SAP Searchlight

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

2012-01-27T12:40:00.000-08:00

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

2012-01-17T08:36:00.000-08:00

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

2011-11-18T15:04:00.000-08:00

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

2011-07-23T10:51:00.000-07:00

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

2011-05-13T09:53:00.000-07:00

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

2011-04-25T05:46:00.000-07:00

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

2011-01-26T07:36:00.000-08:00

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.

This is the “Summit”? That’s the “Dream”?

2010-12-14T13:35:00.000-08:00

Last week saw parallel vendor events. In one corner, SAP Summit 2010 and in another corner Dreamforce 2010 (Salesforce.com). With good friends in attendance at both and the confidence that I’d get special briefings, I had only to follow along on my Tweet Deck and for two days I was treated to ever more annoying reminders of how IT technology will be the death of the English language.

There was a time when business stakeholders could actually get something out of attending the SAP Summit. How about this year? Here is what was described as a keystone slide from the event:

Yup.

No mention in two days of “business process improvement” or “measurable business benefit” or the old saw of “agile business”. As a matter of fact, as best I can tell neither event ever included the term “business” over the equivalent of four event days (two each). In recent years, SAP has made great strides in offering services like Business Transformation Services and tools such as Value Engineering intended to help clients in this regard, there was not a single mention of them, let alone any particular recognition that there’s more to SAP success than wonkiness. By the end of the first day, various Tweets reflected my own frustration. Even an SAP employee noted that there had not been a single mention of SAP’s enterprise support (which normally is mentioned in every third SAP account exec’s breath).

Salesforce’s “Dream” event was an endless parade of merging and emerging technological patches to technological gaps into a technological universe quite far removed from orders to cash, procure to pay, business intelligence, or strategic positioning. Steve Wonder was there. Former president Bill Clinton made an appearance. So how business interested was the content?

Dennis Howlett pretty much sums it up:

“Salesforce on the other hand is not handling a single business critical process. Shocked? Go figure. It is parsing pieces of the pie but it cannot legitimately claim ownership of entire processes.”

These firms only compete in the small to mid-sized market. Much of SAP's event was given over to its emerging Business ByDesign offering which will compete head to head with Salesforce. My sense is that all the Salesforce features and functionality stacked together will not ever compare with SAP’s ability to drive multiple and integrated critical business processes. The question is whether either firm will have the consulting agility (and patience) to efficiently serve the mid-sized market.

While a number of the more technically-minded IT analysts and journalists were over the moon, two recent articles reflected a more grounded reaction.

Contrasting the two vendors is Dennis Howlett in ZDnet: ZDnet http://ht.ly/3nhQt

“Salesforce throws a memorable frat party, SAP offers fine dining. Each has its place but in the enterprise world one has to wonder which represents the ultimate preference of those who sign checks for IT vendors.”

As for innovation, Thomas Wailgum wrote before these events: “The Fallacy of Vendor-Driven IT Innovation” http://snipurl.com/1ne79i

“The term innovative itself is on the precipice of falling into the abyss of meaningless marketing rhetoric: When every new product, every technology iteration, every small step is termed "innovative," then what you have is a collective, irritating din that, conversely, makes anything new and notable exactly the same as everything else.

Let's be honest with each other: Outside of the Internet's impact on businesses (which, by the way, occurred in the mid-1990s), has business really changed that much? “

In the case of Salesforce, the event was totally in line with what we’ve long come to expect from them. In the case of SAP, I admit to disappointment. Going back to Dennis Howlett’s comparison, I do believe that SAP offers fine dining, but this event was far too over-cooked for my taste and the background music was grating.

Just for sake of perspective, let’s remember that in countless surveys, the need for business and IT alignment is at or near the top of the wish list. We can set aside the Salesforce offering which is an “eat it and smile” proposition since clients can’t customize the software and critical business processes are not satisfied. In the case of SAP, however, such alignment is not only possible but, when attained, can yield incredible business benefit.

My hope is that future SAP Summits will be meant to scale the business mountain rather than the range of technical foothills that surround it.

Configure It Out: Why Business Should Own SAP Configuration

2010-12-06T08:17:00.000-08:00

The Fallacy of SAP Configuration as the Realm of IT

Your firm is implementing SAP applications software and it’s time to form an internal project team. You have two candidates for a configuration position in the orders to cash sub-team:

Candidate A:

SKILLS:

• Experience of more than 7 years in the software technology.
• Worked on around 20 projects for 3 different companies and every project is successful.
• In-depth knowledge of software and current technologies.
• Different technologies known are: C, C++, Java, COBOL, Turbo Pascal, Python, C#, VB6.

EDUCATION:

University of Vermont, Bachelor degree in Information Technology
Ohio State University, Master Degree in Computer Software

Candidate B:

Core Competencies:

• Extensive knowledge of integrated logistic management
• In-depth knowledge of testing and functions of system and equipment
• Ability to read computerized reports and have extensive knowledge of computer applications processing
• Good knowledge of budgeting and finance systems
• Ability to adhere with the standard and practices of the organization
• Effective command over written and spoken English language
• Good time management and organizational skills

Educational Summary:

Master's degree in Logistic Management, Management College, IL 1995

What we find most often in the field is that clients opted for candidate A on the mistaken premise that SAP applications configuration is an IT domain and that configuration is a task similar to programming.

In years long past, business managers and directors wrote their memos in longhand or spoke them into dictation machines and the raw material of these efforts was handed over to a secretary or, worse, the typing pool for what only later became known as “word processing”. The reason these managers and directors could not be expected to learn how to type is commingled with the mythic (“typing is not a managerial skill”) and the cultural (“typing is beneath me”). Maybe it had to do with the complexity of changing a ribbon (clearly a task for female fingers!).

We long since gave up on the typing pool and few secretaries these days have to put up with dictation. With e-mail, texting, Twitter, and untold other communications platforms that require a letters-based “word processing”, business people can serve themselves when it comes to written communications.

Beyond the democratization of word processing, we have moved well beyond the scheduled IT distribution of ‘computer listings’ as the primary source of business information. For the past twenty years, business managers have learned basic dashboard and query programs by which business information can be obtained without requests to the IT department and reports can be more and more complex and customized.

However, since the dramatic emergence of SAP as an enterprise applications software giant in the early to mid 90’s, the function known as application configuration has chronically been the realm of IT. For most clients, the basic logic applied is that programmers are the logical inheritors since configuration largely replaces programming. In point of fact, configuration largely eliminates the need for programming. All the same, the majority of SAP clients still assign this task to people with coding skills rather than business process skills.

The Tyranny of Programming

For too long, business has been largely at the mercy of IT primarily because of the necessity of programming. For over forty years, business people needing changes to business processes have been required to pass by IT because those changes could only be effected via changes to the programs. Business people do not speak COBOL or Basic or RPG3 or ABAP.

Think of when you play touch football. In the huddle, the captain says: OK, Bobby, you go straight up the field and cut right toward the tree. Lynnette, just slant left a little bit. Rick and Jose, you block. I’ll hit whoever is open first.

This is a football process design intended to result in a touchdown. Each participant knows his or her role in the process since it was expressed in clear English.

A similar football play may be applied for a high school or college team, but the quarterback’s call to the players will be something like “Right Flank. Blue Dog North on 8”. And if you don’t know the playbook, you can’t run the play because the play book is in code.

Bear in mind:

Programming is the creation of codes that direct the order, path, disposition, and destination of information.

Configuring is the setting of business tables that direct the order, path, disposition, and destination of information.

Eliminating Business & IT “Alignment”

Today, business people routinely use iPads or laptops, a smart phone, GPS, and other “user programmable” devices and yet too often have to pass by IT for even the simplest changes to a business process. This leaves them stuck in a 1972 business model of request-negotiate-check-approve that is slow, irritating, and costly (and does more to fray “business-IT alignment” than any other element in the relationship).

Clients often assign “business analysts” to partner up with mod configurators (FI-CO, SD, MM, et al) which is a little like having someone in the passenger seat tell the driver exactly where to go and at what speed but not having the basic ability to turn a steering wheel, apply the gas, or apply the brakes.

SAP configuration is not that hard for business people to learn. This is often far easier than to teach business process design principles to a former programmer who is now an SAP configuration specialist. The advantage to business accomplishing its own configurations is the near total elimination of that horrid loop of negotiation and approval. Thus:

Clearly, we do not leave it up business staff to complete the necessary IT testing (integration testing, stress testing, etc.) or to place configuration changes into production. All the same, we have vastly streamlined the process and made it fully business-centric.

Step on the Gas

The ultimate goal is business process expertise (BPX) by which the configuring agent can cover an entire business process while being fully versant in business process modeling and business process design. The combination of an authorized business process owner and BPX support provides accelerated business process improvement that will drive measurable benefit.

When I ask clients why they are moving to SAP, I seldom receive a satisfactory response. However, one of the very best responses I got was from Charlie, a CEO in the oil industry, who said he was moving his firm to SAP because “today, when I step on the gas, nothing happens.”

The velocity of business change requires business ownership of configuration so that when your business leadership steps on the gas your firm will immediately move forward. It cannot do so unless business people are firmly behind the configuration wheel.

SAP Clients Cling to their Guns and their Religion: The Failure to Gain Measurable Benefit from SAP Investments

2010-11-15T09:21:00.000-08:00

In recent times, there has been a resurgence of the political argument that “the government should be run more like a business.” Really? One of the more dispiriting aspects of my many consulting missions in the SAP installed base (i.e. at businesses) is the fact that while all are run under the auspices of a Profit & Loss, the majority of strategic decisions for SAP activities are made based on “gut”, “experience”, and “vision” rather than on business metrics. Gut, experience, and vision are the ‘religious’ aspects in play while authority represents ‘the gun’.

While jokes abound about the meaning of SAP, many of them are negative: Send A Payment. Shut up And Pay. Shoot A Programmer. (I have literally heard dozens whereas for me SAP means Suitcase And Passport.) The negative jokes are based upon a view that SAP is about software. This is, of course, a pernicious superstition that should be stamped out with vigor.

What I have long believed SAP should stand for is: Sweeping Awesome Profits. Given the investments that firms have made in SAP, I am continually surprised at how few of those firms adhere to such a belief.

The cost and stake of SAP drove the subject of information technology into the boardroom and one might think that board members would like to know what they are getting for their investments. However, when I asked 100 clients in the installed base what implementation mistakes were still causing them pain, the most cited problem (at 59%) was: “There was no quantifiable measurement of business benefits derived from implementation.”

More recently, I have been engaged with clients undertaking my SAP Maturity Assessment (www.3vsolutions/Assessment.php) Value Management, one of four areas tested, is perpetually the least mature.

At the turn of the millennium, it was understandable that most clients were busy stabilizing their SAP applications portfolio. It is now 2010 and far too many are still stuck in that rut.

Until about 2005, SAP itself gave only lip service to the crucial notion of gaining measurable benefit. Since that time, it has provided Value Engineering, the heart of which is quite similar to Deloitte’s ‘Enterprise Value Mapping’, and the now defunct BearingPoint’s ‘Enterprise Value Creation’ (to mention two of the more prominent predecessors). With Value Engineering, clients can move beyond bullet-point objectives into Key Performance Indicators, the former being superstition/vision and the latter driving P&L results. Further, SAP’s acquisition of Business Objects has vastly accelerated the evolution of business intelligence, thus helping clients in the SAP installed base to turn away from ‘guns and religion’ as the foundation for decision-making toward the science of value management.

To download a white paper: Using SAP as the Engine to Measurable Business Benefit, follow this link:

http://www.michaeldoane.com/uploads/SAP_the_Engine_to_Measurable_Benefit.pdf

For more on this subject, please visit: www.michaeldoane.com/

“Our Software is Stable”: The SAP Maturity Gap

2010-10-27T08:50:00.000-07:00

SAP Discovers the Installed Base: How “Standing Still” is No Longer the Goal

After firms go live with SAP, the collective attitude is a mixture of relief (“we are in!”), surprise (“we are?”), and disappointment (“not quite”). The result is a period of denial in which the general presumption, lasting roughly one year, is that that all will be well once the installation is simply stabilized.

For more firms, realization occurs in the second year after Go-Live as the shake-out continues with no end in sight.

While in the course of the implementation project, your firm may well have targeted business benefit in a “to be” vision but within one year or more of seeking stabilization, you will have a) lost business & IT alignment as the business stakeholders have wandered away and b) re-trenched into an IT only support of existing systems leading to some incremental benefit but not the “business engine” your sponsors had in mind.

While this state of affairs may seem lamentable, things often get worse. Upon reaching a stable state, a high percentage of clients simply cruise from there, content to stand perfectly still after so many months or years of reeling. No dramatic leaps in business process efficiency, little or no measurement of business KPI’s: very little steps for very little feet.

Until recent years, SAP itself seemed to encourage such behavior. Shortly after we reached Y2K, the most help they could offer to the installed base was the SAP Competency Center which was largely about the software and not at all about business process improvement. This program was later rebranded to Customer Care Center but was, in essence, still the same old competency center. By 2005, SAP claimed more than 50,000 customers worldwide and, by my observation, the vast majority of them were seeking the “stand still” state.

Today, SAP clearly recognizes the importance of moving beyond this state. Value Engineering is about five years old and, despite some over-engineering (hey, it’s SAP, folks), is providing insight into how SAP can be a business-improvement engine. SAP has also moved beyond Customer Care Center into Centers of Expertise which go a long way further in addressing business issues in addition to the traditional SAP software-centric concerns. Even more welcome, SAP has created a consulting organization separate from SAP Consulting that is dedicated to the installed base: Business Transformation Services. While the maturity of this new entity remains variable, the fact that SAP recognizes the need for it is both significant and promising. Such an organization is dedicated to helping clients help themselves. The “usual suspect” systems integrators do not regularly or openly provide such services, fearful that they will cut into application management outsourcing revenues.

(Note: SAP does not offer application management outsourcing. This is commendable –and in great contrast to Oracle- in that SAP recognizes that strong client leadership of the SAP destiny is preferable to being stuck in an SAP SI nanny-state.)

Moving Forward (But in What Direction?)

Forward progress with an SAP installation can take many directions and I find that clients are often internally at odds in regard to “next steps”. With the depth and breadth of SAP scope and functionality, there are a myriad of options and a high populace of user demand, ranging from C level to end user. As Chris Barendregt, Chief Information Officer of Fonterra put it: " We’ve had plenty of great advice on how to get the most out of our SAP solution since Go Live, a lot of which unfortunately got lost in the noise and sheer volume of ideas.” (my italics).

