Archive for the ‘SAP’ Category

« Older Entries

Quark Summary: Does SAP HANA Change Your Database Strategy for SAP Apps?

Published on April 18, 2012 by R "Ray" Wang

Forward And Commentary

SAP’s made big claims about HANA and its capabilities today and into the future.  This Quark goes into the details and Constellation’s point of view.

A. Executive Summary

Both HANA as an architecture and database alternative indicate SAP’s future direction and next-generation approach. Consequently, numerous clients and SAP customers have inquired on whether or not they can replace their underlying Relational Database Management Systems (RDBMS) in their SAP Business Suite with HANA. Constellation believes SAP HANA is a critical technology that SAP customers should evaluate and understand as the roadmap reveals itself. This report primarily describes the role HANA will play for use with SAP Business Suite and in future SAP applications.

B. Research Findings

Since 2008, SAP has hinted at a real-time data platform approach to its middleware and application infrastructure based on the power of in-memory database (IMDB) technologies. IMDBs are a database management system that stores data directly onto the main memory of a computer. In an IMDB, the memory resident data has one minimum backup copy on disk, but the primary copy lives permanently in memory. Traditional on-disk databases cache data into main memory for access but the primary copy permanently lives in storage.

More…

RSS feed for comments on this post. — TrackBack URL

Research Summary: Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions

Published on March 18, 2012 by R "Ray" Wang

Forward And Commentary

Software ownership costs continue to escalate as vendors accelerate their efforts to capture support and maintenance revenues. Some vendors have gone to the extreme to eliminate third-party options for their customers. This best practices report examines three strategies to free up unnecessary costs to fund innovation and new projects.

A. Introduction

On average, IT budgets are down from 1-5 percent year-over-year, yet software support and maintenance costs continue to escalate ahead of inflation. Hence, continued pressure on IT budgets and a growing need for innovation projects have top business and technology leaders reexamining their software support and maintenance contracts for cost efficiencies.

Based on experience from over 1500 software contract negotiations, Constellation suggests three approaches to reduce the cost of software support and maintenance. Key strategies include third-party maintenance, shelfware reductions and unbundling maintenance contracts as part of every organization’s tech optimization strategy. Successful implementation can lead to savings from 10-25 percent of the IT budget, freeing up cash to fund innovation initiatives.

B. Research Findings – Why Every Organization Should Consider Third-Party Maintenance, Shelfware Reductions and Unbundling Maintenance Contracts

Most organizations suffocate from the high and hidden cost of support and maintenance. On average, Constellation’s surveys reveal global IT budgets trending down from 1-5 percent year-over-year since 2008. Consumerization of IT, rapidly changing business models, and aging infrastructure have exposed the high cost of software support and maintenance. Because most organizations allocate from 60-85 percent of their budget to keeping the lights on, very little of the budget is left to spend on new projects (see Figure 1).

Organizations can unlock millions by considering third-party maintenance (3PM), reducing shelfware, and keeping support and maintenance contracts unbundled. Each strategy on its own creates opportunities to drive cost savings. All three strategies combined, provide a roadmap for funding innovation.

  1. Third-party maintenance (3PM) delivers the most immediate cost savings and opportunity for innovation. Third-party maintenance describes support and maintenance offerings delivered by non-OEM providers. These vendors can provide a range of options from basic break/fix to bug fixes, performance optimization, tax and regulatory updates, and customization support. Keep in mind, 3PM does not provide access to upgrades and future versions of the OEM’s product. One big driver is the lower cost of delivery, as much as half the cost of the original vendor’s pricing.  The report shows a survey of 268 respondents and why organizations choose 3PM and who the key vendors are.
  2. Reduction of shelfware remains a key pillar in legacy optimization strategies.  Shelfware (i.e. purchased software, not deployed, but incurring annual maintenance fees) is one of the biggest drains on operational expenses for enterprises. The simple definition of shelfware is software you buy and don’t use. For example, an organization that buys 1000 licenses of Vendor X’s latest ERP software and uses 905 licenses, becomes the proud owner of 95 licenses not being utilized. That’s 95 licenses of shelfware because the user will pay support and maintenance on the license whether or not they use the software or not.  The report details 4 successful and proven approaches.
  3. Unbundling maintenance contracts prevents future vendor mischief. About a decade back, vendors would offer support and maintenance as two separate line items on their contracts. Support would run about 5-10 percent of the license fee and so would maintenance. Keep in mind, average support and maintenance fees were under 15 percent back then. Unfortunately, many users have expressed a growing and concerning trend with support and maintenance contracts. Vendors concerns about support and maintenance contract retentions have led to new initiatives to consolidate contracts. At first glance, this may appear to be proactive and beneficial to customers, but the report details three rationales vendors provide and three strategies how to avoid bundling.

