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Welcome to the JonERP.com Podcast Directory

This podcast directory provides handy previews, in text format, of all the podcasts available for download at JonERP.com. There are also video podcasts in the SAP Blog section. Note: The JonERP iTunes feed is currently the most complete audio feed of all new audio content, as Jon posts audio of his video podcasts and hangouts in that feed also. If you're a video fan you'll want to track JD-OD.com also.
 
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Podcast: EPM, GRC, and the Future of SAP in a SaaS World - with Nenshad Bardoliwalla Print E-mail

podcastlogo_jonerp.gif"On the 'Driven to Perform' Book, How it Translates into EPM and GRC skills needs, and how SAP will fare in an SaaS Economy"
Podcast Interview Date: September 25, 2009
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SAP is at a serious crossroads. The ERP market is in a state of significant disruption. The down economy has not only slowed sales; it's created a fertile ground for Software as a Service business models. As I say in the podcast, how SAP responds to these market challenges is going to have a lot to say about its future. Those of us who work in the SAP community have a lot at stake as well. On the consulting side, the commoditization of basic ERP skills is challenging consultants to find a "higher skills ground."

There is no one better to talk about these issues than Nenshad Bardoliwalla. A former executive from the SAP ranks, Nenshad is now heavily involved in SaaS technologies. He is also the co-author of the recently published book Driven to Perform: Risk-Aware Performance Management From Strategy Through Execution. In this in-depth, 50 minute podcast, which I consider to be amongst the best I have ever released, I talk with Nenshad about the book's approach to linking strategy to execution and how this can be leveraged in SAP environments.

The first half of the podcast is focused on breaking down how linking strategy to execution is driving skills demand in the SAP BusinessObjects EPM (Enterprise Performance Management) and GRC (Governance, Risk and Compliance) suites. The second half of the podcast moves into the impact of Software as a Service on the ERP market and how Nenshad thinks SAP should respond. We also get into how SAP professionals should approach SaaS from a skills perspective.

Podcast Highlights

1:43 Nenshad's "incredible journey" within SAP's EPM (Enterprise Performance Management) division as a rising executive - the team decided to make a bold statement in the analytics space, acquiring PIlot Software and then Outlooksoft a couple months later. A few months after that, a slightly bigger acquisition happened: BusinessObjects. Nenshad's job was to help compile these EPM portfolios.

In Nenshad's final role at SAP, working in the office of Vishal Sikka, co-authoring Driven to Perform, looking at the intersection between risk management and performance management.and other issues. Nenshad jokes that within the book there are 20 startup ideas. Having been in the Silicon Valley for ten years, Nenshad felt it would be a regret not to take on the challenge of a startup himself. So that's what he's doing, inspired by the concepts in Driven to Perform.

4:45 Driven to Perform is informed by a coherent methodology - how does this impact the SAP space? First, there are five trends:
1. customer empowerment via socail networking tools like Twitter (example: United Airlines debacle)
2. the workforce is expanding globally and is becoming much more diverse
3. talent wars for the best and brightest are continual.
4. intense level of competition and speed of innovation - price for bringing innovation to market has dropped, so you never know where your next serious competition is going to come from. Disruptive technologies can come out of nowhere.
5. many emergent technologies are coming out (RFID, medical devices, etc) - it's a volatile time to be in business.

7:55 Sometimes much-hyped metholodogies (BPR, BPM) are not quite there yet when it comes to software. So to realize Driven to Perforrm in an SAP environment, where are the current gaps in SAP software to realize this vision? First - change in business always comes down to people - without cultural change, technical change will fail. There are definitely hot products and skills, but any technology must be embedded in a culture, people, and process change to be embedded in a business. Michael Krigsman's work in project failure highlights the flaws in focusing solely on technology.

10:25 There are three principles of Driven to Perform:

1. People mistakenly believe that Driven to Perform is primarily about finance. It's more than regulated financial practices. Performance management needs to be unified with risk management across every line of business.

2. The process of performance management, compliance management, and risk management are currently separate. These need to be unified into a process-based framework. Goal setting, strategy, and risk assessment must be considered together - then you put internal controls in place through a series of management processes that can be monitored just like SAP originally did with transaction-based processing in R/3.

3. You have to embed the strategic processes into the execution processes. This means once you have your strategy and your goals and your risks and controls, if you keep them disconnected, there is little value that can be realized. You want to superimpose these strategic aspects onto your transactional system. BPM is a big piece of this puzzle because it gives you the flexibility to modify your practices based on your strategic priorities.

14:21 So how ready is SAP to realize this vision?

1. SAP, like Oracle and IBM, has developed a phenomenal collection of individual products. The information management and BI tools that came with the Business Objects acquisition (Webi, Crystal, Xcelsius) are outstanding. The same with some of the EPM and GRC tools - SAP now has industry leading consolidation and planning solutions, a great access control solution and a great global trade solution. Overall, an excellent combination of individual parts. The gaps come in because very few of these individual parts work seamlessly together. SAP is not the only vendor in the EPM/GRC space facing this challenge. Until these products are integrated into a process based framework, there will be limitations - though SAP is headed in this direction.

