Fundamentals of the modern ERP

To ground the discussion, modern cloud-based Enterprise Resource Planning (ERP) solutions are focused on analytics, decision making, and the latest technologies — machine learning (ML), artificial intelligence (AI) — all accessible through a user-friendly interface. Regardless of the nature of your company or industry, a modern ERP delivers several overarching core benefits:

• Transparency - vertical and horizontal transparency, providing an organization with the ability to see the information/elements that are captured in the system throughout the enterprise in real time
• Automation – specifically, the automation of workflows and manual tasks
• Improved User Experience (UX) - facilitating adoption and use in order to get the maximum value from the system

These are elements that can maximize value for any type of company, and you’ll see them intermingled throughout this spotlight on SAP for professional services companies.

Addressing Challenges and Opportunities in Professional Services

The challenges/opportunities in professional services lean on three major leverage points: Scaling with People, Differentiating Operations, and Protecting Working Capital and Cash Flow.

Let’s explore each of these in detail and identify the related SAP elements that turn challenge into opportunity. In this post, we’ll focus on Scaling with People.

Scaling with People – Billable Talent

Unlike a product-based company, a traditional professional services organization can only scale by adding more people – and you want to scale in a fashion that maintains your consistency and doesn’t compromise quality. Once you hire, the pressure is on to get employees to billable status and to clear the bench as efficiently as possible — not just because of the financial burden on the company, but to avoid poor morale and ultimately turnover.

To be successful, you need to be able to match the right people with the right skills to the right assignments. Secondly, you need clear visibility on what’s ahead in terms of project demand. Lastly, you need to recruit and develop the appropriate human resources.

• Matching the right people to the right assignments - SAP’s resource management platform enables you to capture everything there is to know about every individual who works within the organization, including subcontractors, giving you a full dossier on each person. You can see when they’re placed on projects, when they’re rolling off, when they’ll become available, and what their projected utilization is, allowing you to match the right person with the right assignment.
• Visibility into the business - In terms of visibility, SAP provides a very robust and sophisticated analytics engine that enables you to see KPIs (Key Performance Indicators), dashboards, and present them on mobile devices, bringing better real-time decision making to your fingertips.
• Recruiting and developing talent – As for filling hard-to-find openings, SAP brings a robust recruiting engine and personnel development engine that enables you to not only identify the individual and manage them through the hiring process, but also put together a performance management plan, and a development plan, as well as lead them through the lifecycle within the company so that you can grow and retain that talent.

All of these SAP elements are available to the customer as one big bundle, ready to be deployed to capitalize on these capabilities. While some of them reside within SAP SuccessFactors and others reside within the S/4 umbrella (whether it’s on premises on in the cloud), they’re all integrated – and the analytics engine is what ties them all together.

Scaling with people – Managing the back office

But how do you scale with people without also inflating your back office? The back-office activities can be very manual with a lot of paperwork involved (e.g., time sheets, expensive reports, status reports, and documentation updates), touched by a lot of hands, and shuffled back and forth for corrections and approvals. Each handoff creates delays, as well as the opportunity for mistakes – and as the organization scales, the volume increases, creating more and more opportunities for issues. Those mistakes can grow exponentially. This is where several core ERP elements can help, namely SAP’s automation, the practice of management by exception, and self-service capabilities.

• Automation - With the readiness of technologies such as robotic process automation or machine learning, you’re able to automate quite heavily. You can identify situations where a process that requires 3-4 steps gets automated and is done “in the background”.
• Management by Exception - These same technologies, especially machine learning, can also support management by exception. People in your organization don’t have to touch every single transaction on every single object. Instead, they can identify those elements that are outside of the acceptable parameters or tolerances. For argument's sake, if you're expected to submit a timesheet for 40 hours a week and you submit 41 or 39, if it's within the designated tolerance, the system can accept it automatically. The real convenience is that it eliminates the need for touching every transaction, and only touching those that require specific attention.
• Self-Service - Self-service puts the technology and tools in the hands of the person who can make the decision and can enter the information – just enter your time sheet directly into the system. If you're in the field and you're performing maintenance on a piece of equipment, the system can present you with the drawings and instructions, letting you confirm automatically that you've completed the task. It doesn't have to go to an intermediary or an administrator to do it for you.

To summarize, SAP’s resource management platform, robust analytics engine, and recruiting and personal development elements work together to support matching the right people to the right assignments – and by using automation, management by exception, and the self-service capabilities inherent in SAP, your organization can scale with people and grow without growing the back office.

In Part 2 of our SAP deep dive into project-centric professional services companies, we’ll look beyond Scaling with People and profile two other major leverage points of opportunity: Differentiating Operations and Protecting Working Capital and Cash Flow.

SAP Platinum Partner Illumiti

As a modern system integrator and management consulting firm, Illumiti focuses on helping customers leverage the power of SAP to work smarter, faster, and leaner – maximizing both performance and value for acquisition. To learn more, visit https://illumiti.com.

Watch for our follow-up post, Part 2: Differentiating Operations and Protecting Working Capital and Cash Flow.