Strategic Tradeoffs At SAP

During this week’s Sapphire conference SAP co-CEOs Jim Hagemann Snabe and Bill McDermott repeatedly stated that their goal is to make SAP the market leader for on-device, on-premises, and on-demand enterprise solutions. This very bold statement raises two simple questions:

  1. With what products and values does SAP want to be the leader? Does the company want to win the technical innovation race or the business optimization and intimacy race?
  2. How does the leadership goal translate into meaningful operational commitments? Does SAP have the determination and resources required to win in all categories? 

We don’t have clear answers to these questions, but the next couple of months will show whether and how this goal translates into organizational capabilities. Right now, we just need to wait with patience for the next change and live with the — hopefully incorrect — impression that SAP is pursuing three strategic tracks simultaneously: intimacy, innovation, and growth.

I strongly agree with Paul Hamerman, who recently observed that SAP's success as a company will be a function of how well it looks after the best interests of customers and how it links innovation to customer value — not growth.

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SAP’s Sustainability Journey To A Next Gen ERP

On Thursday, May 13, 2010 SAP released its new sustainability report. The report achieved an A+ GRI rating versus the B+ for the previous 2008 one. It uses videos and interactive elements to tell a carefully orchestrated story about SAP’s sustainability performance and provide a baseline for continuous improvement. You will find a few new KPIs, such as business health, culture index and employee satisfaction, and also interesting data about carbon footprint reductions, energy consumption, financial performance, and customer satisfaction.

The SAP report is nicely orchestrated and illustrated. But at least as interesting as the performance data is the message about the company’s strong commitment to the sustainability concept. We defined business sustainability as an underlying approach to business strategy, which optimizes the firm’s business processes and resources. SAP uses the concept as a natural go-to-market strategy and an opportunity to repackage existing and new software offerings into a new and more consistent solutions framework. Known as the SAP Sustainability Library, this framework is an excellent source of insights, best practices, and case studies, including SAP’s own sustainability report.

SAP’s Sustainability Library is a basic tutorial for business process executives seeking to understand and get a grip on sustainability. Even if you are not an SAP customer, you should seize SAP’s breakthrough work as an opportunity to learn and extract new ideas, best practices, and solutions that have the potential to increase the profitability and long-term health of your organization.

Six Organizational Practices BPM Initiatives Should Implement

As you may know from my previous blog post, on Thursday last week I delivered the Forrester Teleconference titled Increasing the Maturity of Your BPM Center of Excellence. This blog post summarizes the organizational practices discussed during the teleconference for those of you who could not attend:

  1. Assess the enterprise's BT maturity level. Forrester has developed a business technology (BT) maturity self-assessment approach. I presented an example of how to use it in a recent blog post. Perform the assessment with key business stakeholders first -- the CEO, COO, CFO, BU leaders -- then go for IT. Visualize the existing business-IT alignment gap at your enterprise and develop an improvement plan focusing on organization, enabler processes, and behaviors.
  2. Develop unified BT demand management function. BPM initiatives emerge when and where business stakeholders need them. The pervasiveness of technology services allows these change agents to roll out process improvements with or without support from the IT department. But you will need a place where everything comes together to ensure that investments are synchronized and beneficial at the enterprise level. This business demand function must establish also the enterprise's governance, monitoring and control framework, and provide strategic directions for BT.
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How BPM COEs Increase The Business Technology Maturity Of Your Organization

I am including the text of a recent customer inquiry, which nicely summarizes a common challenge among IT executives:

“Within our current IT organization, we have a team whose function is to provide technical project business analyses, project management and quality assurance.  The same team handles the project portfolio and capital project budgeting.  Within the team are account managers, whose primary function is to act as the liaison between IT and business units.  The account managers spend time with the business unit leaders to understand their technical needs and look for business processes that might be automated.  That information is what is ultimately used to build the ongoing IT project portfolio.

We are looking at re-aligning the account management role into more of a "business technology service delivery" model.  Does Forrester provide information that might assist our efforts to mold into a service delivery organization?”

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