The State of SAP 2012: New Research for a New Age

From 1995 through 2000, I worked in SAP systems integration, helping clients to implement R/3. In 1998, I published The SAP Blue Book, A Concise Business Guide to the World of SAP. One concern I had back then was that there was no primary research at all about the best practices for implementation.

Since that time, I have been gathering primary research about implementation best practices and, even more important, about post-implementation practices and strategies. As a result, over the years, I have led fourteen major research projects and participated in dozens of others. Among the most striking lessons learned across studies relative to SAP (in no particular order):

You Get How You Pay For: Fixed-fee implementation projects are the least successful; value-based fee projects are the most successful (if you can measure).

Tell Me If You’ve Heard This One Before: The large systems integrators tend to perform fairly well in the Fortune 500 market and very poorly in all other markets.

Latch-Key Kids: In a study on end user training and supports, 76% of firms polled claimed that their end users were struggling or failing when it came to SAP competency. When compared to firms that claimed they were doing well, we found that the successful firms overwhelmingly provided more continuous training than the struggling firms.

I Said I Wanted Chicken but Now I Want Steak and Later I Will Be Happy to Have a Hot Dog: The client group mindset changes radically between the time they choose a systems integrator and the time they start a project. Then nearly everything changes again after go-live. (Moral: it is good to have an articulated long-term vision before starting down the SAP path).

My Last Confession Was during Business Blueprint (The Privacy of the Confessional): In public settings, clients blame SAP or their systems integrator for project issues. When provided an anonymous platform, they place far greater blame on themselves.

A Day at the Dentist: Measurement of business performance is deemed (incorrectly) as painful as root canal. (Fewer than 20% have tangible measures during implementations).

Unfortunately, some of the essential data is now old and therefore no longer fully credible. Further, there are a number of new subjects (Centers of Excellence, Shadow IT, and Maintaining SAP Super User Networks) where little or no primary research is available.

In order to answer myriad questions about the state of SAP 2012, we have launched a survey with hopes of having final data and analysis in time for SAPPHIRE.

Survey link:  http://www.surveymonkey.com/s/N9JWXBZ

Survey completion should be about 15 minutesIn return for your contribution, we will provide you with a study based on the survey results -- “The State of SAP 2012: SAP Installed Base Survey Results” -- and/or any of the following white papers:

• We Do It Themselves - Outsourcing SAP Support Services
• Your Users Are Stumbling and Your Business Is Suffering, How cutting SAP Training could make bad times worse
• SAP as the Engine to Measurable Business Benefit

 White papers will be delivered via e-mail, in pdf format, within seven days of your survey completion.

  

In the survey, we ask for your e-mail address. This address will not be used for any purpose at any time other than for returning requested material to you.

Survey completion should be about 15 minutes as the questions are fairly straightforward and responses are mostly “multiple choice” or “check all that apply”.

Example:

Survey Sections include:

Intro Demographics of Respondents

1 Current State

• SAP maturity
• Strengths & weaknesses
• Center of Excellence status

2 Current Organization

•  Business process organization/success rates
• Super user/end user status
• Organizational change management

 3 Forward Planning

• HANA
• Business Intelligence
• Mobility

4 Center of Expertise status

5 Working Preferences

• Service preferences
• Information sources
• Preferred Events
• Preferred Workshops

The first and most important benefit to having this information is to see where you fit across the SAP installed base market. You will gain an understanding of what issues are being faced by others as well as what they are doing to evolve.

The data has extra credibility in that is derived from your peers. Feel free to contact me if you have any questions:

Survey link: http://www.surveymonkey.com/s/N9JWXBZ


michael.doane@cgi.com         michael@michaeldoane.com

It's Cloud's Illusions I Recall: 2012 SAP Client Trends

As is customary this time of year, we have had a plethora of “lists” either of nostalgia (looking back at 2011) or with anticipation (looking ahead to 2012). Prominent on these lists for SAP are: HANA, mobility, Bob J, and Solution Manager (the four horsemen of the Sapocalypse). I fully expect SAP to keep the horns blowing hard for these subjects, though I would truly welcome something new that isn’t techy-wonkish.


In that light, I continue to believe that neither The Cloud nor SaaS are particularly relevant to SAP clients in the installed base with revenues > $500M. No client of major size is going to use cloud in more than a lab environment as they will be loath to consign the heart of their IP to a cloud environment. And although SaaS solutions continue to evolve, they do not lend themselves to continuous business process improvement (to say the least).

The trends that I list here (in no particular order) are clearly not part of the mainstream with analysts whose eyes are turned to the technology but should be trends that clients themselves will follow.

Shadow IT is on the Rise: While I do not have any primary research in this regard, I have noted a serious increase in the frequency of IT systems and solutions used outside of official IT and without official approval. The vast majority of shadow IT is business intelligence (with a concentration upon executive dashboards). This rise is probably due to a) IT leadership not tuned to business needs and/or b) corporate dictates to IT to reduce costs, leaving IT unable to serve business.

