CIO-Reinvented Blog - By Prashanth Rai

Day 1 at SAP Teched 2011 the highlights

Today was the keynote of Vishal Sikka, Below are some of the highlights from the keynote and other meeting from the day:

Mobility:

• SAP’s SUP based apps have 26 Million users (22million just in the US) already. As compared to the 20 Million SAP users after 30 years.
• Its interesting that they mention really strong pipelines for both SAP HANA & SAP SUP. With the current state of IT budgets that’s a really interesting data point. Makes me wonder what the conversion of this pipeline would be like.
• The deal size for these mobile applications for the services portion range from 50-150k, So there isn't too much of a push by the large IT Services players. Its more the small and medium sized services players that are making a big push in the space.
• The single largest hindering factor in the adoption of SUP / Mobility is the lack of talent.
• Mobile app certifications are free till the end of the year
• SAP planning a Cloud based service for developers to discover, help build and certify mobile apps on top of SUP.
• Gateway is core to the integration strategy to the underlying business suite

In Memory:

• HANA the software part license cost to customers is based on the size of the database, This is interesting. But makes me wonder if this will work for the customers. It will greatly depend I suppose of what the rate or dollar cost multiple would be for each GB of the database.
• Have a site focused on HANA - www.experiencesapphana.com
• Heard some of the customer case studies of HANA
  • Medtronic   - Project still to go live (16 B $)
  • Nongfu Spring (494.25 M $)
  • Yodabashi 
  • HILTI (2 Billion $)
• HANA is number one in market awareness in the category of in-memory databases
• HANA’s Grand Unification approach - HANA will start with replacing Datamarts then move on to Data warehouses and finally reach the traditional transactional applications.
• B1 will be the first of the transaction apps to adopt HANA as the backend.

Other Areas:

• Leveraging RDS Hunter Douglas was able to go live with SAP in 8 weeks flat.
• SAP MDM they have 1000+ customers
• Have 65000 productive Netweaver systems - 16000 BW, 10000 Enterprise Portal , 5000 BPM/PI.
• 4.0 release of BO will be going to into GA 16th of this month( Friday)

Some broader Themes:

Intellectual Renewal - During the key note Hasso Plattner mentioned that he has mandated Vishal Sikka with Intellectual renewal of the company two years back – We are seeing the results of that through a variety of initiatives. I believe that now its time that SAP took the intellectual renewal beyond technology and product and bring it to the implementation world – were the rubber hits the road. This is going to be a lot harder.

BITS are increasingly replacing atoms, Value is bring created by dissolving layers and structures, Fueled by a cycle of connectedness, disintermediation and ease of use.

Vishal Sikka - NoSQL will replace everything is complete non sense.

Prashanth Rai

Gamification or Game IT–A Real Enterprise Software Trend - SAP Teched 2011

Honestly before todays keynote, I had never really spent time thinking about Gamification and how it could be leveraged in the enterprise. So todays keynote, was pretty insightful, and to SAP’s credit their conferences most of the time seem to drive our thought process to areas that we hadn't spent much time thinking about. Gamification is one such area.

We are still in the very early days of Gamification or GAME IT and its going to change a lot before it gets the kind of adoption levels that were suggested during the Keynote - 70% of global 2000 companies will have leveraged Gamification by 2016.

But the underlying principals / concepts seem very relevant to today’s organizations. The organizational model has changed, In the current world Information + Engagement + Creativity + Collaboration are most important for organizations. But getting it is becoming more and more difficult for a variety of reasons like distributed organizations, multi cultural workforce, significant pressure, increased work loads etc.

Game IT might be able to address, some of these challenges. But one area that I felt that was covered sufficiently during the keynote today, but I would be interested in reading about is how GAME IT/ Gamification can help shape the culture of an organization. I believe that will be the killer app for Gamification.