For a number of years, I have helped clients to gain focus upon:

Business/IT Alignment: An IT organization is intended to drive business results and an effective application center of excellence; therefore, it must also be staffed by business personnel. Most firms fail to maintain this alignment due to a reliance on pre-ERP practices in which the IT group alone managed application evolution.

Enterprise Applications: The state of the applications (software, functionality, reliability, and interoperability) will have an impact on staff members’ ability to impact change (business process improvement). Unstable applications will consume both IT and business resources with support tasks.

Value Management: Value should be measured at the key performance indicator level and results should be the key drivers to business process improvements. Without value management, business staff will not adequately support a Center of Excellence.

End users: These are the people who actually run the business processes delivered by the enterprise applications. Their level of competence, preferably driven by a continuous training program, will have a direct effect on business process performance and a firm’s ability to absorb continuous change. Most firms have failed in this regard due to a reliance on end-user training practices that fail to address the extended life-span of enterprise applications and thus do not include continuous training.

In order to help clients address “the noise and the volume”, I will be joining SAP in a three webinar campaign that I urge you to attend.

Assess Your SAP Maturity
1:00 p.m. ET/Noon CT/11:00 a.m. MT/10:00 a.m. PT
Tuesday November 2nd 2010

Gaining Measurable Value with SAP
1:00 p.m. ET/Noon CT/11:00 a.m. MT/10:00 a.m. PT
Tuesday November 16th 2010

Optimize Operations and Leverage the Customer Center of Excellence (CoE)
1:00 p.m. ET/Noon CT/11:00 a.m. MT/10:00 a.m. PT
Tuesday November 30th 2010

For more info:

http://www.insiderlearningnetwork.com/sapservices/blog/2010/10/20/assess_the_maturity_of_your_sap_implementation

To register:

http://fm.sap.com/images/WhiteRhino/consulting_webcast/lp_tw.html

Central to this campaign is the offer of a “First Time Free” SAP Maturity Assessment. This assessment will be fully described throughout the series. For more information and/or to register, please visit http://www.3vsolutions.com/ and go to “assessments”. A 20-page overview of the web-based program can be downloaded from there.

See also:

http://sapsearchlight.blogspot.com/2010/07/sap-end-user-maturity-assessments-beta.html

http://sapsearchlight.blogspot.com/2010/06/center-of-excellence-taking-center.html

Training Budget Issues? Get the Evidence

2010-08-12T09:02:00.000-07:00

As I am now in the midst of a 3 webinar (and 3 Twitter events) campaign sponsored by SAP on the subject of end user support and competency, I have had numerous conversations with clients that often include a summarization like the one that follows:

Client: “We did only a fair job of training before go-live. Since then, we have had very little budget for ongoing training. Our users are struggling and often use work-arounds when they come to difficult functions. We then have a lot of reconciliation. Our users need more and better training.”

Me (feigning ignorance): Why aren’t they getting it?

Client: “We have no budget and no one has the authority to raise one.”

The bottom line is an organizational lack of respect for the subject of end user competency. The “authorities” are more concerned with the engine than its drivers (buying more software, improving the existing software, investing in middleware, changing the oil, cleaning the carburetor…). They want to hear that engine hum but are too often oblivious as to where it will take them and how.

I am reminded of conversations that crop up during implementations in which clients foretell the consequences of a late or botched go-live:

Distribution: “Trucks won’t go out!”
Finance: “We won’t be able to invoice!”
CEO: “We won’t get our reports!”

My personal favorite was a doctor who refused to give up his clipboard in favor of a light pen: “Patients will die!”

Then, by hook or by crook, the client goes live with SAP. Thereafter, thanks to the end users who are fulfilling the transactions, trucks go out, invoices are issued, and reports are generated. (Whether or not patients die is not a matter of a ballpoint pen or a light pen.)

My point here is that management does not recognize that if their end user/drivers are not properly supported, trucks will not go out, invoices will not be issued, and reports will not be generated.

So how do you get that message to management? Provide evidence.

The input of your support and end user “crowd” is more convincing than managerial opinion. That is why I endorse a collective assessment. So it isn’t one training manager trying to convince one director. With a collective assessment, it is 25, 40 or more people reporting on the state of affairs.

Two weeks ago, in the course of my first SAP-sponsored webinar “End Users at the Wheel”, we offered at no cost our new SAP End User Maturity Assessment, a web-based tool powered by Zieta Technologies. A number of firms have taken us up on this offer (which still stands, by the way).

Here are two early results:

The “Best of Times” firm is on a positive path toward the Expert Plane. This firm first went live in 2000 and has 4,500 end users around the world. The key to their success is a high level of ownership (authority, budget, respect) which has led to the maintenance of an environment that sufficient supports end user expertise. The global head of training tells me that her “power user” organization has been precisely what has troubled her and now she has confirmation, from 41 respondents around the world, that it is a priority. Evidence.

For the “Other Times” firm, the head of training is a recent hire into a company that went lived in November of 2008, pretty much the worst possible time. Shortly thereafter, the firm had to shed staff and end user training was limited to self-help for the most part. The head of training is using these results (from 25 respondents) to illustrate the depth and reach of the firm’s training issues. Evidence.

Both firms will address their most pressing weaknesses and re-assess, with the same respondent group, in two or three months.

The assessment is based upon a maturity model that proscribes the best practices for three key areas (Ownership, Environment, and Expertise) across five levels of maturity.

We test a client's adherence to 8 best practices per level on a scale of 1 to 10 and consider 7.5 an acceptable result.
What follows are some examples of the “evidence” produced in the assessment.

This client did well for level 1 (Planning) but is challenged in level 2 (Readiness) in terms of end user understanding of roles and goals and a disconnect between super users and business process owners.

By the time we get to level 5 (Expert Plane), we find that insufficient continuous is apparent and super user continuity is at risk:

In previous levels, we also had poor results relative to the super user program. These findings are doubly confirmed in the summary roadmap. Here, we have isolated the poorest results. Note that Par Result is the % of par (7.5) attained:

While assessment results do not provide absolute and definitive direction for your SAP end user support environment, they do provide credible evidence of your current state while pinpointing the most burning issues.

To download an overview of this assessment program and/or to register for free one-time usage, follow this link:

http://www.3vsolutions.com/html2/EndUserAssessment.php

SAP End User Maturity Assessments: A Beta Offer

2010-07-29T13:46:00.000-07:00

The first in a series of three webinars was held Wednesday, July 28 at noon EDT. There were 220 in attendance and I’m told there very few drop-offs (despite the fact that my phone cut out just as I was being introduced and it took me four minutes to get back in).

The content of the webinar is summarized in this white paper http://snipurl.com/zv7ea but I was also accompanied by Kerry Brown, SAP’s Global Vice President for Enablement. Kerry and I find that we are in VIOLENT agreement about many of these subjects and her perspective was a true contribution to the webinar.

In the course of the webinar, I referred to a study I led some years ago regarding the relative competency of end users. The most damning results of this study were:

Of 133 firms responding, 101 (76%) characterized their end user population as sub-standard (64%) or failing (12%). Chilling, no?
In response to questions as to who in the firm was responsible for end user competency and who had the budget to maintain it, more than 75% of the responses were “No one” or “Don’t know”.
Only 13% of the firms provide continuous end user training.

In order to get a clearer idea of how bad things are, and to provide a useful tool to individual clients, I have partnered with Zieta Technologies and 3V Solutions on an SAP End User Maturity Assessment. Collective responses from firms that complete this assessment will provide us an updated and detailed look at the state of end users and end user supports.

I have used the tool in question since 2002 for a variety of assessments:

Organizational Readiness to Launch a Project
SAP Go-Live Readiness
SAP Maturity Assessment

Zieta Technologies is converting my Excel/Survey Monkey tool into a slick web-based tool. It will be available in mid August. In the interim, we are offering use of a beta version at no charge and I am offering a free copy of The SAP Green Book, Thrive After Go-Live to any firm that completes an assessment by August 8, 2010. The offer is valid for the first hundred firms that apply.

I must stress: the assessment is very easily accomplished. You choose 25-40 respondents from your firm who will be given a survey that takes 15 to 20 minutes to complete. Once all surveys are in, you receive results and diagnostics relative to how well you are adhering to 40 best practices.

Anyone interested can go to this link to download a 17 page overview and/or to register.

http://www.3vsolutions.com/html2/EndUserAssessment.php

In the course of the second webinar, scheduled for August 11, 2010, I will be presenting collective results.

How Bad are We? A Reality Check on Your SAP End User Maturity

2010-07-26T10:12:00.000-07:00

The neglect of SAP end users has only grown worse since the economic downturn. Firms that were already struggling with their SAP deployment have cut training budgets and end user competency is falling to new depths.

Follow this link to download my white paper: Your Users Are Stumbling and Your Business Is Suffering, How cutting SAP Training could make bad times worse http://snipurl.com/zv7ea

At noon EDT on Wednesday, July 28, 2010 I will be leading a webinar “End Users at the Wheel”. It is the first of three planned webinars and includes a special offer:

All attendees may access our SAP End User Maturity Assessment at no cost. This offer is valid through August 10, 2010.

The program is a self-assessment covering:

Environment: these best practices address the working environment and end user supports. Some examples:

• SAP training team, methods, and tools are in place.
• End users understand business goals inherent in SAP roles.
• Infrastructure is in place for end user training.

Ownership: these best practices address budget, ownership of issues, and authorities relative to end user maturity. Some examples:

• Ownership of end user competency is established within the organization.
• Senior leadership views SAP competency as a business issue.
• A permanent budget for ongoing end user competency is established.

Expertise: these best practices relate to the relative expertise of SAP end users and super users. Some examples:

• End users have received SAP basic orientation
• End user performance satisfactorily supports business processes.
• Help desk trouble tickets for training issues <20% of total.

The link for this webinar is: http://204.154.71.138/data/web2coe.htm

The assessment is based upon an SAP Maturity Model that I developed some time ago and which has been vetted by SAP America, ASUG, and a number of SAP consultants and trainers.

Key output from this assessment is a level by level and best practice by best practice diagnostic of where a firm stands in regard to its SAP end user maturity.

If you cannot make it to the webinar but are interested in this offer, please contact me at michael@michaeldoane.com.

SAP Oil Washing up on my Family Shore

2010-07-13T05:52:00.000-07:00

I am about to launch a three webinar campaign for SAP Education on the subject of end user training.

“End Users at the Wheel” “Setting End Users on a New Course”

July 28, 2010 12:00 pm – 1:00 pm EDT
Explore the root causes—and heavy costs—of the poor state of end user competency in organizations running SAP software.

“What’s Your End User Aptitude?”
August 11, 2010 12:00 pm – 1:00 pm EDT
The results of the self-assessment survey revealed. Plus Michael and SAP experts provide guidance on how to interpret the results.

“Setting End Users on a New Course”
September 15, 2010 12:00 pm – 1:00 pm EDT
Set the final road map for your business success. Learn how to nurture end users and sustain their knowledge over time

http://snipurl.com/zbbsj

Central to these webinars is a new tool for assessing your SAP end user maturity that I am very excited about and will present in another post down the line.

The state of end user training is pretty dire and while these webinars will be of great import to those who attend, there is another matter regarding "end use" of SAP software that remains troubling: the experience.

As Paul Kurchina once put it to me: "The SAP end user experience is simply awful. I didn't need to be trained to order books off Amazon. Why do I need so much training to make SAP work?"

I've been around SAP since 1995 and have attended a number of end user training sessions. At these sessions, in addition to questions beginning with "how", there are far too many questions beginning with "why", as in "why do I have to do it that way?"

Now it is 2010. My daughter works as an administrative assistant at a prominent fashion firm in New York. Yes, they have SAP, and I have recently lived the nightmare of receiving e-mails from my daughter complaining about "the user experience". Her complaints are not centered on how the software was implemented but the simple (il)logic of the functions. OK, now we're talking family, SAP.

Back in 1998, while giving his keynote at the Los Angeles SAPPHIRE, Hasso Plattner famously stated: "SAP is too complicated. I don't use it anymore." This was his unique way of introducing Enjoy SAP, an upgrade to the SAP graphical user interface. Well, there are millions of SAP users out there, my daughter included, who cannot be said to "enjoy" SAP. So while we are preaching to clients the need for continuous support and training of their end users, we do so fully aware that a) most training is boring and ineffective and b) users are being trained to unnatural acts rather than to ergonomic, logical functions and processes.

The may be some light at the end of this tunnel. Word has it that Jim Snabe, co-CEO of SAP, is leading a group focused on improving the end user experience. Since that is the case, I would like to nominate Harold Hambrose to join the fray.

Mr. Hambrose, who is CEO of Electronic Ink, has recently published a book called Wrench in the System, subtitled "what's sabotaging your business software and how you can release the power to innovate". Some money quotes:

"The disparity between the immense power of business software and its weak performance can be resolved, but the answer can't be found in technology."

"Technologists first loyalty is to the code, not to the customer."

And if you are wondering who he's writing about... "Evaluating the features and functions of a well-established product from SAP, Oracle, Microsoft or another major vendor is one thing; successfully using that product in your own company is an altogether separate activity."

Mr. Hambrose studied design at Carnegie Mellon and made the odd choice of focusing on information technology. Beginning his career at IBM, he found he had to go one programmer at a time to earn the right to be part of the initial design. Technologists wanted to first complete their design and then hand it over to him to handle the aesthetics.

"Too often, our understanding of design is limited to its physical form and doesn't extend to the quality of our experience with that form."

In too many ways, SAP is engineer-dominant. All of the founders were engineers. They engineered their initial product, then R/2, then R/3. We now live in a NetWeaver world. Solution Manager is great but it is complex and almost impossible to retro-fit. In the collective SAP mind, software is the solution to every business question.

It is high time for a new collective SAP mindset, one that sees its role as a business solutions provider, a role in which the business software is central but merely a subset and design of that software is not technology-dominant.

When I get behind the wheel of my Volkswagen Jetta, I do not think of myself as an end user. Instead, I use the term “driver”. Our business terminology, when it comes to defining roles, has failed us in this regard. While directors, managers, and supervisors tend to believe that their role is to drive business processes (orders to cash, procure to pay, et al), their role is actually to direct, manage, and supervise those who drive the business processes. They are not at the wheel: the end user is.

To put it simply, SAP is the engine that propels your end users to drive on the superhighway of business processes, with the goal of improving key performance indicators, to lead to the promised land of improved profit and reduced cost. Expertise is a crucial requirement for your business vehicle; otherwise, it will be constantly in the ditch.

Sometimes, SAP training is like teaching astronomy to shut-ins. It's time to open the doors and windows, SAP. Call Harold Hambrose. For my daughter's sake.

