partners

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.

‘Rightshoring’ SAP? Capgemini tips for prospective SAP end users

A recent book entitled Rightshore!: Successfully Industrialize SAP Projects Offshore by Capgemini consultants Anja Handel, Wolfgang Messner, and Frank Thun can serve as a helpful read for soon-to-be SAP end users deciding how to calibrate an implementation strategy.

Given that system integrators can execute an SAP implementation from anywhere in the world, SAP end users will be called upon to decide how they want their partners to deliver service. Rightshore! offers a helpful discussion of the various options in this regard, and their respective benefits. For example, the book explains that there are five basic implementation delivery models:

• External Offshore: External execution by offshore partners.
• External Distributed Delivery: External execution by nearshore partners, who subcontract work out to offshore partners.
• External Nearshore: External execution by nearshore partners.
• Internal Centralized: Internal execution by a single party.
• Internal Decentralized: Internal execution by several parties.

The fastest-growing model is external offshore, which went from being involved in 1% of IT delivery projects in 2006 to an estimated 5% by 2010. Rightshore! points out that external offshore promises 15-20% savings over internal delivery. This is why many systems integrators, Capgemini included, have hired tens of thousands of Indian workers; the resulting wage arbitrage allows integrators to deliver cheaper implementations to customers via the distributed delivery model.

Of course, this raises an interesting question — why not bypass nearshore partners and go directly to an Indian integrator, such as Wipro? This didn’t get talked about much at this year’s Sapphire, but could be a big issue by next year. Given that almost all of the major SAP failures over the past year involved nearshore partners, there’s no knee-jerk reason to dismiss offshore partners for any SAP project.

Rightshore! makes the argument that a blended approach to delivery models is the key to a successful IT project implementation, but naturally this owes something to the fact that Capgemini owns the trademark to the world ‘rightshore’ and has a vested interest in promoting this model. However, moving past the marketing fluff, rightshoring is a concept that should be taken seriously in the SAP context. An SAP project is complex enough to benefit from the ability to farm out certain kinds of tedious technical work offshore while retaining certain functions, such as training, from near-shore providers. Vendors understand the soundness of this approach as well, and Indian systems integrators have long invested in dedicated U.S. and European resources in order to be able to tell the ‘rightshoring’ story to customers.

For some enterprises, buying SAP is a relatively easy decision, but implementing SAP raises many anxieties. To begin with, there are the horror stories of implementations gone wrong, resulting in millions of dollars of cost-overruns and long delays to go-live; consider the LAUSD fiasco, Waste Management’s $100 million lawsuit against SAP, and problems in Burnaby and Portland. But even in the best of cases, SAP implementation is a major challenge. ‘Rightshoring’ your implementation is one way to mitigate the inevitable risks.

Demir Barlas, Site Editor

Partners, platforms and the SAP economy

It’s important for SAP to succeed in growing its partner ecosystem. In any battle with Microsoft, for example, SAP will need to muster a credible challenge to Redmond’s vast partner channel.

We recently spoke to Zia Yusuf, EVP of SAP’s Global Ecosystem and Partner Group, to get a status check on SAP’s collaborative efforts. We ended up learning more about SAP’s equity investment strategy, the importance of SDN, and even an opinion on why the kind of Web 2.0 embedded in Salesforce.com’s AppExchange won’t work in a B2B context.

Read our writeup of the conversation with Yusuf here.

Demir Barlas, Site Editor