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July 2017 SAP BUSINESS ByDESIGN: SAP’S BEST-KEPT SECRET It has been almost 10 years since SAP Business ByDesign was first introduced. This enterprise resource planning (ERP) solution has always and only been offered as software as a service (SaaS). It was born in the cloud and launched in September 2007 with great fanfare. This came at a time when SaaS ERP solutions were still quite rare and just beginning to gain acceptance. Since then it has been deployed in more than 3,600 companies in 109 countries. And yet while customers seem very happy with their choice of solutions, in many ways SAP Business ByDesign is the Rodney Dangerfield of ERP – it just doesn’t seem to get any respect. While some of its most direct competitors would be thrilled with the level of success it has achieved, somehow pundits and some industry observers just won’t give SAP a break on the ByDesign front. Rumors of its death have surfaced periodically, and yet it lives on, but quietly. Perhaps that “quiet” is to blame for the apparent lack of respect. Perhaps it is time for SAP to raise the volume and build trust in the market, beyond its customer ranks. THE EVOLUTION OF SAP BUSINESS ByDESIGN Before SAP Business ByDesign was first introduced, SAP already had two ERP products and deep market penetration. SAP ERP (which has gone through its own evolution and several different names) targeted the large (and very large) enterprise, while SAP Business One was aimed at small to mid-size businesses (SMBs). There was (is) also SAP Business All-in-One, but in reality that was never a separate product, but rather SAP ERP packaged with “best practices” aimed at simplifying the (large enterprise) solution for mid-size businesses in specific industries. In order to offer a SaaS solution, SAP could have taken a few different paths, including moving either of these products to the cloud. SAP ERP was the more robust solution, but to come down market, it would have had to shed some of that complexity or be overkill for an SMB or even for a subsidiary or division of a large enterprise. Ultimately, starting over allowed SAP to architect the solution specifically for the cloud, drawing on acquired and organically developed leading edge infrastructure. And even more importantly, SAP was able to draw on the thousands of person-years of experience accumulated by its staff in addressing the needs of the large enterprise. After all, the needs of mid-size companies SAP Business ByDesign by the Numbers ü 3605 companies/ customers ü deployed in 109 countries in 9 languages ü 2641 partner built add- on solutions ü 29 Industries including: Ø Professional Service organizations (PSO) Ø Wholesale distribution (WD) Ø High tech Ø Consumer products Ø Industrial machinery and components (IM&C) Ø public sector and higher education ü Usage analysis of productive tenants: Ø 85% Finance Ø 71% SRM Ø 68% Sales Ø 67% Asset management (mgt) Ø 44% Warehousing Ø 43% Project mgt Ø 42% Expense mgt Ø 40% Time recording Ø 27% CRM Ø 24% Production
Transcript of SAP BUSINESS ByDESIGN: SAP’S BEST-KEPT SECRET
July2017
SAPBUSINESSByDESIGN:SAP’SBEST-KEPTSECRET
Ithasbeenalmost10yearssinceSAPBusinessByDesignwasfirstintroduced.Thisenterpriseresourceplanning(ERP)solutionhasalwaysandonlybeenofferedassoftwareasaservice(SaaS).ItwasborninthecloudandlaunchedinSeptember2007withgreatfanfare.ThiscameatatimewhenSaaSERPsolutionswerestillquiterareandjustbeginningtogainacceptance.Sincethenithasbeendeployedinmorethan3,600companiesin109countries.Andyetwhilecustomersseemveryhappywiththeirchoiceofsolutions,inmanywaysSAPBusinessByDesignistheRodneyDangerfieldofERP–itjustdoesn’tseemtogetanyrespect.Whilesomeofitsmostdirectcompetitorswouldbethrilledwiththelevelofsuccessithasachieved,somehowpunditsandsomeindustryobserversjustwon’tgiveSAPabreakontheByDesignfront.Rumorsofitsdeathhavesurfacedperiodically,andyetitliveson,butquietly.Perhapsthat“quiet”istoblamefortheapparentlackofrespect.PerhapsitistimeforSAPtoraisethevolumeandbuildtrustinthemarket,beyonditscustomerranks.