Working from Home, 25 Years On

2010-06-24T08:28:00.000-07:00

I recently celebrated my 25th year of working from home. The first ten were pre-Internet for me. I started out in Paris from where I directed projects around Europe, Japan, and Hong Kong, so there was a lot of travel involved. Since returning to America in 1991, I have continued to travel on a regular basis, so some of the “working from home” gets subtracted.

All the same, there’s a lot to celebrate when compared to a daily commute of one hour each way and the mixed blessing of seeing the same crew day after day.

I can be at my desk 60 seconds after waking and often am.
I can largely choose what hours I work.
I do not have to put up with co-workers slouching into my office to bitch about the boss or tell me about how they are paneling the basement or how about that Vikes game.
I have a kitchen fifty feet away.
The “men’s room” is fifteen feet away.
I have a window looking out on my Japanese garden.
No one listens in on my telephone conversations except my dog.
I am not called in to pointless meetings merely because of my proximity to the conference room.

I estimate that I have worked about 9 hours per day, 48 weeks per year = 240 days per year. That is exactly 6,000 work days. I estimate one in four was travel, leaving 4,500 days.

What I have saved:

Presuming two hours’ commute time and one hour of bullshit conversations per day:
4,500 days * 3 saved hours = 13,500 hours ~ 562 days to live the rest of my life.
Presuming an average of $8 per day of gas (not to mention all the car mileage), a direct savings of $36,000. Probably have saved on parking as well.
I cannot accurately gauge what I’ve saved on business clothing (suits, ties, shoes) but if we consider 1 $500 suit per year, that would make another $12,500. (I have yet to invest in a bathrobe with my company’s logo.)

There have been some additional costs such as having my own phone line for the fourteen years I’ve been an independent (~ $12K), as well as printers and office supplies (~$10K). Any other down side? Nope.

Better productivity, tangible savings of nearly $30,000, and a sense of liberty no office could ever provide.

Best. Career. Decision. Ever.

Center of Excellence Taking Center Stage. Systems Integrators Still Useless.

2010-06-01T06:32:00.000-07:00

SAPPHIRE 2010, which took place a few weeks ago in Orlando, Florida, was my eleventh SAPPHIRE and seventh in Orlando. I have attended in the role of consultant, industry analyst, and just plain tourist. This year I left the analysis to my good friends and spent nearly all of my time with clients and prospects with a major focus on post-implementation strategies and, especially, Centers of Excellence.

For those who are unsure, I view a Center of Excellence as an enterprise organization with sufficient authorities, assets, and resources to drive continuous and measurable business improvement enabled by SAP applications software. It’s a subject I’ve been researching since 2001 with nearly all usable input coming from the clients.

Back in 2002, when I had written a white paper on the subject, I was rewarded with a spot on a keynote panel at SAPPHIRE. While 1,100 people attended, the main result was a shrug as in: “That’s great, Michael, but we’re still busy shaking out our implementations. See you in a few years.”

In the interim, I have carried on and finally, in October of last year, I had enough material (thanks as well to a number of contributors) to finally publish The SAP Green Book, Thrive After Go-Live, of which the centerpiece is a chapter “Building and Sustaining a Center of Excellence”.

Eight years after the 2002 SAPPHIRE keynote, I had the honor of presenting and panel-monitoring a day-long ASUG/SAP Kick-Off event led by Brian Dahill on the Center of Excellence and was very encouraged to find an outpouring of true interest (indeed, passion) coming from the attendees. Thanks to this event and the evangelism of Paul Kurchina of ASUG, there followed three more days of SAPPHIRE meetings that drove home the message: Center of Excellence is an emerging subject and demand for more information is quite high. Clients were avid to learn more about a) how to improve the end user experience and competency levels, b) how to bring business people into the equation, and c) what other firms have done in this regard.

I am now deep into conversation with half a dozen firms and their most pressing question is “Who can help us build a Center of Excellence?” The answer in this regard: it depends.

Clients reported claims by SAP, IBM, and Accenture to having a Center of Excellence offering but I found that while SAP Consulting and a newer SAP services arm known as Business Transformation Services can provide some guidance, they do not have a formal program for Center of Excellence building and little resource in this regard.

As for IBM and Accenture, an eight year old story continues. Back in 2002, I contacted the leaders of prominent SAP systems integrators to pose the question: Can you help clients build an SAP center of excellence?

Unsurprisingly, every one affirmed an ability to do so. Unconvinced, I invariably posed two “banana peel” questions: 1) can you show me your methodology and 2) can you show me some references?

Answer from all and sundry: um, no.

This scenario was repeated at least six times (Deloitte, Capgemini, et al) and just as many times my counterpart took what seemed like a logical next step: to introduce me to their head of applications outsourcing, which only inspired me to write an article entitled “Option A or Option A: Funneling Clients to Application Outsourcing.“ Clients who have recently turned to IBM and/or Accenture have reported that nothing has changed.

Normally, when client maturity (and demand) for a service reaches a high level, systems integrators see a market for their services and so step up. The fact of the matter is that firms like IBM and Accenture are seeking the “client capture” of application outsourcing and so are loathe to help clients build a self-sustaining organization. While their attitude in this regard is short-sighted in that most fully operational Centers of Excellence require a certain level of outsourcing, the fact remains that they will not help you, they will merely claim the ability to do so.

So we have come to a cross-roads in which client maturity in regard to Centers of Excellence is quite high while service provider maturity remains low. Clients are saying they are ready, that they understand the need and potential benefits of instituting and sustaining a vibrant Center of Excellence. If we cannot answer who can help them, the one answer we can provide is: how do you build one? This is an even more important question because, upon reflection, no client really needs either SAP or a large systems integrator to do so.

That is my final take-away from SAPPHIRE 2010: it is time to show clients how it’s done. That will be the subject of my next post. Stay tuned.

Best. SAPPHIRE. Ever.

2010-05-21T07:26:00.000-07:00

This past week, SAPPHIRE 2010, held for the umpteenth time in Orlando, Florida, was a joy (perfect logistics, layouts, scheduling), a relief (no more Leo Apotheker), a revelation (the first 100 days of Snabe-McDermott have restored dialog between SAP-analysts and SAP-customers), and a near 180 turn of the analyst view of SAP.

In 2008-2009, SAP seemed far more inclined to cater to its shareholders than to its clients and continued to tout technologies (Duet, Solution Manager, et al) that simply failed to capture the client imagination. Leo Apotheker appeared to be hearing-impaired and when SAP threatened to raise its maintenance fees from 17% to 22%, the analyst-client-community (SUGEN, ASUG, et al) cut bait. I could not count the number of articles I read about the coming demise of SAP as the firm a) was not cloudy, b) was not SaaSy, c) was too ABAPY, and d) had retreated into a Walldorf shell that could comfort itself with maintenance profits. While I only agreed with point d, it was a damning point.

My own track at this year’s SAPPHIRE was highly customer-centric. I did not join the analyst community at all and have instead relied upon those analysts I know and follow closely to provide the coverage. I will next post upon my activities, which centered largely upon Centers of Excellence, end user competency, and a host of post-implementation strategies. For the analyst coverage, I would begin with Oliver Marks:

SAP Gets Mojo Back: Enterprise 3.0 http://snipurl.com/wltaz

and then on to three of SAP's greatest critics over past years:

Dennis Howlett SAPPHIRE 2010: the wrap http://snipurl.com/wlto1

Dennis is the Hunter S. Thompson of the analyst industry, so that article comes well-earned.

Vinnie Mirchandani Things to compliment at SapphireNow http://snipurl.com/wltmw

SAP's greatest critic and toughest sell is Ray Wang. Therefore, his post is also a revelation:
Event Report: Sapphire 2010 Brings Customers Back To A Sense Of Normalcy
http://snipurl.com/wltvr

Trust that I am not drinking any Kool-Aid here. I continue to be deeply disappointed in SAP in a number of areas (consulting, education/training, the user experience, the constant "technology will fill any gap" mentality) but after a two-year winter of SAP discontent, this event provided welcome sunlight.

The House I Live In

2010-04-28T14:03:00.000-07:00

In early versions of what is now The New SAP Blue Book, A Concise Business Guide to the World of SAP, I had a chapter entitled “What’s Wrong with SAP?” I dropped that chapter after a few updates during reprint because the various answers to the question were constantly shifting as SAP evolved. Needless to say, whatever differences I had with SAP in 1998 have all gone by the wayside, including, as I wrote back then “SAP is a thin-skinned organization that doesn’t take criticism lightly.”

In the course of this book, as in many articles and blog posts over the years, I have taken exception to several of SAP’s decisions and actions. In the 1990’s, I felt that there was way too much unmerited chest-thumping. SAP was making great strides in the marketplace but the R/3 software was not nearly as functionally mature as was being touted. Later, I was disappointed in a number of SAP initiatives in the small and mid-sized market and a continual insistence that more software was the answer to any problems their clients faced. More recently, I have become concerned that a number of SAP initiatives are such as Duet and Business ByDesign have distracted the company from the necessary path of improving the client experience.

Despite these criticisms, there have been two points in my career in which I chose to work in the fields of SAP. First, after a ten year run as a “generic” consultant running design build run teams for integrated applications, I felt compelled in 1995 to choose a vendor as generic consulting was being replaced by burgeoning applications software firms. Through the summer of 1995, I looked closely at ‘the big three’: SAP, PeopleSoft, and Oracle. PeopleSoft sounded cool but appeared to be a provider of HR, Payroll, and some financials as opposed to being a full-scale ERP firm. Scratch PeopleSoft.

I chose SAP over Oracle for three key reasons: 1) former colleagues advised that SAP would fit me like a glove and 2) I noted that SAP had a much higher market profile than Oracle and 3) that Oracle was first and foremost a technology firm and its applications software business was second citizen in the realm. There followed six years in which I worked as an SAP consultant, concentrating not on how SAP worked but on what it could do for business.

The second time I chose SAP was in 2007 following a six-year stint as an industry analyst during which time I had considerable contact with all the major software vendors and large systems integrators. Given that exposure, I could have worked under the Oracle umbrella but I was not at all tempted in that direction. It was bad enough that Oracle had muddied the market waters with an insane acquisitions run (J.D. Edwards, PeopleSoft, Siebel, and a host of others) that turned it into a K-Mart of applications. Worse, I had observed an alarming revolving door in Oracle’s middle management, a cutthroat sales environment, antagonistic analyst relations, and a company-wide cavalier attitude regarding its clients. All of this was in stark contrast to SAP’s relative management stability and sincere attention to its clientele. While they have never taken criticism lightly, they do not shoot the authors of such criticism. In fact, they engage their critics, myself included, sometimes to defuse the criticism and sometimes as a way of listening.

In recent years, analysts and SAP competitors have tried to give the impression that SAP is so yesterday as software as a service (SaaS), the cloud, and SOA are seen as the pivot points to the future. Infor, which acquired more than 31 separate companies, is now marketing on a theme that “big ERP is over”, clearing pointing to SAP. Clearly, I disagree with analysts and with Infor.

I cannot imagine a firm with 5,000 or more active users putting their data out to a cloud. I cannot imagine a firm with 5,000 or more users accepting that they have no way to change their applications software functions.

Nor can I imagine a firm that is already using SAP and, beyond implementation costs, has millions upon millions sunk through deployment to simply shrug and move to something else. In fact, I haven’t seen it happen in my fifteen years around SAP.

SAP is the house I live in because the software works and I don’t have to know all that much about the technology to help clients move ahead. The functional span of SAP is unparalleled, not only across business functions but across discrete industries. Best business practices are truly best business practices. Upper management is stable, relatively harmonious, and nearly always open to discussion. SAP is no longer the hot new thing it was back in 1995; it is now a mature business with a rich eco-system and a vast number of satisfied clients from whom I continually learn new best practices. While I will continue to insist upon evolution (my goal is for SAP to become a business solutions firm and not an applications software vendor), I will not be changing residence.

The Consultant Certification Ruckus

2010-04-22T13:06:00.000-07:00

Here we go again.

Jon Reed, Dennis Howlett, Martin Gillet, Michael Koch, and Leonardo Di Araujo, collectively known as the Certification 5, have posted a 55-page, somewhat discoordinated white paper exploring the need to vastly upgrade the SAP consultant certification process. http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/18849

The article even got the attention of Larry Digby, Editor in Chief of ZDNet http://blogs.zdnet.com/BTL/?p=33369&tag=col1;post-33369

Given the prominence of all of the above, it is certain that this work will be seriously scrutinized by SAP as there is still a perception that too many of the SAP consultants in the field are short on the requisite skills. As it happens, the whole subject was kicked back into high gear about a year ago when (then) CEO Leo Apotheker had this outburst in front of reporters and bloggers:

“I don’t give a s**t if it’s Accenture or IBM. I care about the customer. I find it shocking people are walking around talking to customers and have no experience on [SAP]. [Consultants] get hired of people and have no clue. It’s annoying but that’s a fact. Let’s start by certifying people,” said Apotheker. “If we believe [a project] takes 500 days and another partner says it’s 5,000 days I’ll do it for 500 and a fixed fee.”

While I would welcome tighter certification of individual consultants, even the Certification 5 tend to focus on technical skills (DiAraujo elaborately argues against the viability of testing "soft" consulting skills.) All the same, I remain convinced that it's the systems integration firms that require certification. We all know that even with a team of highly qualified consultants, a single crappy project manager can drive a project into the ground. This was my argument a year ago http://snipurl.com/vpb26 and it remains my argument today.

If certification is focused on SAP technical acumen alone (without business knowledge), the certified term should not be "consultant".

Engineers without business knowledge often build beautiful and efficient bridges to nowhere.

Once Upon Time at J.D. Edwards

2010-02-25T06:45:00.000-08:00

It’s the Fee Models, Stupid

In my last post, I summarized the ongoing challenges of SAP systems integration as observed firsthand and through deep primary research. A major part of the public debate as to what improvements can be made has centered upon certification. Many believe that better certification of consultants is needed. I have already weighed in on this matter (Certainly Certifiable: SAP SI’s, Not Just Consultants http://snipurl.com/udywk ) in which I argue that the systems integration companies should be certified, not just their individual consultants. I wrote that in April of 2009 and have since amended my thinking.

All of the large systems integrators are CMMI certified to at least level 3 but as mentioned in my previous post, that doesn’t stop them from regularly ignoring CMMI-adherent methodologies. (read this and weep: http://snipurl.com/uif1o ) The point is that certifications do not necessarily lead to good field performance and high levels of client satisfaction. In that light, just because a consultant is SAP-certified does not particularly means that he or she will perform well in the field. Clearly certifications of any kind may contribute to project success but I still believe that this type of improvement is tinkering when what we need to is blow up the model.

