While at the 2011 SAP Influencer Summit yesterday, Scott Bolick, Vice President of Sustainability Solutions, commented “The real battle in sustainability is going to be on the energy side.”
I met up with him later in the afternoon to follow up on this (and to discuss the state of the Red Sox, but that’s another story). What makes the energy side the biggest area for sustainability right now?
As you can probably tell if you heat your home with oil or drive a car, energy is rising in term of cost – there is quite a bit of volatility in pricing. In fact, Bolick estimates that the pricing volatility has increased 50% from just ten years ago. Plus, governments are starting to look at legislation to force companies to comply with energy-efficient processes. For example, next year Australia will levy a carbon tax on its 500 largest companies in an effort to get them to limit emissions.
As a result, companies are trying to manage their energy costs while accounting for the volatility. Now Excel spreadsheets might be good for managing your fantasy football league, but not so good at monitoring energy use and connecting this use to business processes. But how do companies use SAP sustainability applications to keep energy costs in check?
Bolick gave the example of Valero, an oil and gas company with 16 refineries. The SAP sustainability application was able to bring real-time energy manufacturing intelligence to devices on the shop floor. Executives can look at dashboards to see energy consumption and shop-floor workers can look at the real-time data and check if they are meeting their energy goals. Bolick commented that in the first year of using SAP sustainability technology, it was able to “save $120 million in the first year and expects to save up to $200 million going forward.”
In another example, Bolick told how Lockheed Martin uses SAP Carbon Impact not in a day-to-day approach, but to benchmark how energy efficient their buildings are and ensure compliance with Energy Star requirements.
In the end, Bolick explained that SAP is “a core believer in applying sustainability to mitigate economic, societal and environmental risk while increases profitability. For us, what is most important for business is that they’re putting effort into these strategies and initiatives” to improve business processes.
SAP is bringing BI to collaboration, but should it have done the opposite?
StreamWork, SAP’s collaborative decision making (CDM) platform, is just that – a way to help teams of users drive projects forward through document sharing, instant messaging, and by using SWOT (strengths, weaknesses, opportunities, and threats) analyses within the application to reach decisions collectively. Because it’s integrated with BusinessObjects (BOBJ), users can upload and share copies of spreadsheets, Crystal Reports and Crystal Dashboards to help inform decisions.
SAP’s is bringing BI reporting capabilities into the collaborative fold as part of the decision making process. Pureplay BI vendors, meanwhile, are approaching the issue from the opposite direction, adding collaborative tools and social components to their platforms.
“We’re starting to see that as an area of feature enhancements within BI platforms,” said Rita Sallam, a Gartner analyst who recently published a report on the CDM market.
For example, BI vendor Qlikview now allows some users to send instant messages and collaborate within certain individual reports. Meanwhile, Panorama, offers that same functionality but also gives users the ability to suggest collaboration participants based on their profiles and the content of the report.
Are the two sides, with two different approaches, both heading toward much of the same functionality?
“I think they probably are,” Sallam says.
But did SAP take the wrong approach? Should they have added a CDM component to BOBJ given that BI is a primary focus for the company and its users? Sallam says no. Sallam added that SAP’s strategy will take a big step forward with the next version of StreamWork, which will allow users to embed live BOBJ reports – not merely static PDFs, for example.
“What they’ve done is part of a broader strategy with their apps as well,” Sallam said. “StreamWork also integrates with CRM, and they’re [also] doing that to compete with companies like Salesforce.com.“
Thomas Michael, the CEO of Michael Management, doesn’t hold back when it comes to saying what he thinks of a lot of the SAP education courses out there. In short, not much.
“It’s very easy to create crappy training,” he said.
Michael’s company recently won an e-learning award for his company’s SAP courses built on interactive simulations of SAP modules. It’s not a live environment, but it feels like it, he said. The courses include voice over instructions, tests, and online web sessions where users can ask questions of an instructor.
He may not be objective, but he may have a point about the level of quality of some education providers. SAP isn’t easy to learn by any stretch of the imagination, but is e-learning a viable option, especially as many companies are looking to avoid spending money on pricey classroom instruction?
A lot of companies think so, Michael said, and what they provide is a far cry from SAP’s e-learning courses.
“SAP has e-learning courses that they offer, but they’re very different from what we do. They’re death by PowerPoint,” Michael said.
Others are looking to get in the e-learning game.
Next year Klee Associates, a company that runs ERPtips and has traditionally focused on classroom training, is rolling out an e-learning product of its own that allows users to work through training modules integrated with their live ERP system, according to David Haynes, the company’s ERP solutions manager.
