SAP Imposes Single-Tier ERP Support Program

July 16, 2008 from eWeek – “SAP is taking a one-size-fits-all approach to product maintenance, in which customers of all sizes will be switched to an Enterprise Support program regardless of their size or IT budgets.

SAP will start transitioning current customers into Enterprise Support this month at no additional cost, but it will start phasing in pricing for this level of service at the rate of 8 percent per year over the next four years starting in 2009, until it reaches the standard cost of 22 percent of product license fees…

SAP contends that the cost of Enterprise Support is below the average maintenance fees charged by other software companies. Cordrey said that the phased-in price increases will help make Enterprise Support affordable for customers of all sizes.

Enterprise support provides a 24/7 service-level agreement, continuous quality checks, produce support advisories, and advanced support for implementing ERP application enhancements and support packages.”

180 View – We anticipate a backlash on 22% product maintenance from SAP customers. We think that maintenance fees will become one of the more important criteria in selecting a new system. Organizations in the selection process should be evaluating NPV (Net Present Value) over 5 years to make a cost comparison between systems. But make sure that vendors have disclosed all maintenance and support fees, which are sometime charged separately.

BlackBerry gets new CRM goodies thanks to RIM-SAP alliance

May 5, 2008 from IT Business.ca – “SAP and Research in Motion have teamed up to bring SAP's back-end business applications, beginning with CRM, to BlackBerry devices… SAP's CRM is the first application that will run natively on the BlackBerry, but eventually the companies plan to build mobile versions of SAP's applications -- including ERP (enterprise resource planning) and supply chain -- for BlackBerry devices, said Bill McDermott, president and CEO of SAP Americas, Asia Pacific and Japan.”

180 View – ERP in the palm of your hand with access anywhere anytime sounds good to us. The only concern is ERP will need to be dummied down to make it easy.

Five things to know before committing to SAP

May 8, 2008 from itWorld Canada – “Installing SAP applications is not easy. Employees who are capable of deploying and maintaining SAP software are in extremely valuable and practically form a whole profession by themselves.

SAP, which built its reputation with ERP software, is rarely chosen by enterprises for one-off applications, AMR Research analyst Jim Shepherd notes in a report this month titled "The five SAP strategies that you need to understand." "For huge organizations, this is typically a multiyear, multimillion-dollar effort to transform the business," he writes. Unfortunately, executives often pay little attention to SAP installations after they are deployed, he adds. That's a big mistake. Let's take a look at the five SAP strategies Shepherd details in his report, and how they affect your technology decisions…”

180 View – Despite bad press, SAP keeps on truckin. The thing is they had the vision and ability in early ERP days to build systems that would work across large organizations with complex business and infrastructure. Decision makers are risk adverse and think that if it works for the best companies (as the SAP ad says), then it will work for me. Another compelling reason to go to SAP is that the most well known and trusted consulting and accounting firms were on board and would help with the implementation.

SAP won the first ERP War fought over automating business across departments, Client/Server technology, and support for multiple databases and operating systems. We are now in the midst of the second ERP War being fought in the trenches of ease of use, web based architecture, SaaS, embedded BI and CRM, customization outside of source code and integration tools.

Leading waste hauler sues SAP claiming ERP rollout a 'complete failure'

March 27, 2008 from ITBusiness.ca – “The trash disposal giant, Waste Management is suing SAP over an ERP implementation it dubs "a complete failure." In its court complaint, Waste Management said senior SAP executives, including SAP Americas' president and CEO, Bill McDermott, participated in the "rigged and manipulated" demos.”

180 View – It’s hard to believe that SAP would intentionally rig or manipulate a demo. A canned demo is apparent if you are asking questions. The demonstrator will be unable to show anything other than what was planned. It’s also unlikely that SAP would have answered specific functionality questions dishonestly. That would be a big problem in court. It would also be a big problem during the selection process if the truth was uncovered as the decision is largely based on trust. But perhaps the requirements were not well defined. And perhaps SAP was not forced to be specific in responding to requirements. A “Yes” can mean many things including out of the box functionality, third party, customization or workaround.

It’s not to say that the vendors are always blameless. We have recently heard a number of horror stories of failed implementations. In these cases, the problem lay with the Value Added Reseller who promised the world and failed to deliver. One question raised by these failures is to what extent the developer should be responsible for the failures of their Value Added Resellers. Many of the developers have certification processes, but it’s no guaranty. We would like to hear your thoughts on this.

SAP and Oracle: Who’s Ready for Small and Medium-Sized Businesses?

