service

SAP: What went wrong? Blame marketing, NetWeaver

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 recent earnings in this guest blog.

SAP has seen better times. The company’s quarterly revenues have declined and SAP is tightening its belt accordingly. What’s really to blame for the tension in Walldorf?

Deputy CEO Leo Apotheker blames the financial crisis. This is an attempt to avoid mentioning the turmoil ignited by the raising of annual SAP service fees from 17% to 22%. Customers haven’t shown the least bit of understanding for this decision. As a consequence, many customers have put their SAP purchases on hold. For example, the German SAP User Group (DSAG) decided in a common action to withhold any SAP purchases until next year.

The new enterprise support is a marketing disaster. The way it was communicated left the impression that SAP makes decisions behind the backs of its customers. Since Apotheker is the SAP marketing guru, he has turned into a burden for all of SAP. There is no one he can blame for this unfortunate move, and I have no idea how Apotheker will be able to escape from this trap. I myself am a techie and therefore feel indifferent towards Leo Apotheker; he is simply not my kin. But the analysts, also, do not seem to like him very much, which makes it difficult for him to explain his position. If this mishap would have been linked to Henning Kagermann, he might have escaped with a simple “Sorry, we meant it differently!” But the contract of the congenial, bright-minded professor is ending soon and he seems to be partially retired, like many of the old SAP crew. 

The explanation given by SAP for the steep increase in support fees is the same old story: Due to the increasing complexity of the full NetWeaver stack, the costs invested by SAP into support rose heavily and now need to be recouped. Customers see it differently. The higher costs stem only from the new dimension of components that SAP introduced in the past decade, against customer wishes.

High support costs and a high frequency of support requests are signs of low quality or a depreciation of support-friendly design. And the same products that have been under fire for years have caused the problems. These are the products that require the Java stack, with the biggest culprits being Enterprise Portal (EP) and Process Integration (PI). PI is awkward to use, costly to install and operate, difficult to examine for causes of malfunctions and no longer based on state-of-the-art Enterprise Service Bus technology. There is no time to pimp up PI into a full featured, modern Event-Driven-Architecture process engine.

In part two of this blog, Axel Angeli discusses ways for SAP to get back on track.

SAP EarlyWatch: Diagnosing SAP problems before they hurt you

SAP service has been a hot-button issue ever since SAP resolved to raise its maintenance fees earlier this year. As long as everyone’s talking about SAP service, this is a good time to familiarize yourself with what kinds of service and support SAP offers. This week, we’ll take a closer look at one of those services, SAP EarlyWatch.

SAP EarlyWatch is exactly what it sounds like — a diagnostic and reporting service designed to catch potential problems in your SAP system before they negatively impact your organization. EarlyWatch covers problems that can occur in:

• SAP applications and programming. For example, EarlyWatch can find ABAP dumps that can cause a program to shut down.

• Databases. EarlyWatch can find expensive SQL statements that increase your database server load.

• Operating systems. EarlyWatch can detect and diagnose various performance issues.

When you run EarlyWatch, SAP will monitor your system, run a full slate of reports and send you an itemized action list explaining your existing and potential system problems, prioritized by urgency. EarlyWatch can be set up to run proactively, so that your system is monitored on an ongoing basis; it can also be requested whenever you need it. If your SAP environment has plenty of moving parts, it can be a good idea to have EarlyWatch running constantly, as the frequently daily changes that take place in your IT stack can have a deleterious impact on SAP applications and SAP-supporting infrastructure.

EarlyWatch can be run from within SAP Solution Manager. Here are step-by-step instructions from SAP on how to do so. The actual front end for EarlyWatch is SAP OSS, also known as SAPnet-R/3.

Knowing how to run, and act upon, EarlyWatch should be standard knowledge for an SAP Basis administrator. For the business, utilizing EarlyWatch is a way of preventing SAP downtime, which can be extremely costly and disruptive to operations.

Demir Barlas, Site Editor

SAP’s Korean R&D center

SAP will establish an R&D center in Seoul, South Korea, according to Korea.net. The deal, brokered by the Ministry of Knowledge Economy and the Korea Trade-Investment Promotion Agency (KOTRA), will see SAP hire 53 employees and invest $21 million over the coming three years.

