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Impressions from the OpenText Industry Analyst Briefing

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In our Supply Chain Matters coverage of the B2B and supply chain technology space, we had previously provided commentary related to GXS, Inc. The roots of GXS stem back to the late sixties with its initial founding as General Electric Information Services (GEIS) providing computer time-sharing to general users, migrating to support value-added network (VAN) services such as EDI for both GE and external clients. By 1998, GEIS’s global electronic trading community exceeded 100,000 trading partners, and in 2002, the renamed GXS was spun out as an independent technology services provider purchased by venture capital firms Francisco Partners and Norwest Venture Partners.

In June of 2012, Supply Chain Matters declared that GXS was a hidden gem in the B2B information services and application support arena. In November of 2013, GXS was acquired by OpenText Corporation, Canada’s largest software technology provider. The purchase price at the time was reported to be approximately $1.2 billion, roughly 2.4 times GXS Fiscal 2012 revenues. T

The crown jewels of GXS is the GXS Trading Grid a global platform to support e-business and supply chain information integration that supported upwards of 550,000 trading partners and included some big-name and rather influential industry supply chains. The question was what Open Text’s strategic intent would end to be regarding the acquisition.

Earlier this month, this author was invited to attend a one-day industry analyst briefing hosted by members of the senior management team of OpenText. By the end of the day, I had acquired a broader understanding of OpenText’s business strategy, particularly as it concerned the leveraging of the newly acquired B2B transactional support network.  However, we walked away with some remaining open questions regarding the broad scope of the strategy.

For readers unfamiliar with OpenText, this vendor classifies itself as a broad-based Enterprise Information Management support provider.  Product support areas are rather broad and include:

  • Enterprise Content Management (ECM) – areas such as content management, secure email and electronic content, data and cloud integration.
  • Business Process Management (BPM) – classic business process workflow tools suite.
  • Customer Experience Management (CEM) - areas such web based content management, customer communities, and digital assets management.
  • Information Exchange and Discovery- areas such as B2B communication and transactional integration, secure messaging and information discovery.

Because of this rather broad technology support footprint, the OpenText vertical industry targeting strategy is broad ranging from manufacturing and retail to financial services, government, public utilities and other industries. Open Text’s prime targeted customers are CIO’s and internal IT, but with this broadened strategy and the acquisition of GXS, customer constituencies will have to include cross-functional supply and value chain groupings.

It was rather obvious to this analyst that OpenText acquired GXS for the value of its B2B supplier and trading partner network.  However, the evolving strategy is more about leveraging the Trading Grid in the context of EIM, document exchange, quicker on-boarding of supplier and trading partners and managed services support.  The current OpenText strategy assumes the existence of other business applications that touch or interact across the network and that business value is derived from the ability to leverage content among various business applications within and across the network.

The provider has placed a rather large emphasis on its partnership with SAP, which it classifies as its most strategic partner. The vendors’ EIM technology is positioned to support needs for SAP Business Suite, Ariba, and Microsoft Sharepoint content access, information management and electronic document exchange needs. The current most attractive interest among SAP installed based customers was described as a supplier electronic invoice solution where OpenText sits aside the Ariba Network. Briefing presentations emphasize that the firm was one of the first SAP ISV’s to run Archive Server on HANA for customers needing to manage combinations of both structured and unstructured data. Having achieved recognition as an SAP Solution Extension, 14 OpenText product offerings are currently sold jointly by SAP and OpenText sales teams. That implies that the SAP salesperson is directly compensated for selling OpenText technology in a deal. Asked by this analyst as to which other vendor in the current market is viewed as a prime competitor, the answer turned out to be IBM and its Sterling based B2B network. I would disagree, but that is subject matter for an additional commentary.

From our lens, it would appear that SAP is positioning OpenText for near-term customer requirements in EIM, B2B transactional and content integration needs.  A very open question is how SAP will position such partner support once Ariba and its Ariba Network platform become more integrated with broader SAP Business Suite, SAP Supply Chain Management, SAP SRM and SAP HANA enabled information and business intelligence needs over the longer-term window. Joint customers will need to continue to monitor the evolution of the partnership. Another open question would be the overall cost of layering these various technologies vs. the market appearance of a more holistic business network platform that marries infrastructure, content, application and business intelligence.