June 2007 from Nucleus Research – “Who’s’ delivering the greatest value to the SMB market? An in-depth analysis of 56 customers showed significant differences between the value delivered by SMBs by Oracle and SAP today…”

180 View – If you read the article you will find that 44% of the Oracle respondents would recommend Oracle to their peers. If you think that’s bad, only 10% of SAP customers would recommend SAP. Is SAP getting a bad rap? Perhaps based on a limited survey base or because SAP’s midmarket systems were not included. I (Michael Burns) have used SAP at Ryerson University to demonstrate ERP concepts. I think SAP would overpower most SMB’s. SAP does offer All-in-One, which is preconfigured for a specific industry and would reduce the setup hit. Also SAP has two SMB solutions – SAP Business One and ByDesign.

SAP’s next-generation application platform

On the one hand we have:

I’ve seen the future of SAP software, and its name is Business ByDesign

December 7, 2009 from Bruce Richardson at AMR Research – “Business ByDesign is the foundation for SAP’s next-generation application platform. It will ultimately replace the SAP Business Suite, albeit gradually and maybe transparently over a 5- to 10-year horizon (or more). In the interim, SAP will retain customer loyalty through Enhancement Packs and continued NetWeaver investments that move SAP Business Suite closer to Business ByDesign. The business user, critical to SAP’s future revenue stream, may be placing it in a potential showdown with Microsoft.”

And on the other hand we have:

Forrester points out missing pieces in SAP's A1S

September 20, 2007 from ComputerWorld Canada – “SAP AG's launch Wednesday of Business ByDesign, a hosted on-demand offering for mid market customers, is a significant improvement relative to its other offerings in this space, but simplicity and ease of use still remain elusive to the vendor, an analyst observed.

According to Ray Wang, principal analyst for enterprise applications with Cambridge, Mass.-based Forrester Research Inc., SAP's new offering is complex despite considerable research into the mid-market space. "Key features like easy access to reporting, quick portal construction, and easy integration to Office remain missing."

180 View – We lean towards AMR’s perspective. Forrester may be right about some shortcomings, but it’s early days for the product. It will surely get better.

SAP Buys Business Objects for $6.78 Billion

October 8, 2007 from PC World – “The acquisition is intended partly to help SAP reach an ambitious goal of doubling its customer base to 100,000 by 2010. Schwarz said about 40 percent of Business Objects' customers are using SAP today. Business Objects has roughly 45,000 customers, suggesting SAP will gain about 27,000 new customers through the deal.

SAP has made some progress with its own business intelligence software, including an analytics engine called BI Accelerator. But Business Objects excels in ease of use and user interface technologies, which will become increasingly important to BI in the future, IDC's Lykkegaard said.

"Business intelligence in the future will increasingly become a user interface for applications," he said. "You'll do your analysis from the BI interface and then dive directly into the transactional data you want to examine."

180 View – For those of you who don’t know Business Objects, you do probably know Crystal Reports, which was acquired by Business Objects in 2003. We think it’s going to be a hard swallow by SAP in that Business Objects has multiple products that overlap not only themselves but also with SAP’s existing business intelligence tools. Also difficult will be supporting all the competing ERP vendors that rely on Crystal reports.

SAP A1S Morphs into Business ByDesign

September 19, 2007 from eWeek – “After perhaps the biggest build up in recent memory, at least in the business applications sector, SAP unveiled its on demand suite built for the mid-market Sept. 19 at an event here at the Nokia Theater. SAP's long-standing code name for the product, A1S, is now officially buried. The new product name: SAP Business ByDesign…

The applications themselves are completely new, written from scratch, according to Peter Zenke, SAP executive board member and technical lead for Business ByDesign. "The [application] code is 95 percent fresh code." Underlying the applications is also a new Foundation Layer that is comprised of "all the key objects" a company would need to define highly personalized items like products, bill of materials or recipes, according to Zenke.

The user interface for Business ByDesign is also new, although it is roles based, similar to Microsoft's UI approach. SAP has decoupled the UI from the business logic which lets users (through consultants) design their own interfaces. Within the applications themselves, users are able to connect to live user communities and to SAP to get help…

The cost is $149 per user, per month with a minimum of 25 users. A $54 per month per user price is available for up to five users—a plan designed for companies looking to access limited portions of the suite."

180 View – We have not seen the system yet, but if SAP delivers on the software’s key principals: “completeness, ease of use, adaptability and lower TCO”, then ByDesign may be just as successful in mid market businesses as its big brother, SAP ERP, in the high end. We also think that ByDesign may explain the departure of Shai Agassi, who brought SAP Business One to SAP, which was to be SAP’s mid market solution. We wonder whether SAP Business One will be phased out.

Culture clash at SAP

May 17, 2007 from InfoWorld - “Agassi accumulates more and more power, hires thousands of developers in the United States and India, decentralizes product development into eight global centers of excellence, and ultimately gets put in charge of all SAP product development. Then the questions begin: Will greater speed jeopardize quality? Will SAP abandon its tried-and-true proprietary ABAP (Advanced Business Application Programming) language? Do customers even want all the new stuff?