The dwindling of the SAP consulting eco-system gives clients less choice than ever: Twelve years ago, there were 300 North American SAP practices. The large practices, often referred to as ‘the usual suspects’ included Price Waterhouse, Coopers & Lybrand, Anderson Consulting (later Accenture), CSC, Deloitte, KPMG (later BearingPoint) , Ernst & Young, IBM, and SAP Consulting. That’s nine firms. Today, we are down to SAP Consulting, IBM, Accenture, Deloitte, Capgemini, and CSC. That’s six firms. And the count of North American SAP practices is less than 100 with almost no second tier. This is the result of aggressive provider consolidation, vastly increased global delivery, and mass growth of SAP Consulting and the IBM and Accenture SAP practices.

Centers of Expertise will continue to give way to Centers of Excellence. Centers of Expertise are intended to get the most out of SAP software. Lots of clients have them. Centers of Excellence are intended to drive continuous measurable business improvements. Few clients have them. So what’s the trend? 2010 and 2011 saw a rise in client maturity regarding the distinction between the two CoE meanings and substance. A rise, I said, not a tsunami. The vast majority of firms with SAP will still be looking in the wrong direction (towards technology) to improve their maturity.

Marc Benioff, CEO of SalesForcedotcom (that’s right, they are still mis-named and still use dotcom in the moniker) will continue to embarrass himself with loudmouth declarations about his firm toppling SAP, Oracle, et al. He’s been doing so for about five years now and should be getting hoarse even as the vision of “toppling” grows ever distant. Waves of analysts, however, will buy in to this delusion.

The definition of a business process expert will continue to be refined. To date, the definers have come from the ranks of IT (read=techie) analysts and more technical-minded consultants. If you go to the BPX Community pages at SDN, you get the impression that business process expertise is about “tools” and “modeling” and, oh my, SAP NetWeaver Process Orchestration. Just as construction is not defined by hammers and nails, we need to remember that business process expertise is supposed to be the nexus between business and IT. The blur. BizIT. Fellow definition refiners are welcome here.

Super user networks will be more common and more effective. 2010 heralded the beginning of the end of the dreadful neglect of SAP end users as we continue to find ways to prove the cost of such neglect and thus gain client mindshare around the issues.

The Long Green Road to CGI

Learning from Clients What Most Vendors Still Won’t (Can’t?) Do

Back in 2001, I left the field of SAP consulting to become an industry analyst at META Group. My coverage area was consulting firms and over the next six years I advised dozens of them in regard to competitive analysis, marketing & messaging, delivery methods, market positioning, and effective sales techniques. What I enjoyed most about this work was the freedom to complete research in order to move past anecdotes and direct experience. What I liked least about this work was, frankly, a lot of the vendor contact. An uncomfortably high number of the consulting leaders that I came across were combinations of self-righteous, arrogant, deaf, paranoid, and dishonest. Too often I was told “We are our clients’ trusted advisors”, a specious claim for which there was never any evidence. Multiple partners from one of the largest firms tended to say “Our clients love us”, to which my immediate answer was always “You’re not talking to all of your clients.” Sales pitches invariably included a reference to how “our people are different”, to which I would ask “How different? Can they go sleepless? Do they have three hands?” The single most annoying aspect of vendor contact was hearing how a firm was “the industry leader in [fill in the blank]” when in nearly every case there was no reference to how such leadership was ascertained or awarded. As Christopher Hitchens puts it (albeit in a different context) “What can be asserted without proof can be dismissed without proof.”

All this time, I very definitely kept my hand in the world of SAP. Until 2001, all efforts by SAP and its implementation partners were focused upon rapid implementations. However, I had a large number of META Group clients who already had SAP. Many of them had read my SAP Blue Book, A Concise Business Guide to the World of SAP and tended to say that it was useful while they were implementing but now that they were live, they needed other advice. Did I have another book about best practices after go-live?

While I was willing to write one, there was one significant impediment: with a rigid focus on implementations, neither SAP nor its partners had much to say in regard to best practices or thought leadership regarding the deployment of an SAP installation.

My META Group clients were all asking fairly similar questions:

• How do we best organize to keep business and IT alignment?
• How do we maintain end user competency?
• How do we gain measurable business benefit?
• Who out there is thriving with their SAP platform?
• What should we be outsourcing and how do we decide?

Seeking out answers, my first step was to talk to SAP. At the time, they were promoting a program around “SAP Competency Centers” that addressed only the SAP applications and associated middleware and did not address organizational or value driving aspects whatsoever. No help there.

My second step was to contact the SAP and Oracle practice leaders of Accenture, IBM, Deloitte, KPMG (later Bearing Point) and SAP Consulting to pose the question: Can you help clients build an SAP center of excellence?

Unsurprisingly, every one affirmed an ability to do so. Here is how every conversation went:

Me: Can you help clients build an SAP (or Oracle) center of excellence?

Practice Leader: Sure can.

Me: Good news. Might I see your methodology?

Practice Leader: Uh, we don’t have one of those. We, uh, compile a team each time.

Me: Fair enough. Who are your references?

Practice Leader: Well, we, uh, don’t have any of those. But, hey, Michael, let me introduce you to Steve.

Steve: Hi, Michael. I head up our firm’s applications outsourcing group.

