Sapphire '09 (Part II): The High Stakes of NetWeaver BPM

Since Peter Russo has done a nice job of hitting the high points of Sapphire 2009, I want to hone in on one of the less-reported stories of the show: the gradual emergence of NetWeaver BPM (often still referred to by its “code name” of Galaxy). Yes, SAP BusinessObjects took center stage at Sapphire; the press conference following Leo’s keynote felt more like a BusinessObjects Explorer demo than a press event, with little discussion of the guts of back-end data cleansing, save for one potent question on whether SAP is ready for prime time when it comes to Master Data Management. But with all the hubbub over BusinessObjects, BPM is still very much a part of SAP’s product strategy going forward. I think the stakes of BPM are actually rather high.

I was able to attend ASUG’s pre-conference seminar organized by Marilyn Pratt entitled "A BPX Guide to Business Suite Value Scenarios." While much of the day was geared towards making sense of SAP’s Value Scenarios, the day ended with some useful sessions from key BPM product and strategy leaders within SAP. I was able to continue those conversations over lunch later in the week. My goal? To understand how BPM fits into SAP’s value proposition it is pushing to customers. At the heart of that proposition lies the question: when do you go with standard SAP functionality and when do you customize to differentiate?

The answer to that question has changed dramatically in the last few years. While it would be going too far to say that altering SAP source code has been discredited as a winning approach to ERP, I would expect SAP to actively discourage this practice going forward – at least for customers on the ERP 6.0 platform. So what’s the alternative?

SAP has been tackling this on two fronts: first, SAP aims to provide a rich collection of pre-configured, industry-specific ERP content. SAP would say that “standard SAP” is no longer vanilla, but a tested collection of industry best practices which can be supplemented with “plug in” solutions from certified partners via that little-mentioned new marketplace known as EcoHub (yes, I was joking about the little-mentioned part).

The biggest change to core ERP content? SAP now envisions its pre-configured content in a process-driven context. In other words, instead of shipping an improved version of, say, CRM, SAP aims to ship, via enhancement packages, continual improvements to end-to-end processes, such as “order to cash,” which would impact the functionality in ERP, CRM and other areas. Trivia question: where will that business process content be stored and accessed? If you were able to catch the Bill McDermott/Jim Snabe keynote, you already know the answer: Solution Manager. When in doubt, the best answer to any SAP question these days is, “It’s in Solution Manager somewhere.”

So on the one hand, we have SAP providing business process “best practices” to its customers via Solution Manager. Whether they will be perceived as such, or welcomed out of the box, remains to be seen. In the longer view, these end-to-end processes will be presented as “Value Scenarios” that span from core ERP into SRM, CRM, and the like. SAP is thinking: no more functional silos, follow the process where it needs to go, and give the customers as much “plug and play” process content as possible. But the pressing question returns: “If all customers have access to the same business process content, then how do they differentiate?” SAP’s answer involves SOA, process modeling, and innovating around the small percentage of processes that directly relate to a company’s competitive advantage. Composing services on top of the suite therefore replaces custom coding as SAP’s recipe for competitive edge.

Perception problem: SOA has become somewhat of a clunky acronmym these days, implying tech-driven projects with scope creep issues. Enter BPM, which is both a philosophical approach to managing businesses through process monitoring, a tool to do this with (Solution Manager), and in the case of NetWeaver BPM, an actual application, now in general release, that allows SAP customers to visually model differentiating processes that can be integrated with existing SAP functionality. Unlike other process modeling tools, BPM generates executable, SAP-ready code. SAP would say that BPM would allow such processes to be “seamlessly integrated” – another proof point that customers will surely investigate for themselves.

For a product that went into general release right before Sapphire, BPM did not get a lot of fanfare at the conference. However, I see NetWeaver BPM as much more important to the future of SAP than the BusinessObjects Explorer tool that got all the demo time, but with this caveat: “only if it works.” I have no doubt that BPM basically functions properly. By “only if it works,” I mean “only if business users embrace the tool to model processes that integrate easily into the SAP core.” While we’re on the subject of user adoption, we should note that BPM is NOT part of the standard NetWeaver license but a premium pricing product.

The tool looks friendly enough, though some business users have told me they find the UI more like a techie composition tool than something they would plop down in front of an executive. The BPM team is conscious of this criticism, and they are working to pull NetWeaver BPM out of the NetWeaver Composition Environment (CE), though it will still be tightly integrated. What they are trying to do is to hide the complexities beneath a simple interface, rather than simplify the processes. It’s a worthy challenge.

During his presentation at the ASUG pre-conference session, Thomas Volmering, who is the Senior Product Manager for Business Process Management at SAP, previewed some very interesting NetWeaver BPM functionality. The most compelling? The long-term plan for complete integration with Solution Manager. This would be a powerful addition to the BPM tool: existing processes could be pulled in from Solution Manager, enhanced within BPM by adding additional services (either from the Enterprise Service Repository or built from scratch), and then integrated back into Solution Manager.

As I write this, it seems almost like science fiction (perhaps that’s why they called it “Galaxy”?), but if it works, it will be worth watching. BPM-Solution Manager integration is currently planned in two installments, with version 7.2 shipping towards the end of this year, and 7.3 sometime in 2010. The 7.2 version is currently envisioned as “read only Solution Manager content,” and the release dates are subject to change, but that gives some idea of the timeframe. (If you want to test-drive a preview version of NetWeaver BPM, Volmering has a useful blog on this topic.)

Of course, SAP would say that you should only focus on a small percentage of competitive processes with this “service composition” approach. The figure varies – during the McDermott/Snabe keynote, I heard the percentage “less than 10 percent.” Ann Rosenberg, BTC Global Practice Ownership for Business Process Management and co-author of the book Business Process Management: The SAP Roadmap, often says that of a company’s processes, twenty percent are automated, and of that twenty percent that are automated, twenty percent of those are typically key to competitive advantage and thus candidates for service composition. By my math, that amounts to six percent of the total.

The BPM team I talked with are a talented bunch. Between Rosenberg, Volmering, and their colleague Wolfgang Hilpert, that’s a pretty sharp team. But lest we assume that BPM is just a case of a few over-enthused product evangelists pushing their case, I would also refer you to a blogger session we had with Pascal Brosset, Chief Strategy Officer with SAP.

Pascal sketched SAP’s product strategy on the back of a program schedule; Vinnie Mirchandani later published the official version in his blog. You can see from the illustration on Vinnie’s page that BPM represents the cutting edge of SAP’s product vision. If you’re wondering where SAP currently sees cloud solutions fitting into this visual, it’s closer to the expanding circle of BPO (Business Process Outsourcing), with the "cloud" tackling on-demand processes in areas like HR and procurement (what SAP calls “standard but non-commodity processes”) and moving outward. BPM is far away from that core, in the area of custom innovation, albeit using as many reusable components as possible.

If SAP’s BPM approach works, it will help to justify the years of hype SAP has invested in SOA, allowing users to build competitive apps by “innovating on top of the core,” as opposed to the expensive and difficult path of custom development, which brings with it support and upgrade-related hassles. If the BPM/SOA approach doesn’t work, it will be back to the drawing board, though by then, we may all be lost in a different kind of hype, likely somewhere in the clouds.

Talking to the BPM team, it was clear to me that they realize the stakes of what they are up to. Though the spotlight isn't on them now, if they can pull this off, they will surely find themselves in front of a Sapphire press conference before too long, showing how business users can team with technical composers to alter business processes on the fly, with the transactional ERP system humming along, no interruptions. For now, they’ll be back in Walldorf, playing the high stakes game of trying to realize this vision!