Germany-based SAP AG is tackling business processes in a novel way with the newest version of its Business Suite, which embeds analytics acquired from Business Objects SA and introduces industry-specific “value scenarios”.
Version 7.0 of SAP Business Suite, a library of business processes, adds industry best practices through more than 30 modular value scenarios — like Superior Customer Value, Product Lifecycle Management (PLM) — designed to cross traditional organizational boundaries.
These “pre-defined end-to-end business processes” are intended to be implemented in small steps by organizations as they need it, said Jim Hagemann Snabe, SAP executive board member.
The value scenarios basically illustrate inter-relationships between SAP product capabilities using graphical guides and business terms, not feature and function lists. The customer can also see the associated systems impacted, and ultimately, the specific SAP modules that would need to be activated.
Value scenarios like Superior Customer Value may sound like customer relationship management, but it’s more than that, said Hagemann. Similarly, Integrated Product Design, another value scenario, focuses on more than just product time to market, he continued. “What happens if quality is bad… if the supply chain is not ready? Then you lose the opportunity even if you have a fantastic time to market.” SAP has challenged the idea of “time to market” and prefers instead to call it “time to profit” and has designed the process for quality, scalability and the ability to read the market so the design can be adjusted, he explained.
The biggest challenge in current economic times, said Hagemann, is organizations have no visibility into the future and no historic facts to rely on.
But while companies are taking a hard look at spending and reviewing projects, “that does not mean… that companies do not spend, they just spend very smartly and very wisely,” said Léo Apotheker, co-CEO of SAP AG.
There is a need, said Apotheker, “to provide better and faster insight, a higher level of efficiency, a need to introduce a whole new degree of flexibility in the way we do business.”
Version 7.0, which Apotheker called a “true milestone in the history of SAP” is also designed to help organizations reduce cost by easing upgrades through enhancement packs that deliver new functionality in a synchronized release schedule for all SAP applications. This release offers more than 150 functional additions.
During a demo of version 7.0, SAP showed how insight could be reaped both internally by collaborating between departments, and externally from social networks like Twitter and a “sentiment engine” to evaluate comments made in the market.
Ray Wang, vice-president with Cambridge, Mass.-based Forrester Research Inc., said customers will find the value scenarios “compelling as they align with the key business drivers users face.” But as with all best practices, Wang said “SAP will need to make it easy for customers to modify those scenarios, reduce the overall cost of owning SAP, and provide more frequent levels of innovation.”
And while synchronizing all application releases is a good start, the shift from “six to eight months for each enhancement package to one year needs to be re-examined in light of the quarterly pace of innovation found with the SaaS vendors,” noted Wang.
One customer, Colgate-Palmolive Co., has large implementations in CRM and PLM that would benefit from the new capabilities of version 7.0, said the company’s senior vice-president of IT and business services, Ed Toben. “Particularly when you look at PLM, which is newer, the processes and the enhancement pack concept of turning on pieces should make us move faster,” said Toben.
Another customer, pharmaceutical company Roche, requires the flexibility and ability to scale as the business changes in order to remain current, said chief information officer Jennifer Allerton. “IT investments… have got to make sense in their own right,” she said. “And, the pharmaceuticals business is one where you invest for the long term and when you make investments about IT packages, you’re not going to change your mind the next day about them.”
IBM Corp., also a customer, is focused on a number of transformation programs including in the area of operational efficiency, said Jeannette Horan, vice-president of enterprise business transformation with the office of the chief information officer with IBM. To that end, the company’s strategy, said Horan, is to globally integrate the enterprise through common processes, using the Business Suite, she said, to “mix and match components of the business to go to market in new and interesting ways.”
Albert Pang, research director of enterprise applications with Framingham, Mass.-based research firm IDC Corp. said SAP is in a good position to be providing a process library that “encapsulates the best practices”, and this new version “underscores its latest attempt to help customers crystallize their vision of delivering better processes on behalf of their end users.”