SAP pushes app-independent BI into the cloud

SAP extends the reach into the SaaS-space with an enhanced offering of SaaS BI. Business Objects BI On Demand goes beyond the already available SaaS BI from Business Objects. It comes integrated with Xcelsius (dashboards) and Business Objects Explorer, all available via an easy to use web interface - at least, that was the impression when SAP demos the front end during a web presentation.

With the product SAP repeats the claim of bringing BI for everyone, extending it now into the cloud. The product is indented to make it easy for users to combine data sets and share reports and such with others.

Since the BI stack runs in a data center, companies should - at least in theory - be able to get up and running fast.

The new SaaS BI gives SAP a better chance to address non-SAP-customers. Companies should be able to integrate data from on-premise and on-demand apps - even the ones from SAP competitors like Salesforce.com.

Of course, the product should also attract SAP users. Interfaces to existing BI environments from SAP are in development and will be provided, SAP said. Then it will be possible to push data from on-premise into the BI environment in the cloud, the ERP vendor explained.

The combination of different BI products from SAP in one cloud-based system sounds compelling, allowing companies a fast start into BI without dealing with BI infrastructure.

However, SAP is not the only company offering SaaS BI. There is e.g. IBM (Cognos 8 in the cloud) and Teradata (Teradata Enterprise Analytics Cloud) and some specialists like Panorama.

Besides the announcement of a subscription fee pricing, SAP has not provided pricing details yet. Pricing figures will be interesting - for new and for existing customers. Will there be a midmarket friendly model?

Another topic to look at: Integration options with IT systems and the management/governance of data between on-premise and on-demand environments will be a topic to look at.

From Frank Niemann, PAC Germany

SAP Consulting Trends 2010 Part Two: How Service Delivery Models are Changing

I kicked off the year with an entry on SAP consulting trends – but that post was only part of the story. In that first post, I outlined the SAP trends to watch in 2010, but for service providers (and those who work for them), there’s a bigger concern: SAP consulting models are under pressure. Companies are looking for different services than consulting firms are used to providing.

The SAP consulting world is suffering from a trickle down effect. Because there are fewer mega-projects to fuel demand, all the consulting players, from “Tier One” entities on down, are seeking new ways to engage their consultants. Essentially, SAP users want smaller, more focused projects, staffed by senior-level talent. Consultancies built on large scale initiatives have no choice but to reinvent or contract. Those “welcome wagon” projects where large consultancies rolled out truckloads of junior SAP consultants are in the rearview now.

As demand for SAP talent narrows, smaller “supplier firms” that based their success on supplying Tier One firms (“staff augmentation”) are really feeling the squeeze. Tier Ones are better able to staff projects from their own bench. However, those boutique firms that anticipated these trends and built a narrower focus around industry specialization or functional specialties have been able to weather these changes better. Often, this means cutting out intermediate brokerage “layers” and working directly with end customers, leading to cheaper bill rates and better value on all sides. But there are more innovations on the horizon.

Here are a few trends to watch in 2010, and some examples of firms (or individuals) who are pushing new approaches into the market.

1. “Spot consulting” and “A la carte” projects. Vivido Labs, founded by ex SAP CEO of North America Greg Tomb, has developed an “Expert Services” division built around “only pay what you need” expert consulting delivery. Companies who need a particular SAP expert for post go-live enhancements can procure that resource for an hour, a day, or whatever they require. The service can be provided on site or remotely. For more information on Vivido Labs, check out the podcast I did on “The Evolution of SAP Consulting” with Greg Tomb.

2. “Cutting out the Layers” and Reverse Auction models. Under the leadership of Mark Koenig, ERP-Consulting.com has rolled out a “reverse auction” model where SAP hiring managers can put out bids for services. Consultants who are pre-screened by ERP-Consulting.com bid directly (and openly) for project openings. Initially, I was concerned about the model because I didn’t think consultants would enjoy a “race to the bottom” auction process.

