Lessons From a Business Intelligence Software Breakdown
May 26, 2010
By
Larry Marion
In more than 15 years of interviewing senior executives about their business intelligence software implementations, I can’t recall hearing about a more badly mangled environment than the tale I am about to tell. And I can’t recall meeting a more candid IT executive than Dawn Conant, director of business intelligence at Beckman Coulter, life sciences instrument maker.
Conant publicly disclosed the company’s trip into a BI rabbit hole, and subsequent escape, at the April 2010 Business Intelligence Summit organized by research firm Gartner.
Beckman has $3.3 billion in annual revenues and 12,400 employees, but beginning in 2001 it created a business intelligence software monster appropriate for a company 10 times its size. Astoundingly, business units created more than 900 Business Objects universes (essentially data marts).
Worse yet, approximately two thirds of them were running directly against a single global Oracle ERP instance or other online transaction processing system. There was no data warehouse to protect the production environment from the analytical sandbox, so performance was awful.
User departments were running amok amid the data marts – more than 1,500 decentralized report writers had created more than 4,500 different canned reports. But only 1,200 reports were unique, Conant noted.
You can predict that there wasn’t a single version of truth. Instead, there were hundreds of expensive versions of guesses. The frustration and confusion went right to the top – the board of directors had called in its own audit team because it couldn’t validate the company’s financial reports.
Conant’s summary of the situation by 2007: “It was complete chaos.”
Beckman’s CEO and CFO called a halt to the madness in late 2007, just as the IT department was trying to clean up the mess. The top execs had heard from Oracle about the prebuilt analytics approach that the software vendor offered and they bought into the vision.
It would save money and streamline the IT organization to use the Oracle Business Intelligence Enterprise Edition, accessing a data warehouse pulling data from the Oracle ERP system.
For the past several years Conant and her team have been implementing a large number of Oracle prebuilt analytics applications to support the following business functions:
• Customer and Product Profitability
• Inventory Management
• Order Management and Order Fulfillment
• Service (custom build)
• Supply Chain
• Finance
• Human Resources
• Quality Assurance (custom build)
All of them went live in early May, with approximately 300 reports. By the end of the year the number of reports is expected to rise to roughly 600.
Conant and a team of 120 people (divided equally among IT, business, and consultants) implemented a powerful business intelligence software environment complete with validated and authenticated data, providing important insights about product profitability by region, customer, or other metric.
In the process her team replaced a fragile and expensive infrastructure with one that was more stable and cost efficient. And she learned a lot of lessons about pre-built analytics apps:
• The rule of thumb frequently provided by the vendors of prebuilt apps is that you should be able to use at least 80% of what is in the box and only have to customize 20% or less. It will come as no surprise that her first piece of advice is to not bank on that level of usability. Instead, carefully match up the code you get versus the functionality you need. “Significant analysis of the code,” is required before you make a commitment, she noted at the event.
• This need for analysis is especially true for the extract, transform and load (ETL) portion of a data warehouse and analytics infrastructure. As Conant points out, ETL is roughly 80% of the implementation challenge and cost, so if the out-of-the-box analytics provides at least 50% of your data sourcing code, it is probably worth it.
• Make sure your business users, and especially your experienced report writers, are part of the code analysis team. The IT department won’t know where all the source data problems are, so you better have people on the assessment team who know the black holes.
• Modifying those prebuilt apps is not a job for neophytes—only let experienced implementers touch that code.
• Building your environment also takes experience to avoid serious mistakes, not the least of which is horrible performance problems. “We didn’t know what we had purchased,” Conant acknowledged to explain the challenges users initially experienced with the performance of many of the reports.
• Report development centralization was implemented to ensure appropriate levels of control. Rather than 1,500 distributed report writers, no more than 100 people will be given writer access to the system. And they will be extensively trained. Validated reports conforming to SOX and other compliance mandates become standard operating procedure, not a wish list item.
• Everyone knows managing data quality is tough, but typically the task is underestimated. Validating and testing data was “extremely hard,” she adds.
• I’ve been hearing IT executives lament about the inadequate amount of change management they included in their implementation plans since they implemented ERP systems to avoid the Y2K scare 10 years ago. Conant says there is still a substantial change management task ahead at Beckman. Taking custom developed reports away from the users that developed them and replacing them with flexible, pre-built reports that are centrally developed is on her plate for this year.
As others have noted, selling the best practices of the pre-built apps is one way of persuading managers to accept the new way of life. Top executives will support this effort because it gives them the opportunity to implement strategy and execution throughout the enterprise.
Other experts offer other cautions about pre-built business intelligence analytics:
• Pre-built apps makes sense for support functions, notes Christian Kirschniak, Global SAP Solutions Leader, Business Intelligence Solutions, HP. Enterprises need to differentiate their core capabilities and shouldn’t consider a generic approach for those processes. HR or IT is not a core competency, so pre-built analytics makes sense in those areas, he added.
• “If analytical packaged apps don’t start with a basic architecture for exploring data, [nor a] a preconceived mix of fixed tables and schema with a presumed approach to reporting, then you’ll run into expensive customizations,” warns Dyke Hensen, Senior Vice President, Product Strategy of PivotLink.
And Dyke should know, his 20-plus years in the Business Intelligence software business includes stints at pre-built analytics firms such as SPSS, Hyperion and Arbor.