These oft-repeated scenarios only inspired me to write an article entitled “Option A or Option A: Funneling Clients to Application Outsourcing. “

Taking it one step further, I undertook a study of the various implementation methodologies of leading systems integrators which revealed that post-implementation planning was almost entirely neglected. Every ounce of effort and concentration was upon a rush to the go-live wedding at the expense of the post go-live marriage. In essence, systems integrators (with much collaboration from SAP, which, let’s face it, actually named their implementation methodology ASAP) were helping clients set the stage for poor deployment.

I then went to what George W. Bush would later refer to as “the interwebs” (and which Senator Stevens of Alaska once helpfully explained is “a series of tubes”). There was a surfeit of information about upgrades and a mountain of listings about outsourcing (‘your mess for less!”). But there was nothing in the “tubes” about centers of excellence, SAP best practices for deployment, or even how to achieve and maintain business and IT alignment.

That took me to the end of 2001 and my bottom line was that all the consulting firms and SAP itself were rushing clients through lousy implementation projects, few of which included any post-implementation planning, and then abandoning those clients after go-live with a message of “You’ll figure it out (but when you don’t you can outsource to us.)”

From that point until recently, I relied upon a growing network of individuals to research best post-implementation practices since SAP Consulting and its partners were of scant use.

The first individual who contributed was Sharon Moody, who in late 2001 had recently retired from Delta but who very generously shared her research with me. With this jumpstart, I published a white paper about centers of excellence for SAP and was amazed at the outpouring of interest. At this point, I was given a major boost by Jack Childs who role at SAP in those days was that of babysitter to the top North American accounts. Between my position at META Group and Jack’s client contacts, I was able to make a number of client connections that revealed many best practices.

I presumed at the time that others would join in on this research. Outside of various members of SAP itself, none have other than fitfully and in passing. I have been joined by Michael Connor, founder and CEO of Meridian Consulting (www.meridian-us.com) and have found occasional material from AMR Research (now absorbed into Gartner), Forrester, and a few of the systems integration firms.

However, the best sources of learning best practices have been clients. For a stretch, I had the pleasure of working with a group consisting of Wrigley, S.C. Johnson and, to some degree, Kimberley Clark in which best practices were shared, debated, and refined. I had a wonderful week in 2005 Paris working with L’Oréal which had a very advanced global center of excellence. Through the years, I actively googled in search of articles or blog posts regarding post-implementation strategies and found very very little and while I came across a number of consultants with experience in the post-implementation market but found none of them worked in that market full time.

In the spring of 2009 I began writing The SAP Green Book, Thrive After Go Live. First I gathered and expanded various articles and white papers that I had written over the years and contacted various contributors industry analysts Jon Reed (of JonERP, the independent Joshua Greenbaum, and Dane Anderson, a vice president at Gartner in charge of research of managed services. I also contacted a number of clients and consulted and the book was actively “edited” by these contributors as it was being written. I also had one more round of asking systems integrators if they could help clients build centers of excellence. This time, no one bothered to fake me out. One even said, “Michael, why would we teach our clients how to fish?”

Thus, it was not until October of 2009 that I had enough material to publish The SAP Green Book, Thrive After Go Live (a second, expanded and revised edition was issued this year. In February of 2012, the book will be re-issued by SAP Press).

Bridge Building

In early 2010, I had the good fortune of meeting Paul Kurchina, for many years the face of ASUG and today a leading light in the SAP Insider community. Through Paul, I met Gabe Rodriguez and Brian Dahill who lead the Center of Excellence special interest group at ASUG (and organize the highly popular pre-SAPPHIRE conference each year). Brian and Gabe honored me with the request that I keynote the upcoming event where I had the great pleasure of discovering huge client interest in business-centric centers of excellence. As had been the case for nine years to that point, the most frequent question I got was “Who can help us with this?” When I asked who they had tried, the answers were “Accenture but we kicked them out.” “IBM but we kicked them out.” “SAP but we kicked them out.”

When I asked why, I was told, invariably: “They had no methodology and they were too concentrated on IT and application maintenance. We want something business centric.”

Sound familiar?

Both Brian Dahill and I began asking clients: “Isn’t the key question ‘how do I build a center of excellence’?” The answer then was a resounding “Yes!”

Brian Dahill has been consulting in a center of excellence environment for the past eight years and neither of us had ever seen more than a PowerPoint on the subject of building one. I had few client engagements through the summer of 2010 and so I took the opportunity to build the first one, which I have dubbed “The Bridge Method, A methodology for creating a sustainable Center of Excellence that will drive & govern continuous and measurable business benefit”.

I was able to come up with this methodology based upon the assistance I had been providing to clients since late 2001. Brian was very helpful in reviewing my work and adding his input based upon his work in the field. It was also helpful that, during this same period, I linked up with SAP Education to lead three webinars on the subject of end users and enablement. To my great joy, the campaign was very successful and the contacts that I made (most notably Kerry Brown of SAP Enablement and Julie Stokes, the SAP Training Strategist at Fluor Corporation and leader of ASUG’s Documentation and Training Special Interest Group) have been instrumental in fine-tuning the Enablement Domain requirements for a Center of Excellence. (A case study “Drivers at Work Building an Effective and Sustainable Super User Network at Fluor Corporation” will be posted later this year).