16:45 Breaking down the EPM and GRC product lines: JonERP readers are very interested to hear this breakdown: a big theme in JonERP podcasts is how not to become a commodity in your skills- you don't want to become part of a global labor pool doing cookie cutter work. In many areas of SAP, including basic BI, there is a fair amount of "skills commodization." EPM and GRC seem like higher ground...but what do they have to offer today? Is there skills needs in these areas now? If so, which ones? Which products within these suites have adoption and market traction now?

18:10 EPM skills opportunities: If you look at the overall market, regardless of vendor, the number one business process that customers use Excel spreadsheets for, and therefore have a significant amount of pain around, is planning, budgeting, and forecasting. Around 35-40% of the EPM market is made up of planning and forecasting. From a skills set perspective, the demand for a range of functional and technical skills around the BusinessObjects Planning and Consolidation area (formerly Outlooksoft) is exploding. There is no better place to start than to learn the BPC product. Nenshad gets pinged for BPC implementation needs all the time. This is the best place in the EPM area to get started. It's a natural fit for folks with FI skills as well as NetWeaver BI skills. For the FI person, there are connections between financial skills such as managing accounts, time, and expense categories, which all fit into planning functions. For the BI person, especially those with back end BI skills, there is a need for expertise on how cubes are modeled and how planning functions are built. These skills translate directly into BPC.

20:44 Another intriguing EPM area: Profitability and Cost Management product. This is the product that was acquired by BusinessObjects prior to the SAP acquisition, which is an activity-based costing product. For those in a down economy who want to cut costs, but in an intelligent way, this is an important area. If you know CO-PA or CO-ABC, there's no reason why you couldn't pick up on the capabilities of PCM very quickly.

22:06 GRC skills opportunities: the flagship product of GRC is the Access Controls product (Virsa acquisition, 2006). This product provides a very important function for companies - the ability to control roles and segregation of duties capabilities. This is important for role-based Sarbanes Oxley compliance. This product has hundreds, possibly a thousand deployments. This addresses an immediate and significant pain point for customers. The other product in the GRC suite that is supply chain specific, but prominent, is Global Trade Services (GTS).

This is a nice fit for SAP supply chain management professionals. The other two products in the GRC suite are interesting and fit well into the Driven to Perform vision, but they have not achieved as much market traction yet. One is a Risk Management product that SAP itself uses internally, and the other is SAP's Process Control product. These are strong products from a functionality perspective, but there is not as much market acceptance yet, so those who pursue these two new areas should be mindful of that.

24:50 For those looking to get involved in Access Control, one obvious skills extension comes from the SAP Security and Identity Management (IDM) side. Are there other skills connections to this product? Yes - people who really understand the core ERP business processes around procure-to-pay and order-to-cash. If you truly understand financial processes, you know the kinds of issues that come up around fraud and separation of roles for fraud protection. Understanding the financial implications of segregation of duties will be a valuable skill and a good way to get involved in Access Control.

26:10 EPM and GRC skills roundup: making a distinction between products that solve an immediate pain point, and are therefore hotter now, versus more visionary products that have important functionality but don't solve a pressing need. These are important skills distinctions to make for career planning. Also: techno-functional skills convergence. It helps is SAP Security folks know something about FI processes when it comes to GRC, or the FI person who understands BI and embedded analytics capabilities on the EPM side.

What's interesting about this class of products (EPM and GRC) is that these products are relevant to executive and C-level folks. This is a great opportunity for consultants to combine functional and technical knowledge and "uplevel" their skills to be more strategically relevant - addressing the pain points of C-level people. These C-level folks are not interested in GL type issues that ERP has traditionally focused on. EPM and GRC are focused on high value business strategy, which allows you to have a much more strategic conversation with customers. This gives you a seat at the table of vital business discussion.

28:50 Final point on skills relevance, which ties back to a point that Ed Herrmann of the Enterprise Geeks was making to Jon recently. As a manager, he wants his consultants or employees to have not only tools expertise, but architecture expertise. To be able to advise on tools not just implement them. In the case of EPM and GRC, this comes back to roadmap expertise: being able to help companies make sense of the evolving SAP BusinessObjects roadmap and be a trusted advisor, not just a hired gun.

So it's about mastering a new EPM or GRC tool, but it's also about understanding the roadmap tradeoffs between different products. Roadmap knowledge is critical. With this portfolio of products, there have been a lot of changes. There are many releases that come out on the Business Suite side, but companies don't want a lot of change. The SAP BO market is vibrant and dynamic, but that means many product changes, so you need to be sure what SAP is going to deliver versus what is undecided. You want to give the SAP customer the best knowledge that you have, because the product roadmap ground is shifting and customers need and expect good direction on these issues.

31:30 The podcast shifts to the impact of Software as as Service (SaaS). Nenshad has deep expertise in this area, and Jon wants to know how SaaS is going to impact SAP's market direction. This issue is on a lot of people's minds. SAP professionals are very interested in SaaS approaches and want to gain the SaaS related skills, but they are also concerned about how SaaS might undermine "big ERP" and therefore their own career.