Infact I think an immediate use case for gamification is how to make “Weekly Status Calls” more interesting. I think those calls have become an exercise of monotony, need to think of some ways of bringing Game IT into the mix there. Welcome any inputs. Below are some of the highlights of from the Gamification Keynote:

• Keynote by Jane McGonigal (@avantgame)
• Gaming (Gambling) is not Gamification
• Interesting stat it took - 100 Million hours to create the whole of Wikipedia, currently people invest 3 billion hours a week playing online games, If we get them to take some of this time and invest it in doing something useful but in a gaming model – Imagine the value that can be created.
• 10 Positive emotions created by games
  • Joy
  • Relief
  • Love
  • Surprise
  • Pride
  • Curiosity
  • Excitement
  • Awe and wonder
  • Contentment
  • Creativity
• Gamification or GAME IT – Focuses on the question of How do we bring these 10 emotions to the work place,to innovation challenges & to customer relationships.
• Gamification or Game IT defined - Inventing new work and business practices that engage employees, customers and consumers as effectively as a good game.
• Games can make us more creative, ambitious etc., its important to see to put these into place to help us solve business challenges.
• Case Study - Zappos – Face Game, Objective - More collaboration across departments.
• Some interesting stats:
• Gamification is on the move - 20+ Million $ in Gamification startups in last 12 months.
• Its expected that by 2016 there will be a 2.8 Billion$ spend in Gamification
• 2014 A primary Gamification platform will become as important as Facebook, eBay or Amazon. Gamification core focus is innovation.
• 70% of global 2000 companies will have leveraged Gamification by 2016
• 99% boys / 94% girls play games regularly
• 2015 More than 50%of organization that manage innovation processes will gamify them.
• What is a game? -  Games are unnecessary obstacles we volunteer to tackle.
• Trivia/Thoughts/Comments:
  • Its inevitable soon we will all be gamers.
  • Massively multiplayer thumb wrestling – Played at Teched with all participants.
  • Gamer addiction was written about 3000 years ago.
  • 500 hours before the game starts becoming fun.
  • The opposite of play isn't work – its depression.
  • Eustress – Positive stress.
• Work is more fun than fun- Gamification helps realize that.
• The objective of Gamification is to create Super empowered hopeful individuals

Prashanth Rai

(image credit – dcclark)

SAP Teched 2011–The Mobility Focus…

On the Pre-Conference day at  SAP Teched 2011, there has been a lot of discussion on SAP Mobility. It was quite a useful deep dive into the area. Some interesting observations from the same:

Lot of the usual suspects in terms of use cases were discussed , one of the things that changed this time was how even in the usual suspects they were lots of efforts being made to leverage the native capabilities of the mobile devices to improve the application and increase its value.

The popularity of mobility apps is no longer in the press / media, companies are aggressively looking at mobility applications

There are close to 100 mobile apps that SAP has in the works at this time, Lots of partner apps are also going to be there. Cant help but wonder how customers are supposed to identify the wheat from the Chaff.

Though we didn’t get to see the whole list we saw a partial list with some apps with interesting names were Virtual Boardroom & CIO Dashboard.

Over 80% of companies expect to outsource mobility app development.

Given the wealth of APPs that SAP seem to bringing to the market place, I cant help but wonder why they don’t go with the Razor/Blades business model for the SUP platform (Razor) and the mobility apps (Razors).

Though its interesting that SAP is going to provide the source code for the mobile apps and the mobile business objects they will be using in the apps for customization and extending by the end users.

AFARIA is the ace in the hole for SAP mobility product set, It offers a wide range of capabilities at the same time, I think there could be some concerns that it puts true big brother capabilities easily into the hands of the enterprises. I think organizations that are going to deploy AFARIA on all their employee devices will need to have new privacy contracts drawn up with them.

Some interesting stats - 54% report at least one security breach in the last year, 33% report using data encryption on mobile devices, 61% report that business use of smart phones is their top security concern, 33% report requiring advanced authentication for corporate network access

Mobile Application - Business Case evaluation variables – Positioning, Target Users, Business Impact, Implementation Cost, Device dependence, Confidentiality & Accessibility.