SAP Korea will be the third R&D center of note in Asia, joining SAP Labs India and SAP Labs China. Korea.net reports that SAP Korea will be dedicated to business intelligence (BI) and database management.

In addition to establishing the R&D center, SAP has signed a partnership with South Korean company Samsung SDS aimed at growing SAP’s share of the Asian ERP pie while expanding the IT service opportunities available to Samsung SDS in the region. Samsung SDS CEO Kim In mentioned China as a big target of the alliance: “The mutual and comprehensive partnership will help us sustain the domestic ERP market of 10 percent annual growth and lay a solid foundation for the rapidly expanding Chinese ERP market.” Analyst David Mitchell of Ovum is bullish on the Chinese opportunity, but sees challenges ahead: “The Chinese ERP consulting, implementation and management services market is going to be an extremely contested ground. Korean companies will attack it.”

Demir Barlas, Site Editor

SAP under fire: Axel Angeli on why 2007 will be tough for SAP

Axel Angeli is a veteran SAP guru with a reputation for brutal honesty about the ERP market. You probably saw his predictions for SAP trends 2007 the other week. Well, Axel had more insights to share about what's going on in the SAP world, so we gave him the opportunity to write a guest editorial! Also don't miss the follow-up columns SAP under fire: Axel responds and SAP under fire: Axel speaks out on what SAP should do next.

The broad strokes
For SAP AG, the year 2007 will be the most critical one in the recent history. While the company is still working on revamping its product line, the competitors are preparing to attack. While the ABAP engine makes slight progress, the ERP components still wait for many enhancements requested by customers. This negligence will play well into the hands of SAP challengers, mainly Microsoft with its Dynamics AX, the latest version of AXAPTA.

Not surprisingly, SOA will continue to be the driving subject in IT as companies begin to have a clearer vision of SOA benefits and governance and they start XI implementations in masses, driving the market into a proper shortage in XI consultants.

CRM and BW are fairly saturated so the business is ready to concentrate on another trend topic: the Supplier Relationship Management (SRM) field.

Looking beyond SAP, we see a steep incline in interest for Knowledge Management (Content Management Systems, CMS) and collaboration tools for project management, appliances and Open Source Public License solutions.

SOA rising
2007 will be the year of the practical break-through of the Service Oriented Architecture. While 2006 was governed by SOA governance concerns, I expect a great number of real life implementations to take place. SAP marketing did too good work here. The number of companies that have scheduled XI implementations is rapidly growing — a development that might bring SAP into trouble when it comes to support them all. XI is still not mature enough to be an out-of-the-box solution. The product kernel is widely stable but there are still missing precautions to cope with data affluence and adapter misbehavior.

These problems can now be circumvented by using safe implementation practices and sober asynchronous architecture, but the number of experienced XI architectures is extremely sparse and education in best practices of SOA has hardly started. Given that middleware XI projects are likely to be mission critical, this situation will mean heavy sea for SAP and give a chance to competitors to step into the gap. As of today, XI implementations are fine but in heavy-duty solutions an architecture is good advice if XI is complemented with some best of breed tools like IBM MQ as message store, Seeburger or SmartEDI for any EDI solution and relying on Windows framework as an adapter engine for everything beyond ODBC/jDBC.

ERP status quo
In the ERP area, there won't be tremendous changes this year because companies are mainly occopied with SOA issues or with upgrading and consolidating their current installations. Nevertheless, SAP will see its first serious challenges. Microsoft AXAPTA has loaded their arsenal to attack the market shares of SAP in the higher end of the SMB market benefiting widely from the intransparent pricing policy of SAP's SMB approach.  

Content Management gaining importance
Content and knowledge management has been neglected for a long time.

With the growing number of Internet literates, there will be an increasing insight that Google-like search engines, agile document management systems like Wikipedia, blogs and shared data repositories are precious tools for project management as well.

When you look for any kind of information today, you look it up in the Internet via Google, Yahoo, A9 or Wikipedia — and in most cases, you find a satisfying solution. The document management within companies, however, still takes place in the file system. Documents are distributed via email and finding back information is normally a nightmare. But now Internet technology reaches the intranet as well.

