Archive for December, 2009

Strategy: 5 Lessons Learned From A Decade Of Naught

Published on December 30, 2009 by R "Ray" Wang

I’ve had considerable time to catch up on reading this holiday season.  Traditionally, it’s a time for predictions, resolutions, and reflections.  But as we close out the last decade, I couldn’t help but dwell on economist Paul Krugman’s Op-Ed from December 27th titled “The Big Zero”.   He brings up good points that it’s been an “era best forgotten” and “it was a decade in which nothing good happened, and none of the optimistic things we were supposed to believe turned out to be true”.  He dives deep to rant about how we’ve achieved zero economic gains and makes compelling arguments.  However, in the world of innovation and adoption of disruptive technologies, it may be safe to say that his point on “our unwillingness, as a nation, to learn from our mistakes”, seems to be less true.

In fact, emerging organizational trends in the next decade can be well rooted in lessons learned through the boom and bust cycle of the 2000′s.  Here’s my opinion on five lessons learned from the tragedy of what we call the past decade:

  • Pace of change moves from constant to constantly accelerating. Quickly evolve or die.  Organizations need to find ways to stay ahead of change or risk being obsolesced.  Organizations must organize around supporting flexibility and agility.  Disruptive technologies play a role in leapfrogging organizational models, business processes, and business models.
  • Planning switches from static to iterative. Agile is the new poster child for today’s approach.  The best plans assume constant iteration.  Organizations must expect to reevaluate and assess plans in shorter cycles.  3 to 5 year plans can’t account for or incorporate the entry of disruptive technologies.  Iterations move from years to months.
  • Viability shifts from size to innovation. Size does not equate to viability.  Success requires solving pain chains.  Mergers and acquisitions will continue out of necessity but must be done strategically.  Not only must organizations achieve an economy of scale that reduces overhead, funds innovation, and grabs the largest share of the customer budget, but they must also address pain chains by developing and delivering innovative last-mile solutions that dis-intermediate inefficiencies in existing business models.  If size gets in the way, then you must divest.
  • Success evolves from technology adoption and process improvement to business value and business impact. Benefits should only focus  on business impact.  After a decade of technology and business process centricity, organizations must start with the business value story.  Business processes must be flexible enough to accommodate the pace of change.  Technology provides an enabler but not the complete solution.  People still matter at the end of the day so make sure the incentives are aligned.  Holistic goals such as the total customer experience, beyond real time relationships, and optimal compliance will provide the business drivers for new initiatives.
  • Collaboration evolves from nice to have to essential. Plain and simple – partnerships count more than ever. No single organization can serve every market, provide every last mile solution, and deliver value in a focused manner.  Most organizations can not afford go it alone strategies.  Partnerships must be based on an understanding of what each party will not do in order to find the common ground among 4 key dimensions: product road map alignment, service and support coverage, sales coordination, and community engagement.

Your POV.

What have you learned from the past decade?  Do you feel it was for naught or were you fruitful in your pursuits?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

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Tuesday’s Tip: 10 Cloud and SaaS Apps Strategies For 2010

Published on December 22, 2009 by R "Ray" Wang

Keep In Mind Basic Rules Still Apply Regardless Of Deployment Option

The proliferation of SaaS solutions provides organizations with a myriad of sorely needed point and disruptive solutions.  Good news – business users can rapidly procure and deploy, while innovating with minimal budget and IT team constraints.  Bad news – users must depend more on their SLA guarantees and deal with a potential integration nightmare of hundreds if not thousands of potential SaaS apps.  Though the 7 key benefits of SaaS outweigh most downside risks, organizations must design their SaaS apps strategies with the same rigor as any apps strategy.  Just because deployment options have changed, this does not mean basic apps strategy is thrown out the window.  Concepts such as SOA, business process orchestration, and enterprise architecture will be more important than ever.  Here are 10 strategies to consider as organizations take SaaS mainstream:

  1. Begin with the business process and desired business value. Understand the desired business value and outcome.  Map back the key performance indicators (KPI’s) to the business processes. Identify what processes will be covered by the SaaS solution.  Determine overlaps and hand-offs between on-premise and SaaS to SaaS that are required to measure the desired KPI’s.
  2. Engage stakeholders early and often. Today’s apps strategies must constantly evolve. Change is happening so fast that line of business leads and IT leaders must collaborate in real time.  The result – an ever changing list of requirements.  While SaaS allows business leaders to make go-it-alone decisions, success will require close collaboration on short term and long term requirements, dependencies, and strategy.
  3. Bet on future suites, SaaS platforms or PaaS (Platform-as-a-service). Winners and losers will emerge in this wave of Cloud computing.  Vendors such as Netsuite, Workday, Zoho, Epicor, and SAP have built or will be building suites.  They provide safe bets as more and more functionality will be rolled into their offerings. Concurrently, organizations should also choose vendors who bring a vibrant and rich ecosystem to the table because those vendors will win in the market.  Salesforce.com and NetSuite already provide users with a platform to build on apps.  Other vendors such as as Google Apps Engine, Microsoft Azure, IBM, and Zoho provide rich developer communities.  Partner and customers will drive innovation which is why platform adoption (i.e. today’s middleware) makes a difference.
  4. Augment with best of breeds, but avoid best of breed hell. No one platform can provide every solution, but choose wisely.  Best of breeds provide deep vertical capabilities and rich last mile solutions.  However, no one wants to manage hundreds of vendor relationships.  Create frameworks that allow business users to work with vendors which support open standards, integrate well with your existing integration strategies, and follow the bill of rights.   Reduction in the number of vendors will become a priority in 2010 going on into 2011.
  5. Assume hybrid will be the rule not the exception. Prepare for hybrid deployments throughout the decade.  Despite the benefits of SaaS and broad adoption in 2010, legacy apps will not go away.  Just count the number of mainframe and client-server apps still in use today.  Many on-premise apps will take time to migrate to SaaS. In some cases, legal requirements will prevent data from being stored off-site.  Software plus services offerings from companies such as Infor, Lawson, Microsoft Dynamics, and SAP may become the norm in 2010 as companies seek private and public cloud solutions.
  6. Design with good architecture. Keep your enterprise architects (EA’s) or hire some more.  Inevitably, more and more SaaS solutions will enter the organization.  EA’s will proactively plan for new scenarios and account for future business requirements.  Organizations should keep some rigor in terms of standards for solution adoption while accounting for the need to rapidly innovate.  Business leaders will need some frameworks on which solutions to adopt.
  7. Choose the right integration strategy for the right time. SaaS integration strategies will evolve based on the organization’s SaaS adoption maturity.  The first set of solutions will probably require point to point integration of data.  Over time, users often migrate to centralized integration services that account for process.  Some will go full enterprise service bus (ESB) and look at business process orchestration as well.  Consider solutions from CastIron, Boomi, Pervasive Software, Informatica, and SnapLogic.  Going forward customer data integration and master data management will be more important than ever.
  8. Minimize long-term storage costs with archiving. Storage represents a significant long term SaaS cost.  Savvy clients can reduce the cost of SaaS storage with a myriad of technologies such as EMC, IBM Optim, and RainStor.  By archiving, organizations will experience faster transaction times, maintain compliance, and reduce storage fees.
  9. Hedge risk with SaaS escrows. Most SaaS vendors will require 5 to 7 years to achieve profitability.  End users often demand software escrows in the on-premise world when they are concerned about vendor viability, takeover threats, and other related breaches to performance or service level agreements.  Software escrows vendors serve as the trusted third party independent organization which holds a copy of the software code.  This often includes user data, source code, documentation and any application executables. SaaS escrows work in a similar way.  Vendors such as EscrowTech, InnovaSafe, Iron Mountain, NCC Group. and OpSource can provide such services.
  10. Protect your rights. Client – vendor relationships in SaaS are perpetual.  Organizations have one shot to get the contract right and begin the relationship with the right tenor.  Apply best practices from The Customer Bill of Rights: SaaS. Work with vendors to find the right balance in approach.

The Bottom Line For Customers – Build Frameworks That Support Easy Line Of Business Adoption

The broad adoption and trajectory of SaaS solutions requires organizations to rapidly replace edicts and 5 year plans with guidelines and policy frameworks.  The goal – enable anyone in the organization to procure a SaaS solution that meets key guidelines and standards.  The result – flexibility, security, and scalability that allows solutions to be used on-demand and in concert with existing applications.

Your POV.

