAP. Accessed 29.2.2016. Available at: https://support.sap.com/support-programs-

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https://support.sap.com/support-programs-services/methodologies/implement-sap/asap-
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Forrester Consulting. 2014. Projected Cost Analysis of the SAP HANA Platform.
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the-sap-hana-platform-cost-savings-enabled-by-transitioning-to-hana-pdf.bypassReg.html
 1

APPENDICES

APPENDIX 1: Interview questions

1. Can you please introduce yourself?

2. What experience do you have with SAP ERP?
3. How exactly were you involved in the SAP ERP implementation processes?
4. What would you say is the 'easiest' part of the implementation process?
5. What would you say is the 'hardest' part of the implementation process?
6. How would you evaluate change management?
7. What are other most difficult parts of the implementation process?
8. What part of the implementation process is the most time-demanding?
9. What part of the implementation process you think is the most critical one? (In general)
10. What are/were your main responsibilities as Project manager/Member of the steering
commitee?
11. In what ways would you say it differs from other members of the implementation team?
12. What parts of the implementation process do you pay the most attention to from the perspective
of Project manager/Steering commitee member?
13. What part of the implementation process you think is the most critical one from the point of
view of Project manager/Steering commitee member?
14. What part of the implementation process is most likely to go wrong?
15. Can you give an example of 2-3 projects you were working on? Can you describe them?
16. How 'big' were the projects?
17. How many people were involved?
18. What was the budget?
19. What problems did you have to deal with in those projects?
20. How important would you say is team work in those projects?
 2

APPENDIX 2: Survey results

 In what department do you work/were you working in when participating in SAP EPR
implementation projects (in case the department has changed since the projects)?

 IT 40 %
 IPO 33 %
 SAP Competence Centre 15 %
 Project Management only 6%
 Purchasing 3%
 Logistics 3%

IT [13]
IPO [11]

Purchasin
g [1]

Project
Manageme SAP
Logistics
nt only [2] Competen [1]

 What was your role/position in SAP ERP implementation projects?

Project Manager [7] Key User [6]

MM Module
Specialist [3]
SAP
Specialist [2]

PP Module
Specialist [1]
Business
Business
Process ERP Manager
Analyst [10]
Manager [8] [1]
 3

 Business Analyst 26 %
 Business Process Manager 21 %
 Project Manager 18 %
 Key User 16 %
 MM Specialist 8%
 SAP Specialist 5%
 PP Module Specialist 3%
 ERP Manager 3%

 Were your activities during the implementation project focused on some parts only? If yes, which
ones?

PROJECT INITIATION AND

PLANNING 4

SIZING AND BLUEPRINTING 6

REALIZATION 5

FINAL PREPARATION 4

GO LIVE 5

 Project initiation and planning 17 %

 Sizing and blueprinting 24 %
 Realization 21 %
 Final Preparation 17 %
 Go Live 21 %

Actual number of respondents: 7

 What part (or parts) of SAP ERP implementation process do you consider to be the "easiest" one?

 Project initiation 11.5 %

 Blueprinting 0%
 Realization 20 %
 Final Preparation 57 %
 Go Live 11.5 %
 4

PROJECT INITIATION AND

PLANNING 4

SIZING AND BLUEPRINTING 0

REALIZATION 7

FINAL PREPARATION 20

GO LIVE 4

 What part (or parts) of SAP ERP implementation process do you consider to be the most difficult
one?
 5

PROJECT INITIATION AND

PLANNING 20

SIZING AND BLUEPRINTING 23

REALIZATION 6

FINAL PREPARATION 1

GO LIVE 3

 Project initiation and planning 38 %

 Sizing and blueprinting 43 %
 Realization 11 %
 Final Preparation 2%
 Go Live 6%
 6

 What activites in particular did you participate in/were responsible for? Please try to be as specific
as possible (testing, end-user training, change management etc.).

DATA MIGRATION 8
BLUEPRINTING 14
CUSTOMIZING 6
TESTING 13
TRAINING (END USER OR KEY USER) 20
OVERALL PROJECT MANAGEMENT 7
CHANGE MANAGEMENT 4
BUSINESS PROCESS ASSESSMENT AND
MODELLING 10

 Data migration 10 %
 Blueprinting 17 %
 Customizing 7%
 Testing 16 %
 Training (end users and key users) 24 %
 Overall project management 9%
 Change management 5%
 Business process assessment and modelling 12 %
 7

 What activities specifically do you consider to be the most important ones in the implementation
project?

BLUEPRINTING 14

CHANGE MANAGEMENT 9

TRAINING (KEY USERS AND END USERS) 13

PROJECT PREPARATION AND PLANNING 9

CORRECT UNDERSTANDING OF BUSINESS

PROCESSES REQUIREMENTS 9

TESTING 17

 Blueprinting 20 %
 Change management 13 %
 Training (end users and key users) 17 %
 Project preparation and planning 13 %
 Correct understanding of business processes requirements 13 %
 Testing 24 %
 8

 In your opinion, what part of the implementation project is the most important?

PROJECT INITIATION AND PLANNING 25

SIZING AND BLUEPRINTING 26

REALIZATION 3

FINAL PREPARATION 1

GO LIVE 0

 Project initiation and planning 45 %

 Sizing and blueprinting 47 %
 Realization 6%
 Final Preparation 2%
 Go Live 0%
 9

 In your opinion, what part of the implementation project is most likely to go wrong?

PROJECT INITIATION AND PLANNING 21

SIZING AND BLUEPRINTING 26

REALIZATION 3

FINAL PREPARATION 3

GO LIVE 2

 Project initiation and planning 38 %

 Sizing and blueprinting 47 %
 Realization 6%
 Final Preparation 6%
 Go Live 3%
 10

 In your opinion, what is the most usual cause of problems/difficulties in implementation projects
(potential answers are for example human error, technical difficulties, not paying enough attention
to an activity,...)? Please try to be as specific as possible.

CHANGE MANAGEMENT 10
MASTER DATA ERRORS 3
LACK OF TOP MANAGEMENT SUPPORT 5
TEAM NOT PROACTIVE 3
PROJECT TEAMS NOT DEDICATED 11
WRONG UNDERSTANDING OF BUSINESS… 10
NEGATIVE ATTITUDE TOWARDS CHANGE 6
COMMUNICATION ISSUES 5
POOR TRAINING 11
EMPLOYEE OVERLOAD 3
INCORRECT SCOPE ESTIMATE/ASSESSMENT 5

 Change management (poorly addressed) 14 %

 Master data errors 5%
 Lack of top management support 7%
 Team not proactive 5%
 Project teams not dedicated 15 %
 Wrong understanding of business requirements 14 %
 Negative attitude towards change 8%
 Communication issues 7%
 Poor training 15 %
 Employee overload 5%
 Incorrect scope estimate/assessment 7%