The biggest questions were cultural, as it turns out. Germans, like Americans, are generally afraid these days of losing good jobs overseas. Plus, they feared the business impact of the "Americanization" of SAP, as Americans flooded into top management positions. They may have a point: SAP succeeded by giving the world a very German software model -- highly structured, with enforced standardization of business processes -- the discipline that global customers needed. Not exactly the chaotic entrepreneurial American way."

180 View – It seemed unlikely that an Israeli, Shai Agassi, could become the leader of the German SAP empire. He brought the innovation and Americanization that SAP seemed to need to compete in today’s market. But something happened along the way and he resigned from SAP on April 1, 2007. It’s not clear what happened, but it probably was a culture clash. It’s unlikely that we have heard the last of Agassi. Click here to learn a little about Shai.

SAP to buy OutlookSoft to get closer to CFOs

May 8, 2007 from InfoWorld – “Business applications vendor SAP is making another acquisition aimed at filling out its product portfolio to better meet the needs of CFOs. The company announced late Tuesday plans to buy U.S. corporate performance management software company OutlookSoft for an undisclosed sum…

180 View – In March, Oracle purchased Hyperion. Both Hyperion and OutlookSoft are Corporate Performance Management (CPM) solutions, which includes strategic planning, scorecarding, budgeting and forecasting, consolidation and business intelligence. For more about CPM, click here. A few years ago, ERP was extended to include CRM. Today CPM is being added to the mix.

RightNow aims to take on SAP

February 15, 2007 from ZDNet – “Greg Gianforte, the outspoken CEO of RightNow Technologies, says the market for customer relationship management software in Europe is booming--and he predicts that some of his company's biggest wins will come at the expense of industry heavyweights SAP and the Oracle-owned Siebel.

Gianforte says chief information officers are tired of what he calls costly and time-consuming on-premise implementations. His company, he says, is picking up enterprise customers from both of his big-name rivals. "We beat SAP at Nikon, for all their campaign management. We threw Siebel out of Electronic Arts. And those are just some of the ones who are prepared for us to talk about it," Gianforte told Silicon.com.

He said many companies are unwilling to admit when they've been forced to ditch costly software rollouts: "You have to understand this is fairly embarrassing for these companies because they made big investments and couldn't get value."

Gianforte singled out market leader SAP for criticism, on the back of recent poor results. "You could drive a truck through the cracks in SAP's armor," he said, claiming he would much rather have his current problem--the recent announcement of $49 million in losses related to a change in RightNow's licensing model--than those of SAP or Siebel, which have to turn around far larger businesses…”

180 View – Although Greg Gianforte is biased, he also has a point or should we say a sharp knife for his competitors. We actually agree with Greg in that the complex/costly implementations are now history. The mid market is where lie all the new business opportunities, and mid market companies won’t put up with complex/costly implementations.

SAP All-in-One vs. MS Dynamics

September 1, 2006 from webCPA – “For the giant multinationals of the world, SAP continues to be the dominant ERP player. But once you move down a notch, the picture changes dramatically. Microsoft, once content to play second fiddle to SAP's ERP core, is quietly but steadily ramping up its Dynamics series with a uniform Dynamics package offering in the works for a 2008 release.

SAP's All-in-One product has many strong points, but so does Dynamics. On the flip side, either solution has its distinct weaknesses compared to the other guy. Which path is best for your company? And what can you expect in the years ahead? Will Microsoft's lower cost and ubiquitous presence (ie. existing "beach heads") translate into market dominance, or will SAP continue its midmarket growth through focus on business values and technical finesse?”

180 View – This article contains detailed analysis by a spokesperson for SAP and Microsoft as to why their system is the best. The SAP argument essentially boils down to “because there is SAP development know-how all over”. The Microsoft argument is the “flexibility to change as your business changes”. Both arguments are interesting but not persuasive. We think that either solution could be the best depending on the circumstances.

SMBs offer SAP big opportunity, big challenge

June 2, 2006 from InfoWorld - "Some business application vendors see it as highly fragmented, others as inherently complex. Donna Troy sees the small and medium-size business (SMB) market simply as "a huge opportunity." Troy, senior vice president of SAP's global SMB business, is on a mission to carve out a bigger chunk of the global SMB market.

"There are more than 75 million small and medium-size companies globally," she said Thursday at the Sapphire customer event in Paris. "There's plenty of room to grow."

SAP has swung its attention to SMBs after having nearly saturated the market for large enterprises. The company hired Troy last year to craft a plan that would carve inroads into the market and try to give SAP a solid lead over rivals such as Oracle and Microsoft.