The key tenet behind the center of excellence (and thus the critical path of The Bridge Method) is the re-ordering of the business and IT dynamic. For fifty years, we have been seeking “business & IT alignment” and I find that even this elusive goal is misbegotten since it suggests that business and IT should work in a partnership. In fact, IT should be entirely at the service of business. For this reason, the IT agenda –when it comes to applications- is almost entirely driven by business process owners. (For more detail on the strategy behind this, read my April 2011 post “IT, Your Fifteen Years are Up”.)

In August of 2010, just as I was finishing the first version of The Bridge Method, Paul Kurchina was asked by Nathalie Mercier of CGI who he would recommend as a speaker for a client event. Paul gave her my name and thus began my relationship with CGI, first in advising them in regard to their marketing and messaging, then in leading a client seminar, and finally in partnering with them in regard to Centers of Excellence.

From September of 2010 to date, I have not heard from anyone at CGI about how they are their clients’ “trusted advisor”, nor did anyone boast that their clients love them. No one tried to “sell” me on their field excellence or show off with three letter acronyms. Whereas most of their contemporaries avoided helping clients to build a Center of Excellence, the people I have worked with at CGI are continually asking a) how I can help them to help their clients get more value from their services and b) what do they need to learn to work with clients in this regard.

I was as a subcontractor in a few of their proposals and in February, I crossed “the aisle” and offered my services on a full-time basis. Shortly thereafter, I was awarded a sub-contract project with CGI to help a major Canadian bank design and plan its business process-centric Center of Excellence. This intense 400 hour project (which is the object of an upcoming case study) provided me a twelve-week period during which I was able to a) prove out, expand, and revise The Bridge Method and b) hang with my potential new colleagues at great length.

September 12, 2011 was my first day as a CGI employee. My title is executive consultant and my charge is to a) continue with my thought leadership in regard to centers of excellence and all that they embrace, b) expand CGI capabilities in this regard, c) continually inform CGI clients and prospects regarding best practices and how to and d) practice my arts in the field. Since mid-September, I have provided open "Thrive after Go-Live workshops in Toronto and Calgary" and have worked with five different clients in various aspects related to the Center of Excellence.

Throughout its history, CGI has been especially focused on managed services rather than systems integration. This concentration and experience provide the ideal context and support for all aspects of a business-centric center of excellence.

More and more of my CGI colleagues, including our Business Engineering group, are working with me to provide clients with the means to get more measurable business benefit from their SAP/ERP investments by organizing themselves in a business-centric fashion.

My joining CGI is by no means the end of my publishing and blogging. On the contrary, surrounded by an enlightened group of consultants and with more access to client contact, I expect to have more to contribute than ever before and welcome your continuing commentary and input.

About CGI

CGI, celebrating thirty-five years since its founding, is headquartered in Montreal. The acronym is derived from Conseil en Gestion Informatique which translates quite simply into “IT consulting”. Now that CGI is an international player ($4.2B, 46% Canada, 47% U.S. 7% Europe), the updated meaning of the acronym is a still precise Consulting for Government and Industry.

It's Good to Be Back

I know I’ve been lax about posting these past months. The key reason is that I took on a twelve week, Monday to Friday project helping a client in Montreal architect and plan an elaborate Center of Excellence (in partnership with CGI). I had not taken on a full-time twelve week project in twenty-five years and found the experience thrilling and overwhelming; thrilling because it was ultimately very successful and I learned volumes more about Centers of Excellence (more to follow); overwhelming because I necessary had night and weekend work to keep up with other clients and interests.


Now that the project is ended, I am getting back up and out, beginning with a workshop this coming Tuesday in Calgary. The workshop title is taken from the subtitle of my book The SAP Green Book, Thrive After Go-Live and has been brilliantly organized by Paul Kurchina as the pilot to what we expect will be many more such workshops (we have Toronto and Ottawa somewhat in the works but I also have plans for Montreal, Atlanta, and Chicago down the line). Workshop content includes SAP Marital Counseling (addressing implementation failures), revitalizing the end user eco-system, value measurement, how to build a Center of Excellence, enlightened sourcing, and much more.

I did attend Sapphire for the nth time and got to hang with the ever-present Jon Reed (http://snipurl.com/27hp3f) while speaking on Centers of Excellence and how to build and sustain super user networks (with Julie Stokes of ASUG and Kerry Brown of SAP).

I plan on writing through the remainder of the summer. First up will be a pair of case studies. The first will cover a joint effort between me and Julies Stokes the head of training for Fluor Corporation by which we have rebuilt an SAP super user network. Julie and I presented at SAPPHIRE and actually attracted more than 170 people to our talk (credit Julie; she cuts a lot of ASUG ice). My second case study will cover the project that I just completed.

While I have been silent regarding this blog, there has been no silence whatsoever in regard to my posting “IT, Your 15 Years Are Up” from last April. http://snipurl.com/27om3t Beyond the case studies, I plan on pushing the notions embedded in this posting quite a bit further.

At any rate, hello again to all. It’s good to be back.

