SAP Rapid Deployment Solutions (RDS) Address Cost And Speed Of SAP Deployment

At SAP SAPPHIRE (SAP’s biggest user conference, May 14–16), SAP announced that it has deployed more than 1,400 instances of Rapid Deployment Solutions (RDS) at more than 1,000 unique customers. These solutions help customers deploy SAP modules in as short as a few weeks at a reduced price point by productizing typical configurations. SAP boasts cost savings typically in the 20% to 40% range versus similar deployments that do not utilize RDS.

SAP has more than 70 of these solutions currently available. Additional solutions are available through partners like Accenture and TCS. RDS solutions are available in a wide range of areas like CRM, Sourcing, Financials, and even SAP HANA.

SAP positions these solutions as “lego-like,” meaning that customers can build one on top of the other and can customize and extend as much or as little as they want.

Our take? These RDS solutions are a great way for companies to quickly realize value out of SAP, an issue which has long plagued the SAP community. Even clients who need to go far beyond what an RDS offers and create a much more customized deployment might be able to jump-start their project with an RDS. However, these offerings are not available in all horizontal or vertical areas. SAP customers who want a complete solution heavily tailored for their industry-specific needs will likely need to turn to SAP’s ecosystem of pre-built solutions, rather than lighter-weight RDS offerings. 

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Are you using RDS solutions? Considering them? We would love to hear your thoughts!

Liz Herbert


Clients Demand Business Innovation From Services Partners

Innovation is again the hot topic for clients, as it was before the economic downturn. Clients have a renewed interest in innovation and business growth, and they seek services partners who can help. But what is innovation in this context?

In this context, clients seek business innovation. They want a provider who delivers new ideas and insights that will change business processes to drive revenue or improve business processes (for example, through product innovation, customer process innovation, supply chain innovation). They do not mean delivery innovation or continuous improvement, where the provider improves service delivery efficiency to drive lower IT cost and/or higher quality of IT service to clients (for example, through improved delivery processes, shared services, reusable assets). (Of course, they usually do want this as well — but this will not necessarily drive business innovation such as new products and processes.)

What do leading firms do to drive ongoing business innovation from services providers?

1) Put process around innovation. Organizations who successfully get innovation from their services providers put processes in place, from idea discovery to incubation to implementation to measurement. They also select services providers who have codified the innovation process. Ongoing innovation cannot happen by accident.

2) Use social media to collaborate at fast paces with customers, partners, and employees. Tools such as social networking sites, microblogs, and collaboration sites let firms gather ideas, evolve ideas, and rank ideas with a wide audience. 

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Deloitte To Acquire Workday Implementation Specialist Aggressor

Deloitte continues to ramp up its software-as-a-service (SaaS) consulting practice, both through organic growth as well as acquisition. Today, Deloitte announced plans to acquire Workday implementation specialist Aggressor. Aggressor has been one of a very small set of Workday integrators (along with Deloitte), which means Deloitte now further boosts its already-impressive Workday practice.

This move furthers Deloitte’s Workday practice, as well as Deloitte’s overall practice in SaaS implementation and integration work. Deloitte also has strategic partnerships with other leading SaaS vendors, most notably

For buyers, this means a stronger and deeper bench of consultants at Deloitte. But, on the downside, it removes a boutique/specialist option from the market, which appealed to some because of its laser focus, smaller size, and (perceived or real) ability to be more nimble, flexible, and price competitive.

Are you an Aggressor or Deloitte client or prospect? We would love to hear your thoughts!


Clients Say Big Data Is Now An Imperative (Not Just An Initiative) At IBM's Smarter Analytics Event

At IBM's Smarter Analytics event this week, clients and partners presented success stories about how organizations are driving business value out of big data, analytics, and IBM Watson technology.

Examples included:

- City of Dublin, Ireland using thousands of data points from local transportation and traffic signals to optimize public transit and deliver information to riders.