But as it turns out, consultants like the model so far, for a couple of reasons. First, it is extremely transparent, without the murkiness of most job application processes. Second, companies don’t necessarily hire the cheapest resource in the bidding, but the most appropriate one. Third, and most importantly, because the contractors hired through the ERP-Consulting auction are billed to the customer with only a modest surcharge, the consultants get a superior rate despite the auction format.

That’s because of the many layers that are cut out of the transaction – an advantage not lost on the hiring managers who are able to procure senior SAP talent at lower rates. When I asked Koenig how ERP-Consulting.com was getting around the logjam of approved vendors that most companies have put in place, he told me that they are taking their reverse auction directly to CIOs and getting a warm reception. For more on the impact of these kinds of approaches, check out my ERP Lounge podcast on “Cutting out the SAP Consulting Layers.”

3. Remote/“cloud-based” consulting and help desks. Staffing help desks, which can be seasonal in demand, can get expensive. Paying for help desk services on demand has a logic that cumulusIQ and partner ERP Consulting Exchange are hoping to capitalize on with their “SAP Helpdesk in the Cloud” offering. The helpdesk, based on cumulusIQ’s KaaS (Knowledge as a Service”) platform and staffed by ERP Consulting Exchange’s expert SAP consultants, is intended to provide SAP help on demand, scaling to a company’s needs.

cumulusIQ CEO Monty Kalsi explained why this model is different than the classic SAP consulting model: “"In a typical arrangement, you sign a contract to receive help from a dedicate resource hardwired to your account during certain hours. That dedicated resource is expensive and inherently non-scalable, since normally there would only be one person helping you at any one time. In our model, consultants are cloud-based, meaning they are available to engage over the Internet as needed wherever demand happens to be.”

4. Fixed cost and remote SAP technical services. “Fixed cost” is not a new concept in SAP consulting anymore, but the notion of conducting an entire project remotely (from the technical side) is. Yet these approaches are gaining traction. Firms like group:basis have been able to complete entire SAP ERP 6.0 technical upgrades without a need for on-site Basis consultants. I talked with Wade Walla, owner of group:basis, about this. He maintains that he can do an entire SAP upgrade without a single on-site Basis specialist. I still believe that in less experienced hands, not having an on-site Basis guru is a mistake, but the point remains: remote systems management is becoming a proven specialty for some firms. They are able to offer rates that are significantly lower as a result.

5. “Gain share” and value-based SAP consulting. For years, Michael Doane, author of the new SAP Green Book: Thrive After Go-Live, has been preaching the virtues of “value-based consulting models.” I have had extended conversations with Michael about one approach in particular, which he calls “gain share,” where service firms charge less upfront in exchange for a bigger payoff down the line if agreed-upon KPIs are met.As Michael puts it, consulting firms do their best work when they have real “skin in the game.”

When I had Michael as my guest for an ERP Lounge podcast on "The Impact of the Cloud on SAP Consulting," he told me that the gain share model is only used on about five percent of projects right now. He said that companies aren’t sure how to measure and track the gains properly. That said, I expect the firm that develops the best “gain share” model will have the most success with larger scale SAP projects in the future.

Finally, a note on CRM – in part one of this series, a reader asked me where CRM fits on the technology list. My quick response is that while SAP CRM is definitely a growth area for 2010, the reason it didn’t make my list is that I see CRM as an area where “on demand” or SaaS products are having a big impact on buying decisions. SAP CRM will still be a factor in 2010, but as Peter Russo has alluded to, SAP’s own CRM on demand product does not seem to have a clear place in the product line. It’s this kind of fuzziness that will hold SAP CRM back from being on the list of top SAP consulting growth areas for 2010. And yes, I have a podcast on that topic too – a special feature on SAP CRM consulting featuring two SAP Mentors which should be live on JonERP.com within the week.

Five years from now, the SAP consulting market will be radically different from the one we see today. It goes without saying that the firms (and individuals) who anticipate these trends – but who don’t risk their shirts prematurely – will be the ones to prosper.

Disclosure – none of the firms cited as examples in this article are JonERP (or PAC) consulting clients.