THEEVOLUTIONOFSAPBUSINESSByDESIGN
BeforeSAPBusinessByDesignwasfirstintroduced,SAPalreadyhadtwoERPproductsanddeepmarketpenetration.SAPERP(whichhasgonethroughitsownevolutionandseveraldifferentnames)targetedthelarge(andverylarge)enterprise,whileSAPBusinessOnewasaimedatsmalltomid-sizebusinesses(SMBs).Therewas(is)alsoSAPBusinessAll-in-One,butinrealitythatwasneveraseparateproduct,butratherSAPERPpackagedwith“bestpractices”aimedatsimplifyingthe(largeenterprise)solutionformid-sizebusinessesinspecificindustries.
InordertoofferaSaaSsolution,SAPcouldhavetakenafewdifferentpaths,includingmovingeitheroftheseproductstothecloud.SAPERPwasthemorerobustsolution,buttocomedownmarket,itwouldhavehadtoshedsomeofthatcomplexityorbeoverkillforanSMBorevenforasubsidiaryordivisionofalargeenterprise.
Ultimately,startingoverallowedSAPtoarchitectthesolutionspecificallyforthecloud,drawingonacquiredandorganicallydevelopedleadingedgeinfrastructure.Andevenmoreimportantly,SAPwasabletodrawonthethousandsofperson-yearsofexperienceaccumulatedbyitsstaffinaddressingtheneedsofthelargeenterprise.Afterall,theneedsofmid-sizecompanies
SAP Business ByDesign by the
Numbers
ü 3605companies/customers
ü deployedin109countriesin9languages
ü 2641partnerbuiltadd-onsolutions
ü 29Industriesincluding:
Ø ProfessionalServiceorganizations(PSO)
Ø Wholesaledistribution(WD)
Ø HightechØ ConsumerproductsØ Industrialmachinery
andcomponents(IM&C)
Ø publicsectorandhighereducation
ü Usageanalysisofproductivetenants:
Ø 85%FinanceØ 71%SRMØ 68%SalesØ 67%Asset
management(mgt)Ø 44%WarehousingØ 43%ProjectmgtØ 42%ExpensemgtØ 40%TimerecordingØ 27%CRMØ 24%Production
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arenotallthatdifferentfromtheneedsoftheirlargercounterparts.Buttheydon’thavethedeeppocketsofalargeenterpriseandcan’taffordthetimeittakestowadethroughthecomplexitiesthathadevolvedwiththelargeenterprisesolution.TheinitialgoalofSAPBusinessByDesignwastosimplifyforthemid-market,whilealsodeliveringa100%cloud-basedsolution,acleardifferentiatoratthetime.
Bothofthosegoalswereachievedearlyoninitslife,butthatprovednottobeenough.TheearliestversionofSAPBusinessByDesignwasasingle-tenantsolution.Whilethefirstchartercustomerswereperfectlyhappywiththischoice,SAPwasnot.Singletenancyprovedtobeanobstacletotheprofitabilityneededtosustainalevelofaggressivedevelopmentofboththesoftwareandthemarket.Thisresultedintheneedtore-architecttheproduct,causingSAPtogoquietasitdevelopedthisnewarchitecture.
There-architectedSAPBusinessByDesignbecametheplatformofchoicefordevelopmentofallcloudofferingsatSAP–foratime.ButthencametheacquisitionofSuccessFactorsandtheaccompanyinginfusionof“cloudDNA”.AllofasuddentheByDesignplatformwasn’timportant.Thepowersthatbeatthetime(SapphireNowMay2012)said,“Customersdon’tcareaboutplatforms.Theyonlycareaboutbeautifulapplications.”
ThencameSapphireMadrid(November2012)andtherewasanewplatformintown:TheHANAplatform.ItwasdecreedthatSAPBusinessByDesignmustnowrunonHANA,SAP’s“gamechanging”in-memorydatabaseandthebasisforthiscloudplatform.Fromadatabaseperspective,SAPBusinessByDesigngainedlittlefromthissinceitalreadyhadin-memorypowersbuiltin.TherealbenefitwouldcomelaterinconformingtoSAPstandardsandthereforebenefitingfromtechnologybeingdevelopedbyothergroups(underotherbudgets).Andthusanotherquiettimeensuedasthedevelopmentteamwas(again)workingunderthecovers.
