I grew up as a consultant in SAP R/3 – programming and configuring several modules , across many continents and for a lot of customers . As I see the excitement build up for SAP Teched next week , I keep thinking of what more SAP can do to make the ERP system more modern .
I know a lot of people think moving ERP to SaaS is the answer . I don’t think that needs to be a priority for SAP at all . Even if SAP had a super duper SaaS ERP today , I don’t know a lot of SAP customers in America or Europe with “wall to wall” on premises ERP who will jump in with both feet . SaaS is a good long term option – but they have a lot of time to get there for core ERP . If at all SAP builds a grand new SaaS ERP – I think they are better off selling it to net new customers and not to instal base ECC customers .
Vertical apps – given SAP has 26 or so industries they have solutions for – seem like the most logical answer . But those are also incredibly hard to build . So I am looking for what horizontal functionality could help modernize the suite .
What was the original message of ERP? In the 90s – it was to give one view of your business . SAP ECC is an incredibly complex and comprehensive system – and it has all the data anyone would ever need . But – it doesn’t give “one view of business” . SAP can create a financial statement for a company code or a profit center in ECC , but that alone does not make “one view”. It is an important view – but only a limited view . A sophisticated “one view” needs to be built custom at each customer today .
It is easy for a user to drown in data in a Buisness suite. Imagine a world where the CXOs can look at a financial statement , which shows exceptions that need attention and they can just navigate to that one transaction that caused that exception . That itself will get them drooling . Now imagine if they can also get prioritized recommendations of what can be done to fix the exception ?
Suite has all the information a business user needs – and an excellent security model to go with it . What is missing is flexibly organizing an enterprise view of a slice of the business and seeing the exceptions . There are many parts of suite that facilitate drill down today – but that is not exception based . You need to drill down endlessly to find the issues . That is when users give up , consultants make a living and MS excel becomes default answer .
What about the lay user ? The biggest problem for a lay user in ERP is searching for information . If an AR clerk knows an order number or a customer address for a shipment that wasn’t paid for – she will need to know specific search helps or reports to find related information . If you look at a standard selection screen on sapgui – you probably won’t expect a lay user to find a way to use it meaningfully . Making it html5 doesn’t solve it – it needs a new UX from scratch to make a difference . Why not give a system wide free form search that all users can use ? Suite has an extremely good data model – granted it has meaning only in ABAP dictionary and not at database . But there is a way to make it work – so why not do that ? Just for search alone – I am sure there are customers who will pay a premium .
What about less tables in data dictionary and less data footprint due to compression ? Geeks like me absolutely love it – but with storage prices going down steadily , and infrastructure getting commoditized – it doesn’t come across as a compelling message by itself for a buyer . At best – the nested tables and less data should be positioned as a way to get to better usability features in future .
While on the topic of simplification – we should also remember the reason SAP became popular was the ability to extend standard code with custom ABAP code. Back in the day it was user exits – and then many other things came in as technology improved . But there is a problem with user exits in general – most of them are at a line item level of a document . This means a database cannot help speed up the code since the logic needs to be executed in abap server in a loop for each line . Will “run simple” mean that suite will now have a lot of additional BAdIs that will understand set operations ? That would be super cool .
Technical simplification is of little to no interest to business – and SAP messaging and product strategy should reflect that .
In the same vein – when people think of a modern suite helping them close books faster , there needs to be a sensible expectation . Not all parts of suite are real time . And even when everything is optimized to be real time – there are things like depreciation that only happen periodically . So while it is correct to say close will be faster – close itself won’t be real time for near future .
Another aspect of faster close needing an expectation setting is when we think of end to end processes . When we close books – there are things like consolidations and inter company eliminations and so on that need to happen. Those don’t always happen in suite . So they need an external system talking to suite and that means that even if suite is real time , you can’t exactly have a real fast close as a business process . This is all still better than the slow closing process today – but if customers have an unreasonable expectation of real time close etc, they will be severely disappointed .
What about good old reporting ? This is the biggest miss for SAP suite today in my mind . SAP has all the knowledge and IP and technology to embed BI in suite apps . Yet we still see the same abap reports today in ECC that I have used in 90s when SAP had black and white screens . Hana live would be a whole lot more palatable to customers if there was BI content on it . I hope one day we will start seeing SAP bring these two worlds together .
What about Hana enterprise cloud for hosting ERP ? I don’t think SAP will be a great data center company and hosting margins are not comparable to software margins . A Management utilities layer built by SAP and licensed to partners who are already in infra business seem better to me than running infrastructure themselves . The IBM announcement seems to be in this direction and I liked it .
I make a lot of fun of “social” and it’s fluffiness . But I will be the first to admit that in the context of ERP , collaboration is actually the killer functionality – right after search functionality . Vast amounts of time and money is spent on rigid workflows and email and calls today and it is the epitome of inefficiency around ECC users everywhere . SAP already has Jam – they just need to sell it everywhere .
Last point – APIs . A modern suite should be able to provide a rich set of APIs to developers to build quickly around it . HCP is already a recommended approach to build extensions . The Apigee partnership provides management . ECC already has a lot of BAPIs (granted – they have God awful interfaces that only abap developers understand, and that needs to be simplified ). All the raw ingredients are already there – including BI and ETL . All that remains is a bit of engineering to make them work together and build a message around using HCP for the install base customers . SAP has a huge developer ecosystem that can make use is all this . I am betting on my friend Steve Lucas and team telling us more about this soon . There is nothing about SAP today that makes me more excited than Hana Cloud Platform .
Rant over and I wish all my pals an exciting time at Teched . Have fun ! I heard that the Keynotes are going to be run like never before 🙂