Analyst Comments from SAP Insider Event 2010

I attended SAP Insider’s five-part conference -- covering Logistics & Supply Chain Management, PLM, Manufacturing, CRM, and Procurement & Materials Management -- and got a chance to catch up with both SAP PLM customers and the SAP executive team on the latest SAP PLM strategy and roadmap. Since 2008, the SAP PLM team has been positioning their myriad stable of PLM software offerings (e.g. DMS, BOM management, cProjects, RPM, the largely defunct iPPE and PD tools, etc.) under new “end-to-end” process themes (e.g. “Continuous Product & Service Innovation”, “Integrated Product Development”, “Embedded Product Compliance”) to primarily drive their product development and integration work. Two years later, I can’t help but ask myself whether this strategy has resulting in more compelling value to SAP PLM users, or just more cross-selling opportunities for SAP?

Certainly the recent economic meltdown makes this question trickier, as the most recent Forrester survey data I’ve seen shows PLM investment among the establish North American and European markets was basically flat in 2009.[i] And although nearly every SAP executive presented a rosier economic outlook for manufacturers heading into 2010, most users I spoke with felt this was typical cheerleading and have yet to see their businesses and IT budgets return to “pre-meltdown”  levels. SAP calls this reality “the new normal” and advocates starting bold new IT investments and programs despite ongoing resource constraints. You gotta love vendor spin.

Even so, SAP PLM customers I spoke with feel SAP’s move to managing solutions around end-to-end process or value scenarios has both benefits and downsides. The upsides include:

Formal commitment for more investment in PLM. In particular, SAP PLM for Process Industries (a.k.a. Recipe Management) is receiving a lot of new investments in UI, compliance support, labeling, etc. as well as benefits from cross-domain new features like product analytics views and improving searching.

Forcing cross-functional swath of users to adhere to structured product data capture. Although the change management challenges are non-trivial, at the end of the day users cite the benefits of increased data discipline and increased emphasis on the product record (vs. CAD drawings) that SAP PLM products like DMS and CAD integrations enable and help promote better cross-functional data sharing and reuse.

Creating a single data source across the lifecycle. Capturing all the product change history across design, manufacturing, marketing, and support lifecycle stages can be a real asset when looking to track all product changes and information flows for compliance requirements or process improvement work.

The downsides include:

Much harder to customize. The emphasis on end-to-end processes mean less emphasis on new individual product features and more emphasis on integrations between toolsets. And as the software becomes more integrated, it can become a major project every time a simple systems change is requested in order to understand all the interdependencies. As one SAP PLM customer I spoke with said, “Integration is both the best and worst part of SAP’s product direction.” And in the words of one SAP solutions executive, “We want to be in the business of provide the complete car, not have users assembling or building their own automobiles.”

Takes a mostly-structured approach to a largely-unstructured design world. In reality, many aspects of SAP’s product development value scenarios are “untamed” and involve design processes that remain outside the purview of enterprise applications. In particular, popular collaboration technologies like chat, presence detection, and threaded discussions help teams of product developers “get work done” particularly if the team operates across distributed sites. And social computing technologies such as blogs, wikis, podcasts, and social networking sites are helping development teams discover new people and ideas that further enhance product ideation, requirement management, and detailed engineering processes. Although SAP has made investments in built-in team collaboration features via their SAP Enterprise Portal and NetWeaver technologies, customers I’ve spoken to insist the connections and processes within the SAP PLM suites are still very structured (like many other PLM enterprise applications) and don’t yet address this larger picture.[ii]

 

At the end of the day, SAP PLM is still a strong consideration for existing SAP customers who have a CEO or CIO with the vision to go with a single enterprise application platform wherever possible. And if your company is following this single application strategy, and you don’t plan on pursuing much customization, and you’re ready to move your people to a very disciplined, structured mode of product data management, then you’ll be in a prime position to take advantage of SAP PLM end-to-end process scenarios and corresponding new features (e.g. the v5 combined RPM + cProjects module, the Business Client 3.0 which shows how UI multiple screens are linked, the Object Navigator which further shows how data objects are linked together) as well as the modularized “switch” architecture that enables faster, more incremental deployment paths (one SAP customer has recently gotten their PLM pilot up in approximately 8 weeks instead of the usual 5-6 months). But if you’re like most companies, you’ve got a heterogeneous PLM app landscape, lots of customized code, and lots of ad-hoc design processes featuring lots of unstructured data; in this case, you’ll have some climbing to do before being able to take advantage of SAP PLM releases.

 

Are you an SAP Customer? Come Jam with us! A host of Forrester analysts from across the company are working to put together our first-ever SAP Jam on March 22-25. Here are a list of dates and times for the different sessions as well as the links to register:

 

SAP Jam Session #1: What Should SAP Clients Know About SAP Product Strategy?

Upcoming Teleconference, March 22, 2010, 11:00 a.m.-12:30 p.m. Eastern time

Paul D. Hamerman, John R. Rymer, Alexander Peters, Ph.D., William Band, Roy C. Wildeman

 

SAP Jam Session #2: What Should SAP Clients Know About SAP Value For Money?

Upcoming Teleconference, March 23, 2010, 11:00 a.m.-12:30 p.m. Eastern time

Dave West, Diego Lo Giudice, George Lawrie, Duncan Jones

 

SAP Jam Session #3: What Do SAP Clients Need To Know About SAP Data Quality, BI, Data Warehousing, And Integration?

Upcoming Teleconference, March 24, 2010, 11:00 a.m.-12:30 p.m. Eastern time

Boris Evelson, Rob Karel, James G. Kobielus, Henry Peyret

 

SAP Jam Session #4: What Do SAP Clients Need To Know About Implementation And Support Services, SAP's Cloud And On-Demand Services, And Offshoring?

Upcoming Teleconference, March 25, 2010, 11:00 a.m.-12:30 p.m. Eastern time

Liz Herbert, Euan Davis, Stefan Ried, Ph.D., Tim Sheedy


[i] According to Forrester survey data, just under one-third (30%) of all software executives reported active investment in PLM software In Q4 2009 – whether than be piloting, implementing, or expanding or upgrading – compared with 28% a year ago.  

[ii] In recognition of these untamed processes, SAP’s PLM 7.01 release will include a new Continuous Product Change capability which “captures product change and associated objects where-ever it starts” – a move which helps further collect more unstructured product data into SAP but still doesn’t fully tie to most ad-hoc design & collaboration processes.

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