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Business Suite 7 - What SAP Customers Need to Know Print E-mail

jonerp_full_logo.PNGBusiness Suite 7 - What SAP Customers Need to Know: Lessons Learned from the Business Suite Event Announcement in New York City
by Jon Reed
Unabridged Edition, Never Before Released

On February 4, 2009, I was amongst the members of the media invited to New York City to cover SAP's official announcement of the release of Business Suite 7 (BS7). Dubbed the largest application release in SAP's history, the BS7 announcement received its fair share of criticism in subsequent coverage. The controversies surrounding that day were interesting, but to SAP customers, that was nowhere near as important as this simple question: "How can BS7 help us?" In this article, I'll do my best to answer that.


1. Putting Criticism of SAP "BS7 Day" in Context

Before we get into the specifics of BS7, the media reaction to the day's event should help us frame the discussion. SAP faced several criticisms following that day: first, it seemed poor timing to announce a big suite release in the midst of downturn, where the last thing customers want is to shell out for a major new release. Second: SAP seemed out of touch that day with other technical trends, including cloud computing, Software as a Service (SaaS), and the "iPhone revolution." Three, in some widely quoted comments in a blogger session, co-CEO Leo Apotheker seemed to be dismissively critical of major consulting partners, and overly enamored with SAP certification as the solution to SAP project problems.

The third criticism, pertaining to Apotheker's remarks during a heated meeting with bloggers, is something I can speak to, as I was in that meeting. During that forty-five minute session, ZDNet Editor in Chief Larry Zignan typed in many of Apotheker's comments verbatim and posted them on his ZDNet blog. I thought Zignan did a good job of not only reporting Apotheker's comments but framing them. However, other bloggers seized upon the most sensational of Leo's comments that day and took them out of context to the point that the nuances of the conversation were totally lost. To me, the most important thing Apotheker said that day was a less-publicized but emphatic statement that SAP was totally dedicated to its customer base. His widely-quoted comments about his consulting partners and the importance of SAP certification both tie into his resolve to help his own customers by improving consultant quality. That's the statement he should be determined to honor, and if he doesn't, then bloggers should hold his feet to the fire.

Cue the second criticism, that SAP appeared out of touch that day with key enterprise trends. It was Vinny Mirchandani, analyst and blogger with DealArchitect.com, who asked in the main press Q and A session why there had been no mention of cloud computing, SaaS, and iPhone trends and how SAP was responding to them. To me, this question underscored that those at the event were looking for more of a general "state of SAP" session than a focused product announcement. Since the BS7 event, we've heard a bit more about these three topics Mirchandani asked about, including SAP's newly announced partnership with Sybase, which will address iPhone compatibility as well as other mobile standards. We can also expect to hear more about SAP's approach to SaaS at this year's Sapphire event in Orlando, when its latest plans for Business by Design are expected to be announced. SAP was in a tricky spot at the BS7 event, determined to make a major software announcement when the assembled media wanted to hear a broader review of SAP's products and priorities.

This brings us back to our first criticism, that SAP appeared out of touch by announcing a massive new software suite at a time when its own customers are ruthlessly focused on incremental projects that have a specific bottom line benefit. This is the criticism that is the most relevant to BS7 specifically. To some degree, I believe it is a valid one. However, I thought that SAP did an underrated job of gearing the BS7 message to the needs of its customers. In particular, the "no more upgrades" message is one that seems responsive to what users have been clamoring for. However, there are a couple of asterisks to the "no more upgrades" message. Before we talk about the benefits of BS7, we should make a note of these disclaimers.

2. BS7 - No More Upgrades, But With An Asterisk (Or Two)

If indeed BS7 lives up to its billing, the niftiest aspect will be that "no more conventional upgrades" are needed. Of course, there's a big catch here: you have to be running ERP 6.0 to benefit from the "no more upgrades" mantra. So, following this peculiar reasoning, in order to never upgrade again, first you have to upgrade. Prior to this article, a contact at SAP confirmed to me that about 13,000 customers are running ERP 6.0, out of a total SAP ERP customer base of 27,000. So those customers running on various flavors of SAP R/3 (4.6, 4.7) still have to upgrade once more to qualify for the "no more upgrades" pledge. SAP has not been secretive about this, but it's a pretty big asterisk for those not running on ERP 6.0.