In research that I completed in 2005 and 2007 regarding the relative field performance of the leading SAP systems integrators, I had deep input from 1,502 clients of the six leading SAP systems integrators for projects completed from 2003-2007. In addition to providing details regarding each system integrator’s performance (across twelve criteria such as adherence to budget, SAP technical skills, efficacy of knowledge transfer, et al), they also let us know what fee model was applied.

Fixed fee, by which a predetermined global fee is applied and which may or may not include expenses. Clients opting for fixed fee seek to reduce cost risk and place a greater responsibility on the systems integrators for results. As a consequence, they tend to take a lesser level of client ownership.

Time and Materials, by which a budget is established and a systems integrator bills time at a daily or hourly rate as well as expenses as incurred.

Mixed fee engagements tend to include time & expenses for client-dependent phases (e.g. design) and fixed fee for vendor-dependent phases (e.g. configuration) as a way of reducing risk with a balanced time and cost adherence mindset.

Value-based, such as gain sharing or benefits sharing. Clients opting for value-based fees reduce risk by paying lower rates in return for a percentage of measurable financial gains. Such clients are more motivated to gain measurable benefits than to simply adhere to time and cost. This model requires a high level of client ownership.

When we ran results sorted by fee model, we found that, while only five percent of the engagements were value-based, clients reported:

Highest performance criteria scores for 11 of 12 criteria
Highest levels of exceeding goals (as opposed to meeting those goals or falling short) for all ten goals tested (e.g. reducing costs, streamline financial management, consolidate IT systems…) and often by a very big margin.

As for problem levels:

Fixed Fee engagements had the highest citation of no problems (44%) with value-based engagements second (38%).

Value-based engagements had the lowest average number of problems per engagement (1.3 compared to a group average of 1.6).

There was not a single citation of ‘Scope Poorly Managed’ in value-based engagements and seven of the thirteen problems were cited least often for this fee model than for the others.

The time & expense model reflected the highest problem per engagement (1.8) and the highest citation frequency for eight of the thirteen problems.

Over-all fixed fee engagements had the worst performance. Clients tend to love fixed fee because they feel they are getting predictable cost. Yes, but they also tend to get predictably mediocre results. If I’m a systems integrator on a fixed-fee project, I also have predictable margins, so where’s my motivation?

J.D. Edwards: A Business Solutions Firm (Briefly)

I have long been a fan of value-based billing and I believe it’s time that we do what we can to retire the other models as much as possible. I have felt this way for a very long time and once, briefly, there was a firm that shared the vision.

In 2002, with new management and a consulting director named Jim Christianson, J.D. Edwards created a methodology and the necessary tools to turn the sales and delivery model for ERP on its pointy head. I had the great pleasure of collaborating with them, most especially with the talented Scott Lutz (now at SAP). In brief, here is the scenario that was made possible:

1. Potential client shows what improvements they wish to make to their business with a focus on their Profit and Loss sheet.

2. J.D. Edwards identifies the key performance indicators (KPIs) driving current results.

3. J.D. Edwards identifies the core business processes that drive those KPIs.

4. J.D. Edwards identifies the software that supports the core business processes (and a cost estimate)

5. J.D. Edwards provides a measure of business gains that will be made for each KPI.

6. J.D. Edwards provides a time and cost estimate for relevant consulting.

Given a credible probable cost/benefit scenario (in $$) the client has the option of a standard time and expenses fee model or can negotiate gain sharing.

The implementation project that follows is directed toward deriving business benefit for the client. It is not viewed as a mere “IT project” but as business enablement. While the client may still be budget-conscious (it will be less so in a gain-sharing deal because fees will be reduced), it will be even more focused on measurable benefit. As such, the engagement will be embraced by business people and that elusive grail -business & IT alignment- will be attained.

What I just described is a client-supplier partnership that beats the living hell out of any fixed fee arrangement.

J.D. Edwards built all of this and had successfully piloted it into the marketplace. At their final Quest event, they shared their plans to reduce the traditional sales workforce with more consultative sales people who could fulfill the above scenario. No longer would they be just a software firm. They would become a business solutions firm.

This all came crashing to a halt shortly thereafter when they were acquired by PeopleSoft, where the services leadership was arrogant, uninformed, and fairly stupid (yes, I had to work with these people before and after the acquisition).

The Selling Model Has to Change First

Clients who are new to SAP tend to talk first with the software vendor and later with potential systems integrators. This misfortune of this order is that software vendors do not sell according to the JDE scenario and tend to focus overmuch on IT issues. Thus, by the time a systems integrator comes along, clients are not looking at driving measurable value, they are looking to keep costs down. Deloitte has an excellent program called Enterprise Value Map but a pair of their partners shared with me some years ago the news that few clients actually bite, often for the reason cited above.

Partners at other systems integrators described similar frustrations so in November of 2004, I wrote twin articles:

How ERP Vendors Sell the Wrong Things to the Wrong Buying Audience — In the Wrong Way, Wrongly

Features and Functions Are Dead — And Never Lived for Today’s ERP Buyer
Total Cost of Ownership Falls Flat at Board Level
Lower the Volume of Software Engineering, Raise the Volume of Value-Based Services

This is the way software is still sold.

How ERP Vendors Can Sell the Right Things to the Right Buying Audience the Right Way

Selling the Enterprise Application Value Chain
Taking the Cue From Systems Integrator Alliance Partners

I repeat all of this same advice to SAP today, all the more loudly given the passage of time.

SAP, in its Value Engineering tools and assets, largely has the ability to fulfill the JDE scenario, which I believe would help solve its dilemma in the SME (see my posting regarding this: http://snipurl.com/ti92h). The trouble is, however much SAP speaks to being a business solutions firm, they remain very much an information technology firm that seeks to leverage software as the answer to all questions.

If value is the cart and SAP software the horse, then clients should be shown the value first as a means of enticing them to get the horse.

Advice to clients: seek out value-based fee models for all of your engagements.

Advice to systems integrators: market your value drivers more vigorously than your technical prowess and learn to partner with your clients.

Advice to readers: please provide feedback. What else can we do to improve the systems integration experience for clients?

A Closing Fable

This actually happened about six years ago. I was asked to take a call from the CIO and three direct reports of a large state. It turned out to be the potential conflict-of-interest call that I had in more than four years at META Group. The state client had engaged a major systems integration firm on a gain-sharing basis. They had projected $200M in benefits over four years but in less than three years they had generated $400M in benefits and expected another $200M in the coming year. State auditors were on their case because, through gain sharing, the amounts they had reimbursed to their systems integrator were very, very high.

While the callers asked what they might do to negotiate a new deal with the systems integrator, I could not answer as the systems integrator in question was a client of my Professional Services Strategies. I did pose one question, however: If the fee model had not been gain sharing, would their benefits have been so high? Their collective answer was no way. They added that throughout the project they continued to find new ways to generate benefits so that even though the final project was a bit a late and more than a little over budget, it was a success in every way.

It’s Time to Evolve the SAP SI Delivery Model

2010-02-16T09:25:00.000-08:00

It’s been a year since the recently-departed Leo Apotheker had an infamous outburst of criticism of, specifically, Accenture and IBM in the realm of SAP consulting. This highly-publicized moment led to an avalanche of largely uninformed blog posts (one gentleman cited SAP translation problems from the 1990’s that have long since been resolved). One over-arching theme that emerged was the need to certify SAP consultants even though various forms of such certification have been in existence since 1993. My own, belated, contribution to this particular point was a post about certifying SAP implementation partners, not just the individual consultants. (point to post).

http://www.businessinsider.com/2009/2/sap-clueless-consultants-from-accenture-and-ibm-giving-us-a-bad-name-sap#comment-49936f8e796c7ade006385cc

Skip the article, read the comments…

I pledge to write more about this in a later post. For the moment, I wish to concentrate on what I believe is at the heart of chronic questions about the efficacy of SAP systems integrators: the need to move to a more evolved delivery model.

When I began working in the world of SAP in 1995, there was no SAP (or ERP) specific delivery methodology extant. Most of the larger players were using modified versions of the 1980’s style Design Build Run methodologies which unfortunately did not at all address configurable software across entire business processes. Further, these methodologies placed a very high emphasis upon the As-Is phase (which I coined the consulting partner’s Retirement Fund phase).

In the spring of 1997, SAP itself unveiled Accelerated SAP (ASAP). Despite the fact that the earlier versions of the methodology were shallow at best, there was an immediate benefit: all systems integrators began working to mutually understandable “sheet music” (which happily included a brief and intelligent verse of As-Is analysis). By 2001, through a combination of more years of field experience and SAP’s iterative improvements to the methodology, we began to see better field results, more on-time implementations, and greater client satisfaction.

In addition to the improvements to ASAP Focus brought by SAP, the various partners have all added tools and layers built around the core of ASAP in order to differentiate and to address field aspects that may not be addressed in ASAP.

In order to cut through the fog regarding “good” or “bad” implementations, I led surveys in 2005 and 2007 regarding the relative field performance of the leading SAP systems integrators. Input from 1,502 clients of the six leading SAP systems integrators for projects completed from 2003-2007, yielded over-all positive results with an average over-all client rating of 6.8 on a scale of 1 to 10 in which 6 equals “good”. Given the high number of participants in these surveys, I conclude that the SAP consulting fields are not the mess that many make of them.

The field performance of the systems integrators varied according to type of project (new implementation, upgrade, optimization, roll-outs), client size, and project size. Accenture had world-class scores for its very large clients and, um, nothing to write home about for the others. Deloitte had persistently low scores for new implementations but enviable scores for the other types of projects. CSC was consistently mediocre, BearingPoint was all over the map. Only IBM had consistently decent levels of performance.

Having said that, I do believe that the final results of too many SAP engagements are disappointing. While over-all scores were good, many of the sub-results were less sunny-side. One key provided by the 1,502 clients: the systems integrators quite frequency go off the reservation and do not adhere to their own methodologies.

Another is that the focus of most projects is adhering to time and budget. This is mostly the fault of clients and the flawed nature of Total Cost of Ownership (given that it provided only one side of the necessary measure of ROI).

The research also shows that, without a clear notion of how an SAP project is going to bring measurable value, clients behave in ways that hinder ultimate success. The syndrome is: I Said I Wanted Chicken But Now I Want Steak and Later I Will Be Happy to Have a Hot Dog.

I said I wanted chicken: while choosing a systems integration partner, clients look for a balance between potential performance and cost.

Now I want steak: once the project starts, clients add scope and extend the aims of a project

I will be happy to have a hot dog: fatigued and running out of budget, clients stumble to go-live.
Over the past eight years, the most welcome of the new tools and methodology layers have been value drivers. Which brings me to the core evolution I believe needs to be brought to the way these systems integrators engage with clients and fulfill their duties in the field: value-driven methodologies and value-driven contracting. In my next post: Once Upon a Time at J.D. Edwards.

A Xerox to Copy: SAP End User Training

2009-12-07T12:10:00.000-08:00

In my final reading/proofing of The SAP Green Book, Thrive After Go-Live (www.michaeldoane.com), I noted that I seldom went more than ten pages without ranting about how clients short-sheet their end users at every turn, well before coming to an entire chapter on the subject (The Care and Nurturing of SAP End Users). I considered toning it down but ending up leaving it all in. In brief, my complaint is that clients want to do anything but train their users (buying more software is usually the preference) whereas their ROI is going right out the back door because of general user incompetence.

In the course of writing The SAP Green Book, I talked with a number of consultants, analysts, and clients, including a CIO whom I greatly admire and whose firm has thrived for ten years with SAP applications. Here is a near-verbatim snippet of one of our conversations.

Me: So how are things going, Bruce? Still thriving after go-live?

Bruce: Clear sailing.

Me: How about your end user competency? Everyone up to speed?

Bruce: Oh, for sure.

Me: What if I interviewed one or two of them?

Bruce: Uh, hold it. You got me there. I don’t really have any idea.

Bruce’s company went live in 1999. In the intervening ten years, there has been no formal user refresher training.

From The SAP Green Book

In 1990, a good friend of mine helped an Australian company go live with SAP R/2. Eight years later, he was called back to the client for new work on SAP R/3. In the course of his project, he spent time with many of the people he had worked with before and in the course of a pub conversation he learned that despite a move from R/2 to R/3 and two subsequent upgrades, the users had received zero refresher training throughout the eight years. The effect, they said, was that through time they felt more and more intimidated (‘hemmed in”) by the applications software and were using less functionality than in previous years. This intimidation only increased with each new change in functionality.

This situation is wide-spread. Therefore it is encouraging to read about success at Xerox, where end user training was the key to a successful roll-out:

The key difference with this roll-out...is that Xerox accepted user training as a prerequisite for going live and made sure that end-users had enough time to complete their courses. "This meant 80% of end-users had to complete the basic training programme before going live," says Farrow.
Xerox used 1,400 training simulations taken from the company's final SAP implementation, rather than interim versions of the software. This meant there were no surprises and relatively few problems when it went live. "Well-trained people will always be able to do their job more efficiently," she says.

In the past, Xerox has squeezed training budgets and timelines in favour of system development and design. This is because unlike the technical aspects of system roll-outs, the benefits of training are difficult to quantify, says Farrow. "Training always got the short end of the stick and we had to fight to get it on the critical path of the project."

Full article = http://bit.ly/81oWKo

Keeping users up to speed should be a no-brainer but few firms are as enlightened as Xerox. Hopefully, I will see more such examples and in a subsequent reprint of The SAP Green Book, I will feel compelled to nag a tad less.

SAP Maintenance Rate Hike: The Listening Tour

2009-12-03T07:08:00.000-08:00

Heartening news:

Dec 1, 2009 DUESSELDORF (Dow Jones)--German business software maker SAP AG (SAP) Tuesday said it had postponed a decision to charge customers higher maintenance fees for its enterprise support until next year.

This announcement, coupled with the fact that over the past six months, SAP has wisely backed off its announcement of a maintenance fee hike from 17% to 22%, is heartening and in stark contrast to a Bill McDermott’s quote that characterized the initial announcement.

"The real criticism you can make is, 'Gee, Bill, why did it take you guys so long to increase the cost of customer support, because you were five points below the industry benchmark of 22% all that time, and giving up shareholder value?' " McDermott says. "That's a fair criticism I'll accept with open arms."

Contrast this to Tuesday’s SAP declaration: "With this (delay), SAP once again demonstrates that it takes the concerns of its customers seriously and also recognizes the ongoing pressures bearing down on IT budgets in the current economic environment," the company said.

