SAP Thought Leadership Paper Education

Transcription

1 SAP Thought Leadership Paper Education Balancing In-House vs Consulting Expertise A practical approach to optimizing third-party costs for implementing, supporting, and extending your SAP landscape

2 Table of Contents 3 Overview 4 Consultancy a Balancing Act 5 Identify Your Critical Skills 6 Assess and Acquire Required Expertise 7 Scope Carefully 8 Put in Place Sustainable Training 9 Conclusion Learn More 2

3 Despite the economic climate, the use of 3rd party resources continues to grow. Whilst they have a part to play in delivering successful projects, the danger is that organizations can become over-reliant on them, leading to potential knowledge gaps and higher costs. However, by carefully assessing the skills, knowledge, and expertise needed, and putting in place sustainable development programs, organizations can reduce their exposure to consultants and optimize costs. 3

4 Consultancy a Balancing Act Consultancy spend is a hot topic, especially when the threat of redundancy hangs over permanent staff. Take the case of the British Government, which has come in for criticism recently. In a news report dated 15th August 2013, the BBC reported that Central government spent more than 500m on consultants and short-term staff last year, despite a crackdown. 1 And this at a time when the report also stated 287m was spent on staff redundancies. In situations like these it s not surprising that stakeholders question whether the use of consultants is necessary. In this white paper we look at how you can optimize your use of third-party resources while ensuring projects are implemented successfully, properly supported, and capable of being upgraded in the future. At the same time, in a report published by Source Information Services in January 2013, only 14 per cent of the organizations surveyed said their expenditure on technology consultants would fall compared to 56 per cent who thought it would grow. One CIO in the services sector commented: Big data and analytics are important subjects for us and we will need consultants in this field in the future. 2 Clearly consultancy is a growing industry and, of course, there are valid reasons for employing them. However, it is a balancing act. The judicious use of thirdparty resources can accelerate project deployment, provide knowledge transfer, and deliver internally unavailable technical expertise. Equally the inappropriate use of consultants can lead to budget overruns, reduced benefits, exposure to knowledge gaps, and even project failure. 1. Source at 2. Source at Trends shaping the consulting industry over the next 12 months, January

5 Identify Your Critical Skills Reducing third-party costs depends on knowing when to use consultants and how best to deploy them. In turn that is dependent on knowing what you want to achieve from your project and how it will be maintained and supported. For every project you undertake there should be a business case that highlights the outcomes you expect to gain from implementing the solution. It may be an improved ability to upsell and cross sell to customers, it could be reduced purchasing spend, it may be faster financial reporting. In reality, for a major project, there will be a large number of outcomes. But, whatever the objectives are, it is important to identify the endstates that you are looking to achieve. Once you have identified these you are in a position to start thinking about the skills that are critical to your business and there will be two areas to consider. IT Requirements The second is your IT requirements. How you ultimately intend to maintain and support the solution has a big impact on the critical skills you need. If everything will be done in-house postimplementation, then you will very likely need both functional and infrastructure experts, as well as solution architects and highly specialized support teams. On the other hand, if you have decided to outsource the running and maintenance of your solution, you are unlikely to need a large team. However, don t fall into the trap of thinking you don t need any IT resource. Having people who understand both your business and your solution is imperative, to ensure you can plan future upgrades/ developments to accommodate changing business requirements. Business Users The first is the business users of the new solution. In order to achieve the expected outcomes you will need to provide them with the relevant knowledge and skills for them to work with the new solution. The question is how many of these are routine simply using the new solution and how many also rely on an understanding of the unique aspects of your business. The latter are critical skills, which external consultants are unlikely to have. So you will want to ensure that you have the resource internally to deliver and refresh the skills as needed in the future. 5