As for OpenText and its continued support for B2B and end-to-end supply chain business network and BPM support, a lot will depend on whether the OpenText management team can place more concentrated emphasis on manufacturing industry, retail and online commerce business process support needs.  The vendor further needs to alter its current product marketing messaging to be more in-tune with today’s industry specific business process challenges and desired business outcomes for supply, services and value chain networks. The entire day of briefings included very little mention of vertical industry focus and approach.

If readers require more specific intelligence and insights, give us a call.

Bob Ferrari

© 2014 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog. All rights reserved.


The Implications of SAP Run Simple for Supply Chain Applications Support

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SAP conducted its annual Sapphire NOW users conference in the U.S. and utilized this customer forum to once again communicate significant changes and implications concerning future direction.  The prime theme that SAP management delivered to customers was the SAP Run Simple message, which for many day-to-day users of SAP, is a message that is received with some cynicism. None the less, the implications are rather profound and real. Supply Chain Matters penned a prior commentary regarding the implications of SAP’s new strategies focused on integrated business planning that has since received significant reader and social media activity.

Among the keynotes delivered at Sapphire was the often anticipated talk by Hasso Plattner, one of the original founders of the company and existing Chairperson of the company’s Supervisory Board. While Hasso’s annual talks to SAP customers tend to sometimes be academic and lengthy, they often contain candor and important insights regarding SAP direction or missteps in the market.  This year was no exception.

One of the most significant messages delivered by Hasso was that enterprise software running on-premise is going to the cloud, no matter what.  That is why SAP’s new strategic emphasis is now all about reengineering for “the cloud.” The message from Hasso was that it is no longer a matter of if but rather a matter of time. That alone is a significant message coming from SAP’s founder and most influential investor.  He further indicated that four years ago, SAP leadership was initially very apprehensive regarding the challenge to change 400 million lines of code within its ERP backbone system, but has now come to the conclusion that it would have no choice but to do so. Software that was designed many years ago under different assumptions related to business processes and existing technology at the time, now has to better match the realities of today’s new business and technology paradigms. Hasso’s drumbeat message remains: “simplicity beats complexity”.

A very significant implication of SAP’s ongoing re-engineering towards leveraging HANA and the cloud is the goal to eliminate “aggregates” within its internal system’s functions.  Aggregates are when the system calculates for instance, gross margin, income statements or a supply chain planning optimization. Long-time SAP APO user teams can best relate to this concept by considering APO’s in-memory or former “live cache” design concept, where all planning related transactional and master data is drawn into the planning engine to formulate optimized supply chain plans.

Instead, the new HANA based cloud or on-premise technology will store all of SAP transactional data in memory (column-store) and will respond to information needs and reporting requirements by assembling models and algorithms on top of transactional data. The implication is a system with a far smaller footprint that users will eventually have the infinite freedom to re-arrange information hierarchy’s on-the-fly in a matter of a few seconds. By Hasso’s description, that opens opportunities for the system to perform all functions via models and algorithms and the ability to perform more predictive and simulation based analysis capabilities based on system-wide data.

Other significant implications will be the even more critical importance to accurate master data, internal skills in modeling and simulation of supply chain related data and the ability of supply chain planning and fulfillment teams to perform multitudes of what-if or target supply chain goal fulfillment analysis.

Of course, this broad and sweeping scope of SAP focused change is going to take additional time, perhaps years in scope. There will be critical decisions that customers will need to make over that time period.  At Sapphire, SAP further communicated its increased dependence on select key partners to assist both SAP and its existing customers to more quickly and successfully navigate this ongoing and significant transition.

Existing SAP customers need to seriously think about the implications of this shift in technology direction, especially as it relates to supporting today’s and tomorrow’s broader and more complex supply chain management needs.  While complexity and frustration may rule today’s mindsets, start seriously thinking about what these new changes imply for integrated supply chain and business planning support needs under the SAP HANA enabled banner. Such changes involve a changing mindset, new and different skill needs as well as a reliance on a trusted external consulting and support partner.