“We just want people to do the exercises in a live environment, actually make mistakes and feel the consequences for that,” Haynes said. “Simulated environments aren’t actual systems, they’re screen captures of systems.”
The idea is that companies will still want to do classroom training up front, but deploy the company’s e-learning program for keeping employees up to speed, as well as on-boarding new employees.
Others, like independent SAP analyst Jon Reed who covers training issues on his site jonerp.com, are still sold on the advantages of classroom training, especially when the instructor also works as a consultant and can speak from real-world experience.
“I remain biased toward classroom instruction, if the instructor is awesome,” Reed said.
SAP to developers: We care.
As a part of its efforts to demonstrate to developers that the technology is all that it’s cracked up to be, SAP has set up a virtual sandbox environment to let developers bang on HANA‘s in-memory functionality as much as they want – and to show them they have their IT interests at heart.
“The goal of the sandbox is really to show that as for SAP, we care about developers and we rely on them to be successful,” said Anne Hardy, vice president for platform evangelism and developer adoption at SAP. “We want to make sure that we excite them. We also want them to believe that they can do business with SAP.”
The move wasn’t made in a vacuum, of course. Rather, the move is a broader effort to speed adoption of HANA. Last week, SAP announced it is making HANA available in a simplified Rapid Deployment Solution (RDS) format to make it easier for businesses to adopt the in-memory technology. Developers can upload their own data for testing, or use generic data SAP includes in the system.
ASUG News’ Courtney Bjorlin outlines some of the other details on how this all works:
To host the sandbox, SAP has rented space in a public data center: Bay Area Internet Solutions (BAIS) in Santa Clara, Calif. Boxes are shared by multiple users, with varying levels of isolation done in some cases. Developers access them through a virtual image that contains all of the tools they need to play around on HANA. This is provided by CloudShare, a vendor that specializes in providing virtual development and test environments. [Developers] log into that image and can develop based on guided exercises, Hardy explains, as well as come up with their own development ideas.
So how’s it going so far? Hardy said that SAP sent out a little more than 200 invitations to developers and about half have signed up so far. Feedback, which she says has been mostly positive, is going to be used to firm things up before the sandbox goes public next year.
Some of the complaints they’re taking into account, Hardy said, have centered around developers wanting more client tools like Advanced Analysis for Office, Dashboard Designer, Webi, and Data Services. She said people are looking to go beyond what’s currently offered by SAP, which includes HANA Studio and BusinessObjects Explorer.
Others have complained about access limitations. Right now developers are only able to access the sandbox for 30 days or 120 hours of usage. Some have declined SAP’s offer to participate for that reason, Hardy said.
The biggest complaint, however, is that data can be hard to upload. Due to security reasons, developers have to upload the data to the client server image, which is prone to slow speeds and timing-out. From there, developers have to upload the data onto the server.
The exercise has given developers a chance to test the limits of the system, Hardy said, noting that at least one person loaded data beyond what’s been documented in an effort to get the system to crash.
Hardy told me that SAP considers the sandbox to be another way smaller, more resource-strapped businesses can play with the technology at a fraction of the cost and time involved in setting up their own environment.
“With some of the new technologies, we are moving away from only taking care of the bigger customers and partners, but also the smaller shops,” Hardy said.
SAP is applying its Rapid Deployment (RDS) software model to its in-memory technology. The move, according to SAP, is a response to customers SAP says are looking for a way to deploy HANA faster, easier and more predictably than they can now,
Like the existing RDS applications, which are designed to be part of larger enterprise applications that address a certain function or specific need, the RDS packages for HANA are centered around more straightforward use cases. So far, that includes deploying the SAP CO-PA Accelerator software, or using HANA for faster BusinessObjects reporting, according to Phillips Hofmann, head of SAP RDS communications.
SAP is also launching an RDS package for the Sybase mobile sales application for SAP CRM.
Like with other RDS applications, the new packages are designed to take some of the guesswork out of deployment, and allow customers to get things up and running in eight weeks. Hofmann declined to say how many customers had purchased the packages, or what the cost was. However, the cost of the HANA appliance is not included in the RDS price.
“The goal of it is to make it so that you have the transparency of what the pricing is, the timeline, everything. It’s like a Happy Meal, where you know what you’re getting,” Hofmann said.
While Hillel Sackstein won’t upgrade his company to BusinessOne 8.82 for another month or two, he already approves of a number of changes that SAP has made to the application, namely the ability to track multi-channel marketing campaigns.
“This is the one [enhancement] we’re going to get the most out of,” said Sackstein, the president of Virtual Graffiti, a California-based provider of software applications and consulting services that specializes in network security.