Last March, my somewhat delayed response to the rate hike was a blog post SAP: Stop Chopping Off the Tallest Heads to Make Everyone Equal http://snipurl.com/tjgu2 in which I called for tiered pricing based upon relative support burdens.

In a recent, detailed article http://snipurl.com/tjgsi, Bob Evans of Information Week pores over the statements, retractions, suggestions, and organizational pause going on in the upper echelons of SAP. The article is titled Will SAP Move to Tiered Maintenance Fees? But unfortunately there is little discussion of this. All the same, this article as well as recent others by Mr. Evans on the subject are well worth reading.

In parallel, we are told that SUGEN had completed its KPI labors and that Gartner will soon commence an audit (though what form this audit will take is not clear to me).

While I still am not hearing anything suggesting tiered pricing for SAP maintenance, the delay in raising maintenance costs is a heartening signal that SAP is listening to its installed base and may find a rational way out of what appeared to be cause for massive client revolt.

From Heidelberg to Hell: How SAP Fails to Support Clients in the North American Small and Midsized Enterprise (SME) Market

2009-12-01T08:53:00.000-08:00

There is currently a lot of positive buzz about the next iteration of SAP’s Business ByDesign, an Saas offering (or, not really: http://blogs.zdnet.com/Howlett/?p=999) targeted at small clients like those of Salesforce.com, Workday, and others.

While the initial version of BBD resulted in a general market shrug, my impression is that SAP will, in time, come up with a creditable offering. They usually make good on R&D promises, though they often take a very long time to do so (APO, CRM, nearly every element of NetWeaver). Once the software is robust, one might assume, BBD will make its way successfully into the marketplace because “it works”.

I have my doubts. SAP, as an organization, has very little understanding of small or medium enterprises and has a spotty record of supporting firms in these markets. This isn’t only my observation. It is SAP history.

1. SAP believes that the smaller the firm the less complex the operations

In 1995, I began working in the world of SAP and my first impression was that it was intended for very large organizations. This impression was driven by a high volume of press about mega-projects such as Hershey, Georgia Pacific, Proctor and Gamble, et al.

I soon got wind of a “Heidelberg Project” (AKA SAP-Lite) that was apparently underway and was intended to service small and mid-sized firms. We never saw evidence of a successful conclusion to this project and over the next seven or eight years SAP continued to trot out SME solutions that had two common elements: 1) the offering was a chopped-down version of R/3 and 2) abject failure in the marketplace.

The thinking at the strategic levels of SAP has persistently been hamstrung by the belief that the smaller a client organization the simpler it is to run. Anyone who has ever implemented SAP software in firms of $50M to $300M knows that truth runs in the other direction. Volume does not necessarily result in complexity. Flatter organizations (those with fewer layers of management) are not necessarily simpler.

While very large clients have a division or department for everything under the sun, SME staff is most often populated by “hyphenates”, staff with multiple roles. Someone in sales also heads up marketing. A factory foreman also supervises distribution. SME’s often have no one for a given function for which a VLE will have dozens to hundreds (quality control, research, …).

Note to SAP: What I am addressing here is software deployment and operation and should not be confused with the level of difficulty of software implementation, which we all know is vastly more complex for VLEs.

The problem of scaled down software has at least been rectified as the All-in-One (A1) offering includes all the features and functionality of basic SAP enterprise software since in essence, All-in-One is simply a marketing term. It is the same software licensed by Fortune 100 firms.

What has not been rectified is SAP’s view of how clients in the SME should be enticed, how implementations should occur, and how installed base clients should be supported.

2. SAP SME staff usually knows less about the market space than does its alliance partners

SAP not only has roadmaps for its clients but also for its alliance partners in the services arena. Second tier and boutique SAP systems integration firms are regularly pressured to follow the official SAP roadmap (or playbook) for software sales and implementations. Often these playbooks emanate from Walldorf and while some of the practices included therein may work well anywhere, others more clearly address the German market than the North American market.

Messaging and marketing to this market have vastly improved in recent years and SAP provides a number of websites (e.g. PartnerEdge) with a vast store of tools, templates, case studies, and the like.

However, many of the practices are flat out wrong for the SME market. Value Engineering is too heavy for most small clients in both conception and practice. Others are flat out wrong, like a template implementation plan pawned off on systems integrators with vertical solutions that gives the impression that any implementation will be done in nine weeks at a cost of $500,000. Besides the one price fits all idiocy, what’s really cool in this template is that various module consultants are planned for two days a week. If projects are done at the client site, doesn’t this strike SAP as travel-heavy?

Further, alliance partners are required to invest in semi-constant teleconferences, site conferences, and the like in order to get training (according to these same playbooks) and to demonstrate their adherence to SAP SME standards.

3. SAP SME account management is chaotic.

Even more frustrating for alliance partners in this market is that the SAP SME cast and crew are reorganized at least every six months, resulting in helter-skelter musical chairs that requires brand new relationship networks and an enormous cost in time.

I recently spent a few years working with an SAP SME systems integration firm. In the first year, I worked with 23 different SAP people (sales, partner support, marketing, etc.). By the end of that year, fifteen of these people were either transferred or fired and the other eight held new positions. The second year was no less chaotic. I have stopped taking business cards from SAP people in the SME.

4. The answer to every knotty problem is more software.

The common dream in Walldorf is that clients can simply buy the software and that no services would ever be required. That is why, from Solution Manager to Fast Start, SAP continues to provide “solutions” in the form of software. Hey, that’s their business, right? Wrong.

Software is not an answer to a business question. It is a variable in an algorithm that can lead to an answer. SAP claims to provide business solutions but without a proper perspective regarding the services needed what you get is a pier and not a bridge.

5. SAP competes with its alliance partners.

In 2000, there were more than 200 SAP systems integration practices in North America with a healthy eco-system of majors (IBM, Accenture, Deloitte, CapGemini, Bearing Point, CSC), second tier, and boutiques. At the time, SAP Consulting had around 5,000 consultants worldwide. It has since grown to more than 25,000 while the number of other SAP systems integration practices has dwindled to the level of mere dozens and only IBM, Accenture, and (to a lesser degree) Deloitte remain major SAP players (CSC is mostly in the DoD and public sector).

While SAP claims that it does not compete with its alliance partners, SAP Consulting is, de facto, on any short list and, despite the highest hourly rates in the universe, it wins a healthy share of clients.

There is a brief chapter in The New SAP Blue Book called “Yes, You Can: SAP for Small & Medium Sized Enterprises” in which I counter many of the myths about SAP for this market. It is a sunny-side up point of view that I am determined to update in the next printing. Given the chronic lack of commitment or intelligence emanating from SAP for the SME, the chapter may have to be retitled “Yes, You Can (But You Might Not)”.

Condoleeza Rice?

2009-09-23T04:41:00.000-07:00

It's nigh impossible to understand the thinking at SAP that resulted in Condoleezza Rice speaking at their recent event in San Jose, CA.

http://snipurl.com/s2cw9

Through the years, at a multitude of SAP events, there has been a great diversity of speakers but none, to my recollection, with a record of continuous abject failure and ignominy in a global political arena.

Money quote after the event from Ms. Rice: "Now I can wake up in the morning and read the newspaper and not feel like I have to do something about what's in it."

Keep reading. Stay home.

As for SAP, I can only hope they don't tap Dick Cheney as a Sapphire keynoter on the subject of "Accelerated Intelligence Gathering."

Announcing The SAP Green Book, Thrive After Go-Live

2009-09-22T13:16:00.000-07:00

In 1998, I published the first edition of The SAP Blue Book, a Concise Business Guide to the World of SAP. At that time, there were very few books about SAP and none that covered the basics of SAP best practices. The book has been revised five times since then and, since it helps to de-mystify SAP, it continues to sell quite well and its wide circulation has helped me to widen my network of contacts and to attract clients in need of SAP advisory.

On September 29, 2009, The SAP Green Book, Thrive After Go-Live will be available at http://www.michaeldoane.com/. A few weeks later, it will also be available through Amazon. My intended readership is anyone with a stake in post-implementation SAP success. To my knowledge, no other such book exists.

My initial intent was to write this book in 2001. However, once I began my research into the best practices for post SAP Go-Live, I realized that the vast population of firms with SAP software were still very immature in terms of their deployment. As such, proven best practices had not entirely emerged.

While the Blue Book was written for anyone who has a stake in its success, the accent is acquisition and implementation. The Green Book was written for firms that seek to get the most of out of their SAP investments through enlightened organizational structures and adherence to proven best practices.

In short, the Blue Book addresses an SAP wedding and this book addresses the SAP marriage.

In the chapters “SAP Marital Counseling”, I outline remedies for SAP deployment pain-points that result from “imperfect” implementations. Subsequent chapters provide guidance for rationally assessing your firm’s SAP maturity (from stable implementation through a thriving center of excellence), how to build and sustain a center of excellence, strategies and rationale for outsourcing non-strategic tasks such as help desk and Basis support. As one Basis guy was heard to mutter “maintenance blows.”

I provide a lengthy chapter on “Weathering a Global Fiscal Crisis with SAP” as well as guidance for “The Care and Nurturing of SAP End Users”. For the latter, as readers will note, I am somewhat obsessed since end user support is the most neglected arena in all of SAP-dom.

Clients who are weary of SAP sales pressures should benefit from “From Supplier to Advisor: A New Chair for SAP” and I further provide a short, cautionary chapter “Intelligent Business Intelligence”.

If the book had been written entirely from my viewpoint it would necessarily be somewhat suspect. There are no renaissance people in SAP and we are all necessarily somewhat specialized. I therefore tapped serious input from among a group of people I’ve worked with through the years:

Michael Connor is founder and CEO of Meridian Consulting (www. meridian-us.com) and a significant contributor to The New SAP Blue Book. We have been sharing intelligence and collaborating with clients since 1997.

Jon Reed has been advising clients and consultants for more than fifteen years and is now the recognized leader in the field of SAP career guidance. We have been working together in the SAP fields since 1995. His website is www.jonerp.com

Joshua Greenbaum is an independent industry analyst who writes for SAP publications and is a valued advisor to upper management at SAP, Oracle, and other enterprise applications software firms. His website is http://ematters.wordpress.com/

Mark Dendinger has led a number of successful SAP systems integration firms since 1995 and has extensive contacts with SAP America and a vast network of SAP consultants.

Kay Tailor is an accomplished SAP architect/technician who has been active in the SAP fields since the mid 1990’s.

Wade Walla is the founder of Group:Basis and has a considerable ability to demystify “the technical”. http://www.groupbasis.com

Dane Anderson has worked as an IT outsourcing provider and since 2003 has been a prominent industry analyst covering the IT services and outsourcing marketplace.

John Ziegler was one of the first group of non-European consultants at SAP America. He has managed dozens of SAP projects since 1992.

Bill Wood has spent fifteen years helping clients go live with SAP. His website is http://www.r3now.com

To order or just to have more information, follow this link to my website: http://www.michaeldoane.com

It’s Getting Ugly (Again)

2009-09-04T11:11:00.000-07:00

Who to Believe?

InformationWeek.com, USA / Internet - September 01, 2009 An SAP official said Tuesday that 30,000 job openings exist worldwide for SAP consultants to support the needs of the company's 82,000 customers and their 12 million users across the globe.

Ray Wang, http://blog.softwareinsider.org/ Superstar Industry Analyst most recently from Forrester: September 3, 2009: Rwang0RT @sapwhisperer: I have never seen this many SAP consultants looking for work! It’s Crazy

Believe both, actually. Simply note that very few of those 30,000 job openings exist in the United States. Consultants are lacking in South America, Africa, and APAC (giving credence to this SAP official) but not (except for exceptional skills) in the United States (so believe Ray as well).

As for the oft-expressed "shortage of SAP consultants", go to the most informed source, Jon Reed, for the real skinny: http://snipurl.com/rm2sm

His conclusion: "Solving the SAP skills shortage" is a discussion that has been pretty much non-stop ever since I joined the SAP marketplace in 1995, with the exception of a brief break around 2000/2001. It’s a valuable discussion, one that all parties in the SAP world have a responsibility to come together and address. I do believe, however, that we need to move beyond generic and breathless assumptions about the nature of this shortage in order to solve it.

The Return of SAP SI Highjinks

In the wake of the economic downturn, new licenses in the U.S. are way down and likely to stay down for some time to come. This puts pressure on all the SAP consultants, whether they are coming from major systems integrators like Accenture, IBM, and Deloitte, or from boutique SAP firms, or as independents. The result should be that we are now in a buyer’s market. The last time we had such a market was 2000-2003 and my observation at the time was that it was having a positive effect on the quality of SAP consulting (increased pressure to retain client confidence in the face of client scarcity). I was so confident of this that I amended my chapter on consulting in The SAP Blue Book, A Concise Business Guide to the World of SAP, from “The Wild West of SAP Consulting” to “The Once Wild West of SAP Consulting”.

I have no new data, only a growing handful of recent stories and corresponding input from my network of SAP-watchers. What the evidence is telling me is that things are getting ugly out there all over again.

Below is text that I retired from The Blue Book in 2005, some of which is, unfortunately, needed anew:

“All the same, some consulting firms in high-demand areas (SAP, Supply Chain, Customer Relationship Management, Internet et al) still play some of these age-old tricks and it is in your interest to have your antenna fully extended.

Bait and switch: A firm bidding to become a client's implementation partner promotes star consultants during the proposal phase and sends inferior consultants once the deal is set.

Flooding the zone: A firm assigns one or two star consultants to a project and surrounds them with an army of neophyte consultants whose SAP experience can be measured in weeks. It takes a while for the client to recognize this because at the onset of a project, neophytes seem to know so much more than the client, but mostly they are hiding behind a terminology smoke-screen.

Gin rummy (spades) : A haves-and-needs body shopper sends a subcontract consultant to a client; some time later, the body shopper finds a cheaper consultant for the same job and, through some pretext, replaces the first one for greater personal profit.

Gin rummy (clubs): A contract consultant accepts a six-month assignment. Two months into the job, the consultant finds another assignment that pays more. Citing 'philosophical differences', he/she abandons the first client in mid-project.

Casper Consulting, Inc.: Resumes of non-existent consultants are presented to clients to puff up the size of a consulting roster. Not so curiously, these consultants are always 'on another assignment'.

Sap, not SAP: Resumes are sprinkled with SAP initials like SD, MM, or PP but the candidate has no real SAP experience. This gambit was once widespread but is happily on the wane. It has now been a full three years since a candidate once called me and opened his spiel by saying that he had three years of sap experience. That's what he said, sap (rhymes with zap), not SAP. Imagine the resonance of a phone slamming onto its receiver.

