BearingPoint Fire Sale Begins...

It was reported this morning that BearingPoint will be selling its public sector business (its most solid business as of now) to Deloitte Consulting for $350 million; and its commercial sector business to PwC for $25 million.

According to a company statement, "BearingPoint also is in late-stage negotiations with its local management teams to sell its European and Latin America practices." We'll see what happens here... But, this would mean the complete removal of BearingPoint from the IT services market.

While its SAP practice has been hemorrhaging business and people during the last few months in particular, it seems that PwC will regain some footing once again in the U.S. SAP Consulting Services market as a result of this purchase, while Deloitte will capture a portion of that business focused on the public sector. This may mark the return (on a much smaller scale) of PwC in the IT services market, after selling PwC Consulting to IBM in 2002.

Business Objects BI Pricing: A Chance for Middle Ground?

Being in the production phase of our next "PAC on SAP" report due in April entitled "Opportunities Around Business Objects BI Services," our discussions are beginning to match some of the market rumblings we've heard prior around the pricing of Business Objects.

On one hand, we continue to see great opportunities for this BI suite during the economic downturn for companies to gain better insights into their SAP ERP systems, increasing efficiency, reactivity and reporting.... However, let's be honest. In this market where big net-new deals are quite rare, SAP is/will target its existing clients to invest into Business Objects BI. The question seems to be for existing SAP BI customers, how much investment is fair?

On one hand, there are many existing SAP customers who have invested into the SAP BI products housed in the Netweaver suite who are now being told that most of those products are not going to be part of the future BI road map. Fair enough, since the comparable Business Objects solutions, in most cases, are far more advanced and mature. Beyond this, the Business Objects BI portfolio went far further into front-end BI solutions than what SAP had pre-acquisition, such as the Xcelsius tool for MS Excel migration and transformation. However, many customers seem to be wondering why they should have to make another large/full investment into Business Objects BI, when their original SAP BI purchase from a few years ago was sold to them as "best-of-breed" BI with the backing and development of SAP behind it?

I completely agree with SAP on the fact that Business Objects is a far broader BI portfolio and certainly some premium should be paid by customers who take advantage of solutions that now go above and beyond of what was available before. But a completely new investment by current SAP BI customers seems a bit out of hand, especially during this economic period. Shouldn't some credit be offered for past investment into "SAP BI" and a path for "base BI" (to have more or less comparable BI functionality as before, but on the Business Objects platform) be offered? I am sure there is quite a bit of discounting being offered to move deals forward today, but without a clear path around pricing options for customers to stay at a "base" vs extending into all of the new solutions should be offered. The shame at the end of the day is that these solutions are extremely valuable to customers right now, but some middle ground needs to be achieved in pricing to really unlock this market!

Check-out the New PAC + Jon Reed Podcast on the SAP Skills Situation During the Economic Downturn

Titled "SAP Skills in a Challenging Economy," this new Podcast hosted by Jon Reed, PAC Fellow & of JonERP.com, offers insights around:

- The Impact of Economic Meltdown on Skills Demand
- Hiring Needs of SAP Customers
- 4 Key Areas of Skills Demand
- How to Keep Skills Marketable

Check it out at www.pac-online.com

Additionally, PAC recently released its annual assessment of the SAP Skills Ecosystem, as part of our SAP Services Research Program. To access the new report, register here.

Run SAP and Solution Manager: Emerging SAP Skills Driven by Enterprise Support

In this economy, there aren’t many bright spots when it comes to SAP services. But one area that service providers and SAP freelancers need to be keeping an eye on is Run SAP and Solution Manager. Taken together, Run SAP and Solution Manager are the keys to SAP’s vision of deriving value from an SAP implementation after go-live.

However, these new tools are not without their controversy. SAP’s “Enterprise Support” offering, announced last July with a 17% to 22% maintenance fee price hike, is in large part justified by SAP due to the increased value these new tools (Solution Manager) and methodologies (Run SAP) are supposed to provide.

Speaking of Enterprise Support, the last time I checked in on that topic in the PAC blog, SAP was working with a confederation of SAP user groups known as SUGEN to identify a series of KPIs that would provide all parties with a supposedly objective standard for assessing the value of Enterprise Support. The idea was that sometime early in 2009, any increases in SAP support would have to be backed up by SAP meeting these agreed-upon KPIs. (see SAP's official press release on the KPIs). We should be on the lookout for an update on these KPIs, which should be finalized soon. When/if PAC hears about it, you can count on a blog entry here.