It is no secret that SAP APO, while designed as a bullet-proof supply chain planning system built around SAP master and transactional data, is somewhat difficult and inflexible in its ability to provide a means to support rapidly changing supply chain business processes or to support a new data paradigm where the majority of supply chain related data exists in an external demand or supply network. In a prior Supply Chain Matters posting, we noted that the structural design rigor and tight internal system linkages has led to many work arounds, including spreadsheets and supplemental systems. In many cases, the full potential of supply chain optimization, such as optimized supply planning is avoided because of the complexity and lack of understanding of innards of SAP APO. However, those teams that have taken the dedicated time and patience to learn and understand such innards with supplemental tools have managed to leverage APO functionality and subsequent benefits.

As noted in prior commentaries, as SAP continues to build out its described muscle platform, organizations need to focus efforts on the further mastering of broad-based supply chain planning and fulfillment process modeling, optimization, simulation and master data management capabilities. There are available tools and knowledgeable partners who can help you to re-focus your current efforts and direction and better respond to line of business needs, customer fulfillment or product management requirements, while helping to facilitate the skills and new capabilities roadmap that prepares for what will come in the new world of SAP.

Key SAP strategic partners such as Intrigo Systems, are not only focused on SAP APO, but the broader SAP Supply Chain Management, both today, and in the realities of the SAP HANA enabled environment. The Intrigo Systems Optek tool suite consists of modules that have been designed to place the planner more in control of the process while making SAP APO functionally more effective today, and in the future capabilities of SAP Supply Chain Management.

Bob Ferrari

© 2014 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters Blog. All rights reserved.

Disclosure; Intrigo Systems is a current client of the Ferrari Consulting and Research Group.


Important Technology Services News: Vishal Sikka Appointed CEO of Infosys Technology

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Global information technology services provider Infosys has announced the selection of Dr. Vishal Sikka as Chief Executive Officer and Managing Director (CEO & MD) of the company. According to the announcement, Dr. Sikka will be inducted as a whole-time director of the Board and CEO & MD (Designate) on June 14, 2014. He will take over as CEO & MD from Mr. S. D. Shibulal on August 1, 2014.

Sikka until recently served as a high visibility executive at SAP AG serving as a member of the Executive Board and Chief Technology Officer (CTO). He suddenly resigned that position in early May.  At SAP, he was responsible for all products, from traditional and cloud-based applications to technology and platform products including SAP HANA, analytics, mobile and middleware. Many rumors abounded from Sikka’s departure from SAP.

Sikka is the very first outsider and non-founder ever appointed to the CEO leadership position and his tenure will no doubt involve lots of scrutiny by business, technology and social media circles. Media outlets in India indicate that Sikka will continue to have his family reside in Northern California but will make frequent visits to Infosys facilities in India including the firm’s corporate headquarters campus.

In conjunction with this latest announcement, the Infosys Board made other important announcements that indicate a rather significant new operating leadership structure for the firm. Mr. U.B. Pravin Rao, President and whole-time director, was appointed Chief Operating Officer, effective June 14, 2014, no doubt to manage day-to-day activities. Twelve existing executives were appointed to Executive Vice President role’s with additional responsibilities.

Infosys co-founder Mr. N.R. Narayana Murthy who recently returned to lead the firm and has driven wholesale changes in senior leadership of the firm, will voluntarily step down as Executive Chairman on June 14, 2014. India based media further reports that Murthy’s son, Rohan, will also step down from leadership. Non-executive Vice Chairmen Mr. S. Gopalakrishnan will additionally step-down on June 14.  To insure a smooth transition, both Murthy and Gopalakrishnan will continue on the Infosys Board until October 10.

Infosys additionally announced Executive Chairman’s office will be dissolved. Dr. Rohan Murty, whose appointment was co-terminus with the Executive Chairman, will leave the company on June 14, 2014. The remaining members of the Chairman’s office will take up other responsibilities in the company.

Current CEO Mr. S. D. Shibulal will step down as CEO & MD and from the Board on July 31, 2014 after a very difficult tenure period including resignation of many high-level Infosys executives who might have been considered internal candidates for the CEO slot or were perceived as not meeting the firm’s operating objectives.  Early in this author’s career, I had the opportunity to work directly with “Shibul” while we were both part of Sun Microsystems’s internal IT team supporting after-market online customer fulfillment. I wish him well in his new chapter.