Also, I've seen some bloggers report inaccurately that this "no more upgrades" pledge means that SAP will never require its customers to do a conventional ERP upgrade again. In fact, SAP has kept a back door open. As I put it in my piece for PAC's "Feeding the SAP Ecosystem" blog, "The most compelling thing about BS7 from a cost standpoint is that once a company is running ERP 6.0, they can implement only the functionality of BS7 they need. This fits into SAP's "no more upgrades" promise for its ERP suite. The fine print is that SAP is leaving itself an out: SAP is committed to using its Enhancement Package approach for the next five years for ERP 6.0." It's not likely that SAP will ever return to large scale upgrades, but they've been careful to leave themselves an out in five year's time.

3. NetWeaver Compatibility and Enhancement Packs

To get a handle on the benefits of BS7, it's important to understand that BS7 is tied to a specific version of SAP ERP and also to a specific version of NetWeaver. Just as you must be running ERP 6.0 to access Business Suite functionality, you must also be running NetWeaver 7.01. Interestingly enough, I confirmed this fact in real time at the event, not from anyone present in New York City, but from an SAP employee who was tracking my live Twitter feed, where I was reporting on the event in 140 character "microblog" entries. Faycal Chraibi, an SAP Enterprise Architect based in Paris, France, who goes by the Twitter handle of "Freakyfays," was good enough to chime in on this detail - a useful factoid that was not mentioned, to my knowledge, during the presentation. Twitter is becoming an increasingly important factor in the coverage of live events. Figure 1 shows a view of my own Twitter feed from the BS7 event. The Tweet that begins with an "@" is a reply, in this case to Forrester Analyst Ray Wang, or @rwang0 on Twitter. The Tweet that begins with RT is known as a "Retweet." That's when you push someone else's Tweet out to your audience.

jonreedbs7figure1.jpg

Figure 1: JonERP Live Twitter Feed Excerpt from BS7 Event

Figure 2 shows a view from ZDNet blogger Dennis Howlett, who was not present at the event, but who organized a simultaneous virtual event by integrating those who "Tweeted" from the event into a live blog with international participation (Dennis Howlett is @dahowlett on Twitter, and he wrote about how Twitter and other virtual tools are changing event coverage in his blog post "The Future of Events"). Figure 2 is a screen capture of the live Tweets Dennis was broadcasting. Each Tweeter was using the hashtag #BS7 which made it easy for Howlett to stream only the relevant posts.

jonreedbs7figure2.jpg

Figure 2: Dennis Howlett's Live Blog Session from BS7 Event - Twitter Posts

Getting back to the compatibility discussion, if you're already running ERP 6.0, you can access the BS 7.0 functionality, but on a selective basis using SAP's "Switch Framework." Another key tip: SAP is now including Business Suite 7.0 as part of its Enhancement Package system, meaning that future Suite enhancements can be installed on an "as needed" basis via the Enhancement Package updates. As of Enhancement Package 4 (EP4), Business Suite content is now included in the Enhancement Packs from this point forward. Announced in early November, 2008, EP4 continues SAP's plan to make Enhancement Packages cumulative. So all the content from the previous three Enhancement Packages are included in EP4.

SAP has now embarked on a dual Enhancement Package strategy - ERP Enhancement Packages and NetWeaver Enhancement Packages. To get some clarification, I checked out the February 7 podcast from a great new SAP podcast series called the Enterprise Geeks. The Enterprise Geeks will bring you as deep into SAP technical trends as you need to go, and in a very entertaining style. On the February 7th podcast, the "EGeeks" explained that NetWeaver Enhancement Package 1 is the same thing as NetWeaver 7.01, which is the most current version of NetWeaver and the one required for BS 7. NetWeaver Enhancement Package 2 is due out later in 2009. (If you want to get really fancy, ECC 6.04 is the version number for the ERP core that ships with Enhancement Package 4. Therefore, ECC 6.04 is the precise numbering of the ERP component required to run BS7). The NetWeaver Enhancement Packages, however, are NOT managed by the Switch Framework, which means you don't get to pick and choose which functionality you activate as you do with the ERP Enhancement Packages. Whew!

