News Analysis: SAP Launches Business Suite 7 - Transformational Change Or Expensive Repackaging?

  • Synchronized release strategy improves upgrade experience. Product
    families in the Business Suite now use the same "Switch Framework",
    which allows clients to upgrade 4 categories of enhancements that
    include usability, horizontal features, vertical features, and
    composite apps/web services.  This provides one upgrade strategy for
    all products and brings all the releases into synch.  Some clients have
    stated that this helped with reducing the pain of some upgrades.POV: The
    movement to synchronize all releases is a good start.   System
    integrators have traditionally bore the burden of integrating and
    synchronizing the various product families.  Going forward, customers
    will expect usage of a common data model via a revamped MDM approach.
    With all products on the switch framework, customers can take advantage
    of the SAP Enhancement Pack
    technology, which makes SAP upgrades a tad bit easier, though mature
    SAP customers with a ton of user exits and customizations may beg to
    defer.  One key concern - will my EhP 27 be dependent on uptake of
    EhP3?  Also, SAP's shift from 6 to 8 months for each enhancement
    package to 1 year may need to be reexamined in light of the quarterly
    pace of innovation found with the SaaS vendors.
  • Renewed focus on end to end business processes ties "Value Scenarios" to business drivers.
    SAP focuses improvements by bringing together traditional functional
    fiefdoms across various roles.  One example of a value scenarios is
    collaborative demand and supply planning where SAP takes a process view
    across fiefdoms like sales, supply chain, operations: manufacturing,
    operations: procurement, and finance.  The goal: timely, profitable
    response to stakeholder demand.  Other examples include financial close
    processes, HR- recruiting and talent, sales-reporting, shared-services,
    etc.POV: Customers will find the Value Scenarios compelling as they align with the key business drivers
    facing today's organizations (e.g operational efficiency, regulatory
    compliance, growth, and strategy).  The initial list covers a basic
    range of cross-functional processes.  Albeit limited in the initial
    launch, one can expect more to come from SAP in future enhancement
    packs (EhP).  As with all best practices, SAP will need to make it easy
    for customers to modify those scenarios.  SAP customers would want a library of business processes that are not based on the past but designed to change for the future. Partners
    and customers in the SAP ecosystem will also want an easy way to extend
    these processes so that they are supported in future upgrades.  This
    dependency on SAP Visual Composer and other SAP NetWeaver components
    may prove a learning and training hurdle for some customers.
  • Pay by module pricing  lessens the burden of buying a monolithic suite. SAP
    states that the new suite offering will now include options for
    customers to purchase by module.  Prospects do not have to buy the
    whole suite to activate each module and modules are at a more granular
    unit than an application family. In fact, SAP claims new customers can
    start one process at a time.POV: Users will most likely question
    what the dependencies are on other SAP infrastructure products.  If the
    footprint is too big, then this module to module approach may not pan
    out.  There may be hope if SAP manages to resurrect lessons learned
    from Business By Design (ByD) and serve up the modules in an on Demand
    fashion.  Hybrid deployment options may be the best approach for
    existing SAP customers and prospects who want to pipe in innovation or
    take advantage of new functionality.  Interesting to note that SAP did
    not focus more on other cost saving programs such as vendor financing and hosting to combat any SaaS vendor marketing pitches.
  • Usability improvements incorporate role based analytics.
    Demo watchers were treated to new dashboards and visualization
    technology. Many of these scenarios focused on role based analytics
    which are an important part of the progression towards Web 2.0
    Enterprise Apps.  These analytics deliver role based and process based
    information for actionable insight.POV: In the demo during the
    event, SAP showcased more integration of BOBJ with heavy usage of SAP
    NetWeaver Business Client (NWBC) and SAP's BPM componentry.  What's
    interesting is not the lack of usage of SAP GUI but the improved
    integration with BOBJ components such as Xcelsius, which of course were
    vendor agnostic to begin with. Users will still want to know what UI
    strategy should they move forward with as BS 7 progresses.

The bottom line - more than repackaging but will clients find this compelling enough to upgrade?

Available May 21st, 2009, Business Suite 7 provides much needed
change to SAP customers and is another carrot to incentivize customers
to upgrade. The challenge will be to make this compelling enough to
prospects and existing customers in the midst of the downturn.
Conversations with over 800 SAP clients in the past 5 months indicate
that SAP can do more by emphasizing financing options and potentially
lowering maintenance fees.  As clients look to recession proof their apps strategy,
we hope SAP continues to find new ways to lower the cost of ownership
and speed up the delivery of innovation.  Announcements of the adoption
of RunSAP methodology by Atos Origin, CapGemini, EDS,IBM and Wipro
show good alignment in the partner ecosystem.  However, more effort
should be invested in concert with other solution providers such as Acresso, GuiXT, Hayes Technology, IBM Optim, IntelliCorp, VMWare, and West Trax
who focus on reducing the overall cost of owning SAP.  Moreover, SAP
could take the opportunity during this launch to restore  vendor-client trust
by lowering the overall cost of ownership, delivering more choices in
deployment options, increasing the investment and pace of innovation,
supporting greater heterogeneity, and orchestrating more value in its
partner ecosystems.

Your POV.

As a prospect, are you now more or less compelled to buy an SAP
solution?  As an existing customer, do you feel this is a good use of
your maintenance dollar?  Will this push you over the edge to move to
the next upgrade?  Post your thoughts or send me a private email to
rwang@forrester.com.

Related posts and blogs worth checking out on SAP's Business Suite 7 (to be updated as the story progresses)

Copyright © 2009 R Wang. All rights reserved.
Reposted from http://blog.softwareinsider.org

Comments

re: News Analysis: SAP Launches Business Suite 7 - Transformati

Hey Ray,Great article. Lowering cost and TCO is definitely of the essence. You hit the nail on the head with "Clients are looking to recession proof their apps strategy".You asked, Will this push clients over the edge to move to the next upgrade? The fact remains that end of maintenance is the number one reason most customers cite for ERP 6.0 upgrades, as per the survey we released available here: http://www.panayainc.com/sap-upgrade-survey.html?src=701200000002M1XFor those about to cross that upgrade bridge, Panaya offers an automated SAP upgrade Software as a Service.Find out more at: http://www.panayainc.com