As you work out your SaaS apps strategies, drop us a line and let us know how you are deploying, what challenges you’ve faced, and what successes have you achieved.  We’re happy to weigh in.  Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

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Wednesday’s Whispers: People Whispers November/December 2009

Published on December 16, 2009 by R "Ray" Wang

PEOPLE WHISPERS: MOVES, PROMOTIONS, AND MILESTONES*

As always, thanks for your emails and alerts. If you’ve got a change or know of a promotion, keep dropping me a line! If you need a referral, and we’ve worked together in the past, don’t hesitate to reach out to me via Linked In.

Eliot Axelrod became Senior Account Exec at Graybow Communications Group in September 2009.  Eliot’s served a variety of account executive roles at technology companies such as  Unimax Systems, Saratoga Systems, Aurigin Systems, Lotus/IBM, and Apple Computer

Michelle Blackmer has updated her current title to Senior Director, Marketing – Healthcare at Initiate Systems .  Prior to Initiate, Michelle served as a marketing manager and project manager at GE Healthcare.

Scott Bonneau has updated their current title to VP IT, Service Management at Dr Pepper Snapple Group. Past positions have leveraged his management consulting skills and include VP Global IT PMO at Cadbury Schweppes plc, Principal at Booz Allen Hamilton, and Senior Consultant at Andersen Consulting.

Anirban Chakraborty has updated his current title to Analyst Relations, Strategic Marketing at Wipro Technologies. Anirban has worked as a consultant at IBM and served as a Systems Analyst at TCS

Eric Christiansen became a Director at BlackRock.  Previous roles include an 8 year stint in various architecture and technology roles at Barclays Global Investors. Eric brings extensive experience in software architecture with roles at ITT Gilfillan, Rockwell International, TRW, and Digital Equipment Corporation

Jeff Comport has become a Senior Vice President with Lawson Software for Product Management.  Jeff will be responsible for overseeing all of Lawson‘s product lines.  Jeff brings to Lawson over 16 years of industry analyst experiences and software management expertise from Integral Systems, Inc (application software) and Criterion Incorporated (application software).C

Ridgely Evers is now on the Board of Directors at SCORE. Ridgely has been focused on helping small businesses succeed.  His current roles include serving as a Managing Partner at Establishment Capital Partners and Tapit Partners.  Previously, he founded NetBooks and worked at Intuit building out QuickBooks and their Online Financial System.

Deb Fitzgerald new CIO for Deltek.  Deb joins Deltek from Verisign where she served as the VP of Information Technology.

Justin Floyd became the CEO of InvestChange.com in October.  The cloud startup focuses on emerging and developing markets.  He founded the company in May 2009.  Previous executive roles include Investor and Chairman at CCL Group plc and Investor and Chairman/CEO at Vecta.

Chuck Gillespie is now Adjunct Professor at IUPUI.  He also serves as the President of Vigor and has focused on the HR technology space as VP of HR Technology at Peoplebase.

Stephen Harvey left his role as a Country Manager for datango.  Havey joined DNA Stream and builds on his management experiences at Sword DDS LTD and Crestec UK LTd.

Laurie Henneborn became Global Research Lead for Technology at Accenture in September 2009.  Previous roles include Global Research Lead for Outsourcing at Accenture, Information Specialist – Banking Channels at AT Kearney, Head Information Specialist at Bates Advertising, and Legal Research Assistant at Paul, Weiss, Rifkind, Wharton and Garrison

Michael Hickins has joined as a News Editor at the WSJ.com at Dow Jones. Michael brings significant technology media experience as the Executive Editor at eWeek, Executive Editor at Ziff Davis Enterprise, Senior Editor at Jupitermedia, Senior editor at Thomson Legal & Regulatory, Editorial Director at Multex, Senior editor at Fairchild Publications, and others.

Lauren Hong was promoted from Account Development Manager to an Account Manager at Forrester Research.

Robert Humphrey was named Infor’s Chief Marketing Officer in November.  Humphrey brings 30 years of marketing and tech experience.  He most recenlty served as Senior Vice-President of WorldWide Field Marketing at McAfee.  Other roles include executive positions at Citadel Security Solutions, i2 Technologies, and OpenDesign, Inc.