Biztel, MyTel, and the Silver Bullet with a Woman’s Name

Why Everyone Should Care about SAP’s Newest Technologies

Over the past three years, just as SAP appeared destined to become The Boring Old Man of the applications solutions industry, it has introduced three elements that have breathed life, youth, and new interest into its eco-system: Biztel (Business Objects/business intelligence), MyTel (mobile applications) and a silver bullet with a woman’s name that speeds up the whole process. While all three of these elements represent a fine champagne for technology-minded industry analysts, I am not a technologist and yet am enamored all the same. Taking the elements one by one…

BizTel


The leaps-and-bounds evolution of business intelligence in the SAP installed base since their Business Objects acquisition has recently made me remember a pair of opposing anecdotes about executive reporting.

Anecdote 1: Constant Craving


Some years ago, I had a client who was obsessed with getting all the intelligence imaginable. At one point, frustrated with his insistence upon obtaining levels of business intelligence that his software could not provide, I told him he would have to be patient “but give me a few years and we’ll install telepathic communications.” He was taken aback and I think, for at least a few seconds, he utterly believed me. And was charmed.

Anecdote 2: The Fig Leaf

Many years earlier, when I was a CIO, our Chief Commerce Officer defined a core sales report that he had to have delivered to his desk every morning. “Without that information, I can’t do my job.” For a few weeks, I delivered the report myself and laid it perfectly on the corner of his desk. One day I forgot but did not receive a call. The next I purposefully did not deliver it. Another day, and another. After about nine working days, I found myself in the CCO’s office listening to him describe other reporting requirements. As he did so, his gaze wandered to the corner of his desk. “And I didn’t get my core report today.”

“It’s been nine days,” I told him, “that you haven’t been able to do your job.”

If I had to choose between these two men as to which I would prefer as a client, it would be the one who believed, if only for a few seconds, that in time he would have telepathic processing. I believe he would know what to do with it while my former CCO colleague would not.

At one end of the spectrum is the executive who craves intelligence for all the right reasons; at the other end of the spectrum is the executive who uses a lack of information as a fig leaf. I’ve been at this for thirty-six years and am highly aware that the Cravers have too seldom been satisfied.

With Business Objects, however, we are seeing what is around the once elusive corner.

For those who are wondering just what has changed in the SAP market, I offer these simple observations:

SAP’s Business Warehouse was vastly inferior to Business Objects, not only in its “biztel” capabilities but also in terms of the “lead-up” utilities by which clients can enable business intelligence (data selection, cleansing, and organization or “cubing”).

By virtue of the fact that SAP had actually made a major acquisition, its senior management was hugely focused on justifying the investment and thus went all out to evangelize Business Objects and to incorporate the technology into mainstream SAP. (Note: until recent years, SAP was not an acquirer. Instead, they created various partnering lines, most of which have proven to be highly successful.)

Business intelligence is a slam dunk complement to SAP business process enablement.

Business disappointment in IT efficacy has led to a wave of business intelligence consulting contracted directly by business clients bypassing their own IT. Another example of constant craving.

In sum, I am observing for the first time a turn towards client numeracy (“a 20% rise in near-term pipeline will probably overcome our 12% drop in last month’s sales) as opposed to client literacy (“our sales results suck”). This twist in the marketplace is helping to reposition SAP as a business solutions asset rather than simply another applications platform.

MyTel


INTERIOR – Executive Suite Atop a Skyscraper - Noon

A Senior Vice President of Strategic Planning sits behind a huge desk and addresses the Admin Assistant who has clearly been summoned.

SVP (to his admin assistant): Bring me the updated sales report.

Admin Assistant: You already have it.

SVP: No, I don’t.

Admin Assistant: Yes, you do.

SVP (looking around his office): I don’t see it anywhere.

Admin Assistant: On your iPhone.

SVP (slapping his forehead): Ah, quite right.

The SVP punches the face his iPhone. CLOSE UP on iPhone to reveal a three-dimensional pie-chart of day sales by geographic region.

As skeptical as I can often be, I admit to the belief that the deployment of mobile applications resulting in the remote delivery of intelligence to a hand-held personal device is an ultimate step in information and business technology. Consider this: that quarter century ago, instead of putting a printer paper listing onto my Chief Commerce Officer’s desk each morning, I can now spend that time seeking new graphics expressions of business intelligence for him (like switching regional sales from a three dimensional dynamic pie chart to a “what if” enabled sliding bar).

Beyond the fact that mobile applications can be delivered to various personal display devices is the socio-psychological barrier that has been broken. Consider the evolution of business reporting over the past forty years:

• Printouts (black ink on green & white sprocketed paper)
• Printouts (black ink on white paper without sprockets)
• Black and white (or green on black) cathode ray tube display (numbers and figures only)
• Four color cathode ray tube display including basic graphics (bar charts, pie charts, et al)
• Laptop screen 3-D color graphic dashboards

While I am using the term MyTel for what is actually “SAP Anywhere”, I am told that the use of tablets is driving mobility even more than phones due to increased “real estate”. Prior to tablets and smart phones, none of the report delivery methods ever became the object of envy. (“Hey, Ricky! Check out this great printout!”) However, both smart phones and tablets are in and of themselves hot subjects across all business spectra. Thus, the addition of “cool” technology like business intelligence can inspire envy and thus slip credibly under the heading of “viral”. When intelligence goes viral, evolution follows.