The bottom line on pre built analytics: They deliver less than you hope but are usually better than starting from scratch.
In Bookstores now: "Open Leadership" by Charlene Li
A few weeks ago my management staff had the pleasure of visiting Altimeter Group's R "Ray" Wang and Jeremiah Owyang at "the Hangar" for a briefing on SAP EcoHub and SAP Community Network. As always, it was great talking with these guys about our ecosystem strategy and as an added bonus, we each received advance copies of Altimeter founder Charlene Li's new book, "Open Leadership: How Social Technology Can Transform the Way You Lead," a follow up to her best-selling "Groundswell."
"Leadership takes on a different dimension in a connected, networked world - that of being a catalyst
for change both outside and inside the organization."
Gain control by letting go
As social technologies transform the business landscape, consumers and even employees are urging executive leadership to be more open - open-minded about new business practices, open and honest communication to employees, open and direct communication with the public, open to new innovations, open to risk-taking and failure...It's a difficult shift to make both culturally and personally, and this book is aimed at helping leaders assess their readiness to develop an "open strategy" that works for them and their organizations. Charlene defines "Open Leadership" as: having the confidence and humility to give up the need to be in control while inspiring commitment from people to accomplish goals.
Now, there still need to be controls to prevent total chaos - at SAP, we think of this as "orchestration." So how does an open organization balance that openness with the necessary discipline to achieve its goals? Or as Charlene puts it, how can you be open while still running a tight ship? Well, last year, she had the opportunity to stay aboard a US Navy aircraft carrier, the USS Nimitz, through the same program that invited me and other social media enthusiasts aboard the USS Lincoln. The fact that the US Navy - charged with protecting and defending the United States and its allies - would open its doors to bloggers and other influencers, and encourage us to talk to anyone to get their unfiltered perspective is pretty extraordinary.
Yet each sailor undergoes intense training, so the commanding officers have confidence that they know what they can and can't discuss with visitors. Additionally, their commitment to the Navy's purpose, combined with the direct correlation between their role and this mission, provides guardrails to the open environment - or, as Charlene prefers, establishes a "covenant" between the sailors and their leaders. As such, the leaders are comfortable giving up an element of control.
"The reason to get proactive about giving up control is that by doing so you can actually regain some semblance of control. It seems counterintuitive, but the act of engaging people, of accepting that they have power, can actually put you in a position to counter negative behavior. In fact, it's the only real chance you have of being able to influence the outcome."
The chain of command is changing
Traditional executives have a tendency to view social media with skepticism, either as simply a fad or as a potential threat. But we're learning that you can't just ignore it - it's part of the changing dynamics in the business world, helping accelerate the push for organizations to be more open and engaging with their ecosystems (if you have a few minutes, check out the refreshed Socialnomics video with powerful stats).
"Two things have happened to put pressure on [the traditional clear chain of command] mode. First, the parameters of success have changed from process control to innovation. You can't simply "Six Sigma" your way into new markets. Instead, organizations need to develop the organizational flexibility to adapt to fast-changing markets. Second, businesses are now more likely to be delivering services than manufacturing objects. A skilled and motivated workforce on the front lines quickly chafes under strict limitations and hierarchies, unable to do what they think is needed because of headquarters' disconnected notions of what really works in the market."
At SAP, we're fortunate to have the trusted SCN community, our SAP Mentors, and platforms like Idea Place and Code Exchange where you - our community members - help us identify market changes and test what really works. And if we can't move fast enough or are not able to step in, our ecosystem is able to fill the gaps with custom extensions and solutions to fill specific needs. Now, extending this culture of openness and evangelizing the benefits to the rest of the global company is a significant culture shift (both historic corporate culture as well as country-specific cultural instincts). My colleague Jonathan Becher, EVP in SAP's marketing organization, recently wrote a blog post about changing the culture in his new group by giving up control. Though his "open strategy" was on a small, internally restricted scale, it still reflects the four underlying objectives Charlene lays out: Learn, Dialog, Support, Innovate. Jonathan was open to learning about dynamics and working styles of his group, opened up dialogues empowering his direct reports, and publicly supported their decisions. This created healthy and productive working relationships, laying the groundwork to foster creativity and innovative approaches.
The ROI of being open
Moving toward an open and transparent model is a risk, with the potential of some very public failures along the way. Charlene spends an entire chapter devoted to "the failure imperative." An important part of being an open leader and cultivating an open environment is being comfortable with taking responsible risks, and supportive if those risks don't pay off. Most importantly, use failures as an opportunity to strengthen relationships and build a culture of trust that encourages risk-taking - build in worst-case scenarios, and if the risk doesn't pay off, be sure that your post-mortem includes what you've learned to do the next time.
It's harder for more established organizations like SAP, and individual employees, to become comfortable taking risks, unlike most Silicon Valley startups which are based on risks. (Charlene references Google's motto of "fail fast, fail smart" - an attitude which is critical to nurturing its innovative culture... and a favorite in my own team is: "fail forward faster.") SAP took a big leap of faith back in 2003 in deciding to create SAP Developer Network (SDN), then committing to support it and build it out over the next few years to what is now a collection of communities, or SAP Community Network (SCN).