Not being a cost center or bring more of a profit center has been the holy grail of IT organizations, I think mobile apps is a good way for them to go about doing that. They need to behave like startups rethinking the enterprise value chain particularly with the end customers.

Clearly defined interoperability strategy, One of the things that never stops to be discussed or confuse people going down the path is the whole discussion on interoperability. SAP is now clearly defining the interoperability mechanism of each of the Netweaver stack items ( Like BPM, BRM, Portal, MDM etc.).

SUPs value proposition – Detailed Device management, Reusable Mobile business objects, Online/Offline capabilities, Backend integration capabilities, Multi device support (current / future).

SUP Pre Generate CRUB UI interfaces for the device model selected for the MBOs.

SAP Gateway – There seems to be an increased focus on Gateway, and is being looked at as an established mechanism to access the SAP systems from SUP. Allows non SAP familiar people to build external apps without underlying SAP system knowledge. Focused to address the challenges of accessing the ever complex underling SAP system.  Provides easy easy ways to generate gateway objects – Needing no coding. Basically exposes business suite content as simple non SAP specific / REST API’s. Typically used for UI applications (not A2A stuff). This is a core piece of the strategy to get to 1 billion users. Support OData (XML). SAP Gateway is built completely on ABAP. Not good to expose other systems (Generators go against SAP systems only).

SAP SUP Roadmap:

Prashanth Rai

Offshore IT Services Providers – The Arbitrage?

Most discussions that I have had/read about is about how the increasing costs at offshore/low cost locations and the forced increase of onsite presence for these companies due to visa issues is going to eliminate / diminish the cost arbitrage advantage that these providers have traditionally had. But here is an interesting prediction by the Everest Group.

We expect increased wage inflation in the low-cost destination countries, and increased fourfold pressures as currencies of developing countries increase relative to their nation currencies of the Euro and Dollar. Nevertheless, we still expect it will become cheaper for providers such as Infosys, Wipro, TCS and others in that class, to provide work out of their low-cost destination locations relative to the cost of delivering them onshore. This is not to say we expect pricing drops from these firms; indeed, they will likely be vocal in pointing to their rising costs as a strong rationale for pricing increases. This arbitrage increase will apply to the overall cost of delivering the work, and may be misunderstood at an individual person or job class level. The reason for this surprising and counter-intuitive prediction is that we believe the class of providers that has mastered talent factories will be able to apply lean process improvements, and continue down-shifting their work to more junior and cheaper resources, overall widening an already growing arbitrage gap. This downshifting of work, which has been under way for a number of years, will be accomplished without materially affecting the quality of the services delivered.

Offshore providers are probably looking at various ways to make this prediction come true, but its not going to be easy. To make this a reality I think a big factor would be the use of tools / prebuilt solutions / use of products / platforms / solutions, the whole version 3.0 of the IT Services industry.

Prashanth Rai

A Discussion with the SAP CIO @ SAPPHIRE 2011

As a part of the Sapphire conference got to spend sometime with the CIO of Oliver Bussmann , it was a very interesting conversation. Below are some excerpts from the same.

Oliver joined SAP around the 2009 time frame and in the first 100 days defined the following key strategic objectives for the IT organization that was in alignment with the overall organization's goals of being 20 Billion Euro in revenue by 2015 & having a profitability of 35%. Which was a significant in revenue per employee for the organization. The strategic objectives for the IT Organization were:

1. Define a new governance model – Business information officer model (Works with each COO & CEO) – And fundamentally rethinking from Corporate / line of business strategy
2. Improve running cost, particularly on the infrastructure side - Demand for development projects was going to explode keeping in track the growth planned – And it was going to need a  global delivery model – Also key decisions on what to keep in house , what you want to do outside. Increase by 80% capacity and increase cost by only by 30% – Manage Curriculums / Job training etc
3. Define an Enterprise Architecture model – Mid term plan was to map business road map to it.

He also seems to have done a serious benchmarking effort. Gartner / Mckinsey did the benchmarking, they compared his business with other Hi-Tech enterprises and some companies in other industries as well.

