Last week, Enterprise Information Management technology provider OpenText continued with its track record of acquisitions, this time announcing the completion of its acquisition of Actuate Corporation, a technology provider of personalized embedded analytics and visualization tools for customer facing applications. The announcement indicates that the merger was completed without a vote of Actuate’s stockholders pursuant to Section 251(h) of the Delaware General Corporation Law with Actuate surviving the merger as a wholly owned subsidiary of OpenText. Thus, pinning the overall cost of this acquisition is probably pre-mature at this point.
Supply Chain Matters readers may recall our prior November 2013 commentary related to OpenText’s acquisition of B2B technology platform provider GXS.
According to posting authored by Mark Barrenechea on the OpenText CEO Blog: “Actuate brings powerful analytics to the OpenText portfolio of products that enable customers to analyze and visualize a broad range of structured, semi-structured, and unstructured data.” The posting declares that more than 3.5 million developers and OEM’s currently utilize Actuate to deliver personalized analytics and analytics and further indicates that Actuate will continue to serve the embedded analytics market while being integrated across the entire OpenText EIM product suite.
In late June of 2014, this author penned his impressions from being invited to a one day OpenText Industry Analyst summit hosted by senior executives. We noted that OpenText’s vertical industry support strategy is broad ranging from manufacturing and retail to financial services, government, public utilities and other industries. This provider primarily targets CIO’s and internal IT groups, but with continual acquisitions, will have to include more line-of-business and cross-functional business teams. In its previous acquisition of B2B platform provider GXS, it was unclear, by this author’s lens, as to the longer-term strategic emphasis on the needs of supporting B2B business network and business process management challenges beyond electronic content or document exchange. This latest acquisition of Actuate frankly causes us more confusion as to what specific industry support areas will be emphasized in short and longer term internal integration planning. While on the subject of integration, OpenText has added quite a few, and that alone raises questions on the provider’s abilities to digest this level while shielding customers from added burdens of multiple user interfaces, data integration or other needs for increased user productivity.
Thus, we will defer from other insights pending updated briefings with OpenText.
The takeaway for existing GXS platform customers is to ascertain if Actuate technology will be included in future releases, and if so, what specific areas and what specific cost. This is especially pertinent to GXS customers with an SAP ERP backbone, since OpenText has placed a rather large emphasis on its strategic partnership with SAP which is offering its own HANA based embedded analytics offerings. The impact of Actuate could therefore provide an alternative, but more strategy, pricing and timetable information is obviously required.
©2015, The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog. All rights reserved.
As Supply Chain Matters readers are aware, from time to time we feature book reviews which we believe would be of value to our extended global supply chain management and IT community of readers. In this particular posting, we review a new and perhaps controversial book focused on ERP and cloud technology provider SAP.
We begin this book commentary with an up-front disclosure. Vinnie Mirchandani is an independent blogger whom this author has come to know and respect for some time because of his numerous years of experience within the enterprise tech arena. Vinnie and I often run into each other at certain enterprise focused IT conferences and we sometimes think alike in terms of independent voices for the state of technology vendors. This author has also previously provided a guest commentary on Vinne’s Deal Architect blog.
Vinnie provided me a complimentary copy of his latest book: SAP Nation- Runaway Software Economy to seek my opinion with no strings or obligations.
We are sharing this review of SAP Nation because by this author’s lens, this is an absolute must-read for supply chain and B2B business network functional and IT decision-makers who exist in the SAP universe. Literally, once into the book, I had to continue, because it both grabbed my interest and resonated with some of my own observations of the SAP universe these past 15 years.
Overall, this book will be controversial because it does not paint the most flattering descriptors of SAP, particularly its ecosystem of partners. However, by our lens, the book’s observations are for the most part objective, insightful and written in a context for what SAP needs to do address to make its customers successful in their business and technology deployment goals. As Vinnie states rather clearly, readers will often not find such insights from traditional top-tier industry analyst firms or certain SAP compensated market influencers because they are too beholden on current and future revenues.
Among the various chapters, the book provides a ten year perspective on SAP, summarizing conversations, observations and case studies among the ecosystem that makes up the “SAP Nation”, including customers, partners, market observers and others. The book quantifies an astounding $1 trillion ecosystem beholden to SAP’s success. Included are 25 case studies outlining various customer strategies for balancing business support challenges within their SAP and broader IT applications landscape. Customer executives further describe certain pain, anger and frustration. One of the most powerful customer analogies is described as follows:
“You can see why many customers are pivoting away from SAP and its partners. Many have concluded they bought a shiny car, but did not realize it would also need premium fuel, deliver low mileage, need $100 oil changes and $1000 tires and more and more.”