Whether or not these KPIs change the Enterprise Support value discussion, there’s one thing we do know: Run SAP and Solution Manager are here to stay. So what are the keys to this post-go live skill set? At JonERP.com, I kicked off the year with a podcast on Run SAP and Solution Manager skills with Ajay Vonkarey of Alphasirius. Ajay had some very interesting things to say about the skills needed in these new areas.

Ajay explained that a classic SAP “Basis” person was not, by default, a good Solution Manager consultant. The roots of this misconception go back eight years ago to Solution Manager 2.1. At that time, Solution Manager really was a monitoring tool used almost exclusively by the technical and Basis teams. Fast forward to 2009: Solution Manager has been significantly enhanced and aligned with Run SAP. During the podcast, Ajay warned that SAP customers will run into difficulties if they don’t expand their Solution Manager skills beyond Basis.

Solution Manager now touches on Basis and many other roles, from project management to business process expert or analyst roles. On the technical side, the Basis team, the infrastructure team, and the development team may all use Solution Manager to some extent. Those consultants who anticipate these skills trends can stay a step ahead. During the podcast, to back up his point, Ajay talked about a customer that expanded Solution Manager beyond core functions into change management, which tied in business change management issues and also integrated with technical transports as well. They needed a broader set of SAP skills to realize these aims.

So how goes this connect to Run SAP? And what exactly is Run SAP anyway? Sometimes known as "ASAP for Operations," Run SAP was created to help SAP customers better manage their environments after go-live. To organize the Run SAP methodology, SAP surveyed a number of customers on their post-go live needs and built 16 “end-to-end solution operation standards.” Run SAP is a methodology that allows you to address these 16 areas, and Solution Manager is the tool that allows you to manage your Run SAP approach. Solution Manager allows SAP users to enable operational standards and functions. Its technical tools include system monitoring, root cause analysis, and diagnostics.

Needless to say, not all SAP customers are rushing to embrace these new tools, but I’ve seen enough activity to convince me that it’s one good skills area for aspiring consultants to target. Those who are looking to add Solution Manager to their skill set might want to start with the latest version of Solution Manager, the Enterprise Edition, which includes many new functions, including business processing and interface monitoring.

As I noted, SAP consultants of a variety of flavors, from technical to functional to project management, can tie their skills into Solution Manager. However, I believe the most successful individuals (and service firms) will need to go beyond “tools aptitude” and be able to help SAP customers understand how the functionality of Solution Manager maps into Run SAP and, hopefully, provides a new level of value to SAP customers via project optimization.

To some degree, it’s unfortunate that these tools have been drawn into the debate about Enterprise Support. Now it’s difficult to evaluate them for their own merits, outside of cost. The pressure is on for SAP to justify that Run SAP and Solution Manager are worth a five percent increase in maintenance. Regardless of the merits of these new tools, that’s a big challenge. KPIs may help to quantify this debate, but the marketplace will have the final say.

SAP Makes a New Push to Green IT

SAP announced today at CeBit that it has launched a new comprehensive approach to environmental sustainability with three major components:

• SAP announced it will reduce its greenhouse gas emissions down to its year-2000 levels by the year 2020
• SAP has partnered with TechniData AG, to expand its solutions for environment, health and safety (EHS) management
• SAP announced that its sustainability efforts will be led by a newly formed cross-functional sustainability organization headed by Peter Graf, who will act as SAP's first Chief Sustainability Officer

It is important to note that sustainability and healthy safety is nothing new for SAP, since it has particularly strong solutions for equipment management, end of life management, materials management and tracking, etc... however, what this announcement shows is that there will now be specific solutions to support sustainability regulations, requirements and corporate goals, as opposed to solutions that already existed and just so happened to be "green."

Sustainability is also an ever-changing and rather immature topic in some regards, as areas like carbon trading and credits have a lot of back and forth in political circles. But at the same time, I believe that many corporations realize that sustainability is not a fad, gimmick or marketing ploy, but rather something they must take very seriously, especially in the context of our increasingly linked and global economy. By having executive level support and backing, SAP should be able to keep up with customer requirements and go well beyond short-term, "green washing" and marketing-centric campaigns.