SAP software and applications are integral to running some of the world’s largest businesses and governments. The software company provides highly complex solutions to solve very complicated problems. And that is expensive. It’s not uncommon for an SAP-using organization to spend approximately one million dollars to manage SAP change.
Yet, most companies are unaware of the ‘true’ cost of change management, which can significantly impact their bottom line and ability to innovate. Known and hidden costs of SAP change can spiral out of control and flatline the delivery of faster, safer, and higher-quality applications and services.
In this blog, I will reveal the hidden costs of SAP change that can cause organizations to overspend without realizing it.
You will learn:
- How the true cost of managing SAP change can hit you hard in the back pocket
- The potential risk of downtime and inefficiencies associated with lack of control and hidden costs
- Why automating SAP change is critical to cost control
Managing SAP change is expensive
Regardless of your size, the complexity of SAP systems, or your industry, managing SAP change involves substantial costs.
Our data from over 25 years of providing automated solutions to SAP users reveals that it typically costs $150 – $300 to manage each SAP change.
It is crucial to understand that these costs are overheads, not development configuration and testing costs.
This is the cost of managing SAP changes from initial approvals through testing to migrating the change to Production. Some costs, such as rates for resources, are established, but others are hidden and can strain your IT spending.
Any unexpected downtime due to changes breaking in Production or inefficient processes can cause the costs of managing SAP change to soar.
Understanding the hidden costs of SAP change
Significant costs that can derail projects or contribute to a blowout in budgets for managing SAP change arise from several areas, based on our experience.
From managing transport lists and migration activities to change control board meetings, seeking process approvals, retrofitting efforts, governance and policing, and Production issues, these hidden costs can become a massive burden if not understood.
Overlooking these and other factors can hinder the development, upgrade, and maintenance of SAP applications.
The ‘true cost’ associated with managing SAP changes involves factors like approval times, migration complexities, and error fixings, and can be categorized as follows:
- Process management costs
- Change management costs
- Inefficient management of process and change activities
Let’s look at each of these.
a) Process management costs:
Change is moved from a business request to Production following a predetermined process, which includes a series of steps and approvals.
Our industry research indicates that over 80% of all SAP enterprise application changes are effectively managed using five or fewer unique processes.
The number of processes your team develops and the number of steps in each process determines the cost of managing change.
Consider too few processes. The problem with this approach is two-fold. High-risk change makes its way to Production with too few controls. As a result, Production issues occur, and the cost of managing SAP change increases.
On the other hand, simple, almost pre-approved changes go through the same lengthy process as all others. Identifying and moving these changes to Production with few controls saves significant costs.
b) Change management costs:
Managing change, including process management, is closely associated with controlling the technical aspects of the change.
You need to consider basis transport management activities, parallel development tracking, retrofitting or rekeying of changes in N +1 development systems, testing, the time to migrate the changes (transports) to target systems, etc.
In this scenario, costs will vary depending on the volume of change managed and the degree of control required.
c) Inefficient management of process and change activities:
The objective of both process and change management is to control better the quality of changes being delivered to Production and reduce hidden costs.
Failing to meet the challenge effectively can result in Production system issues such as unscheduled downtime or an application becoming unavailable or not working correctly.
These issues can cost your business thousands of dollars per hour to millions depending on the duration and the resources required to recover Production systems or redevelop (fix) applications.
Automation is crucial to cost control
Improving process efficiencies and cutting unnecessary costs is not just a good practice; it’s a necessity. It is critical to staying on time and within budget, whether delivering a project or business as usual (BAU) changes.
Managing SAP change has traditionally been very labour-intensive. The problem is that manual activities, such as preparing change or transport status reports, increase the cost of change management and the risk of human error.
Automating SAP change can reduce costs dramatically by eliminating risky manual tasks, minimizing delays, and accelerate change without putting pressure on your budget.
With a sophisticated SAP change automation solution like Rev-Trac Platinum, there are fewer bottlenecks, faster change approvals, and massively reduced systems downtime. Automated workflows enforce consistent processes, so changes migrate from development to Production with minimal disruption.
Adopting automation ensures SAP changes are tracked and well-controlled. The level of control and tracking maintains quality, preserves system integrity, and keeps costs – known and hidden – from spiralling upwards.
The Bottom Line
Want to dig a little deeper into SAP change costs and how to uncover your savings potential? Check out the SAP change savings calculator on our website.
For more information on the hidden costs of SAP change management and regaining control with change automation, contact one of our in-house experts.