There are observations on why other cloud-based competitors have been able to gain attraction among the existing SAP customer base because of the building business pressures and frustrations over elongated development timelines, burdensome software and ongoing support costs. The consequence is described as a ring fence of applications that more and more, are surrounding SAP applications. As the adoption of cloud computing continues to increase, Vinnie opines that SAP runs the risk of becoming even more distant in understanding its customer business needs.
Vinnie further outlines SAP’s ongoing efforts at strategic pivoting, efforts to become more nimble, more cloud-focused and more-simple for customers to do business with. Three major consequences of these efforts are described related to existing customers, ongoing R&D efforts and control over SAP’s ecosystem of partners.
Whether you totally agree with all the insights presented in SAP Nation, it provides some objective analysis of the state of SAP’s ecosystem and business strategies. The one issue that this author had with statements regarding an overall bloated systems integrator community surrounding SAP is that we have found that certain smaller, more focused integrators that concentrate solely on specific dimensions of SAP’s supply chain management, procurement and B2B applications do appear to be adding customer value because they recognize the areas where complexity, cost and more rapid time-to-value need to be buffered for customers, and where third-party applications can add significant value. These smaller integrators tend to staff more with seasoned and experienced technical specialists rather than armies of inexperienced business process consultants that the book describes.
The promotional marketing for SAP Nation declares that readers will benefit from the observations, strategies and insights described in the book. Supply Chain Matters tends to agree and we will henceforth utilize this book as a reference.
These past few weeks have featured a series of noteworthy news items related to enterprise and supply chain technology provider SAP. In a prior posting, Supply Chain Matters called attention to the announcement of a new chief marketing officer and the formation of a new Digital Business operating unit. In this posting we touch upon some other announcements and their significance to a broader strategy that is underway, one that is perhaps strategically critical to SAP.
Earlier this month, SAP announced three business applications to help customers leverage Internet of Things (IoT) technology. These announcements represent initial efforts towards an overall multi-year effort for SAP to provide increased leveraging of digital based technologies.
SAP Predictive Maintenance and Service, which is developed on SAP’s HANA Cloud Platform, is directed for manufacturers’ support in predicting a malfunction of installed equipment before it occurs by monitoring equipment sensors and historic operational data. SAP Connected Logistics is also provided on the SAP HANA Cloud Platform to provide logistics hub operators the ability to monitor traffic toward and within a hub and facilitate communication between involved parties including those that do not have a direct business relationship. The software is planned to offer integration to backend transportation management systems, and lean dispatching capabilities for logistics service providers that do not have a sophisticated backend solution in place. Finally, SAP Manufacturing Execution, Version 15.0 is envisioned to offer IoT support for manufacturing operations, by integrating manufacturing results with real-time feeds into the SAP HANA platform.
The above announcements, in themselves, are significant because they are another reinforcement of the building interest among manufacturers and service providers for increased leveraging of IoT in business support and supply chain planning and execution processes. SAP does not typically initiate development efforts without some form of customer pull influence. The announcements are an indicator that SAP does not want to be the also-ran player in leveraging cloud-based IoT networks. From our lens, that is an indicator that the enterprise vendor needs to foster forms of deeper relationships with broader IoT ecosystem players, similar to what PTC has been initiating with its recent acquisitions in this area, and broadened channel relationships.
Readers may recall SAP’s prior announcement in September of the technology providers intent to acquire travel and expense spend control provider Concur Technologies for $8.3 billion. Last week, both companies announced that Concur’s shareholders have now voted their approval of the acquisition and that the transaction is expected to close on or about December 4, 2014, subject to the satisfaction or waiver of closing conditions, including those related to regulatory approval. At the time of the announcement, this author’s initial reaction was that of puzzlement. Why pay such a significant premium for a cloud-based travel expense support provider and what is the strategic fit to other cloud-based strategies? Apparently, after noting numerous comments from other industry observers as well as SAP’s own influenced blogging community, we were not alone in that perception. Indeed, the SAP user community should wonder whether Walldorf is again taking precious financial resources away from its core strength of supporting broad manufacturing industry business process support needs.
That leads to the third significant announcement. At a recent Morgan Stanley investment conference, SAP CEO Bill McDermott indicated that the enterprise technology provider is about to unveil a five year operating plan. According to a posting by re/code that highlighted a recent interview with McDermott, the first elements of the strategic plan will be laid out in January, when SAP next reports quarterly results. In February, at the SAP shareholders meeting in New York, the CEO will unveil the detailed five year plan. After spending upwards of $16 billion in prior acquisitions of cloud-based providers it would appear that SAP may be chasing installed-based seats vs. an overall cohesion of strategy. According to the re/code commentary, “now it falls to McDermott to make the disparate parts work together in a coherent strategy with SAP’s core group of applications.” In the interview, SAP’s CEO further indicates that the company may be done with large acquisitions, preferring instead to pursue strategic “tuck-in” acquisitions to supplement cloud applications. That is the sure sign that SAP’s financial resources do have limits, particularly as the company transitions to its goal of having a more cloud-based, subscription revenue stream.