4. "Selective Upgrades" with the Switch Framework

One of the other criticisms SAP received from the BS7 event was that when you peeled back the curtains, there really wasn't much new product functionality in the Suite. To some degree, this is true, in that the main focus of the first BS7 announcement was to emphasize the delivery and activation of SAP functionality using less "disruptive" methods. The buzzword here is "modular." SAP users have been clamoring for the ability to cherry pick new features without major upgrades, and that "modular" capability is what BS7 is all about. Using the Switch Framework, an SAP user can activate any functionality in BS 7 that suits them - without having to go through a conventional upgrade. So, we can think of this as the first potential benefit of the Business Suite. If the Switch Framework delivery of BS 7 can live up to the hype, it will give SAP users a new level of control over feature activation.

5. Release Synchronization - All Four Suite Products on Same Release Schedule

Up to this point, customers using CRM, SRM, PLM, and SCM (the four components of the Business Suite), had to manage the release cycle of each component separately. As of BS7, all four are integrated into one release schedule and numbering scheme. Up until recently, there were some pretty anarchic naming conventions, such as SAP CRM 2007 (tying a release to a calendar year always seems problematic). Now all the products are on the 7.0 schedule, at least for now, which should create a bit more sanity around application suite management. Since we have all four Suite releases on the 7.0 numbering scheme, I got the wacky idea that SAP should change ERP 6.0 to ERP 7.0 so that all the application releases would be aligned on a 7.0 numbering scheme. But when I posted that idea on Twitter, I got lots of "not another numbering change!" responses, so I guess I was getting a little too greedy for release conformity.

5. Business Suite is Fully Service-Enabled and "SOA Ready"

ERP 6.0 marked the first version of SAP that was deemed "SOA ready" by SAP. Technically, this meant that ERP 6.0 was "service enabled," allowing users to build services on top of the ERP suite without altering the code based or disrupting core ERP processes. Now, those same benefits have been extended to the entire Suite. Of course, the catch is that many SAP customers are not currently diving into major SOA projects. But SAP does consider SOA-readiness to be a big aspect of the Suite's financial payoff in the long term.

As I Tweeted from the NYC event: "Don't look for SAP amongst ‘SOA is dead' crowd. SAP is still banking on SOA to provide flexibility on top of process integrity of suite." A bit later on, I said, "Customer benefits/perks of BS 7.0 cited: eSOA over costly customizations, Enhancement Packs over multiple $$ upgrades." Steve Mann, formerly part of SAP's Social Media team, also commented: "BS7 suite positioned as a low cost, easily implementable library of business processes delivered without customer disruption." As of yet, we have a handful of flagship customers who can vouch for the benefits of SOA using BS7. But others are certainly looking into it. SOA readiness is not a main driver for most, but SAP is not the only ERP package that is looking to SOA to resolve the tension between over-customizing the code base and giving customers the flexibility to refine their own processes. (For those who are curious, as of February 2009, there were 190 SAP customers in BS 7.0 ramp up).

6. Other Benefits of BS7

There are other enhancements to BS7 which may prove useful:

- Embedded Analytics: The Business Suite has embedded analytics, integrating "actionable information" into the flow of the user experience. BI is becoming less of a separate tool and more of a key ingredient in the mix of the user workflow. Plus, there are new analytical tools to consider. Live demos of the Suite in New York City included a look at some new geo-spatial analytics capabilities.

- Sentiment Analysis: Showcasing one of SAP's first formal integrations of "social media" into its product line, the BS7 event included a demo of CRM-based "sentiment analysis," also drawing on Twitter: the integration of customer/brand feedback on Twitter into the Suite's dashboard displays.

- Harmonized UI: Business Suite 7.0 also features a "Harmonized UI" for a universal look-and-feel for Suite user. However, this is not a mandatory view. Suite content can be accessed by a variety of UIs, from Portals to Microsoft's Duet, depending on the preferences of the user.

7. Industry Value Scenarios: Forward-Thinking Buzzwords

Of all the benefits of Business Suite 7 SAP pushed at the New York City event, the one that befuddled the most people was "industry value scenarios." As I noted that day, "With the Suite, SAP is introducing ‘value scenarios' that follow business events and end-to-end processes even across organizational boundaries."