Google gave it a start with its enterprise version of the search engine. It comes preinstalled and configured in a hardware blade server that simply needs to be connected to power and a network and it starts spidering the documents within the reach in the intranet. From there on you have Google search functionality on the internal documents. SAP will use its advantage that its software is already ubiquitous in enterprises to present the solution manager and its knowledge management as an alternative. But the appeal of the plug-and-play offer of the Google appliance will be hard to beat. From the pure software side, Microsoft SharePoint will be an honest contender to SAP KM and EP.

Editor's comment:
Do you agree with Axel's assessment? Did SAP drop the ERP ball? Is Microsoft poised to give SAP a hard time? Are we at the beginning of a CMS boom? Will there be happy days for XI consultants this year? Sound off on these issues to win a book bundle:

• SAP xApp Analytics
• Designing Composite Applications
• Job Scheduling for SAP

One lucky winner takes all, so send your thoughts to mdanielsson@techtarget.com today.
UPDATE: Rob Ericsson from L10 Systems is the lucky winner of the book bundle. The raffle is over, but we're always interested to hear your opinion so feel free to keep sending additional comments.

Matt Danielsson
Editor

New SAP BW Guide: Open Hub Service

SearchSAP.com introduces our first Crash Course: SAP BW Guide: Open Hub Service. This handy instructional tool will guide you through step-by-step the process for creating, activating and executing an InfoSpoke, which is the central object for exporting data in the BW Open Hub.

This guide is designed to be an easy to navigate set of technical instructions for distributing data from the SAP BW system into external data marts, analytical applications, and other applications. Through the Open Hub service, SAP BW becomes the hub of an enterprise data warehouse and by using this mechanism ultimately your enterprise will become aligned and processes will run more efficiently and more affordably. Opportunities are discovered, and innovations are accelerated and all this contributes to the sustainable and profitable growth of your company.

Check out the SAP BW Guide: Open Hub Service and email me to let me know what you think about our new crash course series and what you want a lesson in.

Juli Austin
Assistant Editor

Client acceptance: the forgotten piece of the SAP-Oracle puzzle?

nbsp;SearchSAP.com reader Prafull Thakkar, HR Manager at Jet Airways in India, sent in this straggler comment on the SAP vs. Oracle debate:

"While I read the SAP vs Oracle face-off, an interesting thought came to mind. The comparison made between these two giants was obviously focusing on the technology, implementation challenges, roadmap and extensibility. However, one important point was missed and that was client acceptance. 

Obviously, there will always be resistance against changing any current system.

In many cases, once a proposal is accepted by any client, the implementation is done in haste by people who may not fully understand the client's need. The client is provided with the standard output from the system which may increase the workload for the users by using alternative software. It is also expected the users will bring out the issues / problems to the implementation consultants which typically does not happen. It is very wrong to assume that the users have understood the technical aspects of the system during the implementation phase itself. We need to understand that the end users are mostly nontechnical people. Their knowledge about the system increases over a period of time.

It is very much required to provide after-sales service to the existing clients and extend the consultation services with no extra charge as and when required by the clients. In today's competitive world, people change their employment frequently. This has a positive aspect as well as negative. People who have experienced bad services in their earlier employment, will never propose or will oppose implementing the same system.

On a side note, I think Oracle and SAP should have a customer satisfaction as well as quality survey done for each and every client where their system is implemented and check whether their business partners/franchisees have done a good job or not. There should be periodic feedback taken from the clienteles. This will certainly decide who will sustain the competition….Oracle or SAP?"

There are some interesting thoughts here. I still recoil when I hear the words "Lotus 1-2-3" … In no small part thanks to a very rushed and very botched implementation I had to endure at my first job back in the stone age. We had this elaborate sales support thing with complex macros, automatic fax capability and whatnot, but of course it wouldn't work. It took a while before we figured out that it was the software and not just us being stupid. When my boss asked the consultants to come back and make it work, she got the perky answer that no issues had been raised during the stipulated post-implementation time frame, so now she'd have to pay the exorbitant hourly rate. We ended up doing work by hand for months.

While I certainly agree on the long-term business advantage of providing good implementation support, what about Thakkar's statement that after-sales services should be extended free of charge? As a customer, I certainly wouldn't complain about having perpetual support. But as a consultant or vendor, there's a limit to the generosity. SLAs and contracts aside, what should be reasonable to expect? And for how long?

Matt Danielsson
Editor