Figure 1. Visualizing the High Costs of Support And Maintenance

(Right-click to see full image)

More…

RSS feed for comments on this post. — TrackBack URL

Product Review: SAP’s Recalls Plus App – The Crossover From Enterprise To Consumer Begins

Published on February 15, 2012 by R "Ray" Wang

SAP’s First Consumer App Addresses A Key Consumer Concern

At midnight pacific time, February 15th, SAP launched its first ever consumer app – Recalls Plus. This consumer app, downloadable for free on Apple’s app store, was developed from one of the world’s leading enterprise software companies (see Figure 1.)  SAP’s first foray into the consumer world will surprise many customers, influencers, and observers.  In fact, in an exclusive conversation with Rishi Diwan, who’s the product owner for the new consumer apps team, he reinforced SAP’s seriousness to enter the market, apply lessons learned, and reiterate.

The basic concept of Recalls Plus is elegant and brings the age old, manual and cumbersome process of tracking consumer recalls to today’s world of engagement systems (see Figure 2.)  With a rich and elegant user experience, consumers can quickly see the latest recalls and share details within social networks (see Figures 3).

In addition, the solution allows consumers to track recalls on individual products, categories of products, and food allergens on their iPhone (today) and other mobile devices (tomorrow) (see Figures 4, 5, and 6.)  More importantly, this consumer app touches the customers of SAP’s customers and provides a missing piece in the customer loyalty angle by providing real-time alerts (see Figure 7.).  By proactively outreaching with end consumers, SAP can help its direct customers build long term loyalty and improve customer engagement.

Figure 1. Sign In Screen Easily Works Like Any Other Consumer Mobile App

 

Figure 2.  Tracked Recalls Show Up On The Initial Home Screen

 

More…

RSS feed for comments on this post. — TrackBack URL

News Analysis: SAP Buys SuccessFactors for $3.4B Signals SAP’s Commitment To Cloud, HCM, and Social

Published on December 3, 2011 by R "Ray" Wang

SuccessFactors Acquisition Puts SAP In Direct Competition With Workday And Taleo

SAP (NYSE:SAP) announced its $3.4B acquisition of SuccessFactors (NYSE: SFSF) as it seeks to bolster its position in the Cloud and more importantly in the rapidly growing strategic HCM market.  Based in San Mateo, CA, USA, SuccessFactors brings over 15 million subscription users from 3,500 customers in 168 countries.  The company has 1450 employees and has been one of the SaaS/Cloud darlings of the industry.  When completed, SuccessFactors will remain an independent entity renamed, SuccessFactors, an SAP company.  Lars Dalgaard, Founder and CEO, SuccessFactors will lead the cloud business for SAP.  A quick analysis of the news reveals:

  • SAP seeking a comprehensive and complementary HCM solution. SAP believes the combination of SuccessFactors and SAP will create a comprehensive HCM solution, marrying strength in enterprise applications with people-focused cloud applications. Today, SAP serves the market with a comprehensive and international Core HR and payroll.  Other on-premise offerings include talent management, workforce analytics, and shared services delivery. Key offerings from SuccessFactors include areas such as talent management, recruiting management, goal management, performance reviews, and business execution.  Further, SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could benefit from one-stop shopping.

    Point of View (POV):     While the core offerings provided a solid approach, these applications remained in the systems of transaction world and lacked many of the newer requirements for systems of engagement.  In fact, many customers left SAP to go to SuccessFactors to accelerate innovation in the talent space. The rise of Taleo, Workday, and Ultimate Software comes from the lack of general innovation in the HCM space by legacy vendors such as Oracle, PeopleSoft, and SAP.  Cloud computing provided the opportunity to deliver rapid innovation to customers.  Consequently, existing customers will welcome the move while best of breed purists will have to overcome the surprise and determine how innovative they expect SAP to become in HCM.
  • SuccessFactors’ provides SAP with massive cross-sell opportunities. SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could potentially go for one-stop shopping from SAP.

    Point of View (POV):     SAP sees the acquisition as a great cross-sell opportunity for other cloud apps and analytics.  Other opportunities include CRM, Collaboration, Travel, and Procurement in the cloud.  In the past two years, Success Factors has made the shift to focus on business performance execution and provides a real time decision making platform.  While customers can acquire a solution from one vendor, the integration of the various cloud platforms may prove to be a challenge.  However, from a financial play, Co-CEO, Bill McDermott sees this as an easy way to meet his 2015 target of €20billion and move towards the 35% margin he seeks to bring shareholders.