The Silver Bullet with a Woman’s Name

Viral does not stand in line. Viral does not take a message. If what you seek does not appear on your screen within seconds, you may well start seeking something else. Thus, SAP has added the silver bullet named HANA to assure that when you flip to your tablet to check out sales activity, you have only to tap a few times and results will arrive, in shapes and in colors, within seconds. Understanding the depth and density of data required to compose those shapes and colors will give you a great appreciation of la belle dame known as HANA.

HANA is an in-memory computing engine that is vastly accelerated. While accelerated computing speed can benefit many aspects of an SAP installation, I am here interested in what it can do for business intelligence.

SAP claims that it has implemented a real-world scenario on SAP HANA that demonstrates the ability to perform arbitrarily complex queries on over 450 billion records in a matter of seconds.

They Said It Was Their Strategy. They All Say That. But This Time I Believe Them. And I Refuse to Blush.


It is difficult to impress hardened industry analysts and most of us have been all over these developments for months now with questions that begin with “If that’s true…” and “If it really works…” In addition to my own queries, I have followed those of another half dozen analysts with more technology background than I possess. My angle is business oriented and I am sometimes at odds with those analysts. Not this time. As a result of my continuing assessments since last year’s SAPPHIRE, my resistance has finally melted and I can now buy into the vision without feeling like a vendor troll.

Back when SAP acquired Business Objects, were they aware of how attractive mobile applications would become if they were delivering business intelligence? Apparently yes. Did this awareness lead to a recognition that for business intelligence to work satisfactorily they might need an in-memory accelerator? Again, it appears that the answer is yes.

Thus, this suite of new elements appears to be the fruit of execution launched by strategy that was inspired by a vision. Such a trifecta has not happened for SAP since the announcement of three-tier client server technology in late 1992. And we all know what happened shortly thereafter.

...

Regular readers of this blog will, I'm sure, be surprised to read a posting like this one, but hey, there's more.
Join me and experts from the SAP Consulting organization for a webcast series covering these topics, “Make the Most of Your SAP Solutions: A Roadmap for Enabling SAP Innovations”, click here for more information and to register for the three webcasts .
http://fm.sap.com/images/WhiteRhino/innovations_series_0511/HTML_pages/lp.html?SOURCEID=Blog ).

We kick off 5-31-11 with a webcast focused on BI, address HANA and In-memory computing on 6-14-11, and close out the series with a look at mobile SAP solutions on 6-28-11.

IT, Your Fifteen Years are Up

Cutting the IT Bottom out of SAP’s Peach Basket


"Technology is a word that describes something that doesn't work yet."
— Douglas Adams

Fifteen years ago, I believed that the SAP market would be a brave new world in which IT actually served business and where technology would be seen as an enabler rather than an end state unto itself. SAP promised to free us of undue operating system concerns through its powerful middleware and since the applications were configurable, I was looking forward to a dramatic reduction in the sway of programmers, data base managers, and anything having to do with operating systems. I was confident that newly-minted business process owners would become the centers of information power at client sites and that information technology, while hardly being banished to “the boiler room” would all the same be placed into a proper business support context.

Ah, well.

Having been recognized as both a consultant and an industry analyst through these SAP years, I have often been asked why SAP projects tend to go so badly. Another question posed to me on a regular basis is: why are so few firms getting full benefit from their SAP investments?

There is a single answer to both questions: because clients, consultants, and SAP itself erroneously believe that SAP is an IT subject. By consequence, most activities relative to implementation and subsequent deployment are incorrectly focused.

The fact is: SAP is no more about IT than books are about ink and paper. The client story is supposed to be the subject and how that story can be better written.

All the same, through my first fifteen years working in the world of SAP, I continue to observe:

a) Clients give their IT departments unwarranted leverage when selecting applications software for acquisition

b) After acquisition of SAP, clients usually turn over implementation leadership duties to their IT staff

c) SAP continues to brand itself as a technology firm rather than a business solutions firm

d) Both client IT and SAP are tenacious in maintaining a “software-centric” culture and agenda that is matched by business slouching its way forward with the oldest fig leaf in the enterprise: “without this information, we can’t do our jobs”.

When firms implement SAP, their business people are given a grand vision of how much more streamlined their processes will be, how much better their reporting, and how the in the future the firm will embrace change rather than suffer from it. But after go-live, IT is still in charge and the tendency is to focus upon cost containment, risk avoidance, consolidations. This is not always due to IT management’s desires for such focus; often it is simply the result of corporate dictates.

SAP itself, utterly branded as a technology firm, does far too little to address this misfire. As such, after years of leading its clientele down an acquisition path, it has fallen behind that same clientele when it comes to business-centric software deployment and positioning. The supplier’s current preoccupations are HANA (an in-memory computing offering), mobile applications, Business ByDesign (applications for small businesses), and the ever-present NetWeaver. Business is not amused.

This is not to say that these subjects are unimportant but quite clearly they do not strike at the heart of business people’s over-riding concerns.

