This is our fourth in a series of Supply Chain Matters commentaries regarding attendance at this year’s SAP Sapphire Now and ASUG conferences being held in Orlando.  Readers can reference our previous three commentaries at the following links;

Commentary One

Commentary Two

Commentary Three

As we write, day three is winding down with the final concluding evening concert headlined by Sting, yet to come.  As with previous Sapphires, this being our tenth, activities have been a blur.

In this commentary, we will touch upon two other topical areas we outlined in our prelude posting last week.  The First is the SAP Rapid Deployment Solutions (RDS) program and specifically its applicability in the supply chain, manufacturing, supplier relationship management and procurement areas.  Noted in earlier commentaries was the explanation that RDS were designed to help SAP customers get up and running in a major quicker manner, and include fixed cost and fixed scope parameters.

We were fortunate to have the opportunity to speak with Stefan Haenisch, senior vise president of solution assembly and packaging who has leadership responsibility for all of RDS deployment programs for SAP.  There are currently 230 RDS programs underway with 30 percent managed by SAP partners.  We learned that many of the components and elements of RDS come from SAP’s All-In-One programs which helped to develop many of the solution accelerators, best practices and tools that now make-up this new ongoing RDS effort.  We were also pleased to hear that SAP is committed to bring in more partner resources to support these programs, and that partners are bringing new ideas and innovation ideas with their involvement.

For the supply chain area specifically, 3 RDS offerings are in release status (Customer Collaboration, Extended Warehouse Management, and a basic S&OP application. Expected for release later this year are Global Available to Promise and Service Parts Management We were somewhat disappointed to be informed that Supplier Network collaboration (SNC) has slipped into early 2012.  Apparently there are concerns among SAP SCM management teams that there are too many RDS program efforts occurring at the same time. In the procurement area, there is an RDS for Procurement, and judging from an eight deep crowd I observed in a specific microforum dedicated to this subject, there appears to be lots of pent-up interest.

Another goal for us in exploring this year’s conference was the opportunity to view the long anticipated Sales and Operations planning prototype built on the HANA platform.  We were informed that demos were being run on the show floor, but to our chagrin, neither the Business Analytics Theatre nor the Advanced Technology Theatre could accommodate our request. We suspect that this application is still “in the oven’ as it were, since in his technology keynote, Vishal Sikka noted that S&OP would be coming later as a component of the Data Warehousing aspects of HANA.  We believe that this is unfortunate because SAP customers probably are confused as to existence of two separate and different S&OP application initiatives for this area, and which best meets business process needs.  We further suspect that SAP wants to make a big statement in this critical process area, but is trading off valuable time for the most elegant technology approach.  A less onerous application supporting the S&OP process is long overdue.

On the subject of business analytics, we participated in a highly informative interview with Steve Lucas, global senior executive leading SAP’s business analytics business strategies.  Steve acknowledged that this year, every individual SAP analytics product was involved with some major product upgrade or initiative, and that may be overwhelming in terms of customer understanding.  His organization has produced a two-sided visual that provided what we believe is the best high level explanation of the various architectural implications of HANA and business analytics, as well as a methodology for how customers can evaluate their roadmaps and direction toward HANA.  This visual was obviously being test run for customer briefings at Sapphire.  It provided for us, the best visual tool thus far to help understand the true implications of SAP’s direction for HANA and business analytics. Participants in our global blogger briefing all unanimously urged Steve to make this visual more visible for SAP customers as a whole.  Over the coming weeks, we will explore the implications of this direction on analytical capabilities applied to supply chain business processes.

We have to close out this commentary but we leave you with an important and meaningful statement from Steve Lucas.  HANA at the end of the day is a database, a dramatically different form of database that can perform its own calculations and analysis at a far more rapid rate than anyone believed.  That is the game-changing aspect of this direction and it comes with many challenges for SAP and its customers. Its also presents many opportunities for how we can better sense, respond, and adjust global supply chain processes.  Technology marches on, regardless of whether we are ready.