They don't want SAP to fall into reactive mode as opposed to capturing market share. Companies like Workday and NetSuite seem to be on the uptick. On the other hand, there are "SaaS krishnas" on Twitter who seem to believe the SaaS means SAP professionals must bail out immediately, and that seems extreme based on the limitations of current SaaS functionality. So what is the truth on SaaS? What is real and what is hype? And how will SAP fare?

There is no doubt that there is an aura of inevitablity about SaaS and cloud computing, because the value proposition is significantly better than on premise software. With on premise, you assume all the risk, assuming responsibility for installation, training, and patches. With SaaS, the vendor has to handle security, skills needs, patches, installation, compatibility issues.

Removing all the hype, in many cases, the cloud model is better for the customer, so cloud computing will prevail over time and there is a very large shift underway. Example: it's almost impossible to get a venture capitalist to fund an on premise software solution right now. SaaS solutions have a much better chance of being funded.

But that being said, we're still in the infancy of the maturity of cloud-based solutions. Example: salesforce.com has tens of thousands of customers on one Oracle replica database. SAP has customers with single instances of SAP ERP whose Oracle database is larger than all of salesforce.com. The idea that with today's technology and cloud computing that a vendor can come in and replace that doesn't make sense.

Years from now, cloud systems will be so powerful that a real alternative to SAP and Oracle on a larger scale. People forget the scale of some of the current deployments of SAP and Oracle, and they forget the business processes that must be run on premise versus the cloud. Example: APO.

There are customers running APO, a statistically rich product, which require one terabyte of main memory to run APO correctly. This is the amount of memory needed to run these scenarios. If you needed to run a processes that required that much memory, it would probably take down all the other tenants in a multi-tenant architecture. Pioneers like Workday and NetSuite, going for the full ERP replacement opportunity, are not ready yet to replace the major big ERP installations. But the change is underway, and more and more customer spend will move to the cloud.

The idea that an SAP person's skills are irrelevant right now doesn't ring true. It will be years before SAP customers will transition core ERP needs in back office areas like financials. Nenshad buys into Vishal Sikka's vision of a hybrid model, but the market direction suggests that the cloud is the next evolution, from mainframe to client server to clouds, but the transition will be gradual.

40:59 So if Nenshad was an SAP consultant, how would he respond to the SaaS trends? First, it's important to understand the distinction between the infrastructure and applications aspects of SaaS. If you know how to configure an SAP module like HR or FI, moving to a new application in the cloud would be much easier for you. Cloud-based vendors have simplified the ease of configuration around functional knowledge, so if you understand the business processes that drive SAP configuration, you can learn some of this pretty quickly. You can even try out some of these apps and see for yourself how easy it is to configure if you understand the processes. On the technical side, the skills needs for SaaS are more dramatically different, so there is more need for skills change.

The design principles can be very different, such as the need to elastically scale up or down server needs quickly. You can shut down servers in the cloud you aren't using quickly, so load balancing is a much more immediate need. And you have to be careful about the script logic you code and how much "energy" they consume on the server. You don't have the luxury to write a long running script in the SaaS world. So database design and scaling is key, and new frameworks like Ruby, the Spring Framework in Java, or the latest versions of .Net. Technical folks will have to invest a lot more because the SaaS shift is disruptive to existing skill sets.

44:25 Nenshad is in the JonERP hot seat: the SAP executive board has noticed Nenshad's Tweets on SAP's direction and want to bring him in for a briefing on what the company needs to do to remain dominant in the market five years from now. Nenshad likes the hiring of John Wookey from Oracle (SaaS product leader), but he wishes SAP had fiver more John Wookeys. He has great product knowledge and vision - hiring people like him is a great start.

SAP needs about five or six Wookeys, clear from SAP's day to day operations, who can be aggressive, rather than just defensive, around SaaS. A defensive play is to try SaaS out, but focus on preserving the on premise business. It's not just a technology change, it's a business model change: subscirption pricing, responsibility for customer server expenses. Nenshad wants a much more significant investment in SaaS.

Then a controversial statement: SAP needs to look at the investment in the Business Suite (ERP, CRM, SCM, etc) and ask themselves how much they should continue to invest there. The BS7 solutions, in Nenshad's view, may have reached the end of life in terms of significant innovation. Sometimes you have to start with a clean sheet of paper.

This impacts the resource allocations to the existing products, which impacts the preservation of maintenance revenue streams. Reallocating cloud resources for an offensive SaaS market is where the SAP executive board needs to be heading. SaaS isn't going away. If SAP wants to remain a long term, viable entity, it has to find a growth strategy.

49:30 Nenshad's parting words: he's proud of what he did at SAP, and he hopes that folks take a close look at Driven to Perform. Look for balance - big ERP isn't dead and SaaS isn't everything. The best approach is to find the balance and capitalize on the strengths of each.

 

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