Although Virtual Graffiti went live on BusinessOne a couple of years ago, it had been holding onto Microsoft Dynamics CRM, waiting for SAP to offer the same campaign management functionality. Just back from a BusinessOne conference where he was able to learn more about the entire slate of enhancements, Sackstein figures SAP has finally gotten around to delivering what he needs, especially since the company’s business model is heavily reliant on marketing campaigns.
Sackstein said that with minor modifications, the SAP CRM module is able to track any invoice tied to any campaign – anything from printing costs for a mailer, to room rentals for sales presentation breakfast meetings. Then there’s the roughly $1 million the company spends on Google ads a year. When a sales lead comes in, it’s tied to one of those campaigns, so that the company can see how much it’s spent on those campaigns, versus how much it’s getting in return.
“It kind of completes the circle,” Sackstein said.
While Microsoft was able to track spending on marketing campaigns, Sackstein’s company couldn’t integrate it into their accounting operations, meaning that costs were tracked separately, Sackstein said. Once everything is configured with the new system and the modifications are made, Sackstein said, all that information will then live in the company’s ERP.
A recent Gartner report, “SAP Throws Down the Next-Generation Architecture Gauntlet With HANA,” from Gartner analysts Massimo Pezzini and Daniel Sholler gives SAP HANA high marks, but cautions that it could be a challenge for SAP to convince “conservative” customers about the need for it.
Key notes from the report include:
- SAP HANA “combines a variety of DBMS [database management system] techniques into a single integrated package, which, according to SAP, can result in tremendous improvements in query performance, especially for complex analytics”
- Project River (Platform-as-a-Service or PaaS), SAP Business ByDesign (Software-as-a-Service or SaaS) and HANA Database-as-a-Service (for cloud services, currently in testing), are all designed to run on top of SAP
- SAP HANA’s architecture is “not yet fully articulated and will take many years to be fully delivered.” Improvements on the SAP NetWeaver platform over the next 12-18 months will further develop this architecture.
- SAP NetWeaver 7.3.1 changes are part of the overall plan for SAP HANA. These include combining SAP NetWeaver Process Integration and SAP NetWeaver Business Process Management into one package.
According to Gartner, with an expected release date of 2013/2014 for SAP NetWeaver 7.4, customers need to plan transition from SAP NetWeaver applications to the new cloud structure in the next three to five years.
The report also emphasized the effect SAP HANA has/will have on other major enterprise software vendors. Explaining that SAP HANA “will force the competition to respond,” the report also cautions that it is important that SAP deliver on what it’s promising regarding SAP HANA, and do so before the competition catches up. To do this, SAP must “win support from its large partners’ ecosystems and have them convert their established solutions and develop new added values on top of the HANA Architecture.”
In recent conferences I have attended, I am definitely hearing some SAP HANA burnout, especially since we’ve been hearing about SAP HANA in a number of keynotes now. From what I can tell, the messaging isn’t convincing companies to spend the large amount of funds needed for an SAP HANA project. (I know of one large company that was investigating SAP HANA, but soon abandoned the idea because of the cost involved.) It comes across as a “nice to have” instead of a “have to have.” However, as the architecture becomes more defined and more common business scenarios are discussed, I can see more companies looking into this new technology.
What are your thoughts?
A new survey by the U.K. and Ireland SAP User Group reinforces the notion that a lot of companies like the idea of cloud computing. They’re just not sure how it fits into their landscape.
In the survey of 100 SAP customers, 80% said their landscape would eventually include a mixture of on-premises and on-demand applications, something SAP executives like CTO Vishal Sikka and Kevin Nix, head of its Line of Business OnDemand division, have routinely acknowledged.
However, many customers blame SAP for the confusion over when and how to move to the cloud. Just under 60% of respondents said cloud adoption was being slowed by a lack of clarity over SAP’s product roadmap. And 59% of respondents said they don’t understand how to upgrade or integrate SAP OnDemand modules with their existing SAP implementation.
Just over a quarter of the respondents said they didn’t know what SAP’s cloud portfolio includes, or what the advantages of those applications are. And 78% of respondents said they still had fears around data protection, highlighting the fact that security continues to be a major issue going forward.
“It is clear from the research that there is still a lot of work to be done communicating SAP’s cloud roadmap if organisations are to truly realise the potential benefits of a hybrid approach,” Craig Dale, chief executive, UK & Ireland SAP User Group, said in a statement.
But how does SAP get that message out? What else could it be doing?
For one, SAP hasn’t done a good job of creating a cohesive picture of its portfolio of cloud applications, which now includes Business ByDesign, Sales OnDemand, and Carbon Impact, according to Albert Pang, CEO of Apps Run the World, an IT market research company that focuses on software. SAP also hasn’t clearly explained how these products fit in with on-premise environments, Pang added.
