At the newspaper I used to work at, one of my assignments every time the price of gas went up was to head to a gas station and ask people if the cost would change their driving habits. I estimate I’ve performed this task at least five different times.
Inevitably, two out of every 10 drivers I interviewed would say yes. The rest would say, ‘Not really.’ But then, they’d add things like, ‘well, we aren’t taking our vacation this year,’ or ‘I do bundle all my errands into one trip now,’ or ‘I am carpooling to work.’
Television news gave the impression that gas prices were truly crushing people, as if no one was driving anymore. But many people didn’t think about it like that. Sure, gas was really expensive, but they were finding ways to manage because they had to.
I thought of this as I was interviewing SAP customers last week about their SAP resolutions for the New Year. With so much news on how the recession would decimate IT budgets, IT projects and consequently, vendor sales, I expected to hear from SAP customers that they’d prioritized some sort of cost cutting measures.
So I was surprised by the optimism I heard, each one chiming in with the new projects they had planned for the coming year, not even mentioning cost cutting. And when I asked how they’d pay for them, they said they would just have to get creative.
I know a resolution is what you want to do, not necessarily what you will do. But the resilience exhibited by customers is a bright spot in a year that has been filled with some pretty bad news.
So let’s head into 2009 remembering this — despite a dismal economy, just as people are still driving, companies are still finding ways to innovate, because they have to.
I’d be interested to hear how you plan to deliver innovation in the New Year, and some of the creative ways you’ll do it.
Most companies that have already started IT projects will finish them even in this economy, analysts and customers have told me in the last month. It seemed like, for the most part, that was holding true.
But the paradigm seems to lose a little luster with Select Comfort’s announcement this week that it’s halting its SAP implementation as part of cost-cutting measures. It appears from SEC filings that the implementation was costing millions of dollars. The bed retailer is also laying off around 120 people — about 22% of its workforce.
No doubt there’s more than one reason why this implementation was halted. But there’s one clue that’s far more interesting than it perhaps being over-budget or behind schedule.
It seems like it was a huge project, and one which the company expected would be completed in early 2008. The company was implementing SAP ERP, CRM, SCM, PLM, SRM, HCM, SEM, BI and enterprise portal to replace its current disparate software systems and facilitate a growth strategy, according to an earlier SEC filing.
“Our current management information systems may not be adequate to support our growth strategy,” one SEC filing said. “We believe this SAP-based IT architecture, along with best-practices-based processes and greater utilization of off-the-shelf, packaged solutions, will provide greater flexibility and functionality for our growing and evolving business model and be less expensive to maintain over the long-term.”
The recession, however, changed everything. Select Comfort now plans to close dozens of stores, according to a press release from the company. Therefore, the software implementation it wanted to help pursue those business plans may need to change as well.
“There are several alternate SAP implementation approaches and given the smaller than anticipated current size of the Company, the approach to SAP software originally adopted may be outsized for the Company’s needs,” a letter from an investment adviser to the company’s board of directors filed with the SEC and quoted in this ComputerWorld story said.
It seems likely that other companies, which started implementations a year or more ago but haven’t yet finished them, may too be facing similar challenges.
People don’t generally trust corporate blogs, according to a Forrester Research study on the topic.
There are, however some exceptions –– among them are Dell, Rubbermaid, Microsoft and, SAP, the report said. Blog Council, a watchdog group that reported on the study said it’s “because they put their customer first and exist to help solve their problems.”
These sentiments lend some insight into the SAP Enterprise Support controversy, and the brouhaha that’s been stirred back up this week with SAP’s decision to allow German and Austrian customers another year of support. They’ll be able to pay for support according to the terms of their existing contracts until 2010, while everyone else moves to the enhanced, but pricier, Enterprise Support offering in January 2009.
Patching up bad feelings and restoring trust, not cutting price, most analysts agree, seems to have been central to that decision. In fact, many German and Austrian customers will wind up maybe paying more than if they had just opted to upgrade and/or move to SAP Enterprise Support. Under the terms of their existing contracts, support for R/3 releases costs more than 17% of net licensing fees.
