Crossing the Great Divide: Moving from Implementation to Effective SupportSession 2604

Stacey WillnerPort Authority of New York and New JerseyTechnology ServicesCustomer Technology Manager

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Outline

• Background

• The process of selecting a service provider

• Daily life with an integrator

• Adding to your SAP environment

• Wrap-up

Outline

•Background• The process of selecting a service

provider

• Daily life with an integrator

• Adding to your SAP environment

• Wrap-up

Background

To identify and meet the critical transportation infrastructure needs of the bistate region's businesses, residents, and

visitors: providing the highest quality, most efficient transportation and port commerce facilities and services that move people and goods within the region, provide access to the rest of the nation and to the world, and

strengthen the economic competitiveness of the New York-New Jersey metropolitan

region

Mission Statement

Port Authority Facilities

Our SAP Environment

Version • SAP 4.6C (upgraded 3rd qtr 01)

Modules• FI-CO (GL, AP, AR, Special Ledgers)• MM (Procurement & Materials Management)• AM, PS• Workflow • CFM (implemented 1/2002)• ItutorNOTE – We use PeopleSoft for our HR & Payroll

Technical Environment• Oracle database running on Sun Solaris Unix

Our SAP environment (Continued)

1200+ named SAP users

– 600 Requisitioners – 300 Approvers – 300 Recipients – Good Receipts and Service Entries – 600 Report and Inquiry – 200 Core department Power Users in the Procurement &

Financial Departments» Buyers, AP, AR, Accountants

Our SAP environment (continued)

• Business Owners– Comptroller’s Department– Procurement Department– Treasury Department

• Custodian– Technology Services

• Other Parties– Audit, End Users

Outline

• Background

• The process of selecting a service provider

• Daily life with an integrator • Adding to your SAP environment• Wrap-up

Cracking the Code

• ASP – Application Service Provider• AMS – Application Maintenance Services• SLA – Service Level Agreements• RFP – Request for Proposals

‘Outsourcing’ versus ‘Rightsourcing’Not giving up control or responsibility

Timeline

– Traditional SAP ASAP implementation 1998– Traditional support model 1999– Outsourced AMS model 2000+

SAP Implementation Transition Vendor Support

In-house support primaryImpl. support

primary

Traditional Support

1/98 1/4/99 2/2000 5/2000

2/2001 Initial Maintenance list

9/11

8/01 Upgrade

1/02 CFM impl.

5/02 Web Vendor Reg

Original Support Configuration Model

C o nfig u ra tionT e s tingS u b je c t M a tte r E xp e rtsN e e ds D ete rm in a tion

B u s in e ss O w n e rs

A B A P sup p o rtB a s is S u pp o rtA u d itW o rk flo w sup p o rt

T e chn o lo gy S erv ices

AMS Support Configuration Model

S u b je c t M a tte r e xp e rtsP ro b le m Id e n tif ica tionN e e ds D ete rm in a tionT e s tin g / F in a l A cce p ta n ce

B u s in e ss O w n er

A B A P sup p o rtB a s is su pp o rtF u nc tio na l co n fig u ra tionW o rk flo w S up p o rt

A M S pro v id er

M a na g e m e nt O vers iteT e s tingS e cu irtyA u d itL iasonE n d Use r C o m m u n ica tion

T e ch n o lo g y S e rv ices

Business Drivers

– Consistent Costing – Expertise & Resources– Corporate Direction / Strategy

• Headcount reductions• Do ‘more with more’

– Industry Readiness • The technologies, tools and market exist

AMS objectives

-Deliver high quality application support services 24 x 7

-Responsive delivery of application enhancements while maintaining the integrity of the production application

- Responsive identification and implementation of upgrades and fixes to ensure application currency

- Continuous measurable improvement in the productivity and quality of the AMS services

- Consistent maintenance methodology

- Maintenance of integrity, availability and confidentiality of system and corporate information

- Cost containment / reduction

- Responsiveness to changes in demand for services

AMS componentsMaintaining and enhancing the customized SAP

environment

Troubleshooting Problem Resolution Coaching

SAP configuration R/3 Admin Capacity Mgmt

Enhancements Authorization Admin ABAP programming

Fixes / Patches Database Admin Best Practices

Release Control Operating System Admin. Security Admin

Disaster Recovery PC / Client GUI support

Upgrade (Optional at our discretion)

Expanded Functionality (Optional at our discretion)