Supply Chain Matters highlights all of these announcements as data points because for us, they indicate that SAP has reached an important stage. The technology provider needs to differentiate itself to its customers and to its investors. Which markets and which technology areas does it portend to strategically pursue over the next five years? Which core industries, including manufacturing related, will SAP continue to provide technology innovation and what areas will SAP open to broader strategic partnerships? Will SAP’s market strategies be governed by the influence of its direct-sales model? Will innovation in future supply chain, manufacturing and B2B business network areas be once again diluted by other strategic needs?
These are all crucial questions, not only to SAP and its installed base customers, but to the tenure of its current senior management team. We can all look forward to 2015 as providing some added answers for the SAP ecosystem.
There has been some noteworthy news regarding enterprise technology provider SAP.
Yesterday, the business software provider made a significant announcement regarding its marketing leadership. SAP appointed Maggie Chan Jones, a former Level 3 Communications and Microsoft marketing executive as Chief Marketing Officer (CMO). The news release cites her extensive cloud technology marketing experience as important for the renewed emphasis of SAP’s marketing efforts. Ms. Jones will be based in SAP’s Global Marketing office in New York City.
Former CMO Jonathan Becher has been appointed to the new role of Chief Digital Officer. Becher will lead a new business unit to expand entry into new areas of digital content and data. With this change, SAP will combine its existing online stores into one SAP Store where prospective buyers can discover, buy, download or upgrade software, services and content.
By our Supply Chain Matters lens, these moves indicate a far more aggressive SAP stance for leveraging cloud applications and cloud-based customer technology delivery. The new role of Chief Digital Officer will be especially challenging since it foretells of less influence and touch points for SAP’s direct sales and system implementation partner teams, who have garnered considerable influence these past years. SAP’s current CEO, Bill McDermott’s background is direct sales, and his active sponsorship of this new effort will be something for SAP customers to monitor in the coming months. One thing is certain for the short-term, we do not foresee SAP customers downloading mission critical business software from a storefront.
On an entirely different front, both SAP and Oracle recently agreed to settle their long-standing legal battle regarding alleged software copyright infringements from SAP’s prior acquisition of now defunct TomorrowNow. Under the settlement, SAP will pay Oracle $359 million to settle this case. In August, an Appeals court overturned a previous $1.3B jury award against SAP, instead identifying true damages as $356.7 million. SAP has now agreed to pay Oracle that amount and added interest charges, plus a previous payment of $120 million for legal and dismissal fees.
In early September, Supply Chain Matters opined that it was time for both SAP and Oracle to move on from their four year legal bitter legal battle. TomorrowNow, has obviously turned out to be not one of SAP’s most astute acquisitions and was time to put aside the egos from both sides. Both technology providers have suffered public embarrassments in the eyes of each’s individual customers and both have other pressing needs in terms of investments and services for supply chain, manufacturing, procurement and B2B network customers.
There have been some noteworthy announcements related to both supply chain B2B network and PLM technology providers this week which Supply Chain Matters highlights in this news roundup commentary.
JDA Software Names Permanent CEO
In the press release, CEO Dail states: “The potential for JDA now, and into the future, is tremendous and I am excited about the opportunity to continue leading this innovative company.”
Since assuming interim CEO leadership, Dail has instituted a sorely needed Global Industries and Solutions Business unit responsible for product portfolio and industry support strategies, established an Innovation Lab to build transformational technology leveraging next-generation platforms, including cloud, and appointed a new leader for global sales.
JDA is also in the process of unveiling a new look and brand identity over the coming months and readers can anticipate broader industry focus and clearer messaging.
SAP Announces Expanded Cloud Relationship with IBM
This week, SAP announced that its SAP HANA Enterprise Cloud services will be made available through IBM’s global cloud infrastructure. The joint announcement came with enthusiastic statements issued by both tech CEO’s. The expanded partnership provides broader global hosted options for moving business applications from on premise to the cloud. According to published reports, this deal provides SAP with access to near 60 data centers between those SAP has deployed and the addition of IBM’s centers.
