Mike – UK based oil company
Mike said that he was doing board research on SAP for his “own personal learning experience.” He described his experience at Sapphire thus far as a net cast over everything SAP. His company is not currently using SAP as an ERP solution, but he seemed to think that they will in the future.

Deon – Australasian forest products company
Deon was focused on upgrading SAP, since his company had not upgraded in quite some time. He seemed almost angry in asking,”How does SAP justify the cost of an SAP upgrade?” and “Can it be quicker, with less disruption to the business?” Deon also said his company was very interested in Duet and that Outlook integration is very important.

Nancy – North American computer technology and consulting corporation
Nancy was at Sapphire to gather info about HCM and to “learn more about Cognos.”

Lynn – North American agricultural biotechnology corporation
A “secret agent” for her rapidly growing company — no time to spare! Lynn is researching new capabilities to be unlocked within SAP in order to leverage it properly. She was completely on task, admitting that she has “several meetings with SAP to understand, from a strategy and execution standpoint, where we can go from here.”

Does Sapphire help the average corporation? You tell me… what did you set out to accomplish at Sapphire this year? If you didn’t make it this year, what would you do in a sea of vendors and unlimited enthusiasm?

I’ll be going around next year, so be sure to look for me… I’m sure looking for you.

Eric Samuels
Assistant Editor

A new report from AMR Research’s Jim Shepherd offers specific insight into where SAP is going until at least 2013, and offers educated predictions about what’s going to happen after 2013. Here are some of the big takeaways from Shepherd’s brief:

Product Release Strategy: “SAP will spend much of 2008 aligning the release schedule of the major products within the SAP Business Suite: ERP, CRM, PLM, SCM, and SRM. Beginning in 2009, it will begin shipping enhancement packages for the Business Suite. Because of the synchronization effort, SAP ERP 6.0, NetWeaver 7.0 and all the core applications in the Business Suite will be covered by mainstream maintenance until March 2013, with extended maintenance through 2016.”

SAP Growth Strategy: One of SAP’s growth plans is to increase account penetration. Since this is such a high priority for SAP, existing customers can expect to be subject to increasing sales attention. The disadvantage is that the SAP sales organization will push some customers to buy products they may not need. The advantage is that customers who really want new products can hold out for better terms from SAP, knowing that SAP is very eager to make these kinds of sales.

SAP Platform Strategy: “The reality is that SAP customers have to use NetWeaver because their applications won’t run without it…” Since you’ll have to buy NetWeaver anyway, get acquainted with the optional functionality, including business intelligence, integration capabilities and the portal. There’s a generic parallel here with risk management. Lots of enterprises bought risk management functionality specifically for SOX, but took advantage of additional features to build out a fuller risk management capability. Similarly, customers who buy NetWeaver to run SAP applications can use the platform for a whole lot more.

SAP Industry Strategy: SAP wants to expand into new industries. This is good for customers who fall outside of SAP’s normal comfort zone, as SAP is highly motivated to work with them on product strategy and development. The losers may be SAP’s existing customers in areas like manufacturing, which SAP has already nailed down and will not be paying as much attention to, going forward.

SAP Product Strategy: SAP is moving to accommodate the Software as a Service (SaaS) paradigm with Business ByDesign, which is now delayed because of compatibility issues with NetWeaver 7.1. However, the market can expect SAP to keep going after SMB accounts with SAP ERP 6.0 and SAP Business All-in-One (for upper midsize companies), SAP Business ByDesign for the lower midsize segment, and SAP Business One for small businesses.

Demir Barlas, Site Editor

• Nearly 20 percent of enterprises have no formal risk management documentation capabilities and 13 percent lack a formalized risk framework. This is despite the fact that 52 percent of all survey respondents encountered a risk episode that “substantially affected” their operations and/or results.
• Finance is increasingly tasked with risk management, as 60 percent of enterprises report that the CFO owns this activity.
• In relative terms, outsourcing isn’t a popular way for companies to reduce the complexity of their finance organizations. Less than 10 percent of respondents use outsourcing enterprise-wide.
• Eight percent of enterprises would need a week or more to discover their spend on global travel last month; 3 percent couldn’t even get a snapshot.
• Almost all financial organizations understand the value integration (“integrating processes, data and technology leading to achieve greater transparency”) but over 90 percent of enterprises consider it difficult. Twenty-five percent consider it a “considerable benefit” but still too onerous to execute.
• The finance workload is shifting. Today, 66 percent of finance work is transactional; in three years, less than 40 percent will be. The time spent on decision support and performance management will nearly double in three years. Time spent on control and risk will grow slightly.

