RE: SAP (Long answer)

From:Bert Dotson <>

   SAP is a German "enterprise" software package that allows a complex 
organization to monitor its expenditures, automate supply ordering and 
payments in addition to performing a whole host of financial and managerial 
accounting operations. There are also human resources and other add-in 
modules that expand its usefulness exponentially.
   On the supply procurement side, it helps an organization identify key 
supplies and services used throughout the company that can be consolidated 
across departments. This gives purchasers ammunition to pursue volume 
discounts on widely used items and reduce the total number of suppliers 
reducing costs overall.
   It is EXTREMELY frustrating for the front-line user (particularly during 
the first year(s) of implementation). We are eighteen months into 
implementation and are only beginning to use the system correctly. I can 
offer a few pieces of advice from our own experience, and some general 
things to keep in mind that I have garnered from executives at large 
companies that have successfully implemented SAP and are pleased with the 
results (finally).
  From the front lines here at Duke:
    1. Technical staff order from the material master only. For laboratory 
supplies that cannot be found in the material master we have a clerical 
assistant that spends about a quarter of her time processing our supply 
orders. This includes time she spends documenting supply vendors and 
volumes. The documentation is used to argue for adding particular vendors 
and products to the material master.
   2. Do not use the "goods receipt" function until you are satisfied that 
the ordering process is working smoothly. Then use it for everything (you 
might be surprised how often you are paying for a full shipment when you 
only receive a partial shipment).
   3. Get to know the procurement or purchasing group or whatever they call 
the people maintaining the SAP software and databases at your institution. 
These folks can help to ease some of the frustration by communicating their 
priorities for implementation and are a great source for information on 
strategies others at your institution are using to adapt to the software.

General considerations:
   1) Often there is a disconnect between the SAP sales force and the 
intention of the software designers. The sales group tends to portray SAP 
as flexible. Nothing could be further from the truth. You must adapt your 
processes to the software. A colleague at Mobil Oil told me that it took 
them several frustrating years to learn this.
   2) Enterprise software in health services is a relatively new concept. 
The software designers don't quite understand the industry. The end-users 
often don't see the need. This is a recipe for headaches.
   3) In my opinion, it is desperately needed. When end users are 
purchasing products from "sole sources" and through "purchasing groups" or 
"purchasing co-ops" that are identical to those that can be purchased at 
Wal-Mart for half the price, powerful tools are needed to target these 
products and hold suppliers accountable. In addition, if the focus on 
containing costs in Ireland is as intense as it is here in the States, 
savings on supplies may help improve employee compensation and job security 
for a while.

Bert Dotson

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