November, 2008

SAP Watch is moving to a new home

Good news. Within the next few weeks, SAP Watch will move to IT Knowledge Exchange. It’s another TechTarget website where you can ask or answer technical questions, and follow any one of the dozens of IT blogs hosted there.

We’re moving our blog to bring you closer to your peers in the enterprise applications industry, specifically, those who work with SAP.

SAP Watch will still provide the same insights on SAP. This is our new address– and we’ll automatically redirect you there when the change happens.

Once we move, please consider bookmarking the new link, and if you’re into RSS, subscribe to us using your favorite feed reader.

Thanks for your cooperation, and please keep reading.

-The SearchSAP.com Editorial Team

Does investing in IT make sense now?

On my way home from New York, a gentleman who was also riding the train noticed I was reading about SAP. As he sold software for a best-of-breed provider, we struck up a conversation about the state-of-the-software business.

“No one is buying anything right now,” pretty much summed up his thoughts on the matter.

It was an interesting caveat to the panel discussion I had just come from — “Why investing in IT makes sense in this economy.”  

The sentiment that “no one is buying anything right now” is backed up by scores of recent studies showing that people really aren’t investing in IT.

But should you be?

“Is it the right time to buy a huge amount of new technology? I don’t know the answer to that question,” was the response of Harvard Business School professor and panelist Andrew McAfee to the question. “Is it the right time to stop trying to innovate and improve and make your business more efficient? It’s a really bad time to do that.”

So how can you innovate and make your business more efficient?

The two SAP customers on the board made clear that their priorities this year were business intelligence - one just having purchased Business Objects software.

“If I have this software, I’ll know which bridge I want to fix,” Naomi Wyatt, secretary of administration for the state of Pennsylvania, said when asked how she justified the software purchase with such a tight state budget.

SAP co-CEO Leo Apotheker stressed that businesses needed to focus on managing liquidity, and pitched a liquidity management package the vendor is delivering to that end.

But investing in IT doesn’t have to mean buying new SAP software.

In her column, “Ten imperatives for midmarket IT strategy in 2009,” Anne McCrory points to an investment in keeping staff happy as one key business strategy. And InfoWorld’s list of “Five top IT spending priorities for hard times” is topped by buying new hardware.

Does investing in IT makes sense for your business in this economy? And how will you do it?

Courtney Bjorlin, News Editor 

SAP interview preparation

As discussed, the future of SAP jobs lies in more certification and business-centric training and credentials. However, regardless of whether you’re a technical or functional SAP consultant, it isn’t enough to accumulate credentials and certifications. You also need to interview well to break into SAP job, or to move into another SAP module.

To that end, here are some helpful resources to help you ace SAP interviews:

General preparation strategy for an SAP interview. There’s an important point here about what you say in your resume versus what happens in an actual interview that could save you from major interview blunders.

How to prepare for an SAP BI interview, including a list of the fundamental aspects of BI with which you need to be familiar.

How to prepare for an SAP Basis interview, including the name of a popular SAP guide that can help you prepare.

How to prepare for an SAP BW interview. Learn the one question that gets asked most frequently in SAP BW interviews.

How to prepare for an SAP CRM interview. This tip offers six sample questions, including a combination of technical and functional questions.

How to contact an SAP hiring manager after an interview. Getting the etiquette right can make the difference between getting a callback and being forgotten.

The information in these tips is designed to prepare you not only for the technical components of SAP interviews in particular modules, but to give you more general pointers for interviewing well, and for following the right etiquette when interacting with a hiring manager.

Be warned: Memorizing answers to common questions, or attempting to substitute glib responses for actual expertise, may get you an SAP job, but it won’t build your career. Instead, take the long view and build your SAP intelligence. It may take longer, but you’ll lay the foundation for a long SAP career.

Demir Barlas, Site Editor

Partly cloudy for SAP?

Cloud computing is starting to take shape for SAP.

SAP co-CEO Leo Apotheker was in New York Friday, presiding over a forum at the company’s New York City office called “Why investing in IT makes sense in troubled times.” And during the forum, attention turned to SAP’s recent investment in developing on-demand applications for large companies.

Apotheker declined to provide much detail on the projects John Wookey, the newly appointed vice president of on-demand for large enterprises, would be working on first.

But he did give some insight on what exactly SAP might mean by “on-demand.”