Facing Mirrors(((()))): There are great numbers of contract consultants who cut subcontract representation deals with more than one consulting firm and thus appear on several firms' rosters. These consultants are only slightly more available than those from Casper Consulting, Inc.”
…

The two tricks I am seeing the most of are Bait and Switch and Flooding the Zone. No need to name names because most of the players are guilty to some degree or another.

What to Do About This Ugly State of Affairs

I have long espoused the need for reliable certification. Much has been made through the years regarding the certification of individual consultants and although the methods deployed have huge flaws (mostly testing their knowledge of SAP technology but not their consulting skills), I still agree that the exercise has merit.

However, most clients hire in SAP consulting firms and SAP applies partnership status to these firms, platinum, gold, etc. (Unfortunately these status levels have nothing to do with the relative field performance of these firms, merely their size and geographic reach. Thus, the firm that I recently lauded -itelligence, for its excellent SAP support services- has a lesser “partner status” than does Accenture.)

Company certification would best be provided not by SAP but by a reputable third-party firm (and clearly one that does not also provide SAP systems integration). Such a firm would be charged with post-implementation reviews of a select percentage of all of a providers’ engagements and certification would center upon a) Adherence to Established Methods and Best SAP Practices, b) the Level of SAP Skills as deployed during the project, c) the Level of Consulting Skills as deployed during the project, and d) Adherence to Time & Cost limitations.

Even better than one reputable third-party firm would be a consortium of individuals and small firms. Think Circuit Court judges.

A client recently asked me, “Are any of these firms really better than the others?” He had recently completed an SAP SI selection process and found that he could barely distinguish the three candidate firms. Once his project got started, results were mixed. His U.S. staff is pleased with the SI performance. His European staff has already tossed the SI in favor of a collection of hand-picked independent consultants formed into a project team.

No company certification exists for SAP SI’s and I see no movement on the part of SAP in this direction. While there is a considerable body of understanding at SAP in regard to quality services, there remains at the core of the organization a fixation on the software aspects of SAP endeavors rather than the organizational and change management aspects. In my many discussions with SAP higher-ups through the years, my nudging (and occasional shoving) are answered with solutions that tend to lead to more software or middleware or architectural changes. Systems integration partners are viewed as enablers and sources of business, not as the guardians of client satisfaction and the purveyors of SAP knowledge transfer. The nudge of this blog posting will change nothing in that regard.

Therefore, clients are again doubly advised to engage a third party for engagement assurance (also known as delivery assurance or quality assurance). For more on this subject, please see a previous post: http://snipurl.com/rlwo1.

Postscript: It is official. My anonymous blogger friend at http://sapmesideways.blogspot.com/ had this add-on following our e-mail exchange in regard to whether or not his firm’s systems integrator was following an implementation methodology:

“A couple of weeks ago, I had some contact with a guy that has been in consulting for a long time – he was kind enough to say some goods things about my writing, so I’ve decided to return the favor. Catch his blog here: http://sapsearchlight.blogspot.com/One thing that I did find of interest; he referred to a process of project management that is supposed to be used by the consultants – ASAP (AcceleratedSAP I believe it stands for) also known more recently as Focus ASAP / ASAP Focus depending on where you get your info.

He said “Outside of IBM and Accenture, all certified partners MUST adhere to SAP’s ASAP methodology, sometimes referred to (recently) as Focus ASAP. Most of these partners add some of their secret sauce to the core SAP methodology. I am willing to bet that if you look at this firm’s proposal of services to you that they make a big deal about their methodology.”

I did actually look thru all of the paperwork from these consultants – nowhere does it a make a mention of this. I asked around our project team to see if anyone had heard it cited, and the general answer was a definite “No” – apart from one person who remembered reading a reference to “Focus ASAP” in one of the SAPpress books that we bought a ways back. So I then thought I’d ask their Project Manager – unfortunately, he’s “not available” at the moment (I don’t know why) and we are not sure when we will next see him.

I approached one of the other consulting staff and asked the question – the response was along the lines of “Oh that was used about 10 years ago, but no-one uses that anymore, it’s a really horrible system”. Interesting?”

OK. SO the Focus ASAP methodology is “a really horrible system”. Let’s just make it up as we go.

SAP User Competency: The Joke is on Us

2009-08-26T07:42:00.000-07:00

A number of my former colleagues have long labored selling SAP end user training courses. The value of their courseware is huge but that value is chronically rejected. Years ago, in a study of 120 firms in the installed base, two of my questions were: 1. Who in your firm is responsible for SAP end user competency? 2. Who in your firm controls the budget for SAP end user training? When responses were expressed in bar charts, the bars for “Don’t Know” and “No One” towered over the others (IT director, HR director, VP of ERP, CIO, et al).

Some years ago, I wrote a brief article entitled “Shop Till You Drop at the ERP Mall”. It was inspired by research, both primary and direct, into the ERP installed base (SAP, PeopleSoft, and Oracle). The research revealed that, after Go-Live, a large percentage of firms tended to buy more applications software to the detriment of stabilizing their existing ERP platform through business process improvements, end user training, data synchronization, and the like. In short, rather than addressing the problems listed in the table above, they merely up the ante.

There is one solution that is by fair the most effective and also the rarest. Train your users. Not only prior to Go-Live but continually thereafter.

This “revelation” came to me back in 2002 when I was a speaker at a searchSAP event in London. There were more than 300 attendees and I asked them to raise their hands if they’d had SAP for three or more years. Nearly all hands went up. I then asked them to keep their hands up if, in the past year, they had provided their end user base any formal refresher training. All hands went down. After a few seconds, everyone burst into embarrassed laughter.

The joke is on us.

On average, clients invest only 4% to 5% of their implementation budget on training of which about 50% is dedicated to the end users with the rest going to the internal project team and to executive awareness. Worse, since end user training is the penultimate step before Go-Live and both budgets and schedules are stretched thin, many clients cheap out and provide foreshortened training. Addressing a budget shortfall at the expense of subsequent user competence is a poor trade-off and is usually followed with a hopeful “they’ll sort it all out” attitude.

The result is that users are hesitant, slow, unaware of their role in fulfilling a business process, and perhaps resentful. Since they are at the source of your SAP business process fulfillment, you will have undermined the entire investment.

Wise firms cultivate a culture in which the efficient deployment of SAP applications is constantly reviewed and refined. It is probable that your firm spent 5% or less of its implementation budget on end user training. It is equally probable that you have no formal budget whatsoever for ongoing training.

Excerpted from The SAP Green Book, Thrive After Go-Live (due September 15, 2009)

Best Kept Secret: itelligence SAP Support

2009-08-21T08:20:00.000-07:00

A large amount of my time over the past eight years has been dedicated to analyzing the capabilities and performance of SAP service providers. While presenting their “wares” during analyst briefings, a distressingly high percentage of these providers have stated that their firm “is one of the best kept secrets in the industry.” These words have often provided an early signal that the firm just isn’t that special.

One of the key instructions when I worked at META Group was to be vendor neutral if not vendor hostile. Our CEO and founder, Dale Kutnick, was often heard to exclaim: “the vendors all suck.” I would venture that, during my time there, META Group was the analyst research firm that was the toughest on vendors seeking to kiss our analyst rings. My point here is that I do not easily praise an SAP service provider. Indeed, most of those I have analyzed fall far short of expectations, most especially in the realm of post-implementation support services.

In late 2004, a client threw a lot of money my way to shortlist acquisition targets to buck up its SAP support services. Two of us scoured North America for likely candidates and came up with very little. Today, if you simply scan web sites, you will find literally hundreds of firms that claim to provide such services but very few of them actually have full-time staff, repeatable delivery and billing methods, or client references. If you retain them, they tend to put together a posse of bench-staff and contract consultants, thus eroding any chance of high quality delivery.

In this context, I am pleased to have a found a firm that is truly one of the best kept secrets in the realm of SAP support services: itelligence. I had the pleasure of spending a day with their leadership this past week and, mirabile dictu, found something I’ve been seeking for some time. I was already aware of itelligence in regard to their systems integration capabilities as they are one of the few solid second-tier firms in the North American SAP consulting eco-system. However, the quality and span of their support services was an eye-opener.

Itelligence has been active in support services since 2001. They now have a base of 80 help desk staff in Cincinnati and back-up groups in Chicago and Poland. It is largely a rookie-free group and, unlike most of their competitors, itelligence can provide a roster including photos and thumbnail resumes of their staff. The pricing is transparent and the delivery model is flexible and sensible. While many firms degrade service levels by over-deploying the remote/offshore mix, itelligence leverages its Poland staff with moderation. I was most impressed with the depth of experience, both industry and SAP skills, arrayed across a huge room and organized into process groups.

I am a firm believer in the outsourcing option for SAP support and have a new white paper on the subject, “We Do It Themselves: Outsourcing SAP Applications Support”, that can be obtained here: http://www.michaeldoane.com/SAP%20Research.html

It is excerpted and adapted from The SAP Green Book, Thrive After Go-Live which will be available in mid-September, 2009.

I urge you to check out this white paper and, if you are in the market for dependable SAP support, you can shortlist itelligence with confidence.

SAP Implementation Projects: Still Crazy After All These Years – Part 2

2009-08-17T07:02:00.000-07:00

In a previous post, I pointed out my discovery of an anonymous blogger who is providing a blow-by-blow of his firm’s painful SAP implementation. (SAP: Loathe It or Ignore It, You Can’t Like It http://sapmesideways.blogspot.com/. )

Since that post, I have had some e-mail contact with the writer, who has agreed to my re-use of our correspondence.

The most striking comment of his was this:

“I don’t know if the SAP project methodology is being used as I have nothing to gauge our experiences against; however, over the past 2 years, I have read a number of items by experienced SAP consultants, and I suspect that they are not applying it correctly, if at all.”
My reply:
“…if they were using a methodology, you would definitely know it. Outside of IBM and Accenture, all certified partners MUST adhere to SAP’s ASAP methodology, sometimes referred to (recently) as Focus ASAP. Most of these partners add some of their secret sauce to the core SAP methodology. I am willing to bet that if you look at this firm’s proposal of services to you that they make a big deal about their methodology.”

The blog was started in January of 2009, so over an eight month period our correspondent is not sure whether or not a methodology is being followed. While this may seem “crazy”, it is unfortunately a more widespread (mal)practice than the systems integrators will admit.

When clients search for SAP consulting help, they are looking for a) specific expertise (business process design, configuration, and technical) and b) a proven project method or methodology by which all necessary project activities are navigated. My research since 2001, both in the field and through extensive survey work, reveals that the leading SAP systems integration firms routinely fail to adhere to their own methodologies.

They claim to have best practices repositories that are referenced in the course of business blueprint but clients report a high incidence of white-boarding. They claim to that their proven methodologies result in on-time, on-budget implementations and yet SAP implementations are still routinely late and over-budget. (I actually blame this aspect on clients who just as routinely establish wildly optimistic budgets and time-frames).

Failures to actually leverage promised assets are not limited to the Usual Suspects. Our anonymous correspondent had this to say about his firm’s SI partner:

“My main beef is with the consultants (what you would call the system integrators I think) – they are a mid sized company and it appears they have not previously implemented in the specific sector which my company operates in. They are an SAP gold partner, but I’m not sure what value that has – in my opinion they do nothing to enhance the reputation of SAP, the company or the product.

Although we had one person for a few months that was very experienced in SAP implementation (some 15+ years), most of the people seem to be very new to the role, less than 2 years. We have had so many different consultants, that I have actually lost track of the number (almost 60, I now believe, where they originally proposed just 4). They have failed to meet a single target on the deadline, or on the budget and in many areas have not met all of the requirements of the business. “

Individually, clients should do a better job of holding their systems integrators’ feet to the fire. Collectively, only SAP itself can directly address these failures and they can do so through the leverage of third-party project quality assurance as well as by leveraging more pressure on all systems integration partners, be they gold, silver, or bronze.

Ray Wang Leaving Forrester

2009-08-07T08:21:00.000-07:00

I worked for the analyst firm META Group from 2001 to 2005. One of our hallmarks was that we were not only vendor-neutral but occasionally vendor hostile. The tone was set by our founder, Dale Kutnick, who hand-edited every article that was posted. If he scrawled a large “VW” across the front page of a submitted article, you knew it was toast. “VW” meant “vendor whore”.

In my four and a half years as an analyst, covering ERP software and services, I received a lot of booty from vendors, including forty-four very expensive pens, countless leather notebooks and bags, many Flash drives, an iPod, and seats at sporting matches. Since this was the case for all of the analysts, you can imagine that some heads were positively turned.

In the salad years of IT advisory firms (1996 to 2001), there were a number of “stars”, all of whom shared one key characteristic: they were tough but fair in their articulate scrutiny of the software and services vendors and thus provided their clients with knowledgeable and trusted input.

Gartner’s acquisition of META Group in 2005 continued a trend of market consolidation that started early in the millennium with the disappearance of Giga, the Horowitz Group, Yankee, and others. This led to the formation of several smaller and more specialized analyst firms (http://www.tekrati.com/ is an excellent source) and the pool of analyst “stars” at the few remaining firms (Gartner, IDC, and Forrester) has considerably diminished. Ray’s departure from Forrester continues this trend.

Ray is not loved by all the vendors and that’s to his credit. Wise vendors have sought his objective advisory but even more so, in his years at Forrester, he has staked out a strong position as a client advocate, most notably in spearheading the Enterprise Software Licensee's Bill of Rights (http://snipurl.com/pb64z).

We all trust that Ray will continue with his excellent blog, A Software Insider’s Point of View (http://blog.softwareinsider.org/) and that his client advocacy will still shine brightly.

For more tributes to Ray from other analysts, see Dennis Howlett, Frank Scavo, and Josh Greenbaum. http://blogs.zdnet.com/Howlett/?p=1167, Frank Scavo (http://fscavo.blogspot.com/)
and Josh Greenbaum (http://ematters.wordpress.com/2009/08/06/hey-ray-dont-be-a-stranger/).

SAP Implementation Projects: Still Crazy After All These Years

2009-07-27T14:17:00.000-07:00

Through the good graces of my long-time associate Jon Reed (www.jonerp.com), I recently discovered a blog that covers the life of an SAP project: SAP: Loathe It or Ignore It, You Can’t Like It http://sapmesideways.blogspot.com/.

Shortly thereafter, Dennis Howlett posted about this blog "Your Implementations are Killing Us" http://blogs.zdnet.com/Howlett/?p=1075 and the next morning I received a frantic e-mail from a friend at SAP lamenting its posting. So I guess this blogger is gaining some buzz.

