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
Agenda
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. 5. 6. 7. 8.
Real Pains! Possible Org Structure model to combat drawbacks Possible jobs, Functions and its related responsibilities RESULTS AND DISCUSSION of some of the hypothetical studies A Recommendation to SAP AG
Crisis Yields Opportunities
In this economic downturn, business is slow everywhere. The Focus Howhave to make SAP ato serve. Product Customer-service specialists fewer customers designers are seeing their project portfolios shrink. Computer successful implementation? programmers are spending fewer hours writing code.
If you're in a similar position inis your unit, don't let downtime become The talk now the Cost wasted time. Use it to work intensively and deliberately on strengthening your managerial knowledge and skills.
How to sustain it and best utilize it?
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
Key Benefits of SAP
SD MM PP FI CO AM
SAP R/3
QM PM HR IS PS
IM
The Focus now is: How to sustain the Business Units implementation? Integration. Business Process Control Productivity
Agenda
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. 5. 6. 7. 8.
Real Pains! Possible Org Structure model to combat drawbacks Possible jobs, Functions and its related responsibilities RESULTS AND DISCUSSION of some of the hypothetical studies A Recommendation to SAP AG
Questions?
Is there any risk in regard to the system sustainability?
Business Process
Are we facing problems in day to day operations?
Questions?
G. Manager
Have we considered the existing Org Structure after SAP implementation?
Finance
IT
HR
How are We satisfied?
Key Sustainability Components!
Technology SAP System Business Business Processes
People Resources Request
Agenda
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. 5. 6. 7. 8.
Real Pains! Possible Org Structure model to combat drawbacks Possible jobs, Functions and its related responsibilities RESULTS AND DISCUSSION of some of the hypothetical studies A Recommendation to SAP AG
Model of Typical Org Structure
Same Organizational Structure Before & After SAP Implementation
Shared Services Concept
President
Shared Services
Production Department
IT
FINANCE
HR
Plant A
SS Structure +SAP committees
SAP Power User SAP Business Owner
Main Responsibilities : Approve Business processes changes
SAP Steering Committee
Main Responsibilities: First Line Support
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
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. 5. 6. 7. 8.
Real Pains! Possible Org Structure model to combat drawbacks Possible jobs, Functions and its related responsibilities RESULTS AND DISCUSSION of some of the hypothetical studies A Recommendation to SAP AG
Impact of the typical Org Structure after SAP (Real Pains) Pain: limited use of SAP best
Pain: Big resources needed for the support & Enhancements has no single owner
Support & Enhancement
practice, Diversion from base configuration
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
?
Requests
Changes
SAP Utilization
Pain: Who should do the test and verify?
Implications: Backlog increase
Sales
R&D
User Involvement & Training
Pain: User turnover and the need for proper training
Purchasing
Materials Management
Production
Pain: Coordination between functions like payroll & finance, Material master & other master data admin
Implications: People (IT, Business)as a resource need to make a lot of efforts to coordinate the integration
Business Processes Integration & coordination
Implications: IT people to take the responsibility
Change Management Role
Preparation Blue Print Realization Final Preparation Go-Live & Support
Agenda
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. 5. 6. 7. 8.
Real Pains! Possible Org Structure model to combat drawbacks Possible jobs, Functions and its related responsibilities RESULTS AND DISCUSSION of some of the hypothetical studies A Recommendation to SAP AG
Possible Org Structure & Job design
Task requirements
Technology
Job design factors
Ability and skill
Managerial decisions: 1.Division of labor 2.Departmental bases 3.Departmental size 4.Delegation of authority
Dimensions of organization structure: 1.Formalization 2.Complexity 3.Centralization
Organizational effectiveness: 1.Production 2.Satisfaction 3.Efficiency 4.Adaptiveness 5.Development 6.Survival
Technology Environmental uncertainty
Organization design factors
Strategy
Managerial choice
Fig.1 Organizations:Behavior,Structure,Process by J.Gibson
Technology
as an important Factor
Job Responsibilities
Technological factors Social setting differences
Task factors
Job analysis
Job design
Perceived Job content
Job performance
Human factors
Individual differences
Fig.2 Conceptual Model of Job Design & Job performance by J.Gibson
Possible Org Structure & Job design
SAP Section or Department?
SAP Competency Center
System Utilization Department
SAP Training Unit
Business Analyst Job
Power User, Key User Job
Business/Process Owner Job
SAP Trainer Job
SAP Org Structure Fit
SD MM PP FI
SAP R/3
IS
CO AM
PS IM
x Fit Z Y A B
QM PM HR
Process
Business Process
User
Data
Agenda
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. 5. 6. 7. 8.
Real Pains! Possible Org Structure model to combat drawbacks Possible jobs, Functions and its related responsibilities RESULTS AND DISCUSSION of some of the hypothetical studies A Recommendation to SAP AG
Hypothetical Studies*
ERP System Impact on Organizations
SAP system will affect organizations & improve those areas that are
IP model
tied to organizational effectiveness measures related to IP model
SAP system will affect organizations & improve those areas that are
RG Model
tied to organizational effectiveness measures related to RG model
A successful implementation of ERP system has to be followed by
HR Model
organizational changes efforts that will improve org effectiveness associated to HR model
A successful implementation of ERP system has to be followed by
OS Model
organizational changes efforts that will improve org effectivness associated to OS model
IP:Internal Process, RG:Rational Goal, HR:human Relations, OS:Open System
*Study by Jonas Hedman & Andreas Borell 2003
Recommendations for SAP AG
SAP to consider the org structure & Job design options as part of best practises packages.
Thank you!