Metrics, QA activities, Test scenarios, Documentation

How we crossed the great divide A step by step approach

1. RFP2. Vendor Selection3. Negotiation4. Contract5. Transition Process6. Contract Management (Ongoing)7. Operations management (Ongoing) 8. Looking forward

Process Timeline

STEPSTEP TIMEFRAMETIMEFRAME

• RFP 2 months for preparation• Vendor Selection 3 months *• Negotiation 3 months *• Contract 3 months *• Transition Process 3 months• Contract Management ongoing• Operations management ongoing

* Some Overlap in tasks & timeframes

RFP

Pre-requisites and Qualifications– Level of Revenues from SAP maintenance activities– Number of years business experience – number of years in

ASP – Financial reports / Financial Stability

Experience Fulfilling Contracts of Similar Size and Scope

Management Structure and Approach

Staffing Capacity– Workforce management plan

RFP

Financial Proposal– Fixed versus Variable rates– Alternative proposals

Additional components– Upgrade– New Modules

Additional Thoughts– To include hardware or not– partnership / sub-contractors

RFP

Provide information to let the vendor know how custom and how extensive your installation is so they can most effectively staff the effort

- Repair Log - Report Tree

- ABAP programs (‘Z’ programs) - SAPscripts

- Function modules - ALE/IDOCs

- Tables - Batch jobs by platform

- Structures - Workflow customizations

- Views

RFP

Sample Evaluation Criteria

• Work Approach

• Management Commitment / Firm Approach

• Technical Competence

• Cost

Vendor Selection

Objective

To chose the best qualified vendor that provides the level and breath of services you require in a manner most

effective in your corporate culture and aligned with your strategic direction with enough flexibility to remain an

effective partner in the mid to long term.

Vendor Selection

Points to consider / discuss

– On site versus offsite models• Cost, corporate culture are important to evaluate

– Local resources versus traveling resources

– Small company versus Large company

• Bench strength and depth of expertise versus being a

more strategic customer

– Maintenance skills versus Implementation skills• ‘Consultants’ versus ‘Support’

Vendor Selection

– Who provides what supplies• Do not underestimate the cost of providing PCs, office

space, supplies, support administrative personnel

– Security & Remote Access• Who will be allowed access to your system, what

functions will be done remotely, will you require named users for authentication

– Inclusion of Hardware or only Software

– Flexibility – future growth• Ability to get more skill sets, agreed upon hourly rates,

packages

Vendor Selection

– Economies of scale if you can commit to additional resources or work at the onset

– Additional bench strength• QA program, established metrics, additional software,

upgraded monitoring, established best practices groups

Question

Do you have effective internal processes to support this model?

Vendor Selection

Onsite versus offsite models

• Cost is reduced with an offsite model and you can leverage ‘part time’ experts.

• Need to evaluate this tradeoff in terms of your corporate culture and audit and security considerations

• A hybrid – Retain an onsite Engagement Manager as your focal point to

manage communication between the offsite team and your ‘onsite’ customers.

– Use onsite resources to transition into the offsite model as they developed some company specific business knowledge.

– Plan for as needed onsite visits.

Contract Negotiation

• Proposed Engagement Manager & Key staff are named and are present in discussions– Important to interview them

• Think about how important the following are to your organization – Existing backlog - Maintenance List– Hot packs – how far behind are you– Audit / Security concerns– SLAs– Coordination with other vendors– Backup / recovery & Disaster Recovery– Communication skills

• Ask what isn’t included

Outline

• Background• The process of selecting a service

provider

•Daily life with an integrator

• Adding to your SAP environment• Wrap-up

The Contract• Duration

– Non trivial effort, so set it up for the long term without boxing yourself in

• I.e - 3 years with 3 one year options at company discretion

• SLAs– Keep them limited to critical processes

– Keep them realistic

– Include Liquidated damages (and follow through when required)

– Examples • Response Time• Resolution Time• System Availability• Critical batch processes / interfaces (I.e. check production, cash

receipt, preparing service provider files)

TransitionSupport Team composition

Vendor – effective communicators, analysts, documentersInternal Staff – know business, positive attitude

Define Roles & ResponsibilitiesSet boundaries

Redefine roles of internal staff

Different Skill set required - Customer Service focusFrom ‘hands on’ to management / QA responsibilitiesFrom ‘hands on coding’ to ‘hands on presentations’

Some Challenges Define & Document where responsibility starts/ends

Ex vendor tests in Dev – Customer in QAScope – how you define this will determine the nature of future discussions