Update: Management Changes at SAP

Hasso Plattner just led an SAP executive board press conference, shedding a few more details on the move to replace Leo Apotheker as CEO with co-CEO's Jim Hagemann Snabe and Bill McDermott.

According to Hasso's statements and a Q&A session, the move has been in the works for several months as a "strategy of change," based both on dissatisfaction by customers, as well as internally by SAP employees. For the latter, Hasso pointed to a recent SAP employee survey that in his words "was not good."

As far as a mea culpa regarding customer satisfaction, Hasso put it quite plainly: "SAP is a public company and we need to be profitable. But we need to be a happy company. We must focus on customers and make them happy."

More specifically related to a question on the maintenance increase, Hasso answered "...we made a mistake and we need to change course and regain the trust of the customer."

SAP's board meets later this week to finalize its new strategy and course through its co-CEO's, and statements from both executives are expected early next week... stay tuned!

Breaking News: Leo Apotheker Resigns as CEO; Jim Hagemann Snabe & Bill McDermott in as co-CEO's

Late Sunday night, SAP AG announced that the SAP board decided not to renew Leo Apotheker's contract as CEO, and that he will resign immediately, to be replaced with the co-CEO model once again, headed by Jim Hagemann Snabe and Bill McDermott. Additionally, Vishal Sikka, has been added to the executive board.

Following the enterprise support debacle by SAP in 2008 and 2009, where the company raised its maintenance rates to 22% and then stuck by the move following an economic collapse and customer up-roar, it has become increasingly clear since late 2009 that Leo was on his way out.

After the return of basic maintenance support earlier this year, a first good move, SAP can effectively wipe its hands clean, and move on, hopefully in a more customer friendly direction. Of course not all of the blame can be placed on Leo Apotheker himself, but the buck stops with the CEO. He made it clear as a co-CEO that SAP margins must improve, and one of his first moves as a sole CEO was to increase maintenance to 22% ("enterprise support"). Customers are not stupid, and can put 2+2 together, and generally saw this as an arrogant move to essentially tax them during a "great recession." From my standpoint and interactions I've had with large SAP customers, this really hurt SAP's image... fewer and fewer customers saw SAP as an IT supplier that could be trusted. A change, desperately needed to be made!

I had the chance to attend the SAP influencer summit this December and had the chance to hear Jim Hagemann Snabe speak again... and I have to say that his combination of technology insight, as well as having a good grasp of what customers are thinking / looking for, will be huge assets for SAP. In today's world a CEO is perhaps even more important as a spokesman for the company than an actual business manager, and I believe Jim Hagemann Snabe is the right man for the job, in my experience, coming off well with both U.S. and European customers.

Additionally, by adding Vishal Sikka to the executive board, along with Jim and Bill as co-CEO's, SAP now has a pretty balanced representation at its executive ranks for its customer base in Europe, North America and Asia-Pacific.

I will be joining an afternoon (CET) call with many of my PAC colleagues to hear more details about this major executive change at SAP, please check back later for more reaction!

Clarifying the Future of NetWeaver PI

On Thursday, January 28, the SAP Mentors gathered for a private briefing from SAP on the future of NetWeaver Process Integration (PI). The goal was to share the PI roadmap and clarify the confusion generated by a recent Gartner analysis of SAP’s acquisition of SOALogix, in which Gartner stated that the SOALogix acquisition “muddied the waters” for the future of NetWeaver PI.

The confusion directly impacted some SAP Mentors on SAP customer sites who found themselves fielding questions from customers nervous about their PI investments going forward in light of the Gartner brief. I have even read some speculation that PI is now a “legacy technology” for SAP. This requires immediate clarification for those customers who are invested in PI internally.

To clarify these points and share the NetWeaver PI roadmap, three SAP product leads, including Udo Paltzer, Solution Manager for NetWeaver Middleware, as well as Sanjay Chikarmane, and Yvonne Waibel, met with us on January 28 (disclosure: I am an SAP Mentor). They agreed to let me share this blog post with the SAP community after the webinar, and they have fact checked this content for technical accuracy (though they have not altered any opinions stated by me in this piece).