WHAT’SNEXT?A3-PRONGEDSTRATEGY
Nowthattheheavyliftinghasbeendoneintermsofre-architectingfortheHANAplatform,it’stimetokickthingsintohighgear.So,what’snext?SAPhasathree-prongedstrategyforSAPBusinessByDesign:
• Deliverbestinclassinnovation• Drivemeaningfuldemand• Developsuccessfulpartnerships
Soundssimple,butthenthemostsuccessfulstrategiesusuallyare.Interestinglyenough,whileitwastheshiftsinplatformthatkeptthelidonSAPBusinessByDesigninthepast,MintJutrasbelievesitwillbetheplatformthatcouldpotentiallyblowthelidoff,oratleastprovideastrongervoicein
Multi-tenant versus Single-tenant SaaS
Multi-tenantSaaS:Multiplecompaniesusethesameinstanceofhostedsoftware;configurationsettings,companyandrole-basedaccesspersonalizebusinessprocessesandprotectdatasecurity.
Single-tenant(orMulti-instance)SaaS:Eachcompanyisgivenitsowninstanceofthesoftware,butmaysharecommonservices,suchasanintegrationplatform,andsecurity.
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thefuture.Andthefirstpartofthestrategy(bestinclassinnovation)islikelytoplayaverymeaningfulroleinenablingtheothertwo.
DELIVERINGBESTINCLASSINNOVATION
Innovationencompassesbothtechnicalstrengthandfunctionality.Theunderlyingplatformbringsthetechnicalmuscle.Butyes,functionalityisalsostillimportant,andSAPissettingaboutenhancingthefunctionalitybuiltintoSAPByDesign,specificallyforthecoreverticalswhereithasenjoyedthemostsuccess.Whileithasbeensoldinto29differentindustries,itsstrongestpresenceisinprofessionalserviceorganizations,wholesaledistribution,hightechandconsumerproducts,industrialmachineryandcomponents(IM&C),thepublicsectorandhighereducation.Weexpecttoseetheteamplacemorefocusonmanufacturingandproductioninthecomingmonthsaswell.
ButSAPwillchoosewheretoinvestwithintheseindustriescarefullyinordertofillgapsinthemarket.Highereducationprovidesagoodexample.SAPhaschosennottoinvestinstudentmanagementorstudentloans,simplybecausethoseneedsarealreadywelladdressedbyothersolutions.Thefocushereinsteadwillbeonintegration.
Butintegrationswingstwoways.Solutionsforstudentmanagementorloansaremostlikelytocomefromexistingorpotentialpartners.ButSAPwillalsobeintegratingSAPBusinessByDesignwithappsandtoolsfromitsownportfolio.SomeoftheappsfallintothecategoryofwhatSAPcallsitsown“bestofbreedlineofbusiness(LOB)”applications.TheseincludeSuccessFactorsEmployeeCentralforemployeemanagementandConcurforexpensemanagementandtheAribasuppliernetwork.ItwillalsotakeadvantageofthebusinessintelligencetoolsfromtheBusinessObjectssideofthehouseandlayeranalyticsontopofSAPBusinessByDesign.
Theuserexperience(UX)providesagoodexampleofhowtheSAPBusinessByDesignteamisnowabletoleverageinnovationdevelopedbyotherSAPteams-oneoftheadvantagesofthepriorworkdone“underthecovers.”TheteamwasabletousetheunderlyingUXlibrariescreatedbytheteamsdevelopingtheSAPFioriappsforSAPERP.SAPBusinessByDesigndoesn’thavetodevelopanystyleguides.TheysimplyusethosedevelopedbytheFioriteam.ThiswashowtheSAPBusinessByDesignteamwasabletocompletelyrenovateitsuserinterfacefromSilverlighttoHTML5quickly.
TheconversiontotheHANAplatformisSAPBusinessByDesign’stickettootherservicesaswell,servicesthatleadtomorefeaturesandfunctions.Likeinvoiceasaservice–theabilitytotakeapictureofadocumentandturnitintoaninvoicewithnoopticalcharacterrecognition(OCR)softwarerequired.Tothebusinessuser,thisconversionappearstobemagic.TheHANAplatformisthepixiedustsprinkledon(orratherunder)SAPBusinessByDesignthatmakesthemagichappen.
Innovationencompassesbothtechnicalstrengthandfunctionality.Theunderlyingplatformbringsthetechnicalmuscle.Butyes,functionalityisalsostillimportant,andSAPissettingaboutenhancingthefunctionalitybuiltintoSAPByDesign,specificallyforthecoreverticalswhereithasenjoyedthemostsuccess,including:
ü professionalserviceorganizations
ü wholesaledistributionü hightechandconsumerproducts
ü industrialmachineryandcomponents(IM&C)
ü publicsectorü highereducation
TheconversiontotheHANAplatformisSAPBusinessByDesign’stickettootherservicesaswell,servicesthatleadtomorefeaturesandfunctions.