Of course, this sounds very good, but what does it mean? And can companies do anything useful with value scenarios today? After the event, I went looking for some answers. In his blog on the SAP Community Network (SCN), Ajesh Kumar of Tata Consultancy has a useful list of some of the value scenarios shipping with BS 7:

• Collaborative Demand and Supply Planning
• Integrated Product Development
• Integrated Sourcing and Procurement
• Asset Safety and Compliance
• Gaining Efficiency in Finance
• Developing High Performing organizations
• Integrated Sales and Marketing Investments
• Differentiation Through Service Excellence

According to Kumar, there are more value scenarios in the making, such as:

• High Performing Assets
• Responsive Supply Chain
• Efficient Manufacturing Operations

OK, so we've defined some value scenarios. But what about the "value" part? As it turns out, SAP sees the value in the pre-built aspect. The idea is that value scenarios will ship as end-to-end processes that are 60-70 percent ready out of the box, with about 30 percent needing configuration. The difference between this and the traditional industry solution? Value scenarios can span different applications and products, including third party software. Kumar used this example: "A value scenario for Enterprise Asset Management (EAM) may contain SAP PM, BI content for maintenance, RCMO, MAM, MII, components of EHS and third party solutions for work permits."

Kumar sees value scenarios as a way to save money that would have been expended on a sophisticated SOA-based approach: "How about an end-to-end process running seamlessly on multiple solutions? Seems like a typical SOA scenario. But if at least 60 percent of it is out of the box and rest is configurable, it would save a lot of plumbing and wiring to make it happen. That's exactly what the industry value scenarios promise to deliver."

It will be interesting to see if value scenarios can live up to this promise. In this economy, the idea of out-of-the-box solutions that are industry-specific and easily customizable certainly has appeal. But as with all SAP product advancements, customer adoption will tell the real story. SAP is certainly feeling some pressure to better define value scenarios, and we can expect this to be a big theme at Sapphire, Orlando 2009.

Fellow SAP Mentor Vijay Viyasankar raised a series of questions on value scenarios on his SCN blog. He ended with this comment: "My last question is - what segment of SAP customers will use it? For one - in a tight economy, I wonder if a significant number of customers will upgrade their systems for the sake of using value scenarios. So primarily, the audience would be the larger, more established implementations that have a committed upgrade plan, and who would upgrade to get into the ‘no more costly upgrades; state. To them, value scenarios should be a side benefit. Do you guys see any other segment that would jump in now?"

I think Vijayasankar's comment sums up the question of BS7 benefits as a whole. Yes, those companies that have upgraded to ERP 6.0 are sure to explore all these potential enhancements, but will these benefits be enough to drive adoption of BS7?

Conclusion

Regardless of the controversies sparked by its launch event, SAP's Business Suite 7 is a serious release with a number of new capabilities that warrant analysis and consideration. For those customers that have not yet moved to ERP 6.0, the exploration of the Suite might be limited to a cost/benefit analysis of an SAP upgrade. For those running on ERP 6.0, there is a need to delve further into specific Suite capabilities. I hope this article has clarified some of the issues surrounding BS7 and brought some of the potential benefits to light.

You will find my initial report after the New York City event on that list as well. I am fond of saying that in the final analysis, the marketplace will have the final say on any new product release. SAP has made its case, now its time to look under the hood and kick some tires.

Site Editor's note: this article will appear in a modified format in the April/May 2009 edition of ERPtips, formerly SAPtips.

Jon Reed, JonERP.com. Jon Reed is an independent SAP analyst who writes on SAP consulting trends. He is the President of JonERP.com, an interactive Web site that features Jon's SAP Career Blog and his podcasts for SAP professionals. Jon has been publishing SAP career and market analysis for more than a decade, and he serves as the career expert for SearchSAP's "Ask the Expert" panel. He is the author of the SAP Consultant Handbook. From 2003 to 2006, Jon was the Managing Editor of SAPtips. Jon was recently named an SAP Mentor, a highly selective program which recognizes those individuals who are making an outstanding contribution to the SAP community.

 

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