- Seton Healthcare mining through vast amounts of unstructured data captured in notes and dictation to get a more complete view of patients. Seton currently uses this information to construct programs that target treatments to the right patients with a goal of minimizing hospitalizations in the way that most efficiently optimizes costs with benefits. The ability to mine unstructured data gives a much more complete view of patients, including factors such as their support system, their ability to have transportation to and from appointments, and whether or not they have a primary care physician.

- WellPoint using Watson technology to improve real-time decision-making by mining through millions of pages of medical information while doctors and nurses are face-to-face with patients.

But, clients warned that as much as the technology is advancing, the biggest hurdles remained the internal ones. Clients stressed that they face a critical challenge in introducing, driving, and changing the organizational mindset to work in a new way that can take advantage of these great advances in technology. What did they suggest?

1) Executive sponsorship from the top (C-level)

2) Hiring or retraining for new roles like data scientists (schools like Syracuse are introducing and promoting new programs out of their iSchool, which can help with reskilling experienced talent from other areas)

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SAP Buys SuccessFactors, Accelerates Cloud Strategy with Addition of Leading HCM Cloud App

Today, SAP announced plans to acquire SuccessFactors, a leading human capital management (HCM) cloud platform with more than 15 million subscribers. This greatly accelerates SAP’s move into the cloud and makes it a provider of one of the world’s leading cloud solutions. SAP plans to operate SuccessFactors as a separate company.

For SuccessFactors customers, this will create more integration opportunities between their best-of-breed cloud HCM solution with SAP’s suite of enterprise applications products, in-memory computing platform HANA, and mobile computing platform Sybase.

For SAP customers, this creates an immediate opportunity to buy an innovative, proven, fast-growing cloud solution from their strategic enterprise software partner. Today, there is only a small overlap between SAP customers and SuccessFactors customers — meaning most SAP customers do not currently use SuccessFactors (and vice versa).

While there are great opportunities and synergies with this acquisition, it also runs the risk of potential downsides for customers: pricing and contract terms are likely to change and the pace and direction of innovation could slow down as the provider moves from a nimble, niche supplier to a new parent company with many competing initiatives.

Key Areas To Consider In SaaS Contract Negotiation

With the Sourcing and Vendor Management Forums coming up next week in Miami and at the end of the month in London, our team is busy finalizing content and rehearsing sessions. Personally the hottest question I have continued to get since the keynote I did last year on SaaS sourcing is the question of SaaS pricing and contract negotiation. So, what can you expect in the track session “Negotiating Cloud Pricing and Contracts” for those of you who can join us?

New data from the Q3 2011 services survey showing:

  1. SaaS is disrupting spend on traditional services. Nearly half of the firms we surveyed say that “as-a-service” spending has reduced spending on traditional on-premises IT spend. And, these firms also say that it will have a noticeable disruptive impact. Out of the firms who say “as-a-service” spending will reduce spending on traditional spend, 30% say this disruption will be 6% or more.   
  2. SaaS adoption has expanded into IT applications and industry-specific applications. Firms are now using SaaS for an increasingly wide range of solutions: horizontal applications like CRM and HR and collaboration applications like email still dominate the trend but now 13% of firms use SaaS for IT software such as asset management and 10% of firms use SaaS for industry-specific solutions such as insurance claims management.
  3. Firms are centralizing their approach to SaaS sourcing and vendor management. The recently gathered data shows a strong trend towards centralized SaaS strategy and formal multi-year plans around SaaS. Not surprisingly, this data also shows that firms expect to see a decrease in unsanctioned, business-led buying.  
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Buyers Scrutinize SaaS Contracts More in H1 2011, As Deal Sizes Grow

The growing realization for SaaS buyers is that if they overlook the details of their SaaS contracts, chances are they’ll pay for it later. Forrester analyzed the thousands of inquiries we receive every quarter to understand the hot button topics in the SaaS space for the first half of 2011. When it comes to on-demand services, we found that people paid more attention to the following three factors in the first half of 2011 than ever before: 