There’s a lot of food for thought here, but the bottom line is that finance is becoming more strategic than tactical, more risk-sensitive, and more integrated. These are emerging best practices that warrant careful consideration from the CFO and CEO.

Demir Barlas, Site Editor

These events tend to be more technical in nature than Sapphire, offering some 1,000+ hours of SAP education for beginners and experts alike. As usual, ASUG, SDN, BPX and other SAP groups will take an active role with sessions and forums to round out the regular SAP fare.

The stated theme of this year’s event is “Enterprise SOA: Put the Power to Work,” focusing on the practical benefits that can be gained from jumping on the Enterprise SOA bandwagon. This is probably a wise move. Many SAP users I’ve spoken to complain that SAP’s push to get users to upgrade has been more stick than carrot; highlighting the positives may help sinking millions into upgrades seem less of a burden and more like a wise investment. If SAP can convince Joe Customer, that is.

One way to make the case for upgrading are the new Enterprise SOA Showcase Contests, where regular SAP shops can provide SOA success stories for a chance to win cash prizes. The contest opened just last week and remains open to submissions until 9/19, after which there’s a public voting opportunity to establish a list of finalists. The grand prize winner, who takes home $10,000 cash, gets crowned at TechEd in Las Vegas.

Chalk that up as wise move number two on SAP’s part. Call me cynical, but after seven years on the SAP beat I’ve learned this: One page of customer case study is worth infinitely more than ten pages of marketing speak. I’m going to go out on a limb and assume I’m not the only one who’s a lot more interested to hear a customer talk about how things worked out in real life than read about world-class solutions set to revolutionize the core value chain through innovation leadership. (Ok, in fairness, this applies to ALL enterprise tech press releases, but you know what I mean…)

Anyway, we were there in 2006, and we’ll be there again this year. Stay tuned as we approach this exciting event!

Matt Danielsson
Editor

Among the new announcements, SAP GRC Risk Management is a new application tapping into the rising interest in GRC we saw at Sapphire Atlanta. The new addition promises to bring risk management to a more strategic, high-level plane where it becomes part of practically every aspect of a business. Components include Risk Planning, Risk Identification and Analysis, Risk Response and Risk Monitoring, IT News Online reports.

John Blau from InfoWorld reports that SAP is acknowledging problems with A1S, the on-demand ERP solution we wrote about last week, but adds that “nothing has changed” according to SAP executives. Slated for Q1 2008 release, rumors were circulating that it may be pushed back to a later date. SAP now insists this will not happen, Blau reports. Time will tell how this plays out, but rest assured we’ll be there to cover it when A1S hits the market.

On a side note, Larry Dignan at ZDNet brought up an interesting point about SAP’s globalization efforts as reported in the Wall Street Journal last week. With Agassi gone, he said, things get more difficult for a company many perceive as a tad stodgy and inflexible. Compounding the issue is a somewhat unorthodox methodology for going global on such a broad scale. From the WSJ article:

“Few companies try to globalize from top to bottom. Many companies build extensive sales, service and manufacturing operations abroad, but most keep top posts and important areas like corporate strategy and product development close to headquarters. Microsoft Corp., for instance, continues to set software strategy from Redmond, Wash., even as it hires thousands of programmers in India. SAP, by contrast, split up its pivotal product-development effort into eight centers around the globe, directed from California by Mr. Agassi.”

What happens now? Dignan describes it as a tug-of-war between the continents, and that rings true. The vacuum left by Agassi’s abrupt departure won’t be filled with a snap of the fingers. Having said that, does this mean SAP’s globalization efforts are about to implode? Most certainly not. The course is set and the juggernaut is in motion — the only question is how much friction there will be in the year ahead as a new equilibrium (or something close to it) is established.

Matt Danielsson
Editor

This video may help the people out there who are not so familiar with Web 2.0 appreciate this “transition” just a little more.