The ROI of this open community, and later integrating multiple Web 2.0 and social media tools, might not have been immediately apparent, but Charlene lays out four clear benefits of open-driven objectives:
Remove friction. By removing barriers and access to information and people, the cost of information sharing and decision making is lowered and it is also simply easier to do.
Scale efforts. The culture of sharing means things spread faster and wider.
Enable fast response. The real-time nature of social technologies means that you can respond quickly. In fact, if you are not there to head off the growing wave, you risk being overrun.
Gain commitment. Probably the hardest to quantify but the most important, as you win the hearts and minds of your employees and customers.
Simply by creating SDN, we committed to having an open strategy seven years ago. As a company, we've certainly experienced each one of these benefits, and we know that our individual members, our customers, partners, and others in the ecosystem have experienced even more benefits, both tangible and intangible.
No matter your role in your organization, I recommend picking up a copy of "Open Leadership" and seeing how you can effect change and transform your company as a collaborative and inspired leader.
Mark Yolton is Senior Vice President of the SAP Community Network (SCN) ... which includes the SDN and BPX communities, the Business Objects community, plus TechEd and Tech Tour events that support those virtual communities with real-world events, and the SAP EcoHub online community-driven solution marketplace.
In the last post on SAP I wrote, I remarked that I wasn’t a Kremlin watcher but had a fascination about how CEOs and changes in CEOs affect companies. Its been about 2 months since I wrote that and by now, as I wrap up my experience (and I am carefully choosing that word) at Sapphire, I have to say, that the effect on SAP of the co-CEOdom of Bill McDermott and J.H.Snabe seems to be truly dramatic. Without hesitation, I would say that I have never, in all my years of experience with high tech companies, or companies of any kind, seen such a fundamental transformation in the outlook, direction, and tenets of company life from any company than the one I’ve seen at SAP. What makes it particularly spectacular is that this isn’t just the words of a company that is attempting to spin - but is reflected strongly in the look, feel and actions of SAP and its employees and staff. It extends from the way that SAP is involved with their customers and partners to the way that Sapphire even looks - something more akin to the 22nd century (so to speak, those of you who read things literally) than even the 21st.
Do I think this is a product of the McDermott-Snabe duet? Not entirely, but I think that they are opening the company up so that what has been there for awhile is now exploding into the open.
That said, I’m not all starry-eyed and awestruck either. There are a couple of non-trivial concerns I have - given the SAP strategy that’s been outlined at SAPPHIRE 2010. However, what I have seen is dazzling - at least when it comes to the cultural transformation.
The Cultural Transformation
While the visible signs of the cultural transformation have been eye-popping, don’t assume that this started this year, or was something that just happened. It has been at least 3 years in the making. In fact, in the 4th edition of CRM at the Speed of Light, (there is a free chapter on culture change available here), you’ll see a section entitled, “Case Study: SAP Goes for the Gold Standard” which outlines at least one of the pockets of cultural transformation that have been around a few years - if this wasn’t the first one. What was noticeable was that SAP at that time, recognized that their traditional way of doing business was no longer going to be appropriate for a new world which at one level demanded increased customer engagement and at another level involved considerable input from customers on what they actually wanted from the companies that they were dealing with or what they would like to see. It was no longer a “build it and they will come” enterprise software world - or world in general for that matter. Customers wanted to play and were playing a more pre-eminent role in how they ran their own businesses - or in the case of B2C - their own lives, rather then have their vendors determine it as they had been doing to some degree.
SAP understood this and began involving their largest customers and partners in the innovation and iteration process. They jointly developed products or improved products that SAP would then produce. Each of them - the vendor and the customer - had skin in the game. This originated, I’m happy to say, in the CRM 2007 product development - the first dramatically different and successful in its difference SAP product. Prior to its development, SAP’s CRM product was a joke at best and a non-existent throwaway at worst. After SAP CRM 2007, it was a contender on the CRM enterprise stage without question.
But of course, the integration of customers into the product development process, changed how SAP saw itself doing business and how they were organized for that. For example, here is what Michael de la Cruz, who was SVP of Mobility at the time (now SVP Public Sector) said about 2007:
While executive support from Shai Agassi, Hennings Kagermann, and Bob Stutz may have triggered and driven the changes at SAP in our culture, our most dramatic changes occurred by us deciding to focus on our customers in every way possible—changing our strategic direction, our processes, and our rates of interactions with our customers as we made the changes and beyond. We spoke to our customers every single day.
Change at SAP started out by having the team interview our customers about their pain points with us and our products. We started prior to the SAP CRM 2007 release and during that time, we found that a lot of our customers weren’t in front of their computers. They were out there conducting their businesses. The customers told us that the product, not just the user interface, was too difficult to use. It was painful to hear brutal feedback on where our functionality fell short. But it was also refreshing for customers and SAP to talk openly and honestly about the good, the bad, and the ugly. As we discovered more things like this, we began to base our strategy on customer feedback. But even more than strategy, those interviews reinforced the need for a broad mindset change by those who created, produced, and released the products. Customers had been telling us this for many years but they were more emphatic now. They had been influenced by the consumer web and consumer thinking that had crept into the enterprise, and the pressure increased.
This was by no means company wide but it was a start toward a “new SAP” that I think simply blossomed when McDermott-Snabe became the ruling duo. They unleashed something that was already there.
