Postmodern ERP Strategies: Next-Gen Application Management

Another in the series of postmodern ERP Strategies. While these are excerpted from SAP Nation 2.0, the concepts can be applied to many other ERP environments. 

One of the largest cost components in the SAP economy is application management, much of it outsourced. That segment is being challenged to automate its labor, and also transition away from the traditional headcount based business model to one as-a-service.

Former SAP CTO, Vishal Sikka now heads Infosys, a major SAP implementer and application management firm. Infosys has announced a significant commitment to automation. "The company has set a long-term internal target of up to 70% automation in

its infrastructure management business, and up to 55% automation in its business process outsourcing business. Currently, 35-40% of its BPO processes are automated."

One of the automation moves at Infosys has been acquisition of Panaya, the tools vendor described earlier in the book.

There are other potential savings from swapping application management providers. The Indian outsourcer HCL calls it "re-bid" business and "guarantees" over 30% cost reduction using its proprietary ALT ASM framework. It has done well replacing incumbents like Accenture, Deloitte, HP and other Indian providers in many SAP outsourcing deals.

More excerpts over the next few days.