This week, SAP conducted its annual Sapphire customer conference in conjunction with its Americas Users Group (ASUG) among thousands of customers, partners and analyst wanabees. There are the usual spiffy, industrial strength executive presentations that portend compelling trends in business and technology with customers responding to fluff questions or singing the praises of technology in return for healthy discounts. However, beneath the glitz is reality, the reality of a technology company that has bold vision but is spread out in too many directions, with confusing messages for its customers.
In their keynote talks, both Co-CEO spoke to mega-trends of business and technology. Co-CEO Bill McDermott stated that the world will consume everything through mobile devices. Co-CEO Jim Hagemann Snabe spoke to the world of 2052, and outlined his view of the three fundamental paradigm shifts in computing:
- The rush to mobile computing and mobile access to data. In five years, everything is mobile.
- Cloud computing adoption is underway, and, in less than 5 years, everything is cloud.
- In-memory computing, with applications that recognize patterns and predict the future.
These are all compelling trends, those that a Geoffrey Moore, MIT’s Charles Fine, or HBR’s Clayton Christensen can certainly expand upon. To no surprise, these three same compelling trends also conveniently match up with SAP’s business plans for revenue growth. We expect to hear about these trends from visionaries. We should expect technology CEO’s to speak to solving customer’s current business problems, both in short and longer-term dimensions. There were some attempts to get to these concepts in the keynotes but SAP missed the mark in not providing a hard-hitting panel facilitator. SAP at its core is an ERP and enterprise technology provider, but those terms seem to become blurred which each Sapphire.
Most businesses and supply chains deal with today’s demanding business challenges of this quarter, next quarter, and the remaining fiscal year. Supply chains are challenged with the complex simultaneous problems of supporting top-line revenue growth, agility, efficiency and managing significant risk. A fundamental shift in the influence of technology decisions is well underway, a shift that favors business and functional teams. Yet SAP messaging still tends to dwell on mega IT trends.
Supply Chain Matters would surmise that business and global supply chain teams utilizing SAP have their success pegged to near-term information, decision support and software application performance realities. For example:
Mobile Computing and Security– how do we protect and insure that sensitive data residing on mobile devices does not fall in the wrong hands. After all, it is a mobile device. In his blog posting in preparation for Sapphire, Ray Wang summarizes user questions related to mobility, specifically: Why does it cost more to use SAP’s mobility solutions and why as an SAP customer, I pay twice, and in some cases three times for mobile licenses to access the same system information? In his blog commentary, ZD Net and SAP Influencer blogger Dennis Howlett noted developer consensus that SAP has shot itself in the foot, missing mobile opportunities that are obvious to everyone but SAP. He also points to considerable internal friction among internal SAP teams.
Cloud is certainly gaining interest but business and functional teams need to be provided with a coherent and scalable strategy that can be positioned with senior executive teams. Some have noted that SAP currently has multiple cloud platform offerings including some of the new HANA based applications. SAP’s newly appointed senior executive charged with Cloud strategy, Lars Dalgaard did not help to provide such clarity other than SuccessFactors is the model.
SAP also straddles private vs. public cloud deployment strategies, trying to both satisfy huge enterprise customers along with mid-market businesses. The current customer adoption among SAP Business by Design and SAP Business One is not exactly stellar at this point, and Business One has just been re-written on the HANA platform. SAP is also just beginning to talk seriously about integration with non-SAP cloud platforms.
In-Memory: Then we have the game changing potential of HANA, which seems to change messaging which each passing Sapphire. Analytics means entirely different needs for different business challenges, and as pointed out by SAP, can span both OLTP (on-line transactional processing) and OLAP (on-line analytical processing) needs. HANA seems to be evolving to not only solve each challenge, but to serve as the ERP transactional and substitute database platform strategy. A bold vision indeed, but customers need specifics related to roadmap and impacts to existing upgrade strategies in applications and newer IT hardware. What about pricing of HANA? That seems to be something that is reserved for deal negotiations vs. overall planning.
SAP and Oracle are also engaged in public warfare over who has the better collection of technology that can support operational reporting, relational query, OLTP and information discovery needs. Each of these analytical needs requires different technical capabilities and both vendors claim the high ground. Some credit goes to SAP for trying to take the high ground. Both vendors however, provide important arguments and IT teams need to assess the bottom line implications. The resolution of the debate will ultimately be determined in actual delivery of all of this functionality in a customer-timely, cost-affordable manner. The other reality remains that the majority of SAP existing deployments include SAP Business Warehouse, most likely wrapped with some SAP Business Object s Explorer tools. What’s the roadmap or recommended strategy for this infrastructure?
In his keynote, Hasso Plattner was willing to speak candidly about the HANA roadmap. Thank goodness for his candor. He spoke of the opportunity to move new SAP applications to the HANA platform, the ability to help customers perform more timely planning as well as simulation, and, as he mentioned last year, the ability to significantly accelerate the performance of SAP APO, SAP’s advanced supply chain planning application. He further noted that IT teams will have to reconfigure their physical systems and applications landscape to be able to leverage these capabilities. But all of this will again take additional time.
Some SAP observers note that the key to HANA adoption is the few killer application use cases that can convince the broader SAP community of the true game-changing power of HANA. For supply chain business process, that opportunity was presented in the recently released SAP Sales and Operations Planning Powered by HANA application. Our Supply Chain Matters first impression was that this was an opportunity to truly demonstrate HANA in a mission-critical supply chain application. But, an initial evaluation noted incomplete features and limited functionality, along with a small select group of pilot customer ramp-up projects. Bottom line, another opportunity squandered.
As another Sapphire moves into the archives, SAP continues to leave gaps among vision, strategy, confusing internal structure and product execution roadmaps. In the mission critical areas of supply chain, manufacturing, product lifecycle management and procurement business process support, another year passes without transferring the power of potentially game-changing technology to multiple applications in planning, predictive analytics, collaboration and decision-support vs. just a singular application. What about supply chain applications availability in the cloud, other than SRM?
There remains a need for clear positioning and articulated value for various supply chain business problems, and providing solutions based on customer timetables as opposed to SAP’s timetables and internal business priorities. That keeps the door ajar for systems integrators, best-of-breed technology and other providers to fill the gaps and turn confusion into opportunity.
©2012 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters Blog. All rights reserved.