• break fix is in scope and included – enhancement is paid for extra • contract is for a certain head count versus level of work

Transition

Do not underestimate the extent and nature of this change to your internal staff

People management skills are equal to if not more important than technical project management skills in

this phase

-- New skill set --

Preparing and giving presentations, Writing newsletters, Maintain SAP intranet site, Customer Service, Perform quality oversight, Testing,

Auditing vendor tasks & access, Securing agency assets

Contract Management

Overall objective Ensure effective change management & communication

• Contract management meetings• Change management meetings• Functional prioritization meetings

Contract management meetings

– ParticipantsParticipants• Mgr SAP new business, SAP Project Manager• Mgr SAP support, Customer Service Manager, SAP Team Lead • Vendor Engagement Manager, Vendor BASIS lead

– What is discussedWhat is discussed• Last week accomplishments & Planned accomplishments• Issues• Staffing• SLA adherences• Cost and other contract items

– Important to keep this documented– Vendor should prepare this material and present it to customer

Change Management meetings

• ParticipantsParticipants– Vendor – Engagement Manager, BASIS lead– Technology Services – MM lead, FI lead, Workflow lead, Team lead,

BASIS lead, Training Manager– Customer Business Owners – 1 from each key area

• ModeratorModerator– Technology Services Customer Services Manager

• What is discussedWhat is discussed– Any and all operational issues– Scheduling– Cross-functional issues

This is a key intra-departmental forum for information exchange

Prioritization meetings

• Participants

– Vendor Functional Lead, Business Owner, Technology Services Lead liaison

• Purpose

– Limited resources on both sides, AMS and Agency, so must prioritize both Maintenance and Enhancement work.

– Discuss what is most critical to be worked on, status of testing and when to move into production

– Must manage the fact that maintenance will usually take priority over enhancements

These are detail oriented, task order specific meetings

Outline

• Background• The process of selecting a service

provider• Daily life with an integrator

•Adding to your SAP environment

• Wrap-up

Operational Fulfillment

• Maintenance process (break fix items, patches, etc.)

• Enhancement process (new functionality)

• Upgrades

• New modules / functionality

• Integrate 3rd party products

• Extraordinary events

Maintenance Process

• Problem is discovered [PA]

• Entered in Vendors Web Based tracking system [PA]

• Support resource contacted & acknowledgement is Issued [AMS]

• Clarification in person , via email, or on the phone [AMS & PA]

• Solution developed and documented [AMS]

• Testing and Transport [PA]

• Fix moved into Production [AMS]

Enhancement Process

• Enhancement is Needed (i.e. A New Report or Interface) [PA]• Call is made to Lead Support Resource [PA]• Meeting (s) on Business Requirement [Both]• Estimate of time and a reiteration of requirement is presented [AMS]• Sign off, as accepted work [PA]• Work is Done [AMS]• Testing & Transport [PA]• Internal Notification – i.e. Newsletter Advising the Agency of the

new Functionality [PA]• Move into Production [AMS]

Upgrade

• Significant Advantage – Familiar with environment

• Cost – prenegotiated price is best– fixed price, favored rates– method to compare price

• 3rd party feasibility or scoping analysis• Timing

– Get some AMS accomplishments before embarking on upgrade

• Challenge– Keep ongoing focus / SLAs

• Team– Keep interest / learn new things

New modules / New functionality

• Team – Make sure resources have expertise in module– Interview them

• New SLAs– Will require contract modification– Keep it specific to new module– If possible, negotiate concurrent to SOW

Integrating 3rd party products

• Key – Multiple vendors; multiple contracts

• Watch out for overlapping responsibility / function or missed responsibility / functions

• Certified add on products– Method of integration– Impact on system performance / adherence to SLAs

In general….

• Risk of vendor complacency– Need to maintain balance

• Business knowledge vs. SAP skillset– Your staff - business primary / SAP secondary– Vendor staff - SAP primary / Business secondary

Extraordinary events

9/11

Impact of 9/11

• Over 2000 Port Authority employees worked at the World Trade Center

• On 9/11, The Port Authority of NY & NJ lost 75 employees (police & civilians), including our Executive Director, Neil Levin,

• All paper records at the WTC were lost

• Phone lines and antennae on the roof of WTC destroyed

• Network connectivity destroyed

SAP and 9/11

• Just completed upgrade to a new release; all staff had not been trained; new processes

• SAP Online HELP server was destroyed

• Printed manuals were at a premium

• Had limited computer access.