Supply Chain Matters has been very familiar with Infosys having the firm as a prior sponsor of this blog.  In addition, this author’s industry analyst presence has caused me to interact with many members of the Infosys executive team over prior past years. We came to notice a lack of cohesiveness across Infosys operating units, an indication of conflicting goals and objectives with a dilution of strong marketing and brand presence in areas of supply chain and customer fulfillment related technology services. Towards the end of our prior relationship, we found ourselves performing a lot of the heavy lifting related to services marketing messaging and supplementary thought leadership.  Our parting of ways was more of a mutual decision.

Much work remains particularly in areas of more cohesive strategy, building broader and deeper strategic partnerships with clients.  There is no doubt in our mind that Dr. Sikka’s technology strategy skills are impeccable, but his broader leadership skills will be challenged in providing vision and leadership for Infosys moving forward.  An important area to watch is whether a strong, capable, hands-on leader of global marketing will be brought on-board and supported.  By our lens, Infosys needs to represent its services in technology, vertical industry and business process enablement dimensions in more impactful dimensions.  Service areas related to online customer fulfillment, online commerce, manufacturing and value-chain enablement must have tighter linkages. Driving industry thought leadership needs to become more external, beyond certain academic arrangements.

In essence, this series of new leadership changes represents a new dawning for Infosys with opportunities for new vigor and market presence.  The opportunity remains to become a continued strategic partner among many industry settings including manufacturing, retail and online services.

We extend to all of the Infosys new executive leadership team and employees our best wishes for this new era of leadership.

Bob Ferrari

 


SAP’s Newly Articulated Supply Chain Applications Roadmap- S&OP and IBP are the Linchpin

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SAP AG will kickoff its joint annual Sapphire-ASUG customer conference this week which will feature revised messaging and strategic direction for the SAP Supply Chain Management suite of applications. This strategy was initially shared at the SAP Insider Supply Chain Management conference in early April as a prelude to this week’s Sapphire event.

SAP will communicate the need for businesses to transform their supply chains to demand networks which implies deeper, more agile support capabilities for integrated business planning (IBP), specifically, the sales and operations planning (S&OP) process. SAP’s perspective in IBP capabilities is communicated as balancing product demand plans with supply network constraints for profitability, as well as the sensing and shaping of product demand to orchestrate customer fulfillment needs and requirements. In essence, SAP’s intent is to enhance and deploy a broader, next generation supply chain platform that is described as a broad, many to many supply chain control tower platform capability underpinned by IBP and response orchestration. The technology will be offered on either a cloud-based or on premise deployment leveraging the SAP HANA platform and more than likely tap the supply network capabilities of Ariba.

As our SAP installed base readers are well aware, the transformation of such a broad collection of SAP supply chain network and applications capabilities will take many subsequent years to accomplish and will require SAP focused supply chain business and IT teams to make difficult decisions over that same period. In the meantime, supply chain teams need to continue to manage today’s supply chain needs for agility , increased responsiveness as well as enhanced efficiencies.

It is important to consider that as SAP builds out its new muscle platform, organizations that are invested in SAP and want to continue to gain more productive benefits need to focus their efforts on further mastering broad-based supply chain planning process modeling, simulation and master data management integration capabilities. Another important consideration is that the SAP Sales and Operations Planning (S&OP), powered by HANA will become ever more strategic for enabling what SAP seeks to achieve.

Supply Chain Matters recently featured a commentary focused on this application. In our commentary we observed that getting up-to-speed and supporting a process that spans such a broad level of participation and influence with an application with this current level of sophistication, often requires the external assistance of an SAP implementation partner. In that commentary, we called reader attention to Intrigo Systems, a focused SAP implementation partner with a high level of honed experience, knowledge and fixed scope implementation methodologies related to SAP’s S&OP Powered by HANA application.

While SAP Sales and Operations Planning, Powered by SAP HANA is a cloud-based application, the needs for managed scope, proven phased implementation of data integration, coupled with considerations for change management and usability uptake remain critical.  As this application further matures and becomes the linchpin for short-term, mid and long-term supply chain and IBP within a more product demand sensing SAP environment, process modeling, robust master data integration and cross-functional user adoption and productivity will be a must for core capabilities. Continuous engagement with business users on testing and maturing the IBP process, while understanding what capabilities would be most important in the strategic roadmap are equally crucial to long-term acceptance and adoption.