Charlie Isaacs became President at SOA Press in October 2009.  Prior to this role, Charlie served as the Chief Customer Officer and Chief Technology for KANA, CTO at Primus Knowledge Solutions, VP/GM Help Desk Lab at Computer Associates (formerly Platinum Technology, and VP of Engineering atGTE Government Systems.

Joseph Loveless joined the Board of Directors at Clear Stake Capital, LLC in August 2009.  He’s currently CEO of Clear Stake, an energy management and carbon abatement concern.  Previous experiences include roles at Product Marketing for Deltek, Product Marketing / Field Marketing Director for CA, Inc., and Director, Professional Services for Entex Information Svcs / Siemens.

Jim Lundy left Gartner to join Saba Software as their VP and GM for Collaboration Software.  Jim previoulsy served roles as Managing Vice President and VP, Distinguished Analyst at Gartner.

Ed Maguire is now Senior Analyst at CLSA Asia-Pacific Markets / CALYON Securities (USA) Inc. Ed’s served previous roles including the Director of Technology Investment Banking and Senior Director at Merrill Lynch.

Subraya Mallya became Advisory Board Member at Sage Scholars Program, UC Berkeley in August 2009

Hellen Omwando became General Manager Light & Health Venture at Philips in June 2009

John Tae Park became a Senior Business Systems Analyst at Toshiba America Medical Systems in December.  JT has served various roles including Oracle Delivery Consultant at IBM Global Services, Sr. Product Manager at Oracle Corporation, and Consultant at Accenture.

Sanjay Poonen is now EVP & GM of Business User Sales at SAP. Sanjay brings expensive managerial and operational experience from previous roles as EVP & GM of Performance Optimization Apps at SAP, Vice President of Line of Business Operations at Symantec Corporation, Vice President of Strategic Operations at VERITAS, Senior Vice President of Marketing, Corporate Officer at Informatica Corporation, and Director of Product Marketing and Strategy, Founder at Alphablox Corporation

Daniel Seaman became Director at Mongoose Cricket in September 2009.  Seaman previously headed product management at WGSN and worked in Marketing Strategy & Product Management at Forrester Research

Stefan Schulz is being promoted to chief financial officer of Lawson Software Jan. 1, 2010.  He succeeds Robert Schriesheim.

Robert Schriesheim, departs Lawson to become CFO of Illinois-based Hewitt Associates, Inc.  Schriesheim will continue to serve on the Lawson board as a non-employee director.

Kevin Schmidt became Director, Product Marketing/Management, Application Platform at Sun Microsystems in August 2009.  Kevin has extensive experience in Master Data Management and other infrastructure technologies.

David Stanley is now Vice President, Business Development and Sales at Altimeter Group.  Previous roles include VP, Sales at ARInsights, Regional Director at MX Logic, and Director, Business Development, Managed Services at Synergy International

Sriram Venkat became Practice Head, CRM at Wipro Technologies in October 2009.  Sriram has served as a practice manager for SAP CRM among his many roles over the past decade at Wipro.

Thomas Wailgum has updated his current title to Senior Editor | CIO.com at IDG Enterprise.  Tom brings over a decade of experience covering business and technology issues for the enterprise.

Jonathan Zhu is now Vice President, Asia at Ken Clark International.  Jonathan brings extensive financial services and Chinese market experiences with senior positions at HORIBA International, Asia Pacific at The EOP Group Inc, and Allied Irish Bank

Your POV

Got a scoop or something to share? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

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Event Report: 2009 SAP Influencer Summit – SAP Must Put Strategy To Execution In Order To Prove Clarity Of Vision

Published on December 11, 2009 by R "Ray" Wang

Boston Park Plaza Lobby nTag at SAP Summit Schwarz and Becher The Future Leadership of SAP?
(Photos by R Wang & Insider Associates, LLC.   Copyright © 2009 All rights reserved.)

Re-innovation Now At The Heart Of SAP’s Focus And Strategy

SAP has faced a rough two years.  From the continuing market pressure on new license revenue, false-start launch of Business By Design (ByD), management restructuring, and issues with user groups and Enterprise Support, one could kindly say its been a brutal period.  Looking forward to a fresh start in 2010, senior executives and key personnel have been hard at work “re-innovating” SAP at both the product and marketing level.  As intended, many of the 275 analysts, bloggers, customers, influencers, and media attendees of this year’s SAP Influencer Summit left Boston with the perception that the company is in the midst of such transition. However, the clarity of that message and the perception of innovation depended on the topic at hand.

