SAP Best Practice, Model Company, or story of A Dog and A Tail

Dmitry Kaglik

August 6, 2018



There is no doubt that SAP accumulated a huge amount of experience in automation of business processes throughout the years. Some of these processes are easy to implement in SAP, others are not so.

Many years ago, at least 20 or maybe more, SAP came up with an idea of “SAP Best Practice”, a set of recommendations for the businesses how to organize the processes better so the automation of these processes goes smoothly. SAP Expert has always been a believer in SAP Best Practices. There is even an article that explains how to deal with cases when business users object the SAP Best Practice recommendations.

SAP IDES, a theoretical company running SAP, was a test and educational system for SAP users who wanted to learn more about SAP. And SAP IDES had many ideas from SAP Best Practice implemented.

Fast forward several years, change the system from SAP R/3 through SAP ECC to the current S/4HANA. What do we see now?

SAP went even further on this route. There is not just “SAP Best Practice” set of recommendations now, but the whole SAP system implementation called “model company”. There are model companies for different industries. These are pre-configured SAP landscapes with pre-configured business processes and even some master data. Model Company is not just an ERP system, but some other relevant systems as well, for example SAP CAR for Retail solution. So-to-speak, SAP IDES taken on another level.

Of course, it is not a free product. If you want to get a SAP Model Company, you need to pay money for software itself, as well as prepare (or prepare to pay for) necessary IT technical components: this is a cloud solution.

And then… SAP customers start to implement Model Companies as their main solution. Just few examples: Arvato and Nostrum.

What does it mean for the market? As usual, there are pros and contras.

Of course, some companies will benefit from speedy SAP implementations. There is no need to repeat the same steps in the system implementation project that have been done by other companies multiple times.

But at the same time you need to look critically at the pre-delivered solution. Starting your new implementation with IDES-delivered processes was not a good idea in the past. Why is Model Company different? Only because it has some industry specifics? But how well does it fit your requirements? Will you keep your main competitive processes intact if you start adaptation of SAP standard processes?

The worse would be if SAP starts pushing be customers into using Model Company as a must, as the only way to use SAP software. This will mean ease of support from SAP side, but lack of business advantages for customers. Tail should not wag the dog. Will it even happen?

How well will SAP and its sales partners balance these factors in their sales pitches? Only time will show.

Do you think that the idea of a Model Company and whole SAP implementation based on Model Company is good or evil?

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  • Marti Green on November 5, 2018

    Many years ago, in the early “ASAP” days, it is said that SAP pitched that companies should figure out the 5% (on average) of their business that truly differentiated themselves from their competitors and develop whatever was necessary to support that 5%. For the remaining 95% pick from any number of best in class processes available within the core SAP system. The challenge during implementations has always been to convince companies that all of their processes aren’t a critical differentiator. Or more likely that they really shouldn’t spend the time and money to make SAP work just like their legacy system. It is here that Model Companies can and should prove most beneficial.

  • Mark Egan on December 18, 2018

    The main problem that I have with this is that SAP expect you to purchase Model Company before you can assess whether it is fit for purpose (or how much it isn’t). This seems counter intuitive at least. My concern is that, should you purchase it and its only a 20% fit – you’d probably not realise any of the touted benefits of Activate and would have been better served running a full blueprinting phase..

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