In its latest messaging, SAP has acknowledged the critical importance of its supply chain partner eco-system in helping users to gain more benefits and positive outcomes from use of SAP technology.  That listing of partners includes Intrigo Systems which will be showcasing its capabilities at Sapphire this week.

Intrigo provides both the knowledge, proven experience and close alignment with SAP’s strategic direction concerning this application and should be on your short-list for adopting an implementation partner.

Bob Ferrari

Disclosure: Intrigo Systems is a current client of the Ferrari Consulting and Research Group

 


Accelerating Value for Existing SAP APO Planning Teams: Intrigo Systems

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Utilization of SAP applications can be both a blessing and sometimes a curse. The blessing comes from the structural design rigor that often underpins SAP applications and underlying master data management, along with the rather tight transactional linkages among the various SAP Business Suite applications. Many manufacturers and services providers elected SAP as their ERP backbone because of its rigor and designed enterprise data integration. They have subsequently learned how to gain the benefits of SAP technology by centralizing expertise, master data management, IT and other support. They have also come to rely on a select cadre of consultants and system integration firms that truly understand what it takes to harvest business value.

For the specific area of supply chain planning, the SAP community can often have a love-hate relationship with SAP APO (Advanced Planning Optimization). This application can be a versatile planning and supply chain optimization tool when all of it’s various SAP elements are deployed and the supply chain business model is somewhat static. SAP APO itself has come a long way since this author served as its global product marketing manager from 2002 through 2005 when Release 4.0 was made generally available.   In those days, not many supply chain planning organizations had deployed supply chain wide optimization because of the complexity and understanding required by supply chain planners as to what occurred in the planning run or what exceptions were flagged across various parts. Planners were literally overwhelmed by the complexity and consequently resorted to heuristic planning options supplemented by other offline tools.  Since that time, far more attention has been directed by SAP at usability and exception management needs along with availability of more-user friendly screens and offline tools.

More and more organizations are discovering that supply chain management among many industries have become incredibly dynamic, reflecting a continuous state of business changes. There are new or changing customer demand streams, multiple changes in production sourcing and far more diverse distribution points brought about by the effects of more online fulfillment. For an SAP APO planning environment, such changes fuel large amounts of required data and modeling tasks, causing the need for re-configuration of planning models.  As consultants, we often advise supply chain management teams to explore what-if and planning simulation processes as a means to assist the business in anticipating various supply chain outcomes to more proactively anticipate the implications of business change. Performing what-if scenario based planning for SAP APO teams often requires replicating the entire planning data set which can take precious hours to complete, let alone analyze.

Planners often cannot keep up, and again revert to offline means such as spreadsheets to meet planning milestones. Problems and subsequent frustrations begin to compound themselves, and like any biologic organization, planners find various workarounds to get their jobs completed, meanwhile losing confidence in their backbone planning tool.

Supply Chain Matters was recently briefed by Intrigo Systems regarding the above challenges. For those unfamiliar with Intrigo’s capabilities, they provide highly experienced knowledge of both SAP APO and other system backbone capabilities for SAP installed base customers. SAP sometimes turns to partners such as Intrigo to provide opportunities and means to increase SAP APO adoption and provide planning focused users more sense of control, making the planner more of the orchestrator and decision-maker in planning while leveraging automated planning tools available. Intrigo was awarded SAP’s supply chain partner of the year award in 2012, because of its team focused capabilities in accelerating value among SAP’s supply chain management applications suite.