  1. Pricing and discounts. It came as no surprise that people are most concerned about money and are looking for guidance around SaaS pricing and discounts more than anything else. Many of our clients want to benchmark themselves against peers. For example, one client asked, “Is there some benchmark data to compare pricing on B2C web portal (PaaS or SaaS) solutions?” Forrester’s take? Unlike traditional software, most SaaS pricing is publicly available on vendor websites. However, pricing and pricing models are still in flux for many emerging areas of SaaS. Even in more established areas, like HR and CRM, discounts can range as high as 85% for large or strategic clients.
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New Insights On Sourcing And Managing SAP Service Providers

Thinking about setting up a relationship or renegotiating a contract with an SAP implementation services provider? We have some exciting new insights on these third-party firms pulled straight from their customers' mouths.  We collected some great data when we surveyed 186 SAP customers using 19 of the leading SI firms for their implementation projects and saw some interesting trends surface. 

The report, Insights Into Real-World SAP Projects, highlights key areas that sourcing professionals should focus on when selecting a provider: pricing model offerings, SI industry expertise, and ability to measure business benefits.

Pricing Model Choices Correlate With Project Cost

We will be presenting more of these findings in the Insights Into Real-World SAP Projects Teleconference we are holding on March 11 at 11:00 a.m. Eastern time.  You can use the data from these customer interviews and the accompanying  Forrester Wave™ report on SAP SIs, which is due out at the end of February, as leverage for your strategic negotiations with these providers in 2011. 

Click here to register for the teleconference now.

Governing Large Implementation Projects: Execution Is Key -- Findings From Forrester's Recent Sourcing Forum

We met with 30 Sourcing & Vendor Management Professionals during an action session at Forrester’s Sourcing & Vendor Management Forum in Chicago to discuss how to improve governance for large implementation projects. Clients were looking for help across the sourcing life cycle – from determining who manages the RFP process, to determining scope with internal stakeholders, to driving governance after the contract is signed.

What tactics are Sourcing & Vendor Management Professionals using to tackle these challenges?

1. Renegotiate rates with current players. Forrester’s recent survey found that 68% of organizations are renegotiating with their existing suppliers. One attendee said, “This has always been a priority, now we are bringing more efficiency and innovation to the process.”

2. Drive innovation from vendors. Everyone wants innovation from their suppliers but few receive it.  Attendees shared tips for how they overcome major hurdles to achieving this in their supplier relationships:

a. Define what you mean by innovation. Many struggle to get innovation from their providers because they haven’t defined what that means — are you looking for idea-sharing or process improvements? Determine which type of innovation you need and communicate that to your vendor.

b. Identify metrics. “It’s not just how you measure innovation; it’s how you measure successful innovation.” Clients shared a variety of metrics such as:

i. Requiring the vendor to submit continuous improvement ideas they agree are impactful to your organization

ii. Number of ideas submitted for approval

iii. Number approved

iv.  ROI of implemented idea

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Sourcing Groups Prepare For 2011 -- Cloud Is Key Initiative

Sourcing executives are winding down 2010 and gearing up for 2011. Most of the sourcing executives we have spoken with recently are bullish about the year ahead, despite some looming uncertainty about the economy, particularly in Europe. Spend is opening up again, and buyers are investing in more strategic initiatives. But sourcing groups still struggle to balance low cost and high value.

Many of the sourcing groups currently working with Forrester are asking about cloud as a viable alternative to traditional deployment models. Cloud promises rapid deployment, potentially significant cost savings, and variable pricing in line with how buyers want to pay in the current economy. And cloud offerings continue to mature in areas where buyers previously had concerns (vendor viability, security, architecture, location of data). Cloud adoption is already over 25% in North America, and continues to grow in Europe (led by UK, but also growing in areas like Germany, France, the Nordics).

Most sourcing strategies around cloud consist of five key phases:

1.       Understanding the evolving supplier landscape and market maturity across cloud offerings.

2.       Educating business (and potentially IT) about the advantages and disadvantages of cloud.

3.       Building decision frameworks to support cloud purchases.

4.       Creating a contract negotiation and pricing strategy for cloud; building contract templates.

5.       Working with business, vendor management, and IT to routinely evaluate ROI and decide whether to renew relationships or find alternatives (potentially cloud, hosted, on-premise, or hybrid).

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