The Total Economic Impact™ Of smartShift SAP Custom Code Transformation

Avoided Manual Code Transformation Costs

Evidence and data. All the interviewees explained that their SAP S/4HANA migrations would require significant manual code transformation efforts on the part of their organization’s ABAP developers. In many cases, developers would be required to work exclusively on these manual transformation tasks, while organizations would also need (but perhaps not have access to) supplemental developer staff to support more complex and labor-intensive transformations. By partnering with smartShift, their organizations avoided dedicating thousands of developer hours (both internal and externally contracted resources) to manual code remediation, saving on costs while ensuring consistency in code transformation.

• The DevOps manager at a retail organization explained that to transform the organization’s nearly 6.5 million lines of custom code, they needed significantly more developer headcount than they (or the system integrator they were previously working with) could source. The interviewee noted that they estimated needing 20 extra developers, but they couldn’t find this talent despite their best efforts: “We were getting to a point of desperation. We had fewer than five developers working on the custom code transformation aspect of our project. And then smartShift came in, and within three months, everything was completed.”

• The SAP delivery lead at a grocery organization estimated that to get to a point where they could begin the S/4HANA migration, they would have needed to hire an additional 12 ABAP developers to work full time on code remediation for nearly a year, costing the organization significantly in terms of developer resources and also delaying the project for nearly a year.

• Given the scope of transformation at a food and beverage organization, involving six ECC SAP instances, the senior director of strategy and transformation explained that the company simply didn’t have the developer resources to do the work: “Ultimately, we realized that we don’t even have the capacity to take on this work ourselves given the tight time frames we have within the migrations. smartShift won our business because it could plug and play with multiple systems integrators, allowing our team to focus on the other things they needed to focus on for the migration.”

• Facing a calculated 900 full developer days of manual code remediation, the senior global solution architect at a global manufacturing organization noted that smartShift completely eliminated this potential transformation requirement.

• The ERP system technical lead at a European manufacturing organization described how significant customization of their environment made it nearly impossible to get a “realistic quote” to do this transformation work from companies other than smartShift. They explored employing internal resources and/or independent coders but deemed this too expensive and risky. They explained: “To employ our own coders would have been a logistical nightmare of overhead. Firstly, finding people willing to work on a short-term contract and secondly, managing those coders to make sure they’re all coding and working to the same sort of standards and producing the same quality of custom code.”

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• Prior to the smartShift investment, the composite organization’s SAP ECC environment would require more than 60 part-time and full-time ABAP developer resources to manage the required manual code transformation. This manual work is fully avoidable with smartShift’s automated code transformation.

• The fully burdened hourly rate for an ABAP developer is $70.

Risks. The scale of this benefit may vary by organization depending on the following:

• The scope of an organization’s SAP environment as it relates to the number of developer resources required for manual code transformation.

• The degree of complexity or customization in an organization’s SAP custom codebase.

• An organization’s SAP environment or business as it relates to the required cadence of the SAP S/4HANA migration.

Results. To account for these variances, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $8.3 million.

Avoided Ongoing Maintenance And Support For Custom Code

Evidence and data. Interviewees described how the work they completed with smartShift provided better visibility into their organizations’ custom codebases. This allowed them to decommission significant amounts of redundant or unused custom code, saving their organizations the future costs of the labor required to maintain, develop, and test this custom code.

• The DevOps manager at a retail organization noted that the visibility provided by smartShift enabled them to retire 1.2 million of their 6.5 million lines of custom code — nearly 20%. Code standardization across the SAP custom codebase with smartShift also provided better visibility into the organization’s custom codebase, reducing ongoing developer effort without having to “scour through lines and lines of code.”

• According to the SAP delivery lead at a grocery company, working with smartShift allowed the organization to pare down its custom codebase significantly, driving consistency in the codebase while avoiding maintenance moving forward. They explained: “Because we had such a high volume of custom code, smartShift allowed us to separate out what was actually truly important and what truly needed remediation versus what didn’t. It helped us really get down to the nuts and bolts of what we needed to do. These were insights that we couldn’t get manually, so there was huge value in getting this information from smartShift so we can formulate a plan on how to move forward.” They concluded: “Deprecating a whole lot of old code is very important for obvious reasons. It frees up the system, frees up resources, and frees up the distractions. When SAP started kicking off the clean core conversation, we felt like we’d already started our clean core journey.”

• The senior director of strategy and transformation at a food and beverage organization described how it found that thousands of its 150,000 custom objects were unnecessary and decommissioned, thanks to smartShift. The interviewee concluded: “This work also moves us closer to clean core, or it helps us with clean core in the future. It also helps us with future upgrades and reduces work going forward. So that was another win in partnering with smartShift on this.”

• The ERP system technical lead at a European manufacturing organization explained that smartShift found more than 31% of the company’s custom code was unused. While not all of it was decommissioned due to a risk-averse company culture, a significant portion was retired, saving on costs related to maintenance and reducing technical debt.

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• The composite organization has 7 million lines of custom code across its SAP ECC environment.

• By using smartShift, the composite discovers that 25% of this custom code is redundant or unused.

• The average annual cost of maintenance for custom code is $0.90 per line.