Mckinsey reviewed it again in 2010 one of the key points identified was that they were about 10-15% better in cost. They had a few items to work on like storage outsourcing, network consolidation etc.

His role As CIO drastically changed after August last year. His role evolved to being a Strategic CIO, one who is helping the organization on the front office/selling/positioning & not just as an enabler. The “In memory” topic was where they brought him out of the closet. From October of last year his direct customer engagements have increased significantly.

But as the CIO the critical measure that he is constantly monitoring is their Unit cost and weather they are staying competitive or not. He is constantly trying to cut down his “run cost” as much possible.

Other takeaways from the session:

• On where his employees are spending time? Top Apps from an internal perspective are:
• T&E management
• Shopping
• HR Self service – Time sheet
• For T&E they implemented the latest version of the software – ERP – Got mixed reaction. Usability was indicated as they challenge – but as they dug deeper they started different perspectives - Did we provide enough documentation / training – Are processes consistent from all regions'. Usability was only a small %.
• The CIO Isn't responsible for the tools for development that is taken care build organization
• Focused on IT contingent labor initiative – Vendor management systems. SRM implemented. Supplier visualization automated.
• Looking at new strategy to support the Education business line.
• Leverage Third party – Vertex – Tax / Credit card management / Jive for communities.
• Pushing hard on virtualization – Already 50% virtualized.
• Moving to cloud with apps like carbon impact etc.
• BI On demand is being used.
• Streamworks is also used on-demand – more integration with CRM / PLM / BI .
• Going to Sales on Demand for certain lines of business.
• BYD for Joint ventures
• Global support – Their Custom Code 10% is only – 2.5% is actively used. The rest can be deactivated. This they found out when they upgraded.
• This customization is being looked at very critically. Board level approval is required for customization. Who sponsors the project. They talk to the product teams also – Product team individual's are part of each of the projects done internally.
• Closely monitors - What amount of CPU/Memory is being used by Custom Functionality
• Part of the hi-tech industry executive council.

He is focused on running IT like a business.

Prashanth Rai

Innovative solutions are only half the battle, Consumption and Value creation is the key!!!–SAPPHIRE 20011

This year at Sapphire we have ring side seats to some really interesting innovations that are happening in the “Enterprise software” space. Over the last couple of days I have seen some really interesting solutions , technologies and products.

To SAP’s credit they have now put a lot of innovation out there, specifically around mobility , business analytics solutions. SAP has accomplished some really neat things and I am sure there are more announcements to come in the key note tomorrow. And this is not factoring in some of the projects that they have in the “works” that are very interesting too, like “SAP River” etc.

But I think they now have two key challenges :

• Communicating it clearly to the customer – In an simple way
• Enabling customers to consume these innovations with truly transformative results

This part of the journey is going to be a lot harder (not trivializing the effort so far) , but this is where the rubber hits the road and is the real test of these solutions.

And if some of these “innovations” are as disruptive as expected by SAP, how customers go about consuming this will also need to be fundamentally different. Yes SAP talks about the stable core and innovations on top. If some of these technologies and solutions are to have the real impact then customers will need to re-invent their IT organizations and their approach to these solutions / projects.

This is a hard problem, Today I listened to many customer stories – Disney, Coca Cola, Bank of America, Under Armor, Canadian Rail and so on and I think in each of the stories the topic moved away from the product or solution to the “implementation” related challenges really fast. How is SAP going to enable this?

Also all this new solutions and innovations , its important that there be a clearly defined roadmap / path to these technologies and this path shouldn’t just be linear, it should prepare for or more accurately focus on leap frogging. How can customer leap frog from where they are to the latest and greatest? I believe that in some way the “Cloud” component will be an important part of this leap frogging approach.

Prashanth Rai

Mobility–The Key Challenge for CIO’s in 2011 - 12

Arriving at the mobility architecture/approach for the organization is going to be a key initiative for CIOs in 2011-2012. It could be an opportunity for a CIO to truly be the Chief Innovation Officer of the enterprise leveraging mobility to innovate his/her business/organization. But its not going to be an easy journey.

