impact of sap implementation on org structure

The Impact of SAP

Implementation on

Organizational Structures

Yousef Ahmed Al-Sharif

IT, Section Head,SAP

Sipchem, Saudi Arabia

10 March 2009

SUG-MENA 2009, March 9-11

Manama, Bahrain

1. SAP importance as one of the leading edge ERP

2. SAP sustainability in our organization?

3. Model of typical Organizational structure (Hierarchy)

Normal Functional model

Shared Services model

Shared Services model with SAP Business Owners and Users committees

4. Real Pains!

5. Possible Org Structure model to combat drawbacks

6. Possible jobs, Functions and its related responsibilities

7. RESULTS AND DISCUSSION of some of the hypothetical studies

8. A Recommendation to SAP AG

Agenda

The Focus How to make SAP a

successful implementation?

The talk now is the Cost

How to sustain it and best utilize it?

In this economic downturn, business is slow everywhere. Customer-service specialists have fewer customers to serve. Product

designers are seeing their project portfolios shrink. Computer

programmers are spending fewer hours writing code.

If you're in a similar position in your unit, don't let downtime become

wasted time. Use it to work intensively and deliberately on

strengthening your managerial knowledge and skills.

Practice will pay off in the long run -- if you do it right. Apply these

principles

Make it a habit. Then, when it's time to perform for real (delivering a presentation, conducting a performance review),

you won't feel the pressure.

Experiment with making small changes that add up. Get feedback (for example, from a trusted peer) on whether you're actually improving.

--- Harvard Business Publishing

Crisis Yields Opportunities

Business Units Integration.

Business Process Control

Productivity

The Focus now is: How to sustain the

implementation?

Key Benefits of SAP

SD

MMPP

QM

PMHR

FI

CO

AM

PSIM

IS

SAP R/3

Agenda







4. Real Pains!





Questions?

Is there any risk in regard to

the system sustainability?

Are we facing problems in

day to day operations?

Bu

sin

ess P

ro

ce

ss

Questions?

Have we considered the

existing Org Structure after

SAP implementation?

How are We satisfied?

G. Manager

Finance IT HR

Key Sustainability Components!

Technology

Business

People

Resources Request

SAP System

Business Processes

People

Agenda







4. Real Pains!





Model of Typical Org Structure

Same Organizational Structure Before & After SAP Implementation

Shared Services Concept

President

Shared Services

IT FINANCE HR

Production Department

Plant A

SAP Steering

Committee

SAP

Business

Owner

SAP Power

User

SS Structure +SAP committees

Main Responsibilities:

First Line Support

Main Responsibilities :

Approve Business

processes changes

Main Responsibilities

Guide the SAP

future at the

organizaiton

If such committees & group are not reflected officially in the Organizational

Structure, the burden will be on IT department

Agenda







4. Real Pains!





Impact of the typical Org Structure after SAP

(Real Pains)

Business Processes

Integration & coordination

User Involvement & Training

Support & Enhancement

SAP Utilization

PurchasingMaterials

Management

Production

R&D

Sales

Requests

Pain: User turnover and the need for

proper training

Pain: Who should

do the test and

verify?

Pain: Coordination

between functions

like payroll &

finance, Material

master & other

master data admin

Pain: Big resources needed for

the support & Enhancements has

no single owner

Pain: limited use of SAP best

practice, Diversion from base

configuration

Implications: People (IT,

Business)as a resource need

to make a lot of efforts to

coordinate the integration

Implications:

Backlog increase

Implications: People from IT

department will bear the burden

to call the business owners,

functional managers to max

utilization

Implications: IT People will

lose focus on system

Implications: IT people to take the responsibility

Changes?

Preparation Blue Print RealizationFinal

PreparationGo-Live & Support

Change Management Role







4. Real Pains!





Agenda

Technology Job design factors Ability and skill

Organization design

factors

Dimensions of

organization

structure:

1.Formalization

2.Complexity

3.Centralization

Organizational

effectiveness:

1.Production

2.Satisfaction

3.Efficiency

4.Adaptiveness

5.Development

6.Survival

Managerial decisions:

1.Division of labor

2.Departmental

bases

3.Departmental

size

4.Delegation of

authority

Technology

Environmental

uncertainty

Strategy

Managerial

choice

Task requirements

Technology as an important Factor

Possible Org Structure & Job design

Fig.1 Organizations:Behavior,Structure,Process by J.Gibson

Task

factors

Job

analysis

Job

design

Perceived

Job content

Job

performance

Human

factors

Technological

factors

Individual

differences

Social setting

differences

Fig.2 Conceptual Model of Job Design & Job performance by J.Gibson

Job Responsibilities

Business Analyst Job

SAP Section or Department?

Possible Org Structure & Job design

System Utilization Department

SAP Competency Center

SAP Training Unit

Power User, Key User Job

Business/Process Owner Job SAP Trainer Job

SAP Org Structure Fit

Process User Data

Bu

sin

ess

Pro

ce

ss

x

Z A B

Y

SDMM

PP

QMPM

HR

FICOAM

PSIM

IS

SAP R/3Fit







4. Real Pains!





Agenda

Hypothetical Studies*

SAP system will affect organizations & improve those areas that are

tied to organizational effectiveness measures related to IP model

SAP system will affect organizations & improve those areas that are

tied to organizational effectiveness measures related to RG model

A successful implementation of ERP system has to be followed by organizational changes efforts that will improve org effectiveness associated to HR model

A successful implementation of ERP system has to be followed by organizational changes efforts that will improve org effectivness associated to OS model

ER

P S

yste

m I

mp

act

on

Org

an

izati

on

s

IP model

RG Model

HR Model

OS Model

IP:Internal Process, RG:Rational Goal, HR:human Relations, OS:Open System

*Study by Jonas Hedman & Andreas Borell 2003

SAP to consider the org structure & Job design options as part of best practises

packages.

Recommendations for SAP AG

Thank you!

impact of sap implementation on org structure

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