Its always easy to be skeptical of large companies and their ability or inability to change. Small companies are nimble, innovative, creative, blah, blah, blah. And for many small companies that is entirely true. Many. Not all. But conversely, large companies can change too. What tells you if they really did or not? Look to the cliche - actions speak louder than words.
That’s exactly why I think SAP’s changes are dazzling. They acted on them and you can see that they’re institutionalizing those actions across the company so that the culture change is both permanent and repeatable - and flexible enough to change again when needed.
That’s reflected in a number of ways - ranging from the strategic reorganization of the company to the individual desire and actual listening to the customers, analysts, partners that SAP is doing - and their creation of institutions to support that transformation.
Its also reflected in the look and feel of the company now - even how they handled SAPPHIRE 2010 - which was outright…..cool.
SAPPHIRE 2010 in the 22nd Century
The overwhelming feeling that you got going to SAPPHIRE 2010 in Orlando, especially at the Exhibition Hall was that somehow you had just entered the early part of the 22nd century. This was the most technologically advanced - and complex - setup I’ve ever seen but was also the most well thought out exhibition hall when it came to producing what you’d have to call an open environment. A few vignettes:
**When you walked into the Exhibition Hall, you were faced with a wall that had a ton of SAP product information on it. See the video here. This wall was a giant touchscreen that allowed you, with your fingers and entire hands to move data around, visualize and re-visualize it, turn it on its side, change its position, integrate it with other pieces of information that you might need - all via touch.**
**I was on a panel with CEM expert Lior Arussy and Gartner Markets whiz Sharon Mertz on CRM strategies, and I happened to look to my right and saw this giant projection wall with 8 huge HD screens that was carrying all the open theater speeches, panels, demos that were going on throughout the massive, colorful exhibition hall.
See?**
**Perhaps the most dramatic for me was the way that they handled the analysts, press, bloggers etc. Typically at these vendor conferences and in SAPPHIRES past, vendors would have an area of rooms that were for press only - a room that you had power and internet connectivity, a room for interviews and a room for a press conference of sorts. This time it was totally different.
There was a wide open area in the front of the Exhibition Hall - yes, in the Exhibition Hall - with hundreds of chairs and long tables with power strips and internet connectivity (wired). There were couches and those kind of bar tables - elevated with a couple of elevated chairs. There was an information desk and an access desk - it was a cordoned off area called Global Communications. There were meeting rooms. Again, all in the Exhibition Hall, all in an open area, and thus it pulsed with the excitement of the Exhibition Hall itself. Not only that, but senior execs at SAP were dropping by to say hello all the time. No longer a “set up an appointment with my secretary/executive assistant” but instead a “hey, ’sup” informality that I’ve seen nowhere else. A brilliant move if you want analysts and journalists to think well of you. Perhaps the only puzzling thing was the isolation of the bloggers who had their own section away from the press and analysts. That comes because SAP oddly distinguishes bloggers from all other business influencers. That wouldn’t work ordinarily, but they have an amazing guy running the bloggers program - Mike Prosceno, so it works but more on the sheer strength of his personality as opposed to it being an exceptional idea. I cross into both groups - my badge usually says chameleon and changes with available budget lines - I actually had a Business Influencer and Speaker set of badges - and could have had analyst, press, or blogger too. Nonetheless, this aside, the openness of the Global Communications was extraordinary.**
The conference set up was brilliant in its openness - and a reflection - I’m sure a conscious one - of the changed culture that SAP wanted to exhibit at SAPPHIRE 2010
While SAPPHIRE was a reflection of the changes, though, SAPPHIRE ended too. The real question was, is, when it comes to the change in SAP culture, how well situated is SAP for the future of its business? The long term is what matters with culture change, not the show floor.
To that end, there is a corporate reorganization that might work within this new cultural framework. Note however, the phrase “might.”
Corporate Reorg
Again, this is NOT just a cultural transformation in name. It is one in deed too. They’ve reorganized the company with considerable corporate restructuring. A lot of senior executives left the fold with the removal of Leo Aptheker - some left voluntarily, some not so much. I usually am sorry about that simply because of the human cost involved but in this particular case, SAP’s moves have been the right ones - mostly - and good for the company. I can’t say I feel sorry for the execs who left or who “got left” because they are well heeled already I have to presume and thus, my populist instincts say, that they’ll land elsewhere.
But the corporate reorganization is a severely transformed structure. It moves from horizontal buckets like CRM, SCM, etc. to a vertical company that has two long totems - lines of business and products (such as in product development). So for example, where they had a CRM “bucket”, now there is a CRM LOB and a CRM product development team that works within the portfolio of each totem. For example, where great guy and SAP senior exec Rich Campione used to be responsible for the enterprise business apps solutions such as CRM and ERP, he’s now responsibility for the product development side of the whole portfolio.
This may work, though it remains to be seen. The imperatives of business tend to genuinely drive product development (at least in theory) in most businesses though realistically, how product development actually occurs is often at odds with the demands of business development. We’ll see how this works at SAP with product development and lines of business separated out. The nature of the transformation will allow, it seems, products to be developed at a faster pace and with more resources than in the past. The LOB component is what remains in question. But this is a risk that SAP is taking and even the willingness to make this sorta dramatic shift is something different than in the past - when SAP operated in a very conservative mode.
But part of the restructuring is not just how they responded to each other internally but how they actually are engaging their customers in the SAP value chain.
