SAP – Shifting Gears

Shai Agassi outlined SAP’s vision this morning, for what he called as solutions for Enterprise 3.0, aimed at fulfilling organizations desire to accommodate immediate changes on the business processes, enable environment to use apps as service and to eventually support industry specific applications and platforms. As he sees SAP today supports 400 micro vertical solutions and this number may grow to somewhere near4000 in future. His contention is SAP & Its ISV ecosystem alone can not manage this demand and therefore there is a need to look at a different approach towards meeting customer expectations.
The resultant rehaul helped shape a few strategic assumptions for the company.

1. SAP would like to keep a single unified platform and today it has grown to accommodate 300 enterprise services stored in a single repository.
2. Help move customers to move away from point solution to suites - This movement would keep in focus the six enterprise jobs Viz, compliance, consolidating the core, optimizing operational networks, manage relationships, enable net growth & manage performance. The focus shifts towards increasing the differentiation edge and less on productivity, as it is taken as given.
3. User experience should be felt in managing business processes (essentially as Shai explained, it is business process context in one own choice of UI)
4. Ecosystem shall reuse common services .Towards this end,Shai explained, that SAP had to make tough choices – like making its appserver exposable to other/external services/applications.

Shai made some impressive revelations on the usage of SDN network . The monthly traffic to SDN network is seen to be 500,000 unique visitors/month, on an average questions get answered in 29 minutes and more interestingly he said that 80% of the questions are answered by ISV’s themselves and not by SAP. Truly impressive a network that SAP has managed to build and grow. With the realigned architecture of SAP, the expectation is the IT functions of an enterprise can be managed by tow different roles under the CIO viz CPSO(Chief process innovation officer) and CITO(Chied information technology officer) – facilitating each one of them to focus on best practices, innovation and routine maintenance and cost reduction respectively. SAP is trying to work on reducing the setup time, reducing the operational cost levels and making it more friendly to use
The Q&A session was interesting as well. Versa’a acquisition was special as it offers a great degree of assurance to enterprises that their operations are SOX compliant and Shai says several SAP customer s wanted that to be part of the core service of SAP and hence the acquisition. Con Godeman from Shell asked Shai to explain how much more time and money does his company need to spend and wait after spending 400 million USD on its SAP rollout – after repeated prodding, Shai answered that similar engagements planned elsewhere are expected to take around four years to migrate, dollar value not mentioned. SAP will have to work very hard in terms of reducing this migration effort and time – after all like changing business needs immediate responses, these infrastructures meant for running business also needs to change faster. Overall am impressive presentation – if you cut the snide remarks made against Oracle. SAP is certainly embarking on a massive change, but customers would like to see it move fast and help them in reducing their TCO