The SMB market is expected to grow faster than the large-enterprise accounts, according to IDC. But vendors must spend heavily to ensure the quality of sales and support staff in the channel. The research company highlighted SAP, Microsoft and The Sage Group as "channel friendly" vendors who've seen growing momentum among their partners.

Establishing a skilled network of channel partners weighs big in Troy's strategy. Currently, more than 1,200 companies sell SAP's Business One package for small businesses and another 800 sell its All-in-One package, a slimmed down version of the mySAP Business Suite for large enterprises.

One of her first moves was to introduce the PartnerEdge Channel Partner Program. Under the new global channel framework, the company awards resellers, ISVs (independent software vendors) and other partners points based on their performance. The points are given not only for the volume of sales but also for the ability to satisfy customers through enhanced applications and service. With the points, partners can move across three levels: associate, silver and gold. The higher the level, the greater SAP's support, which includes funding and training."

180 View - Good idea to reward partners on performance and not just sales.

Microsoft, SAP sing a Duet

May 12, 2006 from Computer Dealer News - "Microsoft and SAP will start selling the software that bridges their key applications next month, promising customers and partners a new era of accessibility to enterprise data. However, while the companies are working together jointly selling and marketing the software, they won't say yet what the price will be.

Called Duet, it allows Microsoft Outlook to be used as a front end to peer into mySAP, the complex enterprise resource management (ERP) application that large companies and governments use to run their operations.

“There are a lot of business processes that anybody in an organization needs to participate in on a day-to-day basis,” said Elizabeth Caley, a senior product manager for Microsoft Canada. “We're trying to take those that are accomplished in SAP and make it so that an end user can do them without a lot of training and support.

Anuj Batra, SAP Canada's national lead for emerging solutions, said the advantages for users will be “superior decision-making because of better synchronization” between mySAP and Office.

One SAP-Microsoft partner already working on an early version of the software is Montreal's Nakisa Inc., whose Web-based application lets users create organization charts and diagrams from SAP data. “For us, (Duet) is an exciting opportunity,” said John Payes, director of Nakisa's Microsoft partnership.

The first release of the software will include four “scenarios,” linking to SAP's budget monitoring aimed mainly at general users covering time management, leave management and organization management functions. Later in the year two value packs will be available for purchase aimed at business managers covering recruitment management, travel management, analytics, purchasing management and sales activity management." For the rest of the article, click here.

180 View - I teach a course at Ryerson University that uses mySAP to demonstrate ERP concepts, and have an appreciation of the deep functionality of the system but also its complexity. It seems to me that Duet is nothing more than windows dressing, and that the vast amount of functionality within mySAP will not be accessible via Outlook.

SAP continues NetWeaver focus at Sapphire 2006

May 18, 2006 from Computerworld - "Since introducing its NetWeaver technology stack three years ago, SAP AG has been steadily promoting it as a pervasive part of its applications, despite user confusion over exactly what it is or fears that it's a proprietary technology.

As the core component to SAP's Enterprise Services Architecture (ESA), NetWeaver comprises a set of service-oriented architecture (SOA) technologies, including a portal, business warehouse and other infrastructure applications. It's meant to enable customers to create integrated workflows over various applications. Not surprisingly, at this week's Sapphire 2006 user conference here, SAP made a number of NetWeaver-related announcements.

Among its other initiatives, the company announced a $125 million fund to invest in NetWeaver technologies developed by software companies, as well as a planned rollout of business intelligence (BI) applications and its next-generation product, mySAP ERP 2005, which is heavily reliant on NetWeaver….

Just what NetWeaver is has yet to be fully defined, said Stanley Ezzell, vice president of strategic initiatives at Wellborn Cabinet Inc. The Ashland, Ala.-based based furniture maker has successfully deployed a set of ERP applications through the SAP BusinessOne program, which is tailored to medium-size businesses. Ezzell has done customizations with his R/3 application and doesn't want to lose them if he consolidates his stack on NetWeaver.

"What NetWeaver really means to the R/3 customer, I don't know," he said. Ezzell was also unclear about just what migration path he would have to take to get mySAP ERP 2005 if he wants to migrate."For me to go and say to my company, 'We've spent millions on this, and guess what, we'll spend more millions for that,' I might be calling looking for another job," he said. For now, he plans to hold off making any moves until he has a higher comfort level with SAP's plans.
SAP executives have made it clear they won't force any customers to NetWeaver and have stressed that it's an open, industry-standard-based architecture. For the article, click here

180 View - So you're not alone if you're not really sure what NetWeaver is all about. Most people are not all that interested in the underlying technology. They want to know what it will do for them and at what cost. The announcement of the roll out of business intelligence applications is noteworthy as more and more ERP vendors try to incorporate this technology. The BI vendors will be facing stiff competition, but will have the edge with organizations that have disparate ERP systems.