According to a specific report from IDG News Service, revelations over the past year about domestic surveillance by U.S. intelligence agencies has raised data sovereignty and data privacy sensitivities among several countries, and this arrangement with IBM provides SAP with a greater ability to accommodate such concerns by cloud services hosted in designated domestic countries. It is therefore little surprise that the joint announcement emphasizes security for enterprise customers. Broader cloud infrastructure and open standards based approach inherent in the footprint of IBM Cloud additionally provides SAP more scalability options in growing HANA Enterprise Cloud.
Arena Solutions Announces PLM Collaboration Platform
Mid-market PLM technology support provider, Arena Solutions announced two new modules plus enhanced functionality incorporated in its fall product release.
Arena Scribe provides a collaboration platform that supports comment and collaboration in the context of each individual process or record within Arena PLM. Users or suppliers can follow comment streams and receive dashboard and email alerts to stay up-to-date with fast-moving information. Arena DataExtract supports the ability to extract process datato a standard, flat file format, which can be analyzed using a variety of analytic tools from the range of basic spreadsheetstosophisticated business intelligence and analytics applications. This type of functionality provides enhanced ability to identify trends and solve problems related to product development, trends in engineering change orders or cycle times.
The new fall release includes what is described as significant ease-of-use enhancements to Arena Quality, a module introduced earlier this year. This module supports broader visibility, cross-functional team collaboration and tracking of product quality resolution.
Readers can gather detailed information related to Arena’s fall release in the news announcement.
As many of our readers may be aware, the Supply-Chain Operations Reference Model (SCOR) was developed by the Supply Chain Council (now APICS Supply Chain Council) to assist multi-industry and organizational supply chain organizations make meaningful and rapid improvements in supply chain business processes. This model’s methodologies describe the Plan, Source, Make, Deliver and Return activities associated with supporting customer and business fulfillment needs and have become a common language to articulate industry supply chain capabilities.
We all know that today, industry supply chains are driven by customer requirements and service needs, and the SCOR model is a tool that helps organization’s with a single standard reference upon which to understand the processes that make-up the supply chain along with their relationships to performance metrics. The power of SCOR is that it does not document the supply chain in the lens of functions (planning, procurement, manufacturing, logistics, etc.) but rather that of business process inputs and outcomes.
This author has been both trained in SCOR methodologies and has volunteered in various positions of the Supply Chain Council, including being a prior member of that organization’s North America Leadership Team. I can therefore attest that SCOR is a rather versatile tool that has assisted many industry and service focused supply chain teams to describe the depth and breadth of their supply chains as well as provide the basis for supply chain improvement or transformational initiatives.
The multi-level SCOR framework maps all customer interactions, all physical and informational transactions, planning and fulfillment processes. SCOR is a hierarchical and highly defined model which can capture the detail of supply chain processes with their relationships to the all-important performance attributes of responsiveness, agility, cost or assets associated to a supply chain. Those teams that have had experience with SCOR know that the real power of the tool is in understanding how all processes relate to one another and where processes need to be adjusted or modified to meet changing business or customer requirements. SCOR is an important tool that brings detailed understanding of the entire makeup of a supply chain, including best practices derived from other multi-industry supply chains.
The power of a comprehensive process definition tool is in providing common taxonomy and detailed cross-organizational and management understanding of the many supply chains that can exist within a particular company. Too often, teams get bogged down in documenting and updating the SCOR framework models which takes away from broad cross-functional support and from the timeliness or effectiveness of the framework as a reference to support decision-making. This is where technology can provide needed assistance.
Supply Chain Matters has previously called attention to highly focused system integrators, such as Bristlecone, who have developed self-contained service offerings that address very specific business needs. These are fixed-cost, managed scope application accelerators developed from prior successful implementations and industry best practices.
To assist firms that utilize SAP’s supply chain management applications the BristleconeStore offers ProcessesNow, a series of pre-built process maps based on the SCOR framework. ProcessesNow provides a central repository of process maps that extend the SCOR model by additional three levels . It uniquely links these processes to the various transactions within SAP’s APO or Oracle’s Demantra planning application helping teams to better align the process maps with the transactions that enable them, hence, enhancing user adoption of the related planning solutions. Teams can interact with SCOR models both online and offline utilizing an easy to navigate expand and collapse structure.
Another neat feature is that Bristlecone has augmented ProcessesNow to support certain industry unique process needs. According to Bristlecone, this tool can typically save 4-8 months of framework documentation efforts, allowing teams to more productive time to analyze and iterate their SCOR models, and the tool itself typically can be installed in about a week. As with DemandPlanningNow which has previously highlighted, this application is built upon acquired knowledge, best practices and technical expertise acquired from prior supply chain implementations.
Disclosure: Bristlecone is a client of the Ferrari Consulting and Research Group