Five key themes drove most formal and informal conversations throughout the event:

  • SAP continues to be innovative. John Schwarz, SAP Executive Board Member, keynoted on stage that ” We are not your grandmother’s SAP” and addressed SAP’s aspiration to become more customer focused and innovative.  Jim Hagemann Snabe, Executive Board Member in charge of Business Technology and Solutions, touted the product vision.  Vishal Sikka, SAP’s Chief Technology Officer (CTO) focused his conversation on Timeless Software and SAP’s cloud orientation.  He emphasized the size of future data volumes and the case for why In-Memory applications would provide the access speed and key meta-data required to draw inference for usage in business intelligence and analytics.  Meanwhile, John Wookey, who leads SAP’s OnDemand for Large Enterprise effort commented on the Cloud by stating, “SAP sees On-Demand as the next major change in computing models and we’re very serious about on-demand. Innovation in on-demand (deployment options) is still largely in front of us.”

    Point of view (POV): SAP’s working hard to highlight its innovations.   With €1.6B spent a year in R&D, innovation exists in SAP Labs but management and tribal politics often keep good ideas from becoming productized.  Users will need to work closely with SAP to identify needs and requirements and help SAP prioritize what should go to market.  Cloud strategy remains hazy in specifics. In-memory approach will benefit customers but will take time to develop across all products.  OnDemand for Large Enterprises could slow in-roads by pure-play SaaS vendors.

  • Business analytics and intelligence play a key role in the platform. Executive Vice-President and General Manager, Marge Breya spent much time talking about SAP’s support for heterogeneous data sources.  As the BOBJ assets integrate into NetWeaver, her emphasis would be to deliver information across new platforms and use cases.  Project Kona for business intelligence (BI) OnDemand in mobility would play a key role in changing how users access SAP information.

    POV: Customers need better information in order to make key decisions.  BI plays a significant role in delivering such value to customers and the Business Objects acquisition provides the enabler.  However, SAP users still find data quality and data governance to be a key hole in the SAP information strategy.  SAP will need to address the different approaches in master data management (MDM) and help customers understand which set of tools should be applied in each customer scenario.

  • Future growth rests with success in small and medium enterprises.  With most of the large enterprise saturated with packaged apps such as ERP, SAP’s future growth rests on its ability to move down market.  The SME team led by Hans-Peter Klaey shared progress on their 3-prong product strategy with Business One (B1), Business All in One (BAiO), and Business by Design (ByD).   B1 continues to gain traction in the small end of the market and SAP has published a product road map well past 2014.  The key issues remain the future of ByD and how SAP plans to scale growth.

    POV: With hopes of getting ByD to scale, Feature Pack 2.5 promises to bring in-memory analytics, multi-tenant support, mobile device enablement, Microsoft Silverlight UI’s, and a software development kit based on Microsoft Visual Studio.  Scaling remains a big issue but now becomes technically feasible.  Conversations with Rainer Zinow, Senior Vice President for SME Strategic Solution Management; Christoph Behrendt, Senior Vice President for Midsize Enterprises; Peter Lorenz, Senior Vice President, SME Solutions; Jeff Stiles, Senior Vice President for SME Marketing; and others, highlight the advanced progression in SAP’s SME thinking.   Early indications show promise that they will eventually approach the market with the right scaling, go to market plan, and cost structure to succeed. Movement towards more Microsoft technologies will help attract B1 partners, especially many at Sage who may be disgruntled but technically competent and customer service oriented.

  • Sustainability is more than a trend.  Building on its Clear Standards acquisition, SAP continues to drive mind share in the field of sustainability tracking.  Key topics include the usual suspects of carbon emissions, energy consumption, and compliance. The Business Objects Sustainability Performance Management offering showcased new areas such as product and workplace safety.  Its recent Sustainability Report highlights how SAP uses its own software to achieve its corporate objectives.  Sustainability shows growth as a board-level topic and issue of concern.