“Most of that has been coming out in bits and pieces,” he said.
But customers could be doing more to learn about cloud computing, and whether it’s the right fit for them to begin with, according to Dale.
“With any new technology delivery model, organisations must do their due diligence to ensure that cloud computing is suitable for them. If they are looking at a hybrid approach they’ll also need to consider which services they want to keep on premise and which they are happy to move to the cloud,” Dale said.
At the 2011 SAP BusinessObjects User Conference, I had the chance to talk with Holly Simmons, senior director of marketing, SAP BusinessObjects OnDemand, about the upcoming integration with SAP StreamWork with Feature Pack 3 for SAP BusinessObjects BI 4.0 (more to come on Feature Pack 3 soon).
Although you might not be aware, SAP’s online collaboration tool is already integrated with a number of applications, including CRM (market planning), product lifecycle management (PLM) and strategy management (to capture the up-front planning process among a team). In addition, in Feature Pack 3, open APIs allow companies to develop more integration if they want – for example, to create templates for commonly used documents.
With the upcoming BI integration, users will be able to send documents directly between SAP StreamWork and the BI LaunchPad. For instance, a team leader can send a report on how certain tee shirt colors are doing in the market and solicit feedback from the team about which colors should stay – without leaving the BI application.
“It allows more people to participate in the collaboration,” said Simmons. “StreamWork captures the BI social structure.”
Role-based access helps users keep documents secure – for example, users can opt to allow anyone to invite others to share the documents or set it so only the users can initiate sharing. SAP has partnered with Novel to provide the security component of StreamWork. “It’s the second thing people usually ask about StreamWork, after asking what it does,” said Simmons.
According to Simmons, a good use case for using StreamWork is in sales and operations planning. Companies can invite vendors (outside of the company) to view documents as needed to help shorten the decision-making process. StreamWork keeps a record of comments and correspondence to refer to later if needed,
Other use cases Simmons described included consultancies sharing documents with clients and non-profits managing volunteer activity and events. In fact, Simmons noted that SAP itself used StreamWork to keep track of the merger and acquisitions activities with the Sybase acquisition.
“SAP is looking at collaboration differently,” explained Simmons. “StreamWork becomes the foundation across silos.”
Simmons also gave me a sneak peek at the upcoming iPad and iPhone apps for StreamWork, which lets users to manage feeds and activities on the go. Speaking of future updates to StreamWork, Simmons mention that it’s a bit of a “cluttered roadmap.” Upcoming SAP integration applications include SAP ERP HCM — for employee on boarding and skill matrixes — and SAP NetWeaver Business Process Management (BPM) — for creating “gravity” maps that can be imported directly from StreamWork in to BPM.
“[StreamWork is the] social foundation for everything we do,” said Simmons.
Last week, I listened to a SAP webinar ostensibly about the benefits that HANA and in-memory technology holds for small and medium-sized enterprises (SME).
The webinar offered a fairly thorough of HANA and in-memory technology, but SAP didn’t really spend much time on how SMEs will use the technology in the future – and the role SMEs will play in HANA’s overall roadmap. And that’s part of the problem – it really isn’t saying much.
Right now, HANA and in-memory technology is discussed in primarily large enterprise terms, because they’re the ones that benefit most of all from HANA’s ability to crunch large sets of data in real-time. And they’re also the ones who can pay for the hardware that HANA now demands, something few SMEs may be will to afford at this point.
“I don’t expect [those hardware] costs to go down anytime soon,” Forrester analyst Boris Evelson told me.
But what’s interesting is that, unlike in the past, SMEs will get first crack at in-memory technology when it comes to transactional processing, given that SAP’s been running both Business One and Business ByDesign in SAP’s labs for some time now. Part of the logic is that it’s far easier to experiment with HANA on a smaller ERP system than more complicated Business Suite software as analyst Jon Reed, one of the panelists in the webinar, noted after the session.
So what might this look like in the coming months?
Laurie McCabe notes some of the possible cost benefits for SMEs when it comes to adopting in-memory technology:
The good news here for SMBs is that while SAP Business Suite customers will pay extra for high-test HANA performance, customers using SAP’s SMB-centric solutions will get at least some of this added horsepower as part of the normal upgrade cycle, at no additional charge. However, at this stage, it’s still fuzzy as to exactly how SAP will embed and deliver HANA in its SMB portfolio, what will be included, and what will be priced separately.
Regardless, SMEs in the past have gotten SAP’s more cutting edge technology only after it’s trickled down from their big-enterprise brethren. But when it comes to HANA’s perceived ability to speed transactional processing, being smaller isn’t a bad thing.