Developed by:
Jim Buttjer, American Digital Sr. SAP Account Executive, Michael “MJ” Johnson- Director of SAP Solutions
Intro
Three long-time SAP customers walk into a bar. The first customer says: “We’re running SAP S/4HANA. Life is beautiful. We are leading our industry in rolling out new functionality quickly, efficiently, and at all-time low costs. Our ongoing investment in innovation is paying big dividends with revenue growth, increased profit, and happy customers.” The second customer says: “We’re right behind you in our industry. We’re running ECC and are planning our S/4HANA upgrade strategy.” The first customer nods. They both look at the third customer, who says: “We still have R/3. We can’t upgrade, our best people left, and we haven’t been able to do anything new for the business in 15 years. It’ll take an act of Congress to find a budget and path toward slowly becoming current again.”
Unfortunately, there’s no punchline since it’s not a joke (if you were expecting one). In simple terms, the third customer has a huge mountain to climb when it comes to time, money, resources, and business focus to modernize their SAP and technology ecosystem and what it can do for their business. In short, they allowed their environment to age without extensively maintaining and customizing it, preventing them from supporting the business with the latest innovations from SAP and other vendors. Aging systems and lack of innovation to create business value make it more difficult to attract and retain top SAP talent. Eventually, their systems will become unsupported by SAP, putting their business at risk. Finally, when they do decide they want to fix the problem, they usually end up paying a hefty price. We call that price “technical debt,” and that’s what I’m going to discuss today.
What is technical debt?
Simply put, technical debt is the gap you have to cross, or the “debt” to be settled first, between where your systems and capabilities are today and how ready your systems are to adopt the latest technology to satisfy your business needs. The bigger the gap, the bigger the technical debt there is to erase from your ledger.
What are some examples of technical debt?
As with most things, technical debt can come in different shapes and sizes. Here are some examples:
- Out-of-date Maintenance.This refers to your software and hardware maintenance level vs. currently available support levels, e.g. SAP Support Package Stacks, database patches, and OS updates.
- Aged Infrastructure.Aged infrastructure limits access to improved capacity, performance, scalability, security, availability, and reliability innovations provided by the latest products and solutions.
- Extensive Custom Development.Instead of properly evaluating and choosing to use SAP standard functionality by default everywhere possible, you choose to make modifications and create custom solutions and objects, requiring caring and feeding by your organization for years or decades to come, e.g. standard SAP program vs. your own special Z* version.
- People Skills.Your staff’s skills and experience levels are outdated. They need to reasonably understand, support, and implement new solutions. A common strategy is to have consultants design and implement new solutions, which can work. The risk is that consultants are allowed to leave without effective training and knowledge transfer to internal staff to support it going forward.
- Extended Timelines.Time is money when it comes to research, implementation, and decisions on what an organization should do or how it should go about it given a lack of outdated products or patch levels, e.g. four to eight months vs. 12+ months for an upgrade.
- Overall Risk.This is risk a business incurs for cost, schedule, and solution quality due to outdated versions, complicated decisions, and possible delays or obstacles in identifying a vendor-supported fix or completing an upgrade along with implementation, migration, or rollout of new functionality.
Some of these forms of technical debt can be burdensome by themselves. But they are especially challenging and expensive to the organization when multiple forms of technical debt are allowed to accumulate together over time.
In the second installment of this three-part series, I’ll discuss ways technical debt can affect your business.
Also, if you’re interested in learning more about this topic and being part of a virtual roundtable discussion, please join us July 29th at 10:00am cst. for our Technical Debt webinar.
All attendees will be entered to win one of three Keurig Drinkworks Beverages Makers- a $349 value. Check out this artisanal beverage maker here