This slide from a recent Gartner presentation is a good depiction of the different aspects that CIOs will need to wrap their heads around before arriving at their mobility strategy for the enterprise.

Mobility is fast becoming a key dimension of discussion in any IT project. It has come in from left field in the last year or two and is now becoming an central tenant of most IT projects. A good example of this is Last month was I talking to a customer who had a failed implementation of CRM, and one of the points of failure or lack of usage of the solution they implemented was their poor or non-existent support for mobility.

Some interesting data on this topic from Forrester:

• Mobility is front and center for 62% of CIOs and IT leaders across the globe, with 16% seeing it as a critical priority and 46% seeing it as a high priority.
• Forty-eight percent of organizations interviewed by Forrester across the globe will be spending on mobilizing enterprise applications in 2010. Another 37% show an interest with no plans to implement in 2010.
• Around 75% of organizations deploy mobile applications to increase worker productivity, and 65% to increase employee responsiveness. Forty-eight percent are focused on resolving customer and internal issues faster. Overall improved customer satisfaction is an important driver of mobilizing applications for 42% of firms.
• Thirty-eight percent of companies surveyed are developing their mobile applications in-house, 27% are buying them from an application store, and 25% are having external IT services firms develop custom applications for their mobile requirements. Only 22% are using a mobile extension from an existing packaged application

Mobility in the RIM world was restricted largely to email & calendaring but in the Apple age, everything is mobile. I think the biggest disconnect GEN Y workers are going to have with corporate IT is probably going to be support (or the lack of it) of mobility.

The mobile device has become the primary portal to the electronic world today. And this has become possible by the improved capabilities of smart phones and tablet devices and the growing ecosystem of applications that are created on these platforms."...There is an app for that" has become common vocabulary and all apps aren’t just limited to some trivial functionalities there are a lot of useful capabilities becoming available through these apps that are very relevant and useful to the business user.

“What is mobility” – That seems to be a moving target too. Until 2010, it was only smart phones, now we are talking tablets, who knows what’s next?

The proliferation of smart phones and tablets has been phenomenal. A good indicator for this is that Apple has managed to sell a significant number of iPad2s in just the first month of release. The rate of their adoption in the enterprises is also on the up. Smartphone usage was always high in the corporate world but limited to middle management and above and was restricted primarily to RIM. But today, the proliferation is near complete across the whole organization and it's heterogeneous in terms of platforms – you have IOS, Android, Windows 7, Web OS etc.

CIOs need to take the challenge head-on and leverage this opportunity to innovate.

Prashanth Rai

Systems of Engagement - The Killer App - In Memory + Mobility

Attended the SAP BI4 launch / SAP Run better today event at NYC. Lots of interesting content. Always fun to start with the “Killer App”.

This is the second time @nstevenlucas mentioned that the killer app is "In memory" combined with "Mobility". It does sound like a very potent combination, its important not to look at it just from the lens of "analytics" but more generally in terms of enablement of business process or mobile enabled business process applications that can be built on an in-memory platform.

Lets for a minute forget the coolness of being able to look at data on the phone or iPad but lets go beyond that , we will need to rethink the way we approach the business processes as a whole in light of how enablement provided by these underlying capabilities. I like the verbage provided by Geoffrey Moore during the keynote at the SAP Better Run event today, about enterprise IT needing to thinking in terms of systems of engagement not just systems of record.

So lets take a minute do understand what Geoffrey Moore meant by systems of engagement:

Systems of Engagement are:

1. Collaborative
2. Interaction oriented
3. User experience centric
4. System learns the user
5. Cool and Groove

As he said, every strategy there are some key make or break moment's, its important to understand who represents the company at these moments and how they can be enabled to be successful in those moments. There is now a need for apps that need to be visualized and built on this killer foundation of "In memory" & "mobility" to address these very moments of engagement.

Prashanth Rai

SAP Business Analytics 4.0

Today I attended a deep dive session on SAP business analytics 4.0, the official launch is tomorrow. SAP clearly see’s this release as a big leap for their business intelligence portfolio but I think they see it as “big leap” for the business intelligence space in general.