CVN and IdeaPlace
SAP has had a unique relationship with their customers for many years - one unlike any other company that I know - through their Customer Value Network (CVN) run by the remarkable - truly amazing - Jim Goldfinger. What made this network unique is that it is about 100 plus SAP customers who are so fully engaged in the company that they are almost seen as internal resources - though, of course, it’s not a blind eye view so to speak. Jim Goldfinger has crafted a network of customer advocates by knowing them deeply and personally and bringing them in to not just discussing SAP fait accomplis but also to discuss direction prior to the decisions being made on which way to go.
The limitation of this extraordinary group of advocates is that it has been largely built on a personal set of relationships that take place as often face to face as they do via cyberspace. Additionally, Jim Goldfinger’s devotion to the customers is legendary - and unique. However, the CVN works - I know because I know about 1/3 of the customers in it - and they are committed to not only implementing SAP but to participation in the SAP ecosystem and evangelizing on its behalf.
Couple that with the engagement of the large companies in the co-creation effort that led to the new CRM product for example and you have the foundation for an extensive SAP ecosystem that is driven via its internal and external advocates. But with the culture changes, come a lot more.
SAP launched a new Jive-based community at Sapphire 2010 called Idea Place, which is perceived by SAP as an “Innovation Campus” and often called out in the rest of the world - an “ideation community.” It fulfills the missing piece of the innovation and engagement puzzle by providing a forum for customer, partner, individual feedback on current SAP products, new ideas for products or even something as small as a feature or minor improvement. It is what “crowd-sourcing” is typically defined as. Here’s a video on it that will explain what it does from SAP’s mouth to your ears.
What makes this important is that not only will SAP have a channel for the “general population” to reach into SAP with their ideas, SAP remains committed to responding and acting on the feedback that it generates. So between the CVN, the co-creation company to company that Michael De La Cruz speaks of, and Idea Place, SAP is actually practicing what we could define as a B2B version of Social CRM, though let’s not go overboard. In fact, Idea Place reminds me a great deal of Procter and Gamble’s Connect and Develop program.
This resembles what’ I’ve styled the “collaborative value chain” - the enterprise value chain with the incorporation of bidirectional customer channels which allow the customer to participate in the actual evolution of the company. They’re not for everyone, but they are available to everyone who cares to participate - though the onus of participation is on the customer actually. The customer can choose to involve himself/herself/his company/group etc. Or not. SAP has taken a first step in that direction.
The Message Remains On Track
In the last 12 months, SAP has been trying to rediscover itself and done itself some actual damage in the process. If you look at their messaging at the varying conferences, its been all over the map and has ranged from smart (sustainability, enterprise mobility) to surprising (innovation, in-memory computing) to stupid (”eliminating 3 letter acronyms, selling end-to-end processes). They seem to have finally righted their ship here and in the last several months have not just expressed but expanded upon the notions of real time, unwired and sustainable which supported their March 2010 Business Influencers Conference themes of in-memory computing, enterprise mobility and sustainability. This is important to reestablish as Ray Wang puts it in his piece on SAPPHIRE 2010 a sense of normalcy, which SAP and its customers - and future prospects - desperately needed.
Product Direction
Okay, all this is well and good, but SAP has to provide products, services and solutions to their customers. To that end, when SAP provides the right themes, they also have to provide the products and services that are appropriate to the themes or the discontinuity shows.
To that end, several products were front and center at the show and several product directions were clarified. Most important? The in memory computing, enterprise mobility, and CRM 7.0 with the first two tied together by the Sybase acquisition. Incorporate the on demand strategy and the inevitable move by SAP into the cloud to this and we get the release of Business by Design. Take into account the UI of CRM 7.0 and the almost intuitive use of Business Objects Explorer on the iPad and we’re looking at a new generation of genuinely usable, cool and useful SAP apps.
Sybase in Context
One of the cornerstones of the SAP enterprise mobility technology has been the Sybase iAnywhere platform, which is a genuinely solid piece of work. Its a mobile platform that can deliver content from an application on the fly in any format for any mobile system that you want. So if you have Blackberry, iPhone, Windows 7 Mobile and Android, let’s say (since I suspect, sorry Palm, that those four will be it soon enough), content can be pushed out to the phone in the format needed as the data is accessed.
But, I thought as did others, why would you want to spend $5.8 billion on a mobile platform - even one this good -when you had a partnership that seemed to make everyone perfectly happy? Plus the estimated value of the mobility business around the iAnywhere platform is around $400 million. Substantial but not enough to pay $5.8 billion though, is it?
I had my nose tweaked back into joint with a series of conversations as I found out more of the thinking - and now - I understand. I can’t speak to the valuation. Not my domain expertise or even my bag, but I can speak to the wisdom of the thinking.
The mobile platform was one of three key reasons that the Sybase acquisition occurred. The second, and what may be the most important, goes to the heart of the upcoming SAP architectural redesign around in-memory computing. For those of you who want to hear more about in-memory computing, here’s a video posted by SAP about it back toward the end of 2009 (thanks to Zoli Erdos for this one). Sybase’s database designs are tailored to support in memory computing. That would be their Adaptive Server Enterprise and SQL Anywhere products. If not end of story, big part of story here. Makes SAP’s evangelical task of bringing in-memory computing to the enterprise masses that much “easier.”
