One of the RCA's with SAP BW implementation is the Business content that SAP delivers with their BW. This is a beauty and a beast. At the time when everyone wanted to install BW, i.e. from 1999 to August 2008 the looming potential of a BI crisis was only on the horizon. From 2003 to August 2008 BI remained in the # 3 to #2 priority of worldwide CEO's as reported by Gartner, Forrester, AMR and Business Week. Then in Aug 2008 it dropped to the #8 position.
The idea of building BW 'Better, Faster, Cheaper' had failed to quite an extent.
Because so mush investment had been done, and companies still needed to report it moved down to #5. CEO's stated that even though they continued to invest large budgets they were not attaining Business Value in accordance to promises or their expectations.
ROI was just not there.
After 10.08 (October 2008) the world just melted. After that companies realized that good or bad they need reports and analytics. BW teams across the planet were put into high gear and by Feb 2009 BI was the # 1 priority of over 1,400 CEO's interviewed by Gartner.
The reason was that during this crisis analytics and risk analysis was imperative and most essential.
ROI demands reverberated across the plant and I tend to support it
1. Business must take back ownership and accountability of all BI implementations
2. Automation of any manual tasks must replace manual processes - higher quality at lower cost
3. Self-Service Queries are the goal of 2009-12 (which means faster query response)
4. Factory model solutions must be tried and implemented.
While it is important that every project must be delivered on time and in budget. It is more important that it delivers Business Value. It must also look to deliver into the strategic future of business. Quick hits are of little use if they delivery little or no business value.
The type of lead resources you employ will have a direct impact on the end result of the project. Your leads must come from business and application experience. It is more critical you hire the right business resources than ones that understand the technology totally and understand little of business. Winning the technology battle is of little use if it does not meet business requirements. Does this mean you can ignore technology, of course not.
Finding BVA is critical and technology is the catalyst that allows proactive management to achieve greater heights with proper business alignment while leveraging technology solutions.
Thursday, October 29, 2009
How to find business benefits in SAP BW
At the start of any BW project, be it new or a rollover or an addition of InfoProviders it seems a lot of companies, big and small, old and new, the most important task is to review deliverables with business owners and users. The second most important thing is for business owners and users to understand what they are being.
Business Case: I was appointed Project manager for a Post go live BW implementation in which a large company, that had been with BW for the last 4 years and a team of 13 BW consultants took the decision to let the new business unit heads and steering committee take care of their BW implementation. The partner convinced the Steering committee that they had enough industry experience to know exactly what the customer needed and that they were going to delivery leading edge metrics whereby the company would be able to measure their performance in ways never done before. Also in order to meet the daily reports they would delivery over six hundred queries that would meet the needs of any large global company.
I find it funny to mention that the company's 1st BW go-live had not been a total success too and their second one had taken a similar direction. To cut the story short Go-Live was planned to be simultaneous to the ECC 6 go live in PP. Out of the six hundred reports our audit clarified that users could only use 28 reports As-Is, 68 reports needed considerable rearchitecture and the rest were useless. Of the metrics delivered none were usable from day one. The company spent the next 6 months with an additional team of 7 resources and did not get very far once gain.
First things first - Basic Business Strategy
One of the critical lessons learned, and the company put the project aside as a lesson learned experience, is that executive sponsor was for budget and time purposes only. Business had been totally kept out of the whole BW implementation process as all key users were fully occupied with the ECC processes and tasks. Thus in order to meet BW needs the company hired an external business manager, from their vendor, who led the project deliverables and decided what was, and what was not, good for the BW deliverables. What they ended with is mostly business content and generic metrics that came straight out of the vendor valuts. It was also found that 86 of the reports were operational reports that were more efficiently delivered directly from existing reports in the ECC system and never needed to be deployed from the BW.
One of the Business Owners even went as far as to ask the question "..can we sue the Vendor.." and we all knew that the vendor had all deliverables covered in their small print and business had signed off to most of the deliverables - as that was part of the standard cutover checks and handover requirement.
So how do we ensure Business Value
1. Business must become an integral part of every BW project
2. Business must participate, own, design and define what they need and do not need
3. Where they are unsure, a Value Architect must be hired to assist them make the right decisions
4. The value architect must not belong to the triad - SW, HW or Vendor partners.
5. There must be constant Business value checks all along the project process
6. A details process must be put into place to clearly define what report comes from which system.
7. Day-to-day reporting needs must be met first
8. All metrics, dashboards and scorecards must be a subsequent event after primary business needs have been met.
9. Architecture and Modeling are key but standards are imperative - part of BI Strategy and best practice documentation
In other words when we fail to plan for business = Plan to fail for business.
Data warehouses were supposed to eliminate a lot of data and replace it with a lot of information, but it seems we are still generating more and more data and sometimes not all the information that business expected to get out of their BW investments.
Business Case: I was appointed Project manager for a Post go live BW implementation in which a large company, that had been with BW for the last 4 years and a team of 13 BW consultants took the decision to let the new business unit heads and steering committee take care of their BW implementation. The partner convinced the Steering committee that they had enough industry experience to know exactly what the customer needed and that they were going to delivery leading edge metrics whereby the company would be able to measure their performance in ways never done before. Also in order to meet the daily reports they would delivery over six hundred queries that would meet the needs of any large global company.
I find it funny to mention that the company's 1st BW go-live had not been a total success too and their second one had taken a similar direction. To cut the story short Go-Live was planned to be simultaneous to the ECC 6 go live in PP. Out of the six hundred reports our audit clarified that users could only use 28 reports As-Is, 68 reports needed considerable rearchitecture and the rest were useless. Of the metrics delivered none were usable from day one. The company spent the next 6 months with an additional team of 7 resources and did not get very far once gain.