6 Assess and Acquire Required Expertise Now that you understand the critical knowledge and skills that will be needed in the future you can look at the expertise you already have, the expertise you need and how you will acquire it. Remember that when assessing the expertise you need it may make sense to look beyond the existing project and think about other areas where the expertise can be deployed. For example, project management may be a critical skill but it is difficult to justify a full time project manager for this one project. However, if lots of projects are planned over the coming months or years, it may justify recruiting someone. When it comes to acquiring expertise you basically have two options open to you. You can hire it in or develop it internally. Hiring In Resources In some instances hiring could be the favored route, for example where developing the competencies in existing staff would take too long or resources are already at full stretch. However, in the current economic climate, obtaining the necessary headcount increase may be difficult. It may also be tough to offer the salaries that individuals with some of the scarcer skillsets would expect. Developing Existing Staff Using existing capacity within the organization, by retraining and redirecting job priorities, is often the most flexible method of creating internal capability without increasing headcount. It allows you to use existing workforce capacity to pick up implementation/ upgrade activities in conjunction with existing work priorities. Developing existing staff can be done through formal and informal education programs as part of the implementation plan. But it can also be done through knowledge transfer from consultants during the implementation process. This will, however, have an impact on the consultants you opt for. Various Engagement Models Consultancies offer varying engagement models. Some companies offer a pyramid resource model. They staff their projects with exceptionally bright but inexperienced graduates who are supported by more senior and experienced consultants. This model provides limited learning opportunities for internal staff and knowledge transfer will be basic. If knowledge transfer is important make sure you specify experienced, highly skilled consultants. The cost may be higher in the short term, but you will have less need to call consultants in on an ad hoc basis in the long term. When it comes to acquiring expertise you basically have two options open to you. You can hire it in or develop it internally. 6

7 Scope Carefully Having decided on your critical skills and the expertise that is required, you are now in a position to start planning the implementation. At this stage it is imperative to be absolutely crystal clear about the scope of the project and who is going to deliver the various tasks. If you aren t, third party costs can easily increase exponentially. Even if you agree a fixed price program paid on results, you need to be sure you have contracted for the right scope, otherwise you could be hit with very expensive day-rate change requests. You should also have a baseline measurement plan of the benefits you expect to gain, so you can measure them at the end of the project to see if they have been achieved. 7

8 Put in Place Sustainable Training You now know where you will be using consultants, where they will be providing knowledge transfer and the additional skills and knowledge you need to acquire as part of the implementation. Armed with this information you can put in place a learning strategy. More than likely this will involve a combination of formal and informal learning delivered by both internal and external trainers and cover: Foundational Knowledge and skills: These are the core skills and knowledge needed to perform a role. In IT deployments, vendor training is normally the best source of foundational knowledge and skills and it is usually done and reinforced intensively over a short period of time. Experiential Knowledge and Skills: Experiential knowledge and skills are developed by practical application in a real-life environment. Experiential learning is usually a mix of informal coaching by knowledgeable individuals, formal workshop sessions, and on-thejob learning. It is less likely to be supported by a consulting partner. Advanced Knowledge and Skills: This extends experiential knowledge and skills to an expert level by continued learning and knowledge refresh. This is very often carried out by e-learning and just-in-time training. However, training at implementation is not the end of the story. Over time, applications, technology, and best practices change, people leave, and knowledge and skills erode. So it is absolutely vital to put in place a sustainable and relevant training program. By ensuring skills and knowledge are maintained and developed, future consultancy spend is reduced or even eliminated. Failure to keep skills and knowledge current and fresh will inevitably lead to future consulting bills for retraining or carrying out activities staff should be capable of completing....it is absolutely vital to put in place a sustainable and relevant training program... 8

9 Conclusion The use of consultants is a balancing act. Used judiciously they can provide valuable skills and knowledge to accelerate return on investment. However, it is all too easy to become over dependent on them, racking up costs and losing control of critical business functions. However, adopting a disciplined and pragmatic skills and knowledge planning program for IT initiatives enables you to optimize your spend on third party resources while successfully delivering, maintaining, and supporting major projects. LEARN MORE At SAP we ve many years of experience of designing education and services solutions that deliver the right internal and external skill sets for our customers. Our tools and services in this area include the SAP Learning Hub, where individuals can get fast, easy access to up-to-date learning materials for training on the go. Users can download the latest curriculums from the SAP Education organization online. They can also identify the most engaging resources with our essential reports on learning consumption and progress. To learn more about how SAP can help you optimize 3rd party costs please visit training-education/learning-software-svc/ learn/solutions/hub/index.html...adopting a disciplined and pragmatic skills and knowledge planning program for IT initiatives enables you to optimize your spend SAP AG or an SAP affiliate company. All rights reserved

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