There is one more thing, which was pointed out to me by several SAP executives. SAP doesn’t have much penetration into the financial services markets (I can corroborate that one) and apparently Sybase does (I’ll have to take their word on that one). This gives SAP a deeper entry into a market they’ve been historically deficient.
All in all, thus, $5.8 billion for the $400,000,000 mobility business isn’t the story as some have speculated. In fact, it might only be the second most important part of the story. Just the coolest looking one.
Okay, this Sybase thing aside, we have to get back to the products at hand - especially the one that they presented so frequently, even looking somewhat cool and rather powerful on an iPad, that you would think it was the savior of SAP. That would be Business by Design and, take my word for it, this isn’t the savior of SAP.
Business by Design
Even the hypercool demo of Business by design on an iPad using in memory by Hasso Plattner during his keynote, doesn’t get BBD off the hook as far as I’m concerned. I did a test drive of the product and saw a demo of some of the CRM functionality of the product that I didn’t get to see in the test drives. I found the product functionally substantial if the market SAP is aiming at is the same as the NetSuite market - the upper end of the midmarket - although BBD plays across the whole midmarket, really. This is NOT a small business product - far too functionally complex for that.
However, I have several problems, some small, some concerning me greatly, with BBD:
I think the UI design has issues. For example, the “Close” button in the Order Management section of the test drive was the second button from the left of the row of buttons. Natural human inclination is to look for a “Close” button on the far right. Things like that are puzzling small but significant decisions on UI design. The UI is generally not all that attractive nor particularly user friendly. But that would be even niggling if it weren’t for the fact that there are significant competitors in the market with deeply functional products and nicer UIs.
Functionality sometimes puzzled me. For example, there is a function called Document Flow that when opened shows a series of boxes that are connected in a sort of simple flow that say things like “sales order” to “sales order” to “customer invoice.” Two thoughts - What happens when the order gets complex and there are 20 boxes - it would be remarkably cluttered. But more importantly, why even include a function like this? Who would want it?
Most importantly, it is being released VERY late in the game and is just not a superior product yet. I’d say SAP BBD is three years (though that’s a metaphorical statement) behind the curve and the other on demand vendors aren’t waiting around for them to catch up. They are directly competitive with NetSuite and as of now, NetSuite is a better product.
All in all, while functionally strong for complex and growing midmarket companies, I am distinctly underwhelmed by this product. Is it a bad product? No. Is it a good product? Not particularly. Is it competitive - yes - but holding up the rear.
All that said, with the spectacular cultural transformation of SAP, BBD could be improved rapidly should SAP decide they want to do that. But they have other options too.
They could acquire the functionality elsewhere.
They could build separate on demand products that handle the same requirements but are not saddled by the UI or the history. For example, one product that they are building right now is Sales 2.0 On Demand (I presume a working name only). This product is based on the collaborative vision of SAP EVP John Wookey, who nailed the future of sales on the head when he defined how salespeople will have to internally interact in the future. He understood that not only will sales people have to treat customers as peers and not objects of a sale, but that there is a way to tap the vast internal knowledge of large sales organizations to extract the knowledge that resides in the heads, not on the laptops and desktops of other sales reps, marketing people and other employees which improves the chances of sales people to succeed in their jobs.
Rather than substituting this for traditional SFA, they are doing the “propah ting” and extending collaborative capabilities to traditional SFA functionality. Smart move. They are doing this as separate from BBD product.
To be fair to SAP, there are a couple of things that need to be said that are positive. First, the standout in the BBD standalone product - their analytics - shows a lot of promise and of course, are geared toward being delivered in-memory. Even as they are now, they are strong and pretty much provide what any company could possibly require in the midmarket at least.
Second, if BBD is placed in a larger context as part of an overall strategy that integrates on premise, on demand and the cloud - with mobile. then it doesn’t need to be a great standalone product - though I’m sure SAP wants it to be. The context for it is how it played on the iPad in the demo given at Sapphire. There it kind of worked. But that’s not the way that most customers will use it as a standalone.
All in all, they need to step it up with BBD. While they at least now have something, they simply have to get a lot better at it.
CRM 7.0
I need to say something briefly about CRM 7.0. Though, this product didn’t get a lot of keynote love, it is seen by SAP as a flagship product - a strategy driver for the newly transformed company. It was well represented in a wide variety of sessions and at the kiosks on the show floor. CRM functionality beyond CRM 7.0 was also widely discussed such as the BBD sales, marketing and customer service functionality and the Sales 2.0 On Demand product mentioned above.
My primary complaint about CRM 7.0 when I first reviewed it several months ago was that the territory management was poorly conceived. The only way to manage territories at the time I saw it was via manual entry. However, SAP has fixed that and, as a result, developed an application that is truly competitive - and has a brilliantly easy interface to deal with. Take a look at the web version of the UI:
Pretty slick and a far cry from the ugly interface of the past. Thing is, SAP has a winner here and will be competitive at the enterprise level for a long time. I’ll be doing a much more complete review of this product later on this year. I just want to make sure that that CRM 7.0 is understood as a strategic part of the SAP portfolio.