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AndtheotheradvantageoftheHANApixiedustisthedramaticsimplificationofthedatamodel.Howisthatpossible?Doesn’ttheoperationalandtransactionalsystemofrecordofyourbusinessrequirethesamelevelofcomplexity,perhapsevenmorecomplexity,aseventhesmallestcompaniesdealinglobalmarketsandadigitaleconomy?Thesimpleansweris,“No.”
Thinkabouthowandwhythedatainsystemshasbecomemorecomplex.Asingletransactionneedstocaptureessentiallythesamepiecesofdataitalwaysdid.GettingthiskindoftransactionaldataintoERPhasalwaysbeenfairlyeasy.Gettinginsights,answersanddecisionsout?Notsoeasy.Justsortingthroughalltherawtransactionaldataeachandeverytimeyouhadaquestionsimplytooktoolong,evenwithsimplequestionslike,“HowmuchinventorydoIhave?”Youcouldn’tverywelladdupallthestockgoinginandoutsincethebeginningoftime.Itwouldsimplytaketoolong.
Soyouhadtoanticipatewhatyouwouldneedupfrontandaddressthoseneedsbyaddingaggregates(totals).Butasingleaggregatewasn’tenough.Overtimeyoulearnedyouneededtoknowthetotalreceiptsandissuesinagivenmonth.Andhavingmonthlytotalsledyoutoaskforquarterlyandannualtotals.Youanticipatedthatandaddedthoseaggregatesin.Itworksforawhile,butthenyoufindyouneedthosetotalsbycountryorregionorbusinessunit.Butyoudidn’tanticipatethat,soyoucan’tanswerthatquestionwithoutlongprocessingtimes(tofindandaddupthetransactions),oraninvasiveanddisruptivechangetothesystem.Andwhathappenswhenyoureorganizeterritoriesorbusinessunits?
ThespeedofHANAnowallowsyoutoeliminatemanyofthoseaggregates.ForverycomplexjoinoperationsitstillmakessenseforSAPBusinessByDesigntopre-calculateratherthanre-calculateeachtime(anditdoes).Butwhybothertokeeptrackofsimpletransactionaldatamonth-to-date,quarter-to-date,year-to-date,bycountry,regionorbusinessunit,whenintheblinkofaneyeyoucouldadditallup?Andifallofasuddenyouneedtosliceanddicethedataadifferentway?Noproblem.Andthinkoftheamountofcodenolongerneededjusttomaintainthosetotals.Thatisdevelopmenttimethatcannowbespentprovidingrealandimpactfulinnovation.Asimplifieddatamodelleadstoaddedagilityinthesolution,whichtranslatesintoaddedagilityinyourbusiness.
THEVALUEOFAGILITYWeliveindisruptivetimes.The2016MintJutrasEnterpriseSolutionStudyfound88%ofcompaniesbelievetheyfacesomelevelofriskintheirbusinessesand/orindustriesbeingdisruptedbynewinnovativeproducts,newwaysofsellingorpricingexistingproductsorservices,entirelynewbusinessmodels,orsomecombinationofalloftheabove.Andthenofcoursetherearestillthemoretraditionaldisruptivefactorslikeexpansionandgrowth,organizationalrestructuringandregulatorychanges,justtonameafew.All
Simplifying the data model
Thecomplexityofthedatamodellargelyresultedfromanticipatingtheneedfortotals.ThespeedofHANAnowallowsyoutoeliminatemanyofthoseaggregates.
Asimplifieddatamodelleadstoaddedagilityinthesolution,whichtranslatesintoaddedagilityinyourbusiness.
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thisdisruptioncanhaveacascadingimpactonbusinessapplicationrequirements,makingagility-theabilitytoeasilyinnovate,evolveandchange-evenmoreimportantthancurrentfunctionality.
Our2017EnterpriseSolutionStudyconfirmedmanysolutionprovidershaveincreasedthepaceandvolumeofupgrades(Figure1).
Figure1:Howhasthepaceofinnovationdeliveredchanged?
Source: Mint Jutras 2017 Enterprise Solution Study
ButMintJutrasknowsofnoothersolutionproviderotherthanSAPthathasgonedownthepathofremovingaggregatestosimplifythedatamodelandtheassociatedcode–certainlynottothisextent.