While customers certainly don’t like paying more, trust, not price, seems to have been one of the central issues in this entire controversy. Forrester’s Ray Wang has been stressing the importance of restoring the vendor-customer relationship through this whole affair. Similarly, analyst Josh Greenbaum pointed this dilemma out months ago in his fictitious speech by SAP co-CEO Leo Apotheker, in which the soon-to-be sole CEO pledges to do a better job of explaining why they increased support prices. In his latest blog, Greenbaum points to ways vendors in general can build better trust, including giving customers 6% back on their maintenance fees, providing they re-invest it in new software from the vendor.
SAP has repeated time and time again during this Enterprise Support rollout that they’re just charging what everyone else in the market charges for support, and at the same time, unlike other vendors, they’re actually giving customers more services instead of just raising their bills. They’re right.
But SAP’s customers seem to hold their vendor to a higher standard. Maybe, taking steps to build that trust will finally help quiet down the controversy.
What is Unicode? Until fairly recently, you had to be a techno-geek to know, but now it seems that all SAP customers had better become familiar with it.
In a nutshell, Unicode is a text encoding standard. For example, when you enter the letter ‘A’ into a computer, the letter is transformed into a certain number of bytes — 2, in the ASCII standard. The purpose of Unicode is to shrink the space (and complexity) associated with traditional character encoding, even when complex non-Western characters such as Chinese ideograms and ligatured letters are being represented.
Let’s consult SAP’s Unicode support policy to learn why that’s such a big deal.
“For new SAP software products and new releases of existing software products new installations will be possible only with Unicode.”
Historically, it’s been possible to do workarounds for non-Unicode systems, but there’s undoubtedly some time and expense involved. Imagine if some of your SAP data is encoded in Unicode UTF-16/UCS-2, in which all characters consist of two bytes while other data encoded in a system friendly to more complex languages will require more than two bytes. If you want to access information on one of these databases via the other’s character set, you’ve got a problem that requires coding and workarounds to solve.
Many SAP customers are global companies maintaining global data in more than one language. In a business environment that demands frequent exchange of data across geographic and linguistic boundaries. Unicode is a way of guaranteeing basic standards that make exchanging and storing SAP data simpler. SAP hasn’t had good experiences with mandates — consider the recent response to Enterprise Support and NetWeaver –and may never officially ask customers to move to Unicode, but SAP’s own Unicode policy is a mandate nonetheless.
In our recent podcast with Unicode expert John Visser, we learned that you can’t install some of the newer SAP modules unless you have Unicode capabilities. That makes it all the more urgent for new and existing SAP customers need to get up to speed on Unicode.
Demir Barlas, Site Editor
Business intelligence initiatives are on the wish lists of many CIOs this year. That even includes President-elect Barack Obama, according to this InformationWeek story on a government pilot BI program.
That’s why it was good to hear from Business Objects CEO John Schwarz that SAP Business Objects isn’t laying off people in research and design in this recession. He gave the lunch keynote recently at the Credit Suisse Technology Conference in Scottsdale, Ariz. He said they’re not hiring or filling empty positions,, but these days there’s not too many people doing either.
And there seems to be some neat things happening as a result. In October, Schwarz said they put the NetWeaver and Business Objects teams under one management for development.
Moreover, unstructured analysis is being embedded in the entire BI suite. They’re building an integrated business planning and analysis suite on top of OutlookSoft and Cartesis and hope to deliver a fully integrated suite of financial planning applications in the next year. Just to name a few initiatives, Schwarz said.
So it begs the question many readers have been asking — should you wait until the dust settles on the Business Objects acquisition to invest in Business Objects?
In fact, the full product integration between SAP and Business Objects will probably take another nine months to a year, Schwarz said.
But, from the numbers Schwarz gave, it doesn’t appear that many customers are sitting on their hands when it comes to investing in the BI technology.
When SAP acquired Business Objects, it represented 1/7 of SAP’s business. Today, it’s more than three times that portion of revenue.
Uptake is particularly high in the SAP base, Schwarz said. With only 5,000 common customers between SAP and Business Objects at the time of the acquisition, the latter has seen uptake “we could not have dreamed of in our own, independent life.”
Are you waiting for another product roadmap before investing in Business Objects? Or is business intelligence too important for you to wait for?
Courtney Bjorlin, News Editor
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
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
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
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.”
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