    POV: More than just buzzwords, SAP’s making a considerable investment in sustainability.  By providing the right templates and KPI’s for external reporting, SAP will transform social responsibility aspirations to reality for its interested customers.   Peter Graf, SAP’s Chief Sustainability Officer, has harnessed the do-good spirit of SAP’s employees in building out SAP’s offerings.  Expect sustainability to be a key area in repairing SAP’s current image.  Conversations with customers indicate that sustainability may not be a primary reason to choose SAP today, but SAP’s investment and commitment in this arena brings SAP into conversations with key business leaders and has led to deal flow.  However, long term success in sustainability will require good master data management (MDM) and SAP must rapidly address this issue or face the prospect of false promises.

  • Partners and ecosystems matter. The partner ecosystem team continues to evolve and innovate with new programs that not only attract new partners, but also improve partner readiness.  SAP currently works with 7000 go to market partners and the SAP Developer Network boasts 2.5M developers.  Efforts such as the SAP Mentor program, SAP Partner Edge, SAP EcoHub, and SAP Community Network by Zia Yusuf and his successor, Singh Mecker, Senior Vice President of GEPG provide proof points of progress and success.

    POV:     The EcoHub provides customers, partners, suppliers, and internal employees with a collaboration point for subject matter experts, trouble shooting, and fostering community.  SAP’s partner ecosystem remains its strongest asset.  In order to capitalize on their success, SAP must make the necessary investment in revamping the technology platforms partners build on.  Should they fail in providing an easier platform, they will lose traction and adoption.  Partner-led innovation will move to easier platforms to work with and business models that sustain profitability.

SAP’s Efforts In Strategy To Execution Rates A “B-” For Now

Applying a quick Vendor Scorecard grading system, here is a subjective evaluation of SAP’s 2009 efforts to date*:

  • Leadership: “B-”. Leo Apotheker and Bill McDermott failed to show up again at a key event.  While this was Q4 and a tough quarter, customer and influencer perceptions remain low on Leo given his decision to push Enterprise Support and the lack of clarity into his vision and approach to date.  To be fair, he has faced a tough hurdle in cleaning up mistakes from his predecessor, Henning Kagermann, and has had to streamline research and development as well as a sprawling bureaucracy.  The good news – their absence highlighted the emerging bench strength of talent within SAP.  This brought some confidence to many in attendance that SAP may have the right stuff to emerge. The bad news – rumors abound on when a successor (Co-CEO) would be announced as Leo’s contract expires in June 2010.
  • Product strategy: “B+”. Sustainability, integration of Business Objects componentry, Enhancement Packages (EhP), and In-Memory apps receive praise.  Meanwhile, adoption of ERP 6.0, remains slow.  SAP cites 50% of all product instances on to ERP 6.0.  However, actual customer counts may be less given the fact some customers have 25 to 50 instances of SAP.   Only 3500 customers have used Enhancement  Packages.  Customers remain confused on the value of Business Suite 7, upset with paying twice for BW and Business Objects, and disappointed with SAP’s slow approach to SaaS and onDemand.  Successful relaunch of ByD in 2010 may help SAP gain traction.  Customers await delivery on OnDemand offerings for Large Enterprise but can not wait much longer.  InMemory Apps planned for 2014 must be delivered on-time to compete with Oracle’s Fusion Apps.  Despite the lack of clarity, SAP still has the richest set of business functions and ability to handle the greatest set of complex scenarios.
  • Technology strategy: “C+”. Middleware strategy remains murky at best.  SAP should revamp NetWeaver or junk it.  NetWeaver is to Blackberry as Salesforce.com’s Force.com is to iPhone.  It’s so much easier to build apps on Force.com and iPhone than it is for SAP’s NetWeaver and RIM’s Blackberry.  The decision to emphasize the NetWeaver ABAP stack over the NetWeaver Java stack will leave customers and partners confused despite how much more efficient it is to build on ABAP.  In addition, the lack of good business process orchestration at both run time and design time remains a critical hole for investment and gives vendors such as IBM and Cordys opportunities to sit on-top of SAP apps.  Mobile strategy at first seems less emphasized with the rare mention of native apps development on Blackberry and other platforms.  Nevertheless, SAP’s decision to leave mobile platform integration of Blackberry and others at the NetWeaver Mobile layer may prove to be the most efficient and effective approach.  The move to in-Memory will help with future development, yet customers lack confidence in SAP’s execution of the Timeless Software argument, despite its best intentions.  It appears that SAP will have 2 OnDemand strategies.  Lighter applications will be built on Java.  More complex applications to be built on the OnDemand stack.
  • Go to market strategy: “B+”. “Best Run Now” packages deserve credit for bringing business value from analytics into core business processes.  Slow adoption can be blamed on a sales teams who treated this as a new license sales opportunity instead of an entry point to showcase SAP value.  Customers could see the sales reps salivating with each interaction for a new sale.  Kudos go to SAP for finally admitting failure with ByD and working hard with customers and partners to revamp efforts.  SAP’s marketing team remains the most innovative and effective.  Just wait till they get products that keep up with their marketing.
  • Innovation agenda: “B-”. SAP’s making in-roads in the right areas.  Project Constellation, integration with Google Wave, and social networking investments highlight some movement towards disruptive technologies.  SAP must rapidly productize innovations from the SAP Imagineering team, worldwide SAP Labs, SAP COIL, and its consulting partners.   SAP needs to tap into its ecosystem and bring out innovation.
  • Service and support: “C+”. Customers continue to self-support and question SAP’s value.  As more customers consider third party maintenance, SAP will have to fight harder to demonstrate value.  On the positive front, SAP’s Value Academy shows promise in helping customers optimize their SAP investments.  Initial discussions with Chakib Bhoudary, SAP’s Chief Value Officer, indicate the deep level of experience and data provided.  Customers will want to see how to access these services with minimal investment or redirected maintenance investment.
  • Customer satisfaction: “C+”. Conversations with over 400 customers in 2009 highlight severe disappointment with their SAP relationship.  Sales reps compensated on net new license sales no longer invest in guiding customers through the SAP offerings.  Customers fail to adopt due to lack of knowledge.  They no longer trust their SAP sales reps nor do they have high confidence in the system integrators to guide them to the most cost effective solution.  SAP sales reps need to understand their products better.  Those customers who are able to make a trip to Walldorf (WDF), find solace that the old SAP still exists with passionate and dedicated engineers.  Customers appreciate the honesty in WDF about what can or can not be accomplished with SAP.  However, this is not a scalable model for SAP.  SAP will need to retrain and reincentivize its sales reps.  Applying social enterprise methods to the great SAP ecosystem may prove to be fruitful in scaling out more personalized approaches.
  • Execution to date: “C-”. Failures abound in execution in Enterprise Support, NetWeaver adoption, ByD roll-out, Duet usage, and Solution Manager capabilities.  SAP’s current state is similar to Microsoft’s prior to the launch of Bing and Windows 7.  SAP needs a success story soon to not only raise morale, but also gain customer confidence in its ability to deliver.  Jim Hagemann Snabe’s efforts at streamlining and centralizing development provides at least a positive indicator.
  • Partner ecosystem: “A”. The team has built one of the best technology partner ecosystems in the market.  The emphasis on community outreach, influencer participation, and investment in a partner’s success continues to be a differentiator.  SAP’s ecosystem strategy should be credited with saving SAP during this round of crisis.  A move towards Microsoft technologies such as SharePoint and Silverlight will help in gaining developer traction and adoption.  Fix NetWeaver and the ecosystem will have a tool they can innovate from.
  • Overall reputation: “B”. SAP carries significant brand presence in emerging markets and the SME space.  Many companies equate ownership of SAP as a sign of success in their markets.  Yet, existing customers have soured on the brand and continue to wonder when SAP will innovate in their requirements and not be distracted by other pursuits.  In general, SAP still carries considerable brand equity which will buy it time as it reinnovates.

* A=4.0, A-=3.7., B+=3.3, B=3.0, B-=2.7, C+=2.3, C=2.0, C-=1.7, D+=1.3, D=1.0, D-=0.7, F=0

The Bottom Line  – SAP’s Turning The Corner

Credit must be given to SAP for charting a new course.  A shift in the management philosophy and product direction will take years to realize, however, its not too late for change.  SAP must remember its roots and become more German and less American.  The renewed focus must put customer requests and priorities ahead of SAP’s bureaucracy.  The emphasis must focus on the relationship.  When that reemerges in how SAP works with customers, partners, influencers, and its own employees, SAP will be back in good graces.  In the meantime, it’s  time to get to work and deliver.  Oracle’s Fusions Apps are coming soon and competitors such as IBM, Microsoft, Epicor, IFS, and SalesForce.com will not relent.