“There’s one thing that all of us in the enterprise software business didn’t do well, for lack of trying,” he said. They focused on functionality at the expense of figuring out how to make software “easy for people to actually consume,” Apotheker said.

“We understand that, and we will make sure that you can actually consume real software,” he said.

However — don’t expect them to float everything in ERP in the cloud.

“There are certain things you can not run in the cloud because the cloud would collapse. It’s simple,” he said. “Don’t believe that any utility company is going to run its billing for 50 million consumers in the cloud.”

“I believe, and John is there to help us, what we can do is to combine the two worlds,” he said, giving customers a choice, while helping them maintain core competencies and competitive advantage.

Plus, he said, they couldn’t be “arrogant” to believe that every customer would want to run everything in the cloud. 

The two customers sitting on the panel with him — Naomi Wyatt, secretary of administration for the Commonwealth of Pennsylvania and Partha Biswas, VP and CIO of JoernsHealthcare, agreed.

 Wyatt said while there was no way she wanted some of the state’s very sensitive data in the cloud, she might be willing to push some business intelligence capabilities there.

“I love the cloud,” Wyatt said. “I don’t want that information in the cloud…but there are some light things that maybe we do want out there.”

It will be interesting to see how these efforts start to take shape at SAP, and, to see what Wookey gets to work on first.

“I’m very happy John Wookey joined us,” Apotheker said. “I’m sure he’ll find his time with SAP usefully spent.”

Courtney Bjorlin, News Editor

Please look to SearchSAP.com this week for more news from CEO Leo Apotheker and SAP’s forum “Why investing in IT makes sense in troubled times.“

Can Silicon Valley help bail out Detroit?

Many of you, no doubt, are watching closely what happens with the proposed bailout of the U.S. auto industry because SAP is so dominant in the manufacturing sector here.

While most of the talk around technology’s  role in saving the industry has centered on making greener vehicles, the “big three” might also be well-served considering how technology can better optimize their supply chains.

Making its perennial appearance on AMR Research’s best demand-driven supply chains list this year was Toyota, running seventh. The report concluded that companies with demand-driven supply chains all approach supply chain management (SCM) more as a way to add value than a way to cut costs. By extension, they’re also among the most successful companies in the world.

The big three U.S. automaker makers — Ford, GM and Chrysler — aren’t on this list.

There are undoubtedly many factors that are contributing to Detroit’s problems. But would better supply chain management help?

Have the lean manufacturing principles that Toyota pioneered really been applied in the U.S.? Or, as this IndustryWeek article points out, have they been limited to the plant-floor? The article, written two years ago, says that U.S. automakers were in deep trouble unless they applied lean manufacturing principals across the entire organization.

Have they maximized visibility into business processes? This is where an SOA-enabled platform can make the difference and where, for SAP customers, NetWeaver enters the picture. The potential value of NetWeaver, SAP’s service-oriented application platform, is in its ability to maintain data integrity in the transaction system, while providing many specific, scalable business functions at a process level that link back to that core set of data definitions, according to a 2007 interview with AMR’s Kevin O’Marah on that years’ best demand-driven supply chains.

“Companies can basically forget about doing (demand-driven SCM) unless they’re willing to invest in the technology that provides process integrity, transaction reliability, data visibility and intelligence for decision making,” O’Marah said in the article. “Every single one of these rests on an IT infrastructure that’s robust and scalable.”

There is a demand for Detroit’s cars. Detroit Free Press reporter Mark Phelan, in his column “6 myths about the Detroit 3,” reveals that this is indeed the number one myth surrounding the industry. According to his column, GM outsold Toyota by about 1.2 million vehicles in the US and is still outselling them this year. And the other big two performed well against Honda, Nissan and Hyundai.

Can some of the wisdom from Silicon Valley help Detroit transform supply chains in demand-driven supply networks?

Courtney Bjorlin, News Editor

The future of SAP jobs

SAP, long the gold standard of IT employment, is feeling the global economic crisis. SAP’s growth has slowed, the company is taking cost-cutting measures and there are many frustrated SAP job seekers out in the marketplace.