RSS feed for comments on this post. — TrackBack URL

Monday’s Musings: A Working Vendor Landscape For Social Business

Published on August 15, 2011 by R "Ray" Wang

Confusion Persists In The Social Business Market

As with any new disruptive technology, the social business solution landscape faces a dynamic, confusing, and converging market. As vendors seek to grab mind share and market share, customers and prospects remain confused as to what are the right business problems to address with social business. However, rampant confusion among users hampers efforts to solve business issues. Three key factors accelerate this level of confusion:

  1. Early adopter market. Constantly changing conditions force customers to alter original plans as executive sponsorship fluctuates from intense to pensive and back to intense in short cycles. Projects remain secretive for competitive advantage reasons. Consequently, prospects lack strong case studies to build off of despite peer groups, adoption networks. Prospects seek metrics that matter and relevant use cases.
  2. Consumerization of IT. With increased social media penetration, success in consumer grade products highlight the potential for enterprise adoption. However, most enterprise class products remain one to two generations behind in achieving similar capabilities. As business users gravitate towards simple, scalable, and sexy attributes; IT departments seek to rein in shadow IT efforts with safety, security, and sustainability requirements.
  3. Marketing mayhem. Fast paced markets always generate hype in marketing messages. Hence, legacy collaboration, community platform, CRM, unified communications, integration platform, and office productivity vendors seek to reposition themselves and address the emerging and trendy social business use cases customers seek.

Social Business Vendors Converge Towards Business Value Sweet Spot

The vendor landscape for social business market represents a diverse and broad collection of solutions.  Vendors approach the market from multiple heritage points, technologies, and markets.  Four key criteria cut across two axes (see Figure 1):

  1. External facing vs internal facing.  External facing includes customers, partners, and suppliers.  Internal facing include employees and trusted networks within the corporate firewall.
  2. Platforms and infrastructure vs purpose built solutions.  Platforms and infrastructure referred to core technology solutions.  Purpose built solutions address specific applications.

Figure 1. Social Business Vendors Converge Towards Business Value Sweet Spot (Working Draft)

More…

RSS feed for comments on this post. — TrackBack URL

Event Report: SAUG Summit 2011 Attendees Show A Shift From SAP Centricity To Purpose Built

Published on August 3, 2011 by R "Ray" Wang

Summit Brings A Cadre Of Thought Leaders To User Group Attendees


The SAP Australian User’s Group held their annual summit once again at the Sydney Convention Centre in Darling Harbour from August 2nd to August 4th.  With around 600 attendees, the keynotes covered many of the hot topics about SAP ownership, road maps, and best practices. Some highlights include:

  • Christian Thompson, Director of Information Services at CITIC Pacific Mining discussed their experiences with growth and to go cloud or not.
  • Jeff Word, Vice President of Product Strategy at SAP shared the latest SAP Technology strategy in his keynote and delivered a standing room only, four hour deep dive, on HANA that was a must attend event.
  • John Kelvie, IS Director at Fonterra outlined how their company replaced legacy systems with SAP for a future SAP road map. John provided detailed examples of what worked and what didn’t.
  • Bridgette Chambers, CEO of the America’s SAP User Group (ASUG) introduced the concept of Infinite ROI. She expressed how to take advantage of timeless software.
  • Malcolm Humphries, BI Solutions Architect at Fonterra; and Keith Murray, Global Product Manager for SAP In-memory computing at IBM shared real-world experiences of how BWA can be deployed and the realities of the SAP’s new HANA in-memory product. This session blew away most marketing fluff presentations at Sapphire 2011 this year.

In addition, breakout sessions focused on industries, solutions, business/analytics, and IT organization/Technology, and BOBJ.  Of particular interest was the excellent session put on by Peter Dee, Head of Upgrade Centre, SAP Asia Pacific Japan. He provided some pragmatic approaches to managing cost effective upgrades.

Meanwhile, the mobile sessions, BI sessions, and solution manager sessions received a lot of attention.  Of note, Australian SAP Mentors Matt Harding, Paul Hawking, Ingo Hilgefort, Nigel James, John Moy, Graham Robinson, and Tony de Thomasi were in attendance providing their wisdom and insights throughout the event.

Australian SAP Users Upgrading But Moving Away From SAP Centric Strategy

Traditionally an SAP only and SAP centric market, conversations with attendees confirmed a significant shift in approach.  Cloud computing, mobile enablement, business pressures, and the need to align with business strategy have driven many Australian SAP customers to stray away from a single vendor approach.  For instance, on the mobile side, SkyTech’s offerings show good penetration.  For collaboration solutions SharePoint and Yammer appear to have gained mind share.  CRM remains dominated by Salesforce.com and Microsoft CRM.  Analytics discussions include Business Objects but IBM Cognos, Oracle Hyperion, QlikTech, and other cloud based solutions show significant presence in conversations.