Your POV.

If you get a chance, let us know:

  • Which SAP products do you use?
  • What do you think about the progress with SAP?
  • Are you considering alternatives to SAP?
  • Do you feel SAP is innovating fast, ok, or slow enough?
  • What do you think of SAP’s new reinnovation strategy?

Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Other related links and good resources

SPECIAL: Video clips from the SAP Influencer Summit from SAP

20091211 ZDNet Software & Services Safari – Brian Sommer “SAP Business ByDesign Update: Multi-tenancy, In-Core Memory DB and More”

20091211 MichaelFauscette.com – Michael Fauscette “SAP Coming Out From the Clouds”

20091210 ZDNet Collaboration 2.0 – Oliver Marks “SAP: The clear path forward for the supertanker…”

20091209 ZDNet IT Project Failures – Michael Krigsman “Is on-premise ERP obsolete?”

20091209 ZDNet Social CRM: The Conversation – Paul Greenberg “SAP Business Influencers Summit: A Clear Path Forward?”

20091209 Spend Matters – Jason Busch “SAP Influencer Summit, Dispatch 1: On-Demand Differentiation and Vision”

20091209 Monkchips – James Governor ” SAP: Out with the Old, Shrugging off the Tag”

20091209 Merv’s Market Strategy For IT Suppliers – Merv Adrian “SAP Promises Acceleration on a “Clear Path” – Will it Be Enough?”

20091209 CIO Reinvented Blog – Prasanth Rai “Interesting Data/Statistics About SAP…(Influencer Summit)”

20091209 DealArchitect – Vinnie Mirchandani “SAP and The Boston Park Plaza”

20091209 Cloud Avenue – Zoli Erdos “Twitter in the Enterprise – Round 56745327″

20091208 ZDNet IT Project Failures – Michael Krigsman “SAP Influencer Summit: First Impressions”

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

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Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

Published on December 8, 2009 by R "Ray" Wang

Begin Apps Strategy Projects With Bite-Sized Entry Points

Complexity often plagues today’s apps strategies.  With tight budgets, limited resources, and little time, organizations need to find bite-sized entry points. The need to meet ever changing complex business requirements requires a four-step, basic (A,B,C,D) approach:
  1. Align your business requirements with the hierarchy of business needs. Every project and initiative can be placed into one of the five stages.  Use the organizational hierarchy of needs to classify and prioritize the importance of each project.  With a clear sense of how the priorities stack up, you can begin crafting your apps strategy around organizational readiness, business process optimization, technology strategy, and vendor ecosystems.
  2. Base decisions on the identification of 3 major types of business processes. As organizations begin that process of documenting business processes, they must differentiate among the 3 major types of business processes.  In key flows such as order to cash, hire to retire, incident to resolution, procure to pay, etc, remember to categorize key processes into three buckets: mission critical, commoditized, and innovative.
  3. Choose your entry points to business value. It makes no sense to boil the ocean.  Clients often start with departmental and work there way to cross-departmental initiatives.  Advanced customers focus on external entry points such as customers and partners.  Keep in mind processes cross functional fiefdoms but you do have to start somewhere. (see Figure 1.)
  4. Define the metrics that matter. Begin with the end in mind.  This Coveyism always rings true in transformational activities.  Metrics should be aligned with your entry points.  Quantify the baseline and determine the effort.  Adjust your ROI targets to align resources with efforts to move the needle.  The goal – drive business value. (see Figure 2.)
Figure 1. Choose Your Entry Points To Business Value

(Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

(Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

Figure 2. Define The Metrics That Matter
Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

(Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

The Bottom Line – Sketch The Big Picture, But Paint By Number

With the pace of adoption much slower than the pace of technology innovation, organizations will have to complete small tactical projects that build out the larger picture.  Apps strategies should include tactical road maps that achieve strategic goals.  Don’t hesitate to plan ahead and build in flexibility.  Plans will change, so apps strategies must take an “agile” approach.   Iterate every 6 months as business needs change and new disruptive technologies emerge.  Keep focused on the goal in mind – business value.

Your POV

Have you planned your 2010 strategy?  Which entry points have you prioritized?  How are you defining business value?  Got a scoop or something to share? Please post or send on to r at softwareinsider dot org or rwang0 at gmail dot com and we’ll keep your anonymity.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

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