Risks. The scale of this benefit may vary by organization depending on the following:

• The amount of custom code in an organization’s SAP environment.

• The degree of customization in the organization’s custom codebase as it relates to the average annual cost of code upkeep.

• The degree of code that is determined to be redundant or unused with smartShift.

Results. To account for these variances, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $3.5 million.

Reduced Cost Of Dual Maintenance

Evidence and data. The interviewees told Forrester that smartShift helped their organizations automate the process of dual maintenance: This is traditionally carried out manually and requires resources to manually synchronize changes with the project system to maintain parity until the full transformation is complete. By automating this process with smartShift, interviewees explained that their developers were freed up to focus on other critical tasks supporting the SAP S/4HANA transformation, including delivering business-required enhancements, supporting testing and migration activities, and maintaining development velocity throughout the transformation.

• The DevOps manager at a retail organization highlighted the developer savings from automated dual maintenance with smartShift. They explained: “Dual maintenance would have taken the juice out of all of us if we needed to do it manually because it is a very cumbersome process. smartShift just made it easy. Every month, we would have about 400 objects going into our production environment. smartShift just nailed it straightaway, every time. If we had to do it manually, it would take several weeks longer and there would probably be issues with it as well.”

• The SAP delivery lead at a grocery organization highlighted using smartShift for automated dual maintenance for nine months as a critical benefit: “We don’t have a business that can stop because we’re running a transformation project. smartShift’s ability to do dual maintenance really helped us. Once a month, it would gather up all of the changes that we had deployed into production that month in ECC, transform that, and actually backfill that into our into our S/4 landscape. It meant that we were always testing with all of our latest changes, fixes, and [deployments], but in an S/4 state.”

• Asked about utilizing smartShift for dual maintenance, the senior director of strategy and transformation at a food and beverage organization noted: “We’re not doing any manual maintenance across multiple systems. Having that dual maintenance [from smartShift] to push custom code across both [the] upper landscape and lower landscape just makes a lot of sense for us.”

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• The composite organization runs dual maintenance on its SAP environment for 12 months.

• The composite requires 30 ABAP developer full-time employees (FTEs) to support the organization’s dual maintenance tasks.

• smartShift reduces the required internal developer effort for these tasks by 30%.

• The average fully burdened annual salary for a developer supporting dual maintenance is $140,000.

Risks. The scale of this benefit may vary by organization depending on the following:

• The duration of an organization’s dual maintenance efforts.

• The scope and complexity of an organization’s SAP environment as it relates to the developer effort required for dual maintenance tasks.

• The skill and capacity of an organization’s developer resources working on dual maintenance tasks.

Results. To account for these variances, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $974,000.

Reduced Likelihood Of Performance Degradation Or Business Disruption

Evidence and data. Interviewees told Forrester that smartShift’s automation provided their organizations with predictable project timelines and reduced the likelihood of the transformation errors that are common with manual transformation work. As a result, they were able to plan around or prevent business disruption, avoiding the revenue and profitability losses associated with these downtime events. They also noted that custom code remediation automated with smartShift was more consistent in style and quality than if it had been transformed manually.

• The DevOps manager at a retail organization explained that even if they had used internal developer resources to manage their code transformation manually, individual differences in approach or manual errors could result in inconsistencies across the environment. They explained, “Everyone looks at things differently, so getting uniformity in our code doesn’t happen when people are looking at it differently and trying to transform custom code.”

• The SAP delivery manager at a grocery organization also noted the quality of the custom code transformation performed by smartShift as a primary benefit; they highlighted that it prevented disruptions that would directly or indirectly cost their business time, money, or both. They concluded: “smartShift’s quality helps us avoid situations like near misses. By cleaning that custom code, we’re encouraging avoidance — situations that we would have hit at some point in time, such as performance issues calling for more memory, costing us money, or poor code that leads to a P1 incident, which then is a direct loss of money for the business.”

• Quality was also noted as one of the most significant value drivers of smartShift by the senior global solution architect at a global manufacturing organization, especially as an estimated 95% of the organization’s business is on its SAP platform. The interviewee explained, “I don’t think any human could deliver this quality of custom code remediation internally because they lose focus doing the same thing hundreds of times, and quality suffers.”

• Business continuity was the primary concern amid the S/4HANA migration for the ERP system technical lead at a European manufacturing organization: “There’s been an awful lot of instances in the press of companies that have tried to move from the ECC system we were running to S/4HANA and going bankrupt as a result.” They noted that using smartShift allowed the organization to execute the migration with confidence in its timelines and therefore near-certainty of business continuity. The interviewee concluded: “The quality of the remediation work was extremely valuable to us [in terms of] knowing with certainty that the custom code is being converted consistently. Then factor in the smartShift contract with fixed costs at only 80% of what the system integrators were quoting us for the same work. And that didn’t include any scope overrun [with the system integrators].”

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• The SAP environment impacts 60% of the composite organization’s annual revenue, averaging to a daily revenue of $98.6 million.

• Based on the cadence of the SAP S/4HANA migration, the potential for one to three days of business disruption or degradation exists annually.

• Working with smartShift reduces the potential impact of this disruption by 5%.