Person-to-person contact, a major theme in Web 2.0 and in this video, could potentially benefit SAP enterprise software through personalization and most of all comfort. SAP has waited before picking up on these trends until now because blogs and wikis that have the Ajax style functionality have proven their worth by the test of time.

During Kagermann’s keynote he mentioned something about failures in the past in regards to their applications. He goes on to talk about how SAP is supposedly going to slowly and accurately develop material in the future so that everything produced is a success. Of course this kind of talk could be interpreted as “I’m sorry, we’ll do better next time”, but this new adoption of communication truly seems to be a step in the right direction.

In his blog, Michael Cote writes, “I’m beginning to think that ‘Web 2.0′ is set to be the ‘SOA’ for [at least] this year and [possibly for] upcoming years”. Cote also points out that SAP has waited a long time to release this technology and when they launch these applications their users will be asking about what “web 4.0″ has to offer. I agree with Cote, there are new trends that will make their presence known, but to be fair SAP is utilizing the core features of the Web 2.0 revolution that have already proven their worth.

Even though SAP’s applications that utilize these Web 2.0 functions have received mixed reviews, one thing is clear: SAP is serious about Web 2.0.

Read more about how SAP plans to utilize Web 2.0 for the SOA.

Eric Samuels
Assistant Editor

The Web 2.0 video, Web 2.0 … The Machine is Us/ing Us was created by Dr. Michael Wesch, assistant professor of cultural anthropology at Kansas State University.

Simply put, SAP’s Enterprise SOA bandwagon is on the move. But at the same time, SAP’s A1S on-demand ERP solution was one of the other big stories of Sapphire. Given the luke-warm reception of SAP CRM on-demand last year, it may seem a bit puzzling why SAP would double down on both sides of the fence. That’s why it was interesting to read Brad Shimmin’s take on the SOA vs. SaaS debate.

Conflict entertains, he said, but the sensible thing is to use SOA as a foundation for SaaS.

“Using an Enterprise Service Bus, SOA solutions can transform disparate data formats, mediate different protocols, and orchestrate transactions. Imagine if an enterprise that employs SOA internally were also to use a SaaS application, say Salesforce.com. That enterprise could use its ESB to connect Salesforce.com to its ERP or CRM systems. Salesforce.com, of course, has been shooting for this goal since 2005. But the real bang won’t come until SaaS customers themselves maintain a SOA infrastructure internally.”

In other words, these concepts are hardly mutually exclusive. That’s certainly food for thought in light of SAP’s stated goal of chasing both rabbits simultaneously.

Matt Danielsson
Editor

But let's not complain too loudly; there were some interesting tidbits to be found. For example, Harmony is an internal collaboration tool that help SAP workers workdwide connect today. It's not unlike IBM's Lotus Connections, and Jeff Nolan said he covered Harmony last year, but we got a glimpse of what's in store for later this year when regular users get to play with these features… And judging by the application product demo, it's pretty darn slick. Assistant Editor Eric Samuels is on the case and hope to have more details on this shortly, so stay tuned.

Another point of interest was SAP and Microsoft's deepened partnership regarding Duet. We've long said Duet is promising, but a tad light on features. If the promises made here today hold water, that may soon not be the case as we look towards Duet 2.0 in 2008 and even Duet 3.0, slated for the next release of SAP's business suite (which will also include Microsoft's next gen Office, including Sharepoint). But for the more immediate future, Duet 1.5 and its Q4 2007 release seems to be the big game in town.

Speaking of Duet, one perhaps less than earth-shattering but notable announcement was the inclusion of Duet as a pre-loaded feature on HP ProLiant servers. There are no new features or clever synergies in play, but it seems like a case where ease of use and availability could make a big difference in helping Duet dig its heels in over time. 

Read Sapphire 2007 quick takes, part 2 here.

Matt Danielsson
Editor

Wohl said SAP is responsible for filling many of the hotels close to the Orange County Convention Center, where the Sapphire conference is being held. Events sponsored by competitors in a hotel, completely booked by SAP personnel and press covering the event is considered "poor sportsmanship."

Meanwhile, a group of about a dozen taxi cabs emblazoned with rooftop Oracle ads were devoid of passengers,  but circled around the drop off area of Sapphire earlier this week. Convention center personnel ordered the cabs to leave the premises, according to Wohl.

-Rob Westervelt

-Rob Westervelt
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