In the specific area of broader SAP APO adoption and business value, Intrigo has been internally developing and deploying its Optek tool suite for SAP APO planning needs since 2009.  The suite consists of modules that have been designed to place the planner more in control of the process while making SAP APO functionally more effective. Optek USE is an accelerator to manage and manipulate large volumes of transaction data and maintain the planning parameters of large revisions of in the APO tool. Additionally Optek provides an opportunity to enforce business rules to that data, as well as the results stemming from a planning run. Other key modules related to Optek help the planner understand impacts to their planning run and provide baseline structures to create multiple what-if scenarios for minimal intervention. Additionally, the Statistical Forecast & Demand Management (SFDM) module supplements SAP APO with additional forecast models from the “R” Library, allowing more flexible forecasting options for planners. The Supply Chain Results Analyzer (SCRA) module was designed to provide planners more user-friendly explanation of planning optimization results while supporting alternative options. Supply Chain Scenario Planner (SCSP) is a slick background utility that copies the SAP APO planning data set while maintaining incremental changes in Optek as the overlay tool to allow planners to review various planning scenarios in Optek before triggering an actual planning run.

Intrigo’s Optek accelerator suite has been deployed in a number of manufacturers and services providers including Broadcom, Nvidia, and others.  Intrigo’s delivery methodology includes a fixed scope implementation with time-to-benefit pegged to 2-4 months for most customers.

If your SAP focused supply chain planning organization is currently looking to accelerate value for planners and for the business, you might want to explore Intrigo’s Optek solution accelerator.

Bob Ferrari

Disclosure: Intrigo Systems is a current client of the Ferrari Consulting and Research Group


Another Round of Senior Management Re-Alignment for SAP

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Supply Chain Matters has often pointed out to our readers that bad news from industrial and information technology firms often come on the weekend when readers and interested parties are occupied with mostly personal matters.

And so it was this weekend as yesterday, global enterprise software provider SAP AG announced Ariba an SAP Companyanother stunning announcement regarding executive re-alignment.

The primary headline that is sure to capture the interest of SAP customers and the broader IT and consultant vendor community is that Dr. Vishal Sikka, Executive Board Member for Products and Innovation, the de-facto Chief Technology Officer and primary shepherd for the development of the SAP HANA platform announced his departure for personal reasons.

At the surface this appears to be another sweeping executive re-organization of technical leadership similar to the previous executive re-alignment changes. Shai Agassi similarly departed the chief technologist role in 2007 under sudden circumstances. In June 2014 came the announcement that Lars Dalgaard, the board executive with overall charge of SAP’s cloud product strategy at the time, suddenly announced he was departing the company. Shortly after, go-to-market leadership for SAP’s efforts was assumed by Bob Calderoni, the then CEO of Ariba, an SAP Company, but Calderoni has since departed SAP as well.

Regarding other executive leadership announcements, SAP announced that Bernd Leukert, who joined SAP’s Global Managing Board in June of last year, will now assume responsibility for the global development organization. Robert Enslin the head of SAP Sales and Services and the company’s go-to-market teams will now assume responsibility for customer operations and join the company’s Executive Board, along with Leukert.

SAP additionally announced two new appointments to its Global Managing Board. Helen Arnold an 18 year veteran will assume the role of SAP Chief Information Officer (CIO) and lead cloud operations and the SAP Enterprise Cloud, in addition to her current role of managing internal Business Innovations and Application Services. Stephan Reis will lead the company’s human resources efforts.

These executive re-alignment announcements come on the heels of last July’s unexpected announcement that the company’s co-CEO model was to transition into a singular CEO this month, as Bill McDermott assumes singular leadership of SAP. No doubt, Mr. McDermott is probably molding his leadership team moving forward. But in all things related to SAP, internal politics and perceptions often present this form of drama and turmoil.

The timing of these announcements comes prior to SAP’s annual Sapphire and ASUG conference coming up in June and again provides uncertainty as to SAP’s product development and product strategies in the coming months as new leadership once again takes effect. SAP has been taking more of the path toward being a cloud technology or B2B platform company vs. a concentration in business and industry applications.

This steady stream of senior executive turnover is obviously a concern for SAP’s customer base. What happens next is again open to lots of speculation and open questions.

From our lens, SAP has been charting a course that strayed from the firm’s core capabilities in industry specific support in business suite applications, including end-to-end supply chain, manufacturing and product management. The notions for becoming a prime player as a database platform company by offering HANA as a stand-alone platform alternative was difficult to comprehend, providing yet another distraction.

But, our view is not as important as the view of SAP’s current customers, prospects and partners.

At this point, we all need to wait and see what the implications of these latest senior leadership changes imply moving forward.

Bob Ferrari

 


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