The following are examples of what I’ve heard from clients over just the past three years (not verbatim, but highly accurate):

“We over-customized our applications and ever since we went live, it’s all we can do to keep up with maintenance. For a while, we had a steering group charged with business process improvement but we never had the time or money to address their issues, so they disbanded.”

“Our IT management only knows how to buy and install new software. We never focus on how to make it work better or how we can get value from it. Our motto is “the more software we have the better we are.”

“We build a center of excellence that worked fairly well for about six months. Then we hit 2009 and there were a lot of layoffs. The center of excellence just melted away since so many of its members were gone and not replaced.”

“No one on the business end will join our center of excellence. They just don’t believe us anymore.”

Even leading light firms can see that light flicker. Some months ago, while speaking about centers of excellence to a group of clients in Atlanta, I cited a local client that has been a core model for the past ten years. During the break after my talk, I discovered that one of the audience members worked for that client. He approached me, introduced himself, and said: “I’ve been there the whole time. We used to be really good like you described. We’re just not that good any more.”

When I asked what happened, he replied, “Budget cuts. We went from business process improvements right back to basic maintenance.”
…

Dr. James Naismith is credited with the invention of the sport of basketball in 1891. His initial “baskets” were peach baskets nailed ten feet high in a gymnasium. The sport was initially codified into 13 rules as published by the good doctor. Unfortunately he missed one very crucial step in the development of the sport.

From http://blog.mitchellandness.com/?tag=/peach+basket

The peach baskets were closed at the bottom, which resulted in someone having to climb up on a ladder to get the ball after a basket was made. A little while after, the peach baskets were replaced with a metal rim and hanging net. Again, the net was closed at the bottom. It wasn't until 1906 when people began to open the bottom of the net to let the ball fall through.

The game was invented for college students and between 1891 and 1906 we can presume it was played by thousands and thousands of them. All the same, fifteen years passed before it finally occurred to someone to cut out the bottom of the peach basket.

Obviously, that change in “basketball process” has radically benefitted both players and fans over the past 105 years.
…

Year after year I come across clients with a serious lack of agreement regarding their SAP maturity. IT people give me the thumbs up and business people just shake their heads.

I believe that if everything was left up to technologists nothing would operate but everything would work.

Today, the phrase “business and IT alignment” makes me cringe as ‘alignment’ is both a cipher for “can’t we all just get along” and a false grail. The only alignment needed is a repositioning: IT at the service of business, period.

On the bright side, over the past year I have observed a distinct movement in this direction. I know a consultant who was hired by business stakeholders at a major client and told to provide business intelligence in the form of dashboards. He was also told not to communicate with the firm’s IT or SAP support staff or with the Deloitte consultants who were onsite. “They’ll only get in our way.”

I have also come across a high number of clients who, attempting to build a center of excellence, have kicked out initial suppliers because their approach was too IT-centric.

In a wonderful article by Jim Shepherd of Gartner, The "Digital Natives" Are Restless: The Impending Revolt Against the IT Nanny State, he writes:

“Gartner has seen a steady increase in the percentage of IT spending that’s directly funded by user departments, rather than the corporate IT budget….I'm regularly hearing middle managers and even senior executives complaining bitterly about IT departments that are so focused on the global rollout of some monolithic solution that they have no time for new and innovative technologies that could have an immediate impact on the business. They're fed up with IT's refusal to acknowledge the technical sophistication of today's average user, most of whom have spent their lives surrounded by complex hardware and software. They regularly purchase, deploy and manage a wide variety of computing and communications technology in their personal lives, but at work, they have to call a "professional" if they want to change their screen saver.”

This all suggests that a dramatic change in process is overdue for clients with SAP. IT predominance is the bottom of the peach basket. Time to cut it out and get business fully into play.

The best way to do so is to establish and sustain a business-led Center of Excellence that features continuous business process improvement. The chart below is a shorthand version.

Regular readers of this blog and or my books are aware that I have written quite a bit on this subject since 2001. For more on this subject, you can visit my website at http://www.michaeldoane.com/. Further, I will be keynoting with Brian Dahill at the ASUG/SAPPHIRE Preconference on May 15th: Creating a Business-Run Customer Center of Expertise (COE) with SAP, 8:00 a.m. – 5:00 p.m. I had the honor of participating in this event last year and found it to be exceptional. I recommend it to anyone currently engaged in building or improving a business-centric center of excellence.

Helping clients to move into a business realm of SAP is going to take a greater effort on the part of the entire eco-system, including ASUG, SAP services, consulting partners, and industry analysts. This does not have to occur at the cost of continued applications excellence but we do need to stop tinkering with the SAP applications engine at the cost of filling business needs.

It must not go unsaid that such a shift means that business must become more involved and more accountable. In a proper center of excellence, the key position is that of business process owner, with the accent on ownership.  Without this, your center of excellence will simply be yet another center of mediocrity.

There are a host of best practices in this regard, most of them fully explored in The SAP Green Book, Thrive After Go-Live. However, I learned one of the very best practices from a client since the second printing of that book. Not only did the client describe to me his fully business-centric center of excellence, he added that working in the center of excellence for two to three years was deemed a required stepping-stone for anyone destined for senior leadership. “Center of excellence experience is viewed as being at the heart of all we do and are.”