Summary
While some of this seems a bit disjointed I’m sure, there is one thread that runs continuously throughout SAP’s new business-stream. SAP has transformed their company from what has been seen as a highly traditional, conservative, closed company, to an open innovative accessible organization who can play on the international enterprise stage as it progresses through the 21st century. There are still holes and problems and needless to say, we have to see how much of this survives 2010 and becomes part of a permanent new landscape. I suspect it will, but its up to SAP, not me, to continue this.
<조직에 대한 공헌>
강력한 개념을 구축하고 기획할 능력이 있다.
아이디어를 행동계획으로 조직화한다.
목표달성을 위해 모든 장애를 제거하는 노력을 한다.
시스템의 각 부분간의 복잡한 상호작용을 포함하여 그 전체성을 이햐하도록 조직을 밀고 나간다.
조직이 어떻게 될 것인가에 대한 강력한 비전을 가지고 있다.
<리더십 스타일>
조직목표를 달성하기 위해 자신과 남을 이끌어간다.
아이디어 영역에서는 강력하고 강압적으로 행동한다.
남에 대해 엄격해질 수 있다.
개념화, 디자인, 신모델을 구축한다.
필요한 경우, 냉정하게 전 시스템을 재편성 할 수 있다.
<선호하는 작업 환경>
장기비전의 실천에 관심있는 지적이며, 확고하고, 도전적인 부하를 선호한다.
반성에 필요한 사생활을 허용하는 분위기를 선호한다.
효율성이 있는 분위기를 선호한다.
효율적이고 생산적 인물이 포함된 분위기를 선호한다.
자율성을 고취하고 지원하는 분위기를 선호한다.
창조성에 대한 기회를 제공하는 분위기를 선호한다.
과업중심적인 분위기를 선호한다.
<잠재적 결함>
조금 양보가 없어 남들이 이들에게 접근하거나 도전하기를 두려워한다.
자신의 이상을 추구함에 있으서 남을 비판한다.
비현실적인 아이디어를 너그러이 봐주는데 어려움이 있다.
자신의 아이디어나 스타일이 다른 사람에게 미치는 영향을 무시한다.
<개발할 점>
피드백과 제안을 수용할 필요가 있다.
남을 인정하는 법을 배울 필요가 있다.
비현실적인 아이디어를 포기하는 것을 배울 필요가 있다.
자신의 아이디어가 남에게 미치는 영향에 대해 좀더 주의를 기울일 필요가 있다.
<일반적인 강점>
장래의 일을 너무나도 명백히 마음 속에 그리므로 그것을 지각할 수 있다.
패러다임을 바꾸는 사람 즉, 개념의 틀을 바꾸려는 사람이다.
전체적인 관점에서 각 부분들의 관계를 본다.
<성장을 필요로 하는 전형적인 영역>
결과를 너무나 생생하게 볼 수 있으므로 다른 사람이 어떻게 해서 그 결과를 놓치는지 이해하지 못하는 점
다른 사람의 관점을 끝까지 허용하지 않는 점
자신의 생각 속에 갇혀서 의견을 바꾸려하지 않는 점
킴 프로젝트 등을 혼자서 하려는 점 즉, 자신이 아닌 다른 누구도 그것을 더 좋게 할 수 없다고 빋는 점
다른 사람을 훈련/개발하는 데 필요한 시간을 들이지 않는 점
참을성이 없는 점. 즉, 다른 사람에게 미치는 자신의 영향을 자각하지 못하고 자신의 세계 속에서 길을 잃어 버린다.
↓
<지도를 위한 제안들>
인내심을 가지고 다른 사람이 이해할 때까지 당신이 통찰한 바르르 계속 되풀이 하는 연습으르 하라. 무엇이 그들의 마음을 붙들고 있는지 생각해보라. 그런 다음 당신이 당신의 아이디어들을 전체적으로 조명해 보는 방식으로 이러한 정보를 전체적으로 활용하라.
다른 사람들의 도움을 받으려면 당신이 일을 다 마치기 전에 당신의 과정속으로 그들의 관점을 받아들여라.
다른 사람의 아이디어를 적어보라. 그리고 그것들을 내팽개치기 전에 그것들의 장점을 곰곰이 생각해보라.
가능한 한 빨리 당신의 비전 혹은 업무의 일부를 다른 누군가가 그 위임으로부터 상당히 덕을 볼지도 모른다.
다른사람과 업무를 나누는 연습을 하라. 그런 다음 그들을 훈련시키는 시간을 갖도록 하라. 그렇게 한다면 결과적으로 당신은 더 많은 창조를 할 수 있는 자유를 얻게 된다는 점을 깨달아라.
믿을만한 사람에게 자신이 다른 사람에게 미치는 영향에 대한 피드백을 들려줄 것을 부탁해보라. 이 때 다른 사람들의 말문을 막지 않도록 하라.
다른 사람에게 미치는 자신의 영향을 자각하지 못하고 자신의 세계 속에서 길을 잃어 버린다.. 라..
영향을 미치긴 하나? 별로 안그런거 같은데;;
(이견있으신분은 좀 알려주시라능)
There's no doubt that SAP customers are excited about the in-memory and column-store database technology announced at last week's SAPPHIRE event. But are they hearing only what they want to hear from SAP? And if that's the case, when can the company deliver what they are really after?
SAP put the emphasis of its SAP Business Analytic Engine announcement on delivering what it called "real, real-time" analysis. But among the SAP customers InformationWeek canvassed, the bottom-line takeaway on the "New DB" described by Chairman Hasso Plattner was that it could simplify IT environments by eliminating business intelligence infrastructure.