On the assumption that the global economy will not recover for at least 18 months, what should SAPers — whether currently employed, or seeking a job — do? Here are some ideas culled from SearchSAP experts over the past several months:

1. Build your functional skills. In the future, low-level technical activities such as configuration will be increasingly automated, and there will be greater demand for people who understand both SAP application logic and business processes. Look into getting the BPX certification to learn more about business processes from SAP’s perspective.
2. Build your industry credentials. Getting a one-week tech certification isn’t the same as passing something like the APP test offered by the Institute for Supply Management (ISM). A techie who possesses industry credentials will tend to be more employable, all else being equal.
3. Build your academic credentials. How about getting a one- or two-year MBA? For non-U.S. residents, there are plenty of credible one-year MBA programs in Europe and India, and you can always apply for a scholarship.
4. Keep building your SAP intelligence. SAP technology is constantly shifting, and you need to keep up with current trends even if you take time off to build another aspect of your professional portfolio.

These tips can help you position yourself for an SAP job, or a better SAP job, after the downturn ends.

Demir Barlas, Site Editor

Is it a buyer’s market for vendors?

Not everyone will be hunkering down in this economic downturn - the big vendors, including SAP, will be spending money.

The high cost of winning new customers will drive acquisitions - because many vendors are spending more than $1 for every $1 they’re bringing in, according to AMR Chief Research Officer Bruce Richardson.

“They’ve come to realize, it’s too expensive. They have to do acquisitions to offset organic growth,” Richardson said during his keynote at the AMR Research’s Business Technology Conference being held in Boston this week. “Even in a down economy, I think we’ll continue to see acquisitions.”

So who’s up for grabs? Richardson broke up the software field into two categories, the predators and the prey. The prey, “the shrinking software middle class,” as Richardson refers to them, are best of breed software companies that bring in between a $100 million and $500 million in revenue.

They are: Ariba, JDA, Manhattan, RedPrairie, Chordiant, RightNow, SuccessFactors, Taleo, Deltek, Epicor, Lawson and QAD .

Typically between a third and a half of their revenue comes from maintenance and Richardson thinks we could see a lot of those companies acquired in the next two years.

Larry Ellison’s certainly showing no fear when it comes to continuing the company’s acquisition spree in this economy- Oracle having just made its 10^th acquisition of the year.

And with SAP’s blockbuster announcement this week that it will engage in more organic growth - tapping former Oracle exec John Wookey to lead the development of on-demand software for large companies -will SAP offset that with acquisitions of on-premise vendors and the maintenance revenue streams they carry?

Courtney Bjorlin, News Editor 

No Business“Buy”Design, no problem?

SaaS ERP — with its irresistible pay-as-you-go model and less-costly deployment — is well positioned for the current economy, most analysts agree.

 So is SAP missing out on big chances to sell Business ByDesign?

In a week when there’s been no shortage of digs on SAP’s debuted, then-delayed SaaS ERP, and attempts to sway SAP customers to other vendors, it’s tempting to think so. NetSuite is trying to lure SAP customers to its own SaaS ERP offering with discounts and freebies. Salesforce.com CEO Marc Benioff took aim at SAP during Salesforce.com’s annual Dreamforce conference, saying that SAP — along with Microsoft and Oracle — were too late to the game.

Analysts say that NetSuite’s 50% off offer to SAP customers is less likely to appeal to the R/3 customers it’s targeted at, than to enterprise-size SAP customers who were thinking of deploying SaaS ERP in a smaller division or subsidiary. Those are potential, new SMB customer wins SAP could be missing out on.  

But there’s also another view emerging.

The Wall Street Journal, in its Business Technology blog, took aim this week at the claim that online software is recession proof, citing NetSuite’s slightly lowered guidance for the remainder of the year, as well Benioff’s answer on how the economy had affected Salesforce.com — that these were difficult and unusual times, but Salesforce.com was in a position of strength.

And evidence is starting to emerge that IT budgets are, at best, uncertain. A recent story on our sister-site SearchCIO.com, centered on a Forrester Research survey on how IT is riding out the recession, revealed the approach to IT spending right now is somewhat unclear.

While the report said that “more than half of the IT executives said they are not cutting budgets and do not have plans to make cuts for 2009,” it also added that “the number of CIOs responding thus far is roughly a third of what Forrester normally sees at this point in a survey…suggesting deep uncertainty about what is going to happen.”

Will SaaS vendors just ride out the recession better than on-premise vendors, or will they really get a significant boost?

And is SAP missing out on a bunch of chances to sell its SaaS ERP, or, is it no big deal? Is the economy actually good, or at least neutral, for Business ByDesign?