Swish.

The Pent-up Demand of the Mostly Invisible and Perpetually Ignored Business People in the World of SAP

One of the more demanding requirements for an “industry analyst” is to prognosticate market undulations. Crystal balling is important to service providers as well as software firm as I discovered in early 2001 when I created Professional Services Strategies at META Group in early 2001. In the previous year, the market for IT related services had completely cratered and in short order, I had signed up all of the usual suspects (Accenture, Deloitte, IBM, SAP Consulting, Oracle Consulting, et al) as well as a number of lesser-knowns as clients. While all were generally interested in my insight regarding competitive analysis, marketing drivers, and best practices for service delivery, what they really really really wanted to know was…where is the business? This simple burning question quite naturally led to subset queries such as:


1. when will things turn around?
2. what services will turn around first?
3. what new services might spark client interest?
4. will rate structures hold up?
5. how is offshore affecting onshore consulting rates?

I had one major client with an internal business analyst who would “make the rounds” with all the prominent analyst firms (IDC, Forrester, AMR, Gartner, and META Group) as well as a few other once every six months. Her task was to gather intelligence for budgeting and sales forecasting and our bi-annual meetings lasted from two to four hours. Her questions were unusually sophisticated and I came to highly value these meetings for their substance and mutual enlightenment.

From our first conversation in late 2001 to our last conversation in mid 2005, she told me that I was running counter to my competition, many of whom tended to regularly tell her, in so many words, that “the market will turn the corner in six months”. The problem, she told me, was that none of them could say just why.

Until late 2003, I simply advised that there would be no movement or improvement in the consulting services market for the foreseeable future. My argument was that neither of the two most important business drivers was at all evident: a) a positive economic climate or b) new and disruptive technology. In the 1990’s, we had seen a perfect and positive storm of both as well as the decision accelerator known as Y2K. From 2001 through 2003, we watched the slow smoldering of a post dot-com universe amid a sprawling trash heap of firms that did a disastrous and rushed job of implementing large-scale ERP. CRM was incorrectly touted as the new wave and NetWeaver was prematurely presented as disruptive technology. In fact from the onset of Y2K to date, we have had no new wave of business applications nor any truly disruptive technology. (“The cloud” is a repurposing of assets, primarily Internet, not a new technology per se). At any rate, this was an extremely boring phase for information technology and most especially for related consulting services.

Finally, in late 2003, I presented an upbeat quarterly trends teleconference with my partner, Stan Lepeak. The teleconference was very well attended, a response fueled in part by the title: “In 2004, the Sun is Coming Up (for those who know where to find it)”. While economic indicators had shown only slight improvement and no new technology drivers had appeared, Stan and I had begun to detect serious upticks in some consulting areas, most especially those having to do with low-end functional outsourcing (e.g. HR) and low-end technical outsourcing (infrastructure and ADM). While much of our evidence was anecdotal and too little of it based upon rigorous primary research, we amended our market outlook from “cloudy” to “partly cloudy” and by mid-2004 our prognostication has been borne out. No particular driver was attributed to this change either by META Group or any of its competitors. At the time, I chalked it up to “pent up demand”, a mass reaction to three or more years of “sucking it up”, “belt tightening”, and the like.

The downturn in SAP consulting since 2008 has been nowhere near as severe as the 2000-2003 rut. For the most part, 2009 was the worst year ever so 2010 seemed better than its sluggish reality. All the same, I am detecting some changes in conversations and observations to such point that I will now declare that “the SAP consulting market will turn the corner in the next six months (~ late spring or early autumn 2011)”. My evidence is thin but does include very sunny-side up quarterly results for SAP, a somewhat improved economic environment, and that strongest of drivers after two plus years of struggle…pent up demand.

I am not expecting vast and ambitious projects. I expect instead to see a slight flood of “sweat the asset” initiatives, including hefty doses of business intelligence, business process optimization, instance consolidation, legacy retirement, and improved supports of end users to increase deployment competency. The latter of these may be the result of rose-colored glasses but over the past year I have definitely detected a market wave of realization that end users are the most neglected aspect in the SAP installed base as well as an understanding that well-supported users (heretofore referred to as “business process drivers”) can yield considerable business benefit.

This rosy prognostication flies in the face of those provided by Forrester, Gartner, et al, most of who see little to no growth (a holding pattern). Admittedly, they are addressing the tech market (software and hardware purchases) which is driven by IT clientele more than the services market which is more driven by business clientele. My prediction is based on the pent up demand of business people, the emerging SAP clientele.

There still isn’t anyone talking to these people. SAP continues to address the techie world almost exclusively, as if their software is like something provided by Apple or Microsoft that just “plugs in”. In their most recent quarterly call, SAP once again spoke almost entirely about the 37% of their revenues that is derived from software while ignoring the 63% that is service and support related.

The business people represent a market of necessity as analytics and business intelligence represent an ever-growing percentage of SAP software sales. The demands of the business market (business analysts, business process owners, end users, et al) may finally be addressed by SAP’s consulting partners if not SAP itself. Whether ASUG will follow this trend remains to be seen.