• The composite organization has a 7% net margin, as Forrester measures this benefit in profit rather than revenue.

Risks. The scale of this benefit may vary by organization depending on the following:

• An organization’s annual revenue and net margin.

• The complexity of an organization’s SAP environment and/or business as it relates to the potential for business disruption or degradation amid SAP custom code transformation tasks.

• The connection between an organization’s SAP environment and revenue-generating activities.

Results. To account for these variances, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $753,000.

Cost Savings From Accelerated Project Timelines

Evidence and data. The interviewees told Forrester that their organizations completed their SAP S/4HANA migrations faster with smartShift than if they had carried out the custom code transformation manually. Beyond the productivity savings for developers, organizations’ acceleration to the cloud could accelerate the cost savings associated with cloud SAP deployments, such as infrastructure upgrades and/or maintenance, power and cooling costs, and personnel hours dedicated to on-premises infrastructure. The DevOps manager at a retail organization estimated that using smartShift allowed it to accelerate its migration by nearly a year, while the SAP delivery lead at a grocery organization estimated a six- to 12-month improvement of its migration timeline.

Modeling and assumptions. For the composite organization, Forrester makes the following assumptions:

• The composite organization’s average annual on-premises infrastructure and maintenance spend for the legacy on-premises SAP ECC environment is $7 million.

• Working with smartShift accelerates the majority of the SAP S/4HANA migration work by six months, avoiding these on-premises-related costs sooner.

• Forrester recognizes 40% of the savings for this benefit, as cloud consumption and other SAP S/4HANA-related costs begin to accrue sooner, offsetting some of these on-premises savings.

Risks. The scale of this benefit may vary by organization depending on the following:

• An organization’s SAP ECC environment as it relates to annual on-premises infrastructure spend.

• The scope and complexity of an organization’s SAP ECC environment as it relates to the potential to accelerate the migration project timeline with smartShift.

• An organization’s SAP S/4HANA costs after migration as related to the amount of total costs offset via the accelerated migration.

Results. To account for these variances, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.1 million.

Unquantified Benefits

Benefits that provide value for the composite organization but are not quantified for this study include:

• Improved security. Interviewees noted that custom code that has been transformed automatically with smartShift is inherently less error-prone than if done manually, reducing the likelihood of vulnerabilities in the code and the potential security implications of these vulnerabilities. According to the DevOps manager at a retail organization, “smartShift helped us standardize the custom code and allowed us to introduce security checks, helping us fill potential security gaps in our custom code.”

• Better developer experience. Interviewees explained that by managing SAP custom code transformation tasks automatically with smartShift, their developers avoid this often-tedious work and are freed to work on more fulfilling projects.
  The DevOps manager at a retail organization noted that developer resources were freed up to work on non-transformation tasks related to their SAP S/4HANA deployment. They explained: “smartShift remediated the code so the team could focus on other areas that needed attention, such as business process changes. There was time to do other stuff rather than focusing on monotonously transforming custom code.”
  By reducing the burden on developers to remediate custom code, the ERP system technical lead at a European manufacturing organization noted that they could start to focus on solving business challenges in S/4: “Our developers started work internally on new processes that we, as a business, needed to create in S/4 to handle functional deficiencies, rather than concentrating on making old code work in the new environment.”

• Project predictability. Interviewees explained that working with smartShift eliminated the guesswork involved in custom code transformation timelines, greatly improving the accuracy of real project timelines and enabling planning with greater confidence.

• More comprehensive code remediation. Interviewees noted that traditional migration efforts often focus on addressing only the issues required to achieve go-live readiness. However, smartShift’s automated approach enabled their organizations to assess and remediate a broader portion of the custom codebase, helping reduce technical debt, improve code quality and maintainability, and advance clean core initiatives.
  The DevOps manager at the retail organization explained that smartShift enabled broader code improvement efforts that would not have been feasible through manual remediation: “We wouldn’t be able to do it if we had an army of people because we’ll be focusing on the MVP, which is getting the code to work, rather than trying to standardize the custom code.”

• The smartShift relationship. Several interviewees highlighted the collaborative partnership with smartShift as an ongoing benefit, noting that the team was easy to work with and was invested in their project’s success. According to the SAP delivery lead at a grocery organization: “While smartShift is a technology partner for us, there is still the personal side behind the relationship. It really is a partnership. We couldn’t have gone live without them.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might work with smartShift and later realize additional uses and business opportunities, including:

• The future output of freed-up developer resources. Every interviewee noted that developers no longer responsible for manual SAP custom code transformation activities could be assigned to other projects or IT initiatives that may not have been undertaken before. This net-new work may lead to additional benefits for the organizations over time. The DevOps manager at a retail organization highlighted several business-supporting projects that their developers could take due to smartShift, supporting retail operations and finance teams with customized solutions on SAP Business Technology Platform (BTP).

• “Clean core” in the future. While most of the interviewees noted that a “clean core” for their SAP environments was still a work in progress for their organizations, every interviewee noted that the remediation work with smartShift provided critical custom code standardization, visibility, and decluttering of their SAP custom codebases — which are critical requirements for a clean core.

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).