Courtney Bjorlin, News Editor

What SAP is doing right

SearchSAP.com site expert Axel Angeli recently leveled some criticism against SAP’s leadership and technical direction. This week he offers some support of SAP’s policies.

There are areas in which SAP is making positive progress, mainly in the embedding of communities and in collaboration with customers and vendors. SAP has learned a lesson from the enthusiastic engagement of Global Communication and the community experts. SDN is doing great and discussing product strategies in SDN would give better insight than listening to internal plans for the future.

A new member in the family is the SAP EcoHub. The idea is great. It creates a marketplace where SAP third party-vendors and SAP customers can meet in a single place. The questions that remain are: Why is a marketplace not simply called a marketplace, and why did EcoHub come into being shortly after some former SAP employees started a similar project under the name SolutionsScout.com?

The business counterpart to SDN, the Business Process Expert community (BPX), is getting more and more popular. A BPXer is a knowledge engineer, an advisor who should be able to explain the technology to business and explain the real business needs to the technical staff. Here is where paths cross: Listening to the true BPX community would give SAP an idea of where they need to invest, rather than investing in something later pushed into a market that hasn’t asked for it.

SAP has established standards for certified Business Process Experts. The idea here is to deliver a canonical set of knowledge and methods as the common ground for everyone working as ERP consultants. There are plans for training and certification in order to make BPX more popular and to quickly get a critical mass of qualified BPXers all over the world.

SAP is a good company and SAP has great products. SAP customers enjoy working with the ABAP stack; not for nostalgic reasons but because it is reliable, stable, still elaborate by design and superior to everything else that competes with it. SAP ERP is also the best choice for SMBs, if it is installed and if all service is rendered by an experienced SAP partner who specializes in the SMB customer’s industry sector. SAP ERP is still the best, and only Microsoft Dynamics AX will come close.

There is still potential for SAP, but management has to understand that listening to customers and freely giving out information early — even if details change later — is better than hatching strategies in an ivory tower. SAP leaders, wake up: Listen to your community and treat customer complaints as sacred!

In part one of this blog, published earlier this week, Axel Angeli discussed why he isn’t fond of SAP CEO Leo Apotheker, SAP’s service fee increases or elements of NetWeaver. In part two, Axel criticized some of SAP’s technology decisions.

How can SAP get back on track?

SearchSAP.com site expert Axel Angeli isn’t one to pull his punches when it comes to SAP and he makes no exception in discussing SAP’s technological direction in this guest blog.

Has SAP lost its mojo?

In the good old days, SAP was an extremely successful technology company and the darling of many analysts. This was in the last millennium, before SAP lost its belief in its own strengths and virtues.

In 1998 SAP undertook its last breath-taking act of innovation when it introduced the BAPI framework. BAPIs had been designed to transform SAP’s transaction-based system into a component-based service suite where any functionality would be programmatically accessible. Back then, SAP was already an SOA-aware software package! But this successful path was needlessly abandoned in the years to come. The old SAP crew that defined the company’s technological success — in terms of ABAP, RFC and Batch Input — was mugged by the dogma of Java.

Even though it was implemented in the mindset of assembler programming, Java is a language that decorates itself with the feathers of object-oriented programming. It is unstable, unreadable, incomplete and completely redundant, since it did not introduce a single new feature that the world had been waiting for.

How should SAP escape the Java trap? Go back to its old merits. Make a clear and non-negotiable decision in favor of ABAP. This would also mean polishing up ABAP with a more modern syntax. The new ABAP 7.2 kernel has already taken some first steps in this regard. Technically the rudders are in the right direction. What is missing is the clear commitment of the SAP board.

In terms of SOA, there is another problematic area that requires immediate action: Process Infrastructure (PI). SAP doesn’t have the power to make technology changes from the inside and needs to shore up PI by buying a standing technology as an enhancement package for the existing stack. IBM bought Mercator Datastage TX, Progress took IONA, Oracle snagged BEA and Software AG showed mercy to suffering webMethods. The number of possible candidates for purchase is limited. If looking for quality products with an inherent Event-Driven ESB architecture, there are mainly Fiorano, ActiveBPEL or the not-for-sale SAP partner Seeburger. 

In part one of this blog, published last week, Axel Angeli discussed why he isn’t fond of SAP CEO Leo Apotheker, SAP’s service fee increases or elements of NetWeaver. In the next part of this blog, Axel will explain what SAP is, in his opinion, doing right.