First things first - Basic Business Strategy
One of the critical lessons learned, and the company put the project aside as a lesson learned experience, is that executive sponsor was for budget and time purposes only. Business had been totally kept out of the whole BW implementation process as all key users were fully occupied with the ECC processes and tasks. Thus in order to meet BW needs the company hired an external business manager, from their vendor, who led the project deliverables and decided what was, and what was not, good for the BW deliverables. What they ended with is mostly business content and generic metrics that came straight out of the vendor valuts. It was also found that 86 of the reports were operational reports that were more efficiently delivered directly from existing reports in the ECC system and never needed to be deployed from the BW.
One of the Business Owners even went as far as to ask the question "..can we sue the Vendor.." and we all knew that the vendor had all deliverables covered in their small print and business had signed off to most of the deliverables - as that was part of the standard cutover checks and handover requirement.
So how do we ensure Business Value
1. Business must become an integral part of every BW project
2. Business must participate, own, design and define what they need and do not need
3. Where they are unsure, a Value Architect must be hired to assist them make the right decisions
4. The value architect must not belong to the triad - SW, HW or Vendor partners.
5. There must be constant Business value checks all along the project process
6. A details process must be put into place to clearly define what report comes from which system.
7. Day-to-day reporting needs must be met first
8. All metrics, dashboards and scorecards must be a subsequent event after primary business needs have been met.
9. Architecture and Modeling are key but standards are imperative - part of BI Strategy and best practice documentation
In other words when we fail to plan for business = Plan to fail for business.
Data warehouses were supposed to eliminate a lot of data and replace it with a lot of information, but it seems we are still generating more and more data and sometimes not all the information that business expected to get out of their BW investments.
Why executive participation is so important
Since I started working in 1987 one of the fundamental thing I learned is ' Don't provide a solution until you understand the need'. I used to be a salesman at that time and slowly progressed to sales manager and national sales director.
Over the years it is surprising how SAP implementations still sometimes do not follow this simple guideline. I started with SAP R/3 in 1995 and have since heard it repeated, re-iterated, proposed and discussed how important executive participation is to the success of a ERP project. This is independent whether it be a SAP, APO, CRM or BI project. As I have focused on BI since 1997 I will delve on that aspect of SAP.
most companies erroneously believe that executive participation brings stamina and sustenance. That too but one of the most important aspects executive participation brings is strategic sustenance. The future plans, the future business needs and the future business goals that are integral to the development of all ERP configurations and along with architecture and modeling of the BI environments.
If you are a CEO, CIO, CTO or VP operations your active participation with current business needs, future business plans and strategic business goals can be the difference of success or heading down a road of technical delivery with difficult user and budget discussions as a predictable outcome. Fail to plan = Plan to Fail.
Business cases
In one of my SAP Projects while talking to the CEO and CIO over lunch I was told that this global manufacturing company was planning to invest into their own distribution network by possibly buying out their current small distributors.
I went back reviewed the configuration in R/3 and a couple of weeks later requested that if the company had any possibility of going to distribution then we would need to move from manufacture to order to manufacture to stock. There was also the need to set up new company codes. We extended the project timeline by 3 weeks and 4 months after go live the company did decide to implement their plans. Their ECC and BW was perfectly designed to accommodate such a scenario and the move went very smoothly indeed.
In another company in our weekly meetings the CEO came in unexpectedly and mentioned that they were working with a high tier company that was delivering all their manufacturing reports. he also mentioned in his conversations that the proposed plan was to deliver business content as it met most of the reports. In a subsequent meeting with the CEO I requested permission to review the new BW plans and deliverable's. The CEO offered me a 4 week time to part time work with the group and report back to him after 4 weeks. In two weeks I realized the new team had not talked to any business stakeholders, were planning to deliver metrics as their BI strategy and mostly standard business content. By week three I requested the CEO to arrange a meeting with business owners and we all agreed that the current path would deliver a lot of data but very little information. I was moved from my existing project and made PM for the new implementation where we totally changed path, increased business needs identification, ownership and participation and the outcome was a very smooth and successful BW implementation.
Without executive participation and communications all this would have been an absolute disaster. The failure to plan for direct business needs and for the future in the initial phases can lead to a form of architecture called 'Report marts' - something most best practices would not recommend going to.
Find the Missing Link
In every ERP and/or BW project find the ownership to Business Value Attainment. In the above two examples the reason success was reached is because of executive involvement. There are many stories some of them ending with a simple question "..can we sue the implementing partner..? and none of us want to go anywhere near that path or direction.
One of the critical aspects of all BI strategy is alignment to business goals. We see this missing in most BW implementation, but a few. We have seen many enterprises have.
According to a Gartner report of Feb 209, many multi-billion dollar, multi-nationals companies, have invested million of dollars into BI and potentially not attained their anticipated Business Value from their investments. We call this BVA or Business Value Attainment.
The three things essential for BVA are, [1] Executive participation and communication; [2] BI Value Owner or Architect, and [3] BI Strategy & best practice documentation.
Lessons Learned
1. Executive participation in IT projects creates ownership and visibility within strategic company directives. Just having an executive sponsor is not adequate, it must be leveraged, communicated and utilized.
2. The second most important criteria would be BI Strategy including best practice documentation and communication of it thereof.
3. BI Value Architect is possibly the second most critical component in BI success. In a 8 month research we came out with a clear finding that in current BW projects there is no BI Business Value Owner. No particular individual, or a group, that