Bob Ferrari

This is our third Supply Chain Matters commentary regarding attendance at this year’s SAP Sapphire Now and ASUG conferences being held in Orlando.  Readers can reference our previous two commentaries at the following links;

Commentary One

Commentary Two

Because of some significant supply chain related news, this commentary comes “on the fly”, and we will elaborate more in our conference summary posting.

Traditionally, day three of Sapphire Now keynotes are dedicated to SAP’s strategic direction and reporting card on technology initiatives, and in our view, this is the real takeaway story for this year’s conference. Significant is not so much as what was happening in front of podiums and cameras, but the significant technology changes that are being orchestrated in SAP technology labs around  the world. Make no mistake, there ar significant technology direction changes underway at SAP.

Vishal Sikka, SAP’s CTO and member of the executive board for technology and innovation, did a superb job of avoiding the usual technology detailed updates by inserting multiple videos declaring testimonials of support for SAP efforts and initial prototyping on HANA based technology in various real world business applications. This was a prelude to the GA release of HANA upcoming in June, and a much more powerful use of messaging, incorporating the voice of customers as the means of communication.  As a side note- many other software providers can benefit from this approach.  We really liked it.

In our summary of last year’s Sapphire, we observed that if successful, SAP’s efforts in in-memory architecture and applications would be a game-changing event for the industry.  This year’s messages, especially those coming from multiple customers, tended to reinforce the potential.  But with anything dramatically new and innovative, the real proof comes in the actual mainstream deployment, and SAP customers seem to be very interested in the potential benefits of HANA.

Vishal again reinforced that the HANA architecture is fundamental to the long-term direction of SAP, and that was reinforced in multiple dimensions by the appearance of Dr. Hasso Plattner, chief technology evangelist and chairmen of the supervisory board of SAP.  Where Vishal leveraged customer testimonials, Plattner directly addressed why SAP is committed to this direction, and more importantly, directly addressed 13 rather candid and direct questions posed by various other customers spanning the direction, benefit, impact and deployment of HANA across the entire SAP suite of software and business applications.

Since this blog is focused on the global supply chain functional and IT teams, we will in this commentary distill some of the more important takeaways for our community.

First, most all of the current customer pilot initiatives and testimonials stem from the IT community.  There were many senior IT executives featured in today’s testimonials.  The ultimate user adoption of HANA will ultimately come from end-user leverage and use, and SAP is still rather distant from that goal.  The potential however remains enormous, particularly in the area of supply chain planning, business intelligence and real-time sensing applications.  That point was driven home in a live demo of a complex ATP check performed by a HANA powered application, which faltered during Hasso’s session.  Hasso assured the audience that it worked earlier.

In his remarks, Hasso declared that within the SAP BusinessSuite, the most strategic effort that SAP can accomplish is to have all planning applications rewritten to take maximum advantage of the capabilities of HANA.  Specifically, Hasso cited SAP APO as the number one priority, with some bantering with Co-CEO Bill McDermott as to whether he agreed.  “It will be faster- trust me, Bill” That is very big news for the SAP Supply Chain installed base community to consider in long-term deployment and future functionality considerations. Vishal also made mention of the again rumored Sales and Operations Planning HANA powered application.  More on this in our later commentaries.

Our impression is that Hasso and the rest of the SAP executive team has set a very aggressive technology direction, described By Hasso himself as the largest technology transformation undertaken by SAP in the last ten years. While many will not be utilizing HANA in the coming months, the longer term potential and implications are significant for the way supply chain response management, fulfillment, execution decisions are performed in the coming years.

It is rather important that SAP customers keep a careful and watchful eye on these efforts, since the technology and functionality gaps could well be significant. For now, gaining a basic understanding of direction and implications should be an agenda item for SAP supply chain teams.

More detailed commentary later, including highlights of an interview held with Steve Lucas, the global sen ior executive leading SAP’s business analytics initiatives.

Bob Ferrari