• Staff disbursed; temp offices; life and security took precedence

• Limited time / ability for data entry.

• Competing priorities; Constant reprioritization

SAP, 9/11 and our AMS provider

• AMS staff co located with us, went through it with us

• They jumped right in with us – Provided staff from orig implementation– Leveraged business relationships with other 3rd party vendors– Worked with us to do immediate triage

• Checks - new forms, new location• Audit reports• New account codes• Changed workflow

• Some specifics– SAP assigns PO and contract numbers at time of input – vendors

needed a PO number at time of order– Developed special numbering scheme that separated emergency

WTC-related purchases from all others – Plant Changes

Disaster Recovery

• Importance of planning and preparation for disruptions

• Importance of testing disaster recovery plans as well as business and continuity preparations.

• Include off-site storage of computerized information, forms, contacts etc.

• Off site servers • Retain Disaster Recovery services• Test, test and test again!!!

Looking Forward

Think about the future –

‘Hope for the best, prepare for the worst’

What do you need at the end – or – how do you develop an effective knowledge transfer

• Consistent monitoring• Keep internal staff involved in the process• Documentation• Investigate external 3rd party review

KEY CONCEPTS

This is an ongoing process that needs careful ongoing monitoring, nurturing and

course correction to succeed.

You are not only managing to a contract, you are maintaining a relationship.

It is not one shot work.

Outline

• Background

• The process of selecting a service provider

• Daily life with an integrator

• Adding to your SAP environment

•Wrap-up

Did we meet our stated objectives?

• Driver -- Corporate Strategy / DirectionDriver -- Corporate Strategy / Direction– Met – We are not on the front lines anymore; reduced headcount– But – Agency develops a more limited scope of understanding;

Different career / growth path for remaining resources

• Driver – Gain Expertise / Resources Driver – Gain Expertise / Resources – True - Gained Best practices & solid experiences– But - Still must deal with vendor staff turnover, qualifications etc;

Lack of glamour in a support environment

• Driver - Consistent costingDriver - Consistent costing– Met – We do have standard costing

• Driver - Industry TrendsDriver - Industry Trends– Met – The ASP/AMS model does exist – But - It is undergoing growing pains changing / adapting to a more

refined business model

Pros & ConsPros

• A Knowledgeable base of experienced resources skilled in the SAP functionality areas of expertise, BASIS, operating system and ABAP coding.

• Outstanding Work is tracked and coordinated centrally. Cross Module implications can be easily uncovered.

• Standardized tracking and addressing methodology.• Fast Turnaround. We completed 98 maintenance and

enhancement items in a 9 (nine) month period. Some quite complex.

• Solid Methodology and procedures• Solid Project Management• Leverage Solution Centers, central call centers

Pros & ConsCons

• Communication Issues - Misinterpretation of Requirements. Need to be exceptionally detailed. Arguing Semantics. Definitions: Maintenance vs. Enhancements. Slower Communication

• Lack of Company Specific Business Knowledge.• Time Constraints: Business Client very active in the process &

Takes a lot of time. • Clearly communicating Specifications (Need to be much more

technical than previously-when dealing with internal staff and legacy systems)

• Testing. Full testing from developing test plans and executing and documenting. Some assistance available from TSD, but only the business functional person can evaluate the results as pass or fail.

• Write and develop newsletters and educational materials

Lessons Learned

• The process is more intensive than you think. You will need more internal staff for contract management, customer liaisons, etc.

• Interview the proposed resources – ask probing questions about your environment to ensure a good fit.

• Maintain effective communication with all parties – it is not a static environment it will change – be prepared.

• Keep an effective tracking system. • Be flexible – be open to new ways of doing things. • Allow the contract to adapt to new situations • Be willing to change corporate policies / practices where feasible.• Learn from best practices.

Current Issues

– Vendor to vendor relationships

– Roles & Responsibilities• Refining the liaison role• Effective Testing

– Security

In Conclusion

…while it is a delicate balancing act…

…we are very satisfied with the results

Questions

Comments

Thoughts

Q & A

Carmen ReinCarmen ReinPort Authority of NY & NJ ProcurementProcurement Systems & Support Manager212-435-3922Crein@panynj.gov

Stacey WillnerStacey WillnerPort Authority of NY & NJ Technology ServicesCustomer Technology Manager212-435-3343Swillner@panynj.gov

Contacts

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Session Code: 2604