I take exception with the title of the SAP blog as I have seen countless clients who actually do like SAP. All the same, I find it a curious and worthwhile contribution. The writer maintains complete anonymity throughout. No profile or mention of his name, his company’s, the implementation partner’s identity. Mum. While this is largely understandable as a matter of the blogger’s self-protection, it also degrades the effect. All the same, the twenty-seven postings since January, 2009 vividly describe the mind-numbing frustrations, side-shows, and cul-de-sacs that a poorly-run implementation can engender.

The appearance of this blog is in parallel to some serious SAP head scratching on the subject of bad implementations. At the end of the day, when an SAP implementation project goes wrong, it is the joint fault (in varying measures) of the client and the systems integrator but it is usually SAP that gets the PR black eye.

I have been involved in SAP implementation work since 1995 and the balance of my book The New SAP Blue Book, A Concise Business Guide to the World of SAP provides guidance for the best practices for implementation. The book first appeared in 1998 and has been revised seven times as better practices continue to emerge. During this same time-period, I have done a considerable amount of primary research with more than 1500 clients reporting upon their SAP experiences and the performance of their SAP systems integrator.

SAP does not deserve the full black-eye for failed implementations. In my esteem, however, SAP does a poor job of policing its SAP partners. The 1500 clients reported upon the field performance of all of the leading integrators (Accenture, IBM, Deloitte, et al) and the following provider failures were chronically noted in regard to deficient project process (in order of importance):

Poor scope/resource management
Lack of adherence to methodology: all the systems integrators have sophisticated methodologies and tools; they just don’t use them consistently (if at all);
Ineffective partner management.

In this research, clients cited who they considered responsible for various issue. They tabbed themselves the guilty party for:

Over-engineered and difficult to use results
Insufficient post-implementation planning
Lack of client ownership.

What SAP Can Do to Address Implementation Issues

All the systems integrators, including SAP Consulting, regularly tout their client satisfaction ratings. When you scratch the surface, these ratings tend to be childish and generalized buckets for entire projects of Very Satisfied, Satisfied, and Not Satisfied. The first reaction is to ask who is satisfied, what are they satisfied with, and when were they satisfied. Many clients I have spoken to who claimed that they were satisfied added that the whole project was a bumpy nerve-wracking mess but they were finally satisfied that it was over.

In this light, SAP needs to finally recognize that implementation services are every bit as much about consulting as about software. While tools such as Solution Manager are excellent for tracking software issues, project issues relative to consulting, governance, etc. are not tracked. SAP should be working more closely with its largest implementation partners to create a client-satisfaction tracking that continually addresses from an SI perspective

Business/IT Alignment
Governance & Control
Human Capital Management
Technology, Tools & Process
Service Delivery & Operations

Short of this, SAP should create and cultivate a network of objective, third-party quality assurance units (not SAP, not SAP implementation partners) to accomplish this tracking. When such a QA unit exists, life is better for both the client and the systems integrator as in many cases the QA group can point out to clients where they are going wrong. Again, each of the systems integrators have their own internal quality assurance but it is seldom demonstrably objective. By the same token, such QA should not be undertaken by SAP.

Quality assurance can add 1% to 2% to an overall implementation budget while resulting in a 10% to 30% savings in over-all implementation costs (primarily by fending off budget over-runs).

Value to Clients of Third Party Implementation Project Quality Assurance:

Cost containment, derived from progress monitoring

Time adherence, resulting from continuous (phase to phase) monitoring as well as scope management

Vision/benefits realization: assuring that the project will deliver the intended business value

Reduced administrative and strategic burden; fewer client/SI meetings for the purpose of progress reporting, issues management, and the like

Objective advisory as to what other services or support functions might be appropriate and desirable.

Quality assurance reporting would be most effective if it is directed to the client, to SAP, and to the systems integration partner.

In the field, I find that systems integrators initially balk at the inclusion of third party quality assurance on the premise that it will act as an audit of only their performance. Once they understand that the quality assurance role also focuses on client performance and SAP performance, the activity yields positive results.

It should be noted that the SAP/SI partner dynamic is not the same for all partners. Clearly, IBM and Accenture are not as malleable as a small partner such as Capgemini or any number of boutiques. However, it is evident that scrolling a third-party quality assurance activity into any SAP implementation will benefit all three parties (client, SI, and SAP).

It is probably too late for our anonymous blogger. I look forward to when he fills out his satisfaction rating.

The Deeper Green: SAP Sustainability

2009-07-13T07:01:00.000-07:00

While “green” may connote money, it has come to connote environmental issues all the more. The two subjects are not mutually exclusive.

As Joshua Greenbaum wrote in his blog “Enterprise Matters” (http://ematters.wordpress.com/)

“SAP’s customers, according to SAP, produce 1/6 of the world’s carbon emissions … That means that anything SAP can do to support sustainability, efficiency, and other green concepts could have a profound effect on its customers, and therefore a significant quantity of the world’s emissions. And, as one of the main goals of SAP’s sustainability initiative is to build software solutions that can lower these emissions, and support more efficient and responsible use of other scarce resources like water, enterprise software companies like SAP can indeed become leaders in these efforts.”

In the late 1970’s I worked on a Control Data mainframe for the City of St. Paul, Minnesota. The mainframe was a few miles away and we had our printouts delivered twice a day. One of my key responsibilities was running demographics data for urban planning with a powerful (at the time) software called Statistical Package for the Social Sciences (SPSS). Once or twice a week, I would receive a request for a new extract and after entering the parameters I would receive a twenty to thirty page report.

I was only a novice when it came to the full SPSS package and one morning I made the mistake of checking one extra box that provided a third dimension to the report. Early that afternoon the delivery man wheeled in a five foot high printout. This 10,000 page report was obviously unusable for anything other than a bonfire but it was summertime and I was not inclined. The next day I instituted paper recycling for St. Paul’s Citywide Data Processing.

Today, such an effort would fall under the heading of “Sustainability”. In SAP terminology, sustainability addresses environmental, health, and safety issues. At the risk of getting lost amid a flurry of potential avenues in search of sustainability, I advise that you focus upon core potential within the SAP installed base, namely energy and resource conservation, health and safety, and common sense. Investing in sustainability in these areas is the right thing to do and it should be a given a high priority, not only in altruistic terms but also because it will improve the health of your enterprise.

For the moment, sustainability in the context of SAP is a maturing movement. In March of 2009, SAP announced plans to reduce its greenhouse gas emissions down to its year-2000 levels by the year 2020. In support of this initiative as well as client-based initiatives, they named Peter Graf, a longtime SAP honcho, as its first sustainability officer. To date, there is not a lot of detail in regard to “how to” but common sense leads us right back to the starting point of Key Performance Indicators.

Ratio of Recycled Waste to Discarded Waste would have worked for me at the City of St. Paul.

An SAP prospect recently told me that transportation management at his firm consisted of a ball point pen and a notepad. Given that his firm spent $5M a year on transport, it is obvious that basic transport management would save them money (I estimated at least $1.5M). In sustainability terms, it would also have reduced carbon emissions. As KPI’s go, we could comfortably settle on Miles per Ton or simply the Cost of Truck Fuel. The firm has other problems since it is in the chicken industry. My prospect could quote the hatch rate, a somewhat crucial KPI for this industry, but he also claimed that safety issues were a great concern, though he did not quote any KPIs in that regard.

My advice is to embed sustainability issues into business process redesign, most especially where the KPIs, like those just mentioned, fairly shout to be addressed. This is not a PR subject unless you have actually done something. If you settle into the standard compliance and reporting elixir offered up by the former Big 4, you may improve compliance and reporting marks without improving the environment at all. However, if you have vastly reduced waste through recycling, reduced carbon emissions through more efficient transport management or manufacturing, or increased plant safety levels, you will have PR gold as well as my admiration.

So Lawson is the ERP Pioneer for Installed Base Justice? (Not According to the Books)

2009-04-24T09:47:00.000-07:00

SAP clients who have recently had to face the fact that SAP "just isn't that into you" with its 30% hike in maintenance fees can, for now, only wonder what would happen if maintenance costs were tiered according to needs, usage, and merit.

Dennis Howlett, who attended (via Internet) Lawson Software's CUE09 reports that "...the company has introduced a tiered set of maintenance charges: bronze, silver and gold. Each has different price components that depend upon what the individual customer wants in terms of support and value."

http://blogs.zdnet.com/Howlett/?p=860

One would think that such a differentiator would be highly touted but further analyst digging revealed a few clouds of dust around what glitters like gold.

From Frank Scavo:

"...with a number of financial analysts in the room, Lawson finds it important to reassure Wall Street that its maintenance revenue stream is not threatened. A couple of us later checked with Lawson's PR group concerning pricing for Lawson's two tiers and found that Silver is priced annually at 22% of software license cost, while Bronze is just a two point discount, at 20%. We were underwhelmed, to say the least."

http://fscavo.blogspot.com/

While it is always difficult to glean apples to apples from these firms' annual reports, Lawson's 2008 report is challenging because of the split between maintenance and consulting. http://snurl.com/gmmo1

All the same, on page 39, we find a report of $336.8M in revenues for 2008 maintenance. On page 41, we find costs of 2008 maintenance of $65.9M. And further down, there it is: Gross margin, maintenance: 80%.

In the restaurant business, food is served at a marginal loss and profit is derived from the wine list. (This is why a waiter grimaces when six guests order salads and bottled water.) It appears that in the enterprise software business, maintenance is the wine list and clients are ordered to drink from it. Yes, at Lawson too.

Certainly Certifiable: SAP SI’s, Not Just Consultants

2009-04-14T08:53:00.001-07:00

That hardy perennial “SAP consultant certification” is blooming again but this time in regard to independent consultants as opposed to those in systems integration firms.

http://blogs.zdnet.com/Howlett/?p=761

Below is a link to Jon Reed’s excellent analysis of a recent survey of SAP consultants in this regard:

https://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/13913

Past certification programs, administered by SAP, have been met with partial success at best and have been unfortunately skewed entirely to SAP technical bones and not at all toward consulting skills.

Since 1995, I have come across a lot of SAP consultants who know the software inside and out but are incapable of holding a conversation with a business person (manager level or user level). These consultants would fly through any SAP certification to date but I wouldn't want them on my implementation team.

More to the point, what problem do we seek to remedy? If it is poor implementation results, I would have to say that consultant performance is only a subset of that problem. The SAP implementation teeter-totter includes two sides:

Systems Integrator:

Adherence to Methods/Practices
Level of SAP Skills
Level of Consulting Skills

Client

Adequate Budget
Realistic/Tangible Goals
Project Ownership

A few years ago, I was involved in deep research of SAP systems integrator performance based upon input from 1,502 clients of the leading SAP systems integrators (the usual suspects and SAP Consulting). Roughly two-thirds of the client respondents were project leadership or delivery team members and the remainder were training, change management, and business stakeholders for projects completed between 2003 and 2006. The results of this research were both varied and compelling. Some of the numbers mumble (it is still hard to determine true client interest in an SI’s industry focus) but other numbers scream in perfect grammar.

Some of the screaming results:

An alarmingly high number of teams fail to adhere to established methods & practices; in essence, business process white-boarding and seat-of-the-pants configuration prevails far too often. (In this instance, even the best consultants may well be wasting client time and dollars).

Very few clients set tangible goals, so projects drift toward go-live, leading to “till’s empty, time’s up, might as well go live”.

Client ownership and participation in implementation project is regularly compromised by faulty knowledge transfer (attributable to both SI’s and clients).

My long-held belief is that systems integrators, not individual consultants, should be held to a certification/ratings fire. To date, they are not. Most of them tend to claim “our clients love us” but it is readily evident that they are not talking to all of their clients.

Well known “rating” systems such as the Magic Quandrant, the Forrester Wave, and others are not sufficiently based upon field input. All are founded upon a very small client sampling mixed with analyst opinion. Further, none of these rating systems cover various aspects of projects or even types of projects (new implementations, upgrades, geographic roll-outs, or optimizations. For example, one key finding in my studies is that Deloitte (240 clients reporting) is chronically challenged by new implementations but shines at all other types of SAP projects. Another finding is that Accenture (276 clients reporting) performs very admirably in large projects but causes considerable grief in small and mid-sized projects.

(FYI, an identical study of leading Oracle systems integrators was also conducted and yielded very similar results.)

I do agree that efforts to improve field performance are a necessity. In that light, I generally welcome ongoing efforts to certify SAP consultants provided:

A suitable third party (separate from the SAP organization) has a hand in such certification.

Certification addresses consulting skills and is not, as we have seen in past efforts, a conglomeration of multiple choice questions relating primarily to technical acumen.

(I will have to give some thought to the latter consideration. Consulting skills address a combination of experience, communication skills, empathy, and the like and as such are not subject to written examination.)

Further, I would like to see some sort of certification process for project managers whose role in any SAP field endeavor is of paramount importance.

All the same, if we are going to visibly improve SAP systems integration field results, I believe that we should be certifying what matters most: the systems integration firms. Maybe Gartner can replace some of the magic in the Magic Quadrant with actual field data or the Forrester Wave can include hundreds of clients hitting that beach.

Investment Analyst Love and Client Satisfaction: How SAP Can Solve the Client Crisis of Confidence (and Still Jack Up Its Support Fees)

2009-04-03T09:19:00.000-07:00

Pushback on the SAP Support Costs

The announcement at the 2007 SAPPHIRE in Atlanta, GA that got the biggest ovation was SAP’s message that, in the future, they would not be pushing upgrades based on new functionality. Instead, future upgrades would be less frequent and based almost entirely upon technological breakthroughs.

One year later, SAP raised its annual maintenance fee from 17% of base license costs to 22%, a 30% hike based upon…”that’s what Oracle charges”.

Prior to 2007, nearly every SAP upgrade announcement was keyed by a laundry list of new functionality. But Hasso Plattner’s message “How many ways can you enter an order?” signals that SAP now possesses full-blown do-it-however-you-like business functionality. So what’s in the next upgrades? Technology and something called Enterprise Support, the latter of which has generated close to zero enthusiasm.

http://www.computerworlduk.com/management/it-business/services-sourcing/news/index.cfm?newsid=14158 agement/it-business/services-sourcing/news/index.cfm?newsid=14158

Further, if you want all the new stuff, you have to be on version 6.0. More than two thirds of SAP clients are not on this version, so they have to upgrade to, uh, upgrade.

So if you have no need or interest in Enterprise Support, you may just be sitting tight with a less-than-contemporary version and a 22% maintenance fee.