DRIVINGMEANINGFULDEMANDSowillthisinnovationimmediatelydrivemeaningfuldemand?NotnecessarilyandnotifSAPremainsquiet.Itmustraisethevolumewithnewanddifferentwaysofmarketingthesolution,newwaysthatarereflectiveofhowsearchesfornewsoftwareareconductedtoday.Likeotherfunctionsinanyorganizationtoday,marketingmustgothroughadigitaltransformation.
TheSAPBusinessByDesignteamisrespondingbybuildingoutaDigitalDemandGenerationEngine(DDE).Theyunderstandpeopledon’trespondtothesameeffortsthatusedtowork.TheyknowthemajorityofB2Bpotentialbuyersconductresearchoutsideofthenormal9-to-5workday.Searchengineoptimization(SEO)iscritical.DoesSAPBusinessByDesignevenshowupinonlinesearches?Andwhathappenswhenitdoes?ThespeedwithwhichSAPrespondsandactsonanyinquirieswillhaveadirectimpactonwhetheritiseveninvitedtotheparty.Thegoalistorespondimmediately24/7.
Thisofcourse,willhaveasignificantimpactonitssuccessinthethirdprongofitsstrategy.Bydevelopinga“virtualagency”thatdeliversallcomponentsofacampaign(emails,landingpages,supportingmaterialsfortelemarketingandsocialmedia),SAPcanprovidereal(andmuchneeded)marketingsupporttoitspartners.
DEVELOPINGSUCCESSFULPARTNERSHIPSMuchofSAPBusinessByDesign’searlysuccesswasachievedthroughdirectsalesefforts.Butthathaschanged.In2016partnerswrote70%ofSAP
Disruptioncanhaveacascadingimpactonbusinessapplicationrequirements,makingagility-theabilitytoeasilyinnovate,evolveandchange-evenmoreimportantthancurrentfunctionality.
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BusinessByDesigncontracts.Indeeditwouldappeartheplatformhascontinuedtobolsterthistransition,asevidencedbythe2,641partner-builtadd-onsavailabletoday.
Thisisnecessaryinordertogettothenextlevel,andifsuccessfulcouldleadtoexplosivegrowth.ApartnerstrategyisattheveryrootofSAP’spriorsuccessintheSMBmarketwithSAPBusinessOne.Thatmeansbuildingasuccessfulindirectchannel.ItmayindeedtapintotheexistingSAPBusinessOnechannel,whichhasgrownthatinstalledbasedtoover55,000customers,supportingoveramillionusers.Oritcouldrecruitfromitscompetitors.Eitherway,SAPplanstodoubletheSAPBusinessByDesignpartnercapacityinthenextyear.
CONCLUSIONS
It’sabouttimeforSAPBusinessByDesigntoleaveitsRodneyDangerfieldimagebehind.SAP’sthree-prongedstrategyforSAPBusinessByDesign…
• Deliverbestinclassinnovation• Drivemeaningfuldemand• Developsuccessfulpartnerships
…seemstocoverallthebases.ItwillcontinuetoinvestinthecorefunctionsofERP.InfactSAPhasvowedtoaddanadditional100developerstotheteam.Itwillbegintoleverageitsinvestmentintheunderlyingarchitecturetoimprovetheuserexperienceandintegratetoother“bestofbreed”functionalitywithinitsownportfolio,initspartnercommunityandperhapsevenbeyond.
Anditplanstoraisethevolumeofitsmarketingbeyondthewhisperthatithasbeen,withthehopeofattractingnewpartnersandevenmorenewcustomers.
Incombiningthesethree,MintJutraswouldcontendthattheplatform-theverythingthatcausedSAPtogoquietinthepast-shouldnowbethereasontoshout.AwordofadvicetoSAP:Shoutloudandclear.
Abouttheauthor:CindyJutrasisawidelyrecognizedexpertinanalyzingtheimpactofenterpriseapplicationsonbusinessperformance.Utilizingover40yearsofcorporateexperienceandspecificexpertiseinmanufacturing,supplychain,customerserviceandbusinessperformancemanagement,Cindyhasspentthepast11yearsbenchmarkingtheperformanceofsoftwaresolutionsinthecontextofthebusinessbenefitsoftechnology.In2011CindyfoundedMintJutrasLLC(www.mintjutras.com),specializinginanalyzingandcommunicatingthebusinessvalueenterpriseapplicationsbringtotheenterprise.
SAPBusinessByDesignhas2,641partner-builtadd-onsavailabletoday.
SAPplanstodoubletheSAPBusinessByDesignpartnercapacityinthenextyear.