"Most of what we look at through BI is just data that's in SAP R3 put in a different place so that we can report on it quickly and efficiently," said Mike O'Dell, CIO at Pacific Coast Building Products. "If suddenly I can do that same reporting on a live system because it's in-memory and it's fast, then I don't need the infrastructure for BI."
An executive at Kraft Foods had much the same take. "The real value is in removing complexity," said Tom Zavos, senior director of Business Intelligence at Kraft. "I won't have to do ETL anymore, and I won't need a separate Business Warehouse database or additional appliances like the [SAP] BW Accelerator."
Customizing apps can result in code sprawl, architectural chaos and brittle systems
In fact, Zavos and others told InformationWeek that the desire for simplicity trumps the demand for real-time analysis. "We do have situations where people want real-time insight, but that's more often the exception," Zavos said. Customer-facing users like salespeople might appreciate real time, he added. But he questioned the need for marketing, procurement or manufacturing personnel to go beyond daily updates.
In the six-step roadmap outlined in his keynote address, SAP's Plattner said the New DB/SAP Business Analytic Engine would first serve as a sort of turbo charger alongside existing application and data warehouse infrastructure. This "no risk" approach offers the advantage of not ripping and replacing existing systems, he said. Workloads will be moved over to the new environment gradually, he said, and aging legacy systems decommissioned over time.
But if simplicity is what customers are really after, how quickly can companies hope to get to the latter stages of SAP's roadmap? It's too early to say, co-CEO Hagemann Snabe told InformationWeek. He did allow, "it will start in analytics, and then you'll see us building more advanced optimization applications like planning."
The response at least suggests that customers won't have to wait years to consolidate BI infrastructure. The real question on most customer minds is, how much will it cost?
In an interview with InformationWeek, co-CEO McDermott said questions about cost can only be answered when the product comes to market, but he noted that "by definition, it seems that removing layers takes cost out... There will be different situations for different customers, but the theme is, let's get rid of redundant IT and free up cash flow for innovation."
The bottom line is that SAP is selling consolidation as well as real-time performance. And on both fronts, there are many questions about cost, performance, storage capacity, data integration flexibility and many other details that are nowhere near being answered. Nonetheless, SAP customers like what they're hearing.
The Enterprise 2.0 Conference is the largest gathering for people ready to connect teams, and harness collective intelligence with social tools and 2.0 technologies. It happens in Boston, June 14-17. Find out more here.
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BW 도, BIA도 버리겠다는건가..
BO로 가겠다는건가..
의도적으로 자꾸 BO를 키우는게 보이긴 하지만.. 음..
real time analysis..
요즘은 뭐가 맞는건지 잘 모르겠군..
이번 사파이어에서 나온 roadmap을 구해서 좀 봐얄거 같은데..
누구한테 구해봐야 하나.. 킁.
Analysts speculate that SAP will continue upgrading and selling most of Sybase's products -- while increasing license fees.
By Chris Kanaracus
May 24, 2010 06:00 AM ET
Computerworld - SAP Executives have said little about their plans for Sybase products once the enterprise software vendor's $5.8 billion deal to buy the Dublin, Calif., database maker closes, leaving Sybase users and partners wondering about the fate of technology that many of them depend on.
Customers were looking for hints of Sybase's future during the Sapphire user conference in Orlando last week but heard little other than SAP co-CEO Bill McDermott's pledge that the company will one day offer a full suite of ERP applications and business intelligence tools that can run on "any device, at any place, at any time."
Analysts said that's an indication that SAP plans to quickly move to integrate Sybase's mobile technologies with its own offerings. SAP executives had touted the mobile technologies of Sybase during a conference call earlier this month when they announced the deal, some noted.
Jeffrey Hammond, an analyst at Forrester Research Inc., said he expects that SAP will promptly take advantage of Sybase's mobile expertise. "[Mobile] is one of the hottest areas for future growth," he said, noting that the number of Forrester clients seeking advice on mobile development has "exploded" over the past couple of quarters,
The future of the various Sybase database products is less clear, said veteran database analyst Curt Monash of Monash Research.
He suggested that SAP will eventually de-emphasize its own MaxDB database for use with its ERP applications in favor of Sybase's Adaptive Server Enterprise. "That would be an incentive for further [SAP] investment" in Sybase's flagship ASE, Monash added.
Meanwhile, SAP's Business Objects unit currently partners with vendors selling business intelligence products that compete with the Sybase IQ columnar database, he noted. "It should be possible for IQ to remain independent, in co-opetition with everybody else, but there's some risk that [it] will get swept up in SAP's grander strategies," Monash said.
Ray Wang, an analyst at Altimeter Group, said that he expects SAP to retain most, if not all, Sybase products but added that users should brace themselves for potentially higher license fees. He noted that following its purchase of Business Objects in 2008, SAP jacked up prices and cut back on the discounts available for Business Objects products.
SAP officials did say that once the deal closes, Sybase will operate as a separate business unit, much like Business Objects.
Computerworld - SAP Executives have said little about their plans for Sybase products once the enterprise software vendor's $5.8 billion deal to buy the Dublin, Calif., database maker closes, leaving Sybase users and partners wondering about the fate of technology that many of them depend on.