The first point of emphasis: SAP remains strongly committed to NetWeaver PI. The SOALogix acquisition had a very specific purpose: to strengthen SAP’s product offerings around the integration of project and portfolio management (PPM) solutions. As such, it has no impact on SAP’s plans for PI going forward. As Paltzer stated in an email to the Mentors prior to the webinars, “The SOALogix acquisition is not pertinent to the strategic direction of SAP NetWeaver PI or our general purpose SAP NetWeaver solutions.”

During the webinar, SAP presented their view of the “future of middleware” on which the PI product roadmap is based. In SAP’s view, middleware is shifting from an IT-focused concern to a business-centric function. SAP is calling their middleware portfolio “Business-Aware Middleware.” In SAP’s view, business-centric middleware involves the convergence of BPM (process management), event management, BI, and classic middleware into one integrated solution.

NetWeaver PI is a key part of this portfolio of products. Future improvements to PI and to other middleware components will be delivered via a combination of NetWeaver Enhancement Packs and major releases – a recognition that customers require more frequent updates of middleware functionality than SAP has historically provided. In his email to the SAP Mentors, Paltzer verified this PI release strategy: “First and foremost, SAP remains committed to SAP NetWeaver PI. We continue to invest in it and are planning to deliver continuous improvements through both enhancement packs and new releases.”

Recent (and future) PI Enhancement Packs and releases are as follows:

• NetWeaver PI, EHP1, released in Q1 2009 (NetWeaver PI 7.1) – already in productive use on SAP customer sites.
• NetWeaver PI 7.3 (next version of PI) - focused on centralized monitoring, standalone Java installation, improved quality and performance with features previewed at SAP TechEd 2009, targeted for release in September of 2010 as part of NetWeaver 7.3.

A major focus of today’s webinar was looking ahead to SAP’s Process Integration Roadmap, including upcoming NetWeaver 7.3 functionality.

A few notable points on PI 7.3:

• PI 7.3 will include embedded Solution Manager integration, with a “Good Morning” PI monitor in SolMan that will allow “central monitoring” of multiple PI instances in Solution Manager and make PI scenarios visible within the Solution Manager PI control panel.


• The PI 7.3 Enterprise Service Bus, driven by the AAE (Advanced Adapter Engine), will offer greater visibility into SAP’s SOA architecture, promising simpler and faster consumption of enterprise services.


• PI 7.3 will allow Java-only messaging, no longer requiring integration with the ABAP stack, thus improving speed and performance. .NET integration scenarios will also be available.

In his email to Mentors, Paltzer had this to say about the upcoming SAP “Business Middleware” functionality: “Our planned strategic direction for this family of products includes a variety of several significant new capabilities for end-to-end process orchestration, including complex event processing and business activity monitoring. Additionally, in conjunction with SAP BusinessObjects products, SAP plans to include novel capabilities for Operational BI, which represents the convergence of integration, BPM and BI technologies that enable intelligent business processes.”

One quote from the today’s webinar stood out to me: “low touch integration via standards-based interoperability.” That strikes me as the key to further PI adoption and a worthy challenge to the PI team.

My take: I’m glad to see SAP is continuing to invest in PI and to place PI in the context of a middleware roadmap that is in tune with process monitoring and business intelligence trends. However, technical experts who have spent hands-on time with NetWeaver PI have given me mixed reviews, some impressed by its capabilities and others warning of its complexities and learning curve. Given the emphasis SAP is placing on enabling its customers to differentiate their processes by “composing” on top of the Business Suite, and given the heterogeneous environments customers are running, I believe SAP needs not just good middleware, but best-in-class.

Many have argued that SAP needs to acquire in order to achieve that best-in-class middleware status. Despite the market rumors, at this point, SAP is taking a build from within approach. How SAP gets there is not important, as long as the destination meets customer expectations. In this area in particular, the bar is high, and so are the stakes.