The four key themes for this release are:

• Big data in real-time
• Insight with confidence across business and social data
• Instant, Powerful BI in your hands - Mobile BI
• The best fit, right size, right now

Have covered some of the details of this release in an earlier post based on a briefing by Steve Lucas (GM Business Analytics ) SAP.

Some interesting bits from todays session:

1. 1 Million Person days investment made for this release
2. BI 4 – Is a new release after 3 years – Lot of customer interest.
3. Close to 30 customers in ramp-up
4. Both the co-CEO's of SAP had iPads with the SAP Business Object Explorer app which has access to the full CRM data of SAP loaded up onto the "in-memory" platform. This usage pattern has had a trickle down impact across the organization both in terms of usage of the system and user behavior.
5. In Memory – HANA - 5x faster on SAP BW
6. 13000 SAP customers have SAP BW implemented
7. Hana’s licensing is based on the size of usage - Extra small package will be available for SMEs

One of the key aspects of this release is the “In Memory” aspect, with this regard SAP has put together a 3 x 3 matrix on what is the best approach to “in memory” or “Acceleration” for customers based on their respective application environments:

Application Environment	Acceleration Technology	Business Intelligence Solution
SAP ERP (4.6c or later)	Go directly to HANA	SAP Business Object BI
SAP Netweaver BW	SAP Netweaver BW Accelerator	SAP Business Objects Explorer
Non SAP analytics / data	Sybase IQ	SAP Business Object BI

Another area that is going to be interesting to track / watch is Analytic applications , these are apps that are going to be built on the In-memory platform/HANA. Looks like the SAP BPC solution is also likely to go down this path being built / deployed on the in-memory platform (HANA).

Prashanth Rai

Image Source: 1

SaaS BI / BI On Demand ….State of Affairs–Part 1

BI On Demand / SaaS BI is a great way particularly for small and medium size companies to get the low hanging fruits of business analysis/reporting without spending a huge amount of money and IT effort. This gets companies started down the path of Business analytics within a couple of weeks.I think it is flawed to think that this model makes more sense primarily if the data sources are “SaaS” based but I think even for on premise data sources, leveraging SaaS based BI can help companies start down the path of business analytics without needing to put together a whole BI competency center, which most SME’s are not going to be in a position to do that anytime in the near future.

The tools are quite powerful and cater to many relevant use cases at companies particularly SME companies. There are quite of few solutions out there in this domain, will look through them over the next couple of days. Lets start with SAP BI On demand, Recently was trying out the solution and liked quite a few things about it. The approach to this solution seemed to be report sharing solution to external stakeholders like salesperson, customers , distributors etc. But it can be lot more than that particularly for SME’s.

The one thing I really liked about the SAP Bi On demand solution was the iPhone app – SAP Business Object explorer.It provides some nice visualizations for the data that is loaded into the on-demand warehouse right on my mobile phone.

I was able to get some data from an ERP load it up into a personal account and get the data on my iPhone in a matter of an hour (of course there are some restrictions on the size of data in these personal accounts). But I think it was pretty neat say to be able to deliver analytics / reports to a complete sales force with a couple of days efforts.

Below is a video testimonial for SAP BI on demand

SAP BI On Demand Case Study

More on SAP BI on demand to follow, Want to see when we are going to see the impact or benefits of SAP's business analytics 4 solution launch ( in the next couple of days).

But I think we are going to see a lot of innovation from the SaaS BI / BI ondemand space trickle back down into , On Premise solutions. I like what I am reading from companies like Chart.io

data visualization will still help uncover important nuances. Maybe not all, but you’ll discover lots of useful insights and be guided toward the relevant next steps for analysis.

, Excel is horrible for developing data insights. Avoid it. It’s simply not good at all for discovery. I see data visualization, instead, as being key for the first steps. So if you’re running a business and you’re not asking “Where are the data visualizations?” then you’re doing something wrong.

More to follow….

Prashanth Rai