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SAP for CIOs - Jon Reed's analysis

This section of JonERP.com contains pieces Jon Reed specifically wrote for CIOs, including for ERPtips. If you're interested in more content Jon publishes for SAP leaders, Jon is now the Editor in Chief for The ERP Executive - Panaya's Magazine for SAP Managers. See Jon's ERP Executive articles here. You can subscribe to ERP Executive content and check out the original content Jon and his team create each month for SAP managers.
Changing the Way Companies Approach ERP PDF Print E-mail
Article Index
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III. Reduced Development Costs

eSOA also has the potential to save big money on development costs. eSOA projects promote the re-usability of services, and allow users to build applications with visual building blocks. Both these techniques tend to save money and time over traditional “cubicle coding.” With the release of NetWeaver 7.1, SAP has pulled all these new development tools together into the NetWeaver CE (Composition Environment).

So far, the testimonials on reduced development costs are promising. The implications? eSOA custom development not only saves hassles during the upgrade cycle, but the development work itself is a cost savings. In a December 2006 study, Gartner predicted that through 2008, companies that implement “enterprise-wide CBD (component-based development) re-use methods in support of SOAs will increase developer productivity by forty percent over the next five years.” And in Cardinal Health’s SAPPHIRE 2007 presentation, they reported that their eSOA projects have proven to be two thirds cheaper than traditional development projects.

NetWeaver-driven SOA development allows technical teams to build web services, and sometimes even complete business processes, using re-usable “building blocks.” Modeling environments like Visual Composer streamline the coding process, and to a certain extent, allow business users to participate in the overall structure of a new program or service. It’s not surprising that a programming process based on re-usable pieces would be more efficient and affordable than the classic line-by-line development effort.

IV. Extending SAP to the Casual User

Another benefit of eSOA is the ability to extend SAP to casual users. The casual user doesn’t want to have to deal with the SAP GUI screen, and CIOs do not want the overhead of installing and maintaining client-based ERP systems. By allowing the casual user to access role-based SAP functions via a web browser, eSOA saves installation costs while giving users access to the specific SAP information they need in a familiar, browser-based environment.

Of course, eSOA is not the only SAP initiative that serves this function. Enterprise Portals, now called NetWeaver Portals, is inspired by the same user-friendly mentality. SAP’s partnerships with Microsoft (Duet) and Adobe (Forms) are also part of SAP’s overall goal of giving users the SAP data they need in the navigation environment they are most comfortable in.

At this point, the early reports are in. SAP customers are reporting success extending SAP to casual users via eSOA and role-based Portals (SAP Portals now ships with more than 800 “Business Packages” of built-in, role-based user content). Most importantly, casual users are embracing SAP with unexpected levels of enthusiasm because it is being presented in a browser-based format they are already familiar with. Smooth user adoption not only saves on training and change management costs, but it also ensures that the water cooler talk stays focused on sports and American Idol instead of SAP bashing.

V. With eSOA, You Can Start Small

The strange payoff of eSOA is that once the initial platform is in place, then you can start small. A good analogy might be: you have to build the runway (NetWeaver, core upgrades, and all the other prepwork), but then you can fly and land any size plane. What we saw at SAPPHIRE ’07 was a number of smaller scale eSOA and xApps success stories. For example, I did a one-on-one interview with Gisa, an SAP customer that had implemented an SAP Enterprise Service for Electronic Bill Presentation and Payment (EBPP) in just two total weeks of labor time. This EBPP service integrated seamlessly with Gisa’s enterprise core. The catch, of course, is that they were already running on mySAP ERP 2005. But once you are running on services-friendly platform, you can roll out eSOA in a gradual way, building on the ROI momentum as you go forward.

VI. No More “Interface Parting Trauma” During Upgrades

Last, but not least, a commitment to eSOA means fast, and dare-we-say, painless upgrades. In that sense, the real payoff for eSOA will come years down the road, when it’s once again time for a major upgrade to the enterprise core. In theory, at that point a company will get to maintain all their SOA-based functionality without having to bid fond farewell to their favorite hand-coded interfaces that in the past had to be abandoned to upgrade the core. The only catch is a good one: the new eSOA add-ons won’t even be hand-coded in the traditional sense. And that’s the ultimate promise of eSOA: with eSOA, you don’t have to “go vanilla” to be guaranteed a smooth upgrade anymore. If SAP can deliver on that promise, then it will redefine basic assumptions about ERP. If and when we reach that point, SAP R/3 will feel as distant to tomorrow’s ERP user as R/2 feels to today’s.

Conclusion

SAP eSOA is a monster topic, far beyond the scope of one article. If there is reader interest, in future editions of SAPtips, I will continue to touch on eSOA, sharing more case study details on “eSOA in action.” What we focused on this time around were the true benefits of eSOA as SAP customers have actually documented them.

SAP is a visionary company with a well-honed hype machine, but in this case, the buzz about eSOA does seem to be justified. At minimum, we can say, “so far, so good.” In a few weeks, I’ll be heading to SAP TechEd 2007, where I intend to get an earful on the next stages of eSOA in the wake of NetWeaver 7.1.

Site Editor’s Note: This article was originally published in a modified version in the October/November 2007 edition of SAPtips. SAPtips is a subscription-based publication, but you can obtain a free sample issue from the SAPtips web site, as well as information on all previously published articles.    

SAPtips Bio: 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 which 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.com’s "Ask the Expert" panel. From 2003 to 2006, Jon was the Managing Editor of SAPtips.

Jon Reed was recently named an SAP Mentor. The SAP Mentor Initiative is a highly selective program which recognizes those individuals who are making an outstanding contribution to the SAP community. Jon is one of 70 mentors who are playing an active role in SAP's online ecosystem, which includes the combined 1.3 million members of the SDN and BPX web sites.


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