Pay (only) as you use – innovative approach? Indeed (although we have already recommended a similar approach in SAP licensing by concurrent users, suggesting that companies pay only for the licenses they really need). I am a big believer in SAP® and also in methods that enable enterprises to better use SAP. One such method is pay (only) as you use. This can be achieved by implementing the concept of usage inspection in every aspect and angle of a business. Effective ERP usage inspection enables companies to pay only for software/programs/applications that are actually being used. In this blog post I am referring to internal payment processes, which organizations can really implement very easily.
Based on what I witness on the field, I can (sadly) assure you that software usage statistics in companies is basically non-existent. And when I say non-existent I’m not exaggerating, as most programs and T-Codes in SAP systems are not used at all. I realize that SAP systems (or any other ERP systems) include many modules, and enterprises choose which ones to use. Thus, the percentage of program usage will always be less than 100%; in fact total usage of even 30% is considered good. Then why am I bothered, you ask? Because the overall average of program consumption is as low as 7%. Still, what troubles me even more than this number is the fact that in-house developed programs are totally overlooked, and this in my opinion definitely demands attention.
In-house development includes reports, T-Codes or other enhancements, which are not part of the initial software. I am not referring to customization, which basically entails changes in existing features. In-house development creates something new, which did not exist in the system beforehand. SAP includes a whole infrastructure for developing new programs and it is integrated in the standard environment. The only way to identify an in-house program is by its name, which starts with a Y or Z, whereas SAP standard programs begin differently. Thus, a T-Code called MM01 is a SAP standard T-Code for creating materials and report; ZSHOW_INVOICES, on the other hand, is a self-developed report for displaying invoice data.
What harm can in-house developed programs do?
Organizations are forever facing the requirement for additional programs; and each organization reacts to this differently. This is not the time or place to have a discussion on in-house development vs. off-the-shelf software (but for those of you who wish to have a short commercial break, check out the article To build or to buy IT applications). In-house programs present no harm on their own – it is the lack of using them that can be harmful for an enterprise. Stay with me… I’ll explain: So many of these programs don’t get used. Sometimes for good reason and sometime due to lack of attention. There are cases where programs are developed internally only for converting data in initial go-live phase of the system, others are developed ad-hock for a one-time task, some are developed for an employee that already left the company, and at times such programs are not used at all due to changes in business strategy.
The average usage of own developed programs is around 25%. This means that 75% of the Y and Z programs (3 out of 4!) were developed with no use at all. Here are a couple of real cases: A manufacturing organization with about 9,000 SAP users has 1,360 Y and Z T-Codes and throughout the past year they used 424 T-Codes only – which is 31%. Another example coming from a utilities company with about 900 SAP users, has 587 Y and Z T-Codes, out of which only 98 were used in the last three months – which is 17%.
Here’s what I suggest: each department in an organization will have to pay for its usage of Y and Z programs (this is only fair, as the IT department spent time and money on developing it). If this seems too strict, departments should at least pay for unused active programs which they have required. In addition, an internal quarterly inspection will be conducted to identify Y and Z programs that are still required and those that can be eliminated.
What advantages can effective usage inspection have?
Enterprises that inspect usage of in-house programs and manage them as suggested above can benefit from the following:
- Unused/unneeded programs are eliminated thus mitigating the system. This saves valuable time for future upgrades and increases security since closed programs cannot be misused.
- Decrease in new development requests and increase in using current developments. If departments are required to pay for program usage and/or lack of usage, they will definitely put some thought into the process of requiring new developments. Employees will also get into the habit of searching thoroughly for an existing standard solution before asking for a new internal program.
- Employees will have access to an inventory of programs, where they can keep track of programs that have already been developed and which could possibly be of use to them.
I can guarantee that ERP usage inspection is the basis for concepts such as pay only as you use. As to how this concept is realized, is in the end really in your hands.