Ray Wang (http://blog.softwareinsider.org/) notes the difference between support and maintenance:

About a decade back it was common to have 2 line items. Support covered help desk requests, bug fixes, and troubleshooting. Meanwhile, maintenance provided access to regulatory updates, tax changes, enhancements and sometimes point releases. Today the bundling of both support and maintenance prevents customers from choosing to keep maintenance without support or vice versa. In new contracts, clients should push for separate line items so they can eventually engage the vendor in deciding what they would like to pay for going forward.

Under these definitions, the support may be worthwhile unless you have your own help desk and a viable center of excellence. The value of maintenance is variable; tax change stuff is probably being handled by Vertex but regulatory changes, many of which are on the horizon, will be useful.

That said, there has been a considerable amount of howling among SAP clients, SAP prospects, and industry analysts, none of which has been adequately addressed by SAP. While most current clients are moving incrementally from 17% to 22%, four of five German and Austrian clients are holding at 17%. No such break is being accorded to U.S.-based clients.

As Dennis Howlett concludes in his recent blog post (Corrupting Consolidation, March 29, 2009) (http://blogs.zdnet.com/Howlett/?p=768):

Denial is a common attribute of those who believe they are unassailable but as Wall Street discovered, no-one is too big to fail except through the complicity of those who let them continue. The applications vendor consolidation of the last five or so years was fine in the good times when the idea of having a single throat to choke seemed sensible. It led to what I believe is a corrupted industry that refuses to give customers relief. We’re living through disruptive economic conditions yet that doesn’t seem to impact the mega vendors’ relentless pursuit of Wall Street approval. That cannot be right. It cannot continue.

To date, SAP is determined that it will continue. Clients will pay 22% maintenance and SAP will bank the profit. Some angry clients will dream of alternatives such as Cloud Computing (was ever an IT concept so aptly named?), some will consider moving (sunk costs be damned) to other vendors (like Oracle with its 22% maintenance?), some will turn to build rather than buy, and some will simply Shut up And Pay (note the acronym). This is not client satisfaction. It is SAP corporate economics 2009-2010.

The Economics of SAP Support

What follows is based upon SAP’s 2008 results.

http://www.sap.com/about/investor/reports/annualreport/2008/pdf/SAP_2008_Annual_Report.pdf

Euro amounts have been uniformly converted to USD at 1.33 to address the U.S. audience.

Not a bad year, despite a 4Q slump.

However, looking at just the support side, before the hike from 17% to 22%, the picture is really bright:

Without these support margins, SAP is running at -2% operating profit.

In 2010, that support revenue will be based on an average rate much higher than 17%. Assuming 5% rise in costs and an average support rate of 20%, this would yield.

Investment analysts love software firms. They love them because software requires no refrigeration, has no (perceived) shelf life, engages zero storage or transfer costs, and includes maintenance fees that defy the imagination. But how much love does SAP need? And how might they balance investment analyst love with a reduction of client rage?

A Client-Vendor Partnership: Tiered Support Rates

SAP has been in business for nearly forty years and regularly touts its dedication to client satisfaction and value. Never in its history has it faced such a revolt from its client base and I believe the core of that revolt is lousy justification for the rate increase aggravated by inconsistent application thereof.

SAP could slip this noose and truly distinguish itself as a viable vendor partner by instituting a client-vendor partnership by which excellent clients (those not tapping the SAP support operating expenses) would be given a break and those who are flat out maintenance hogs will know why they are paying so much. In such an arrangement, clients will have added incentive to improve their operations. If enough of them do so, SAP will have a tangibly lesser maintenance burden and, yes, better client satisfaction.

There are myriad ways to measure a client’s stress on SAP support resources. A thumbnail tier system could include reductions from 22% as follows:

Call Volume/Severity: High = 0%, Medium 1%, Low 2%

Version: 4.6 = 0%, 4.7 .5%, 6.0 = 2%

Solution Manager: None = 0%, Installed = 1%, Complete = 2%

In this simplistic scenario, “great citizen” clients would be paying 16%. “Medium citizens”, such as a client on version 4.7 with a medium level of calls and an installed Solution Manager would be paying 19.5%. Only the truly woeful, of which there are admittedly a boatload, would be paying the full 22%.

Refinements to the scale would include “contribution” activities such as active ASUG participation (how much does client-to-client support relieve the burden on SAP?) and other less measurable factors that still have a positive impact on SAP resource requirements.

Though lacking exact figures as to the current state of the SAP client base, I can extrapolate that the over-all percentage of banked maintenance fees may drop a few points but isn’t that worth it to the SAP ecology? Or this just “the cloud” that I am huffing?

(See, “SAP: Stop Chopping Off the Tallest Heads to Make Everyone Equal”) http://sapsearchlight.blogspot.com/2009/03/sap-stop-chopping-off-tallest-heads-to_25.html

I Can’t Find the Any Key: Taking Out the Help Desk Garbage

2009-03-30T13:41:00.000-07:00

Many years ago, I was on a long call with a Gateway technician helping me to save my hard drive. While various operations were running, she regaled me with stories, either lived or recounted by others, of strange help desk calls. The client whose foot-pedal didn’t work (it was the mouse). The client whose cup holder was broken (the CD tray). The client who only got a black screen (the video wasn’t plugged in). And finally, everyone’s favorite: the client who for the life of him could not find the Any key.

The hour I spent with the Gateway technician cost my company nothing nor were the aforementioned callers charged for their queries because none of us were using in-house help desk. For those of you with an in-house SAP help desk, we have to ask the question: how much of your time is spent explaining that a mouse is not a foot pedal and a CD tray is not a cup holder?

On many occasions, I have had the fascinating task of assessing a client’s SAP help desk statistics. Call volume, average call time, average resolution time, and the like are invariably categorized but I have yet to see the category “mindless waste of time” so I have no statistical handle on the frequency of such calls in an SAP environment.

However, there has been one simple trend to every help desk analysis I have ever been a part of and that is the very high percentage of calls that relate to “end user training”. That is to say, calls that would not be necessary if end users were properly trained and supported.

This “revelation” came to me back in 2002 when I was a speaker at a searchSAP event in London. There were more than 300 attendees and I asked them to raise their hands if they’d had SAP for three or more years. Nearly all hands went up. I then asked them to keep their hands up if, in the past year, they had provided their end user base any formal refresher training. All hands went down. After a few seconds, everyone burst into embarrassed laughter.

On average, clients invest only 4% to 5% of their implementation budget on training of which about 50% is dedicated to the end users with the rest going to the internal project team and to executive awareness. Worse, since end user training is the penultimate step before go-live and both budgets and schedules are stretched thin, many clients cheap out and provide foreshortened training. There is no justification for this and the failure to adequately train users is often relegated to a hopeful “they’ll sort it all out” attitude.

The result is that users are hesitant, slow, unaware of their role in fulfilling a business process, and perhaps resentful. Since they are at the source of actual SAP performance, the entire investment is undermined. If they can’t find the Any key, they will call your help desk. And what will be said?

Past research about SAP user competency yielded this great nugget: in response to two questions:

1) Who in your firm is responsible for ongoing end user competency?
2) Who is your firm has budget for ongoing end user competency?

By far, the most frequent answers were a) Don’t Know and b) No One. No other reply, either for Human Resources, SAP managers, business managers, or process managers was higher than 5%.

Parallel research asked SAP managers what next steps they planned to take to further their SAP maturity. Overwhelming response: buy more applications software.

And another round of Any keys.

Adapted from excerpts of The SAP Green Book: Weathering the Global Fiscal Crisis with SAP. Michael Doane 2009, all rights reserved.

Business Process Orphanship

2009-03-26T08:09:00.000-07:00

In a recent post, Dennis Howlett (http://blogs.zdnet.com/Howlett/) extends upon my call to SAP to rationalize its maintenance fee policy and he rightly raises the subject of how Centers of Excellence, tied to certification, should lead to preferred terms with SAP.

This is a fairly huge subject that I have been dealing with since 2001 and there will be further posts in this regard. For the moment, let’s concentrate upon what I have observed is the greatest impediment to sustaining a viable Center of Excellence and the reason that so many of them turn into Centers of Mediocrity.

The notion of business process was popularized in the mid-1990’s by the bestseller Reengineering the Corporation by James Champy and Michael Hammer. Like most revolutionary ideas, it led to mass confusion and set up a power curve for every SAP implementation that followed. We all know about the SAP learning curve. The power curve is kicked off by the learning curve as when departmental heads in a vertical environment are told that the organizational will heretofore “flatten” and become horizontal. The “lesson” is that department heads no longer call all the shots in their domains and are required to blend into business processes. Turf wars inevitably proliferate.

The measure of a power curve is revealed in the time it takes for your firm to make decisions relative to the business processes to be adopted either as part of an SAP implementation or in response to business need or opportunity. If there has been knowledgeable management commitment from the outset, this curve is shortened.

The duration of this curve is determined by the levels of unity, management, and communications of a firm, as well as by the quality of preparation during the runway phase to major process changes.

At the heart of business process change is, or should be, the business process owners whose key responsibility is to assess and monitor process performance and metrics with a focus upon continuous process improvement.

Only about fifteen years have passed since this concept was introduced into the business world and it is still difficult for many companies to shift an organizational mindset away from discrete vertical departments (marketing-sales-production-billing) into fully operational and horizontal business process units. Therefore, the role of business process ownership is only partially baked into the business conscience and fulfilling that role can be perilous.

Since most business processes cross departmental boundaries, their “owners” are often at odds with department heads with turf issues. Without a clear charter and authority from on high, a business process owner is constantly buffeted by resistance to process change. The result is an inability to improve business processes beyond the tinkering stage which does not result in any appreciable business benefit. In such a situation, business process ownership is business process orphanship.

Back when I was first researching best practices for post-implementation SAP, I had the good fortune to work with Jack Childs of SAP America whose task in life was supporting the major North American SAP accounts and whose insight into client efforts was invaluable. In 2003, Mr. Childs administered an informal poll regarding the role of a business process owner and found that the shelf-life was only two years. Reasons for this short shelf life were unsurprising: high stress, low authority, inability to succeed.

If you do not invest good business process owners with proper executive support, you should not bother building an SAP Center of Excellence. Of all the roles included, it is the most vital.

For more, check out Jon Reed's piece: http://www.jonerp.com/content/view/209/1/

SAP: Stop Chopping Off the Tallest Heads to Make Everyone Equal

2009-03-25T11:25:00.000-07:00

Since SAP raised its monthly maintenance fees from 17% of license base to 22%, the reaction has been predictably sour, and all the worse because nothing new is coming back to clients in return. Not improved maintenance support or an easier-to-deploy Solution Manager or, as suggested by Josh Greenbaum (http://ematters.wordpress.com/), some sort of return credit for future software purchases.

Josh is not the only SAP industry analyst to aggressively weigh in on SAP’s smugness regarding the rate hike. Jon Reed (www.jonerp.com), Dennis Howlett (http://blogs.zdnet.com/Howlett/) and others have contributed some amusing-even-as-it hurts observations. Ray Wang of Forrester (http://blog.softwareinsider.org/) has recently revived “The Enterprise Software Licensee Bill of Rights”) partly in response to this move.

Forrester, Gartner, and other analyst firms have recently come out with solid advice to clients about how to reduce maintenance costs and I advise you to check these out.

In parallel, I would like to propose to SAP that they revive an older program by which clients could again qualify for a maintenance fee reduction by demonstrating a high level of autonomy (and a consequent reduced maintenance burden for SAP). Clearly, SAP’s maintenance burden varies from client to client so why should they uniformly pay at the same rate?

The old program that was phased out some years ago was admittedly applied somewhat haphazardly. The gist of it was that clients who could demonstrate the existence of an internal “SAP Competence Center” received a reduction from 17% to 15%. The demonstration did not have to include the existence of a physical center; organizational attributes and assets were examined and satisfaction of a multi-page “SAP Competency” checklist got you in.

Currently, one nub of this issue is the status, cost, and usability of Solution Manager. When it was initially announced, SAP touted it (as it still does today) as the “… application management solution facilitates technical support for distributed systems – with functionality that covers all key aspects of solution deployment, operation, and continuous improvement.”

Behind the scenes, it was also intended to reduce the maintenance burden carried by SAP. Therefore, doesn’t it stand to reason that a client with a fully functioning Solution Manager is less of a burden on SAP maintenance staff than a client without it?

Doesn’t it also stand to reason that clients with the following attributes should be given a break?

Outsourced help desk – reduces the volume of annoyance calls to SAP through improved routing and service

High level or outsourced Basis administration – idem

Internal Center of Excellence with a strong focus on user competency and robust functionality

High level of participation in ASUG or ASUG-like client-to-client support and sharing of best practices

Full compliance with SAP upgrade policy (it is obvious that a 4.7 client is more of a burden than a 6.0 client)

In the SAP client base, as in the U.S. financial community, some firms are playing within reasonable boundaries and others are a shameless mess. Short of instituting an as-you-go maintenance fee (dream on), SAP should strongly consider rewarding its best and most disciplined clients with some sort of break. Clients, ask your SAP rep about this and see if you get a better answer than those given the analysts.

SAP in Early 2009

2009-02-14T10:13:00.000-08:00

Since I first began working in the world of SAP in 1995, there have been three "crossroads" periods. The first was 1999 when the Y2K driver dried up and no one in North America was licensing anymore and the dot com craze (erroneously, as it turned out) seemed to have superseded the quaint notion of enterprise wide software. The second was 2004 when SAP got a second wind and the term NetWeaver fully entered the lexicon.

We are now going through a new crossroad, fueled obviously by a global fiscal crisis, in which SAP is both mature and, in many ways, boring. I do not think of boring as a bad thing. I think of it as predictable, knowable, and comforting. Back when SAP was pushing out new versions every six months or so, it wasn't boring, it was grit-your-teeth annoying for clients, systems integrators, and just about everyone involved with the exception of industry analysts who thrive on chaos.

I have been writing about SAP since early 1996, first with a thin book entitled "In the Path of the Whirlwind, An Apprentice Guide to the World of SAP" and later with the (still going) "SAP Blue Book, A Concise Business Guide to the World of SAP". From 2001 to 2007, I worked as an industry analyst but in all other years have been deeply involved in SAP consulting. Having seen SAP reach this new crossroads, and at the urging of colleagues and associates, I am starting this blog with the hope of cutting through the new phase of SAP fog whenever it curls its way into the industry. Observation of this industry tells that this will occur roughly every other Tuesday or after the latest flurry of SAP press releases.

Subjects will center not on how SAP works (I will leave that to SAP.com and myriad other blogs and websites) but on what you do with SAP and how to gain value from it. I have no expectations of any ability to withhold criticism of SAP (the company, if not the software) so readers can rest assured that this blog will not have an SAP imprimatur.
I definitely welcome input, contributions, and criticism from all and sundry. The more candlepower the better.