During the Future of Enterprise Software and SAP keynote, an informal poll of the 650+ attendees revealed the following SAP strategies (see Figure 1):

  • Stay with status quo: 15%
  • Move to shiny new SAP: 20%
  • Stabilize SAP and augment: 25%
  • Modernize SAP and surround with best of breed: 40%

Figure 1. Four Paths To SAP Optimization

With 65% of the respondents considering solutions outside the SAP sphere, SAP HQ should take note that the Fortress SAP approach no longer holds true in ANZ.  The good news – 60% of respondents have made the decision to upgrade to the latest SAP products and remain interested in having SAP as part of their long term strategy. SAP remains in good relationships with its key customers. While customers do see SAP as a core part of their strategy, it is not the only strategy.

More…

RSS feed for comments on this post. — TrackBack URL

Executive Profiles: Disruptive Tech Leaders In Cloud Computing – Peter Lorenz, SAP AG

Published on June 7, 2011 by R "Ray" Wang

Welcome to an on-going series of interviews with the people behind the technologies in Social Business.  The interviews  provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Peter Lorenz – Executive Vice President OnDemand, Corporate Officer, SAP AG

Biography
Peter Lorenz is SAP’s executive vice president of on-demand. He is also a corporate officer, reporting to Jim Hagemann Snabe, Co-CEO of SAP and leading the Business Solutions and Technology organization. As head of OnDemand,  he is responsible for all aspects of SAP’s on-demand solutions – SAP® Business ByDesign™ and SAP Line of Business OnDemand including development, solution management, delivery, and deployment, as well as service and support.

In his previous role, Lorenz was chief technology officer of SAP Business ByDesign. He also drove the enterprise service-oriented architecture for the solution. In addition, he was in charge of the enterprise services architecture modeling, product management within the application platform, and the application platform Supplier Relationship Management (SRM) development organization.

Peter Lorenz joined SAP in 1993.

The Interview

1. Tell me in 2 minutes or less why Cloud Computing is changing the world for your customers.

Peter Lorenz (PL): We impact two types of customers.  For our existing customers, we’re delivering a new level of flexibility, elasticity, and TCO (Total Cost of Onwership).  They get a new feeling.  They don’t (have to) wait to get on.  (A) new breed of applications now emerge that wouldn’t have been available to customers in the past.   They can access mobility in the cloud, experience different applications, consume new breeds of applications.

For new customers, especially in small-medium-enterprises (SME), they get something you never could have gotten before for that price.  Also they require minimal IT staff (i.e. 1 person) for  this cost and price/value point.   They also gain lower hurdles of adoption.

What’s the “ah hah” moment?  We’re delivering a co-innovation model and we have open conversations creating the experience part.  It’s non-transactional between us and not the data store.  Take Sales On Demand, it’s formless, not structured.

In Business by Design (ByD) – we deliver a more seamless process deep integration.   This experience is brought forward in a relaxed way.  This is the” ah hah” moment. I can really operate this with ease.  Another thing we hear, when we see mobility with the on-demand applications, these (components) all comes together.

2. What makes cloud computing disruptive?

PL: A key thing – cloud computing changes the speed of adoption.  Customers gain faster time to market and value.  We don’t get on these super large projects and wait for ages and people really do hate to wait for the system to come on line.

Most people associate cloud application with a like factor. There is something here.

Another positive disruption – guaranteed service for a defined price.  At the end of the day, we have a defined cost. We have the price of adoption. Price per user per month. All these things are fixed.

This is a much more defined world than on-premise where you run the whole thing by yourself.

3. What is the next big thing in Cloud Computing?

PL: We’ll need to connect the cloud to the on-premise world.  This is the first thing that has to happen.  This is important.  The fluidity of applications.  The private parts of the network. This has to improve a lot.  We have to take services that run on-premises and combine them with the data in the cloud.  Outsource, in-0source, this is something that will have to come.  This is not a raw technology problem.  How can applications be run that takes advantage of outsourced HR with SaaS CRM, with on premise finance?  We have to be able to monitor how its working.

Also, the hybrid world of SAP products need to work with each other.  We can bring them together in a defined way.  Stick it together.  These things can happen.  What I would think would happen is a private private cloud.

What you get easily ask, I’m’ a big IT dept getting beaten up.  I’m threatened by on-demand all the time.  The interesting thing in cases where they sell the operations infrastructure, we’ll be the internal cloud service provider.  The idea is to use all the scalability advantages internally.

More…

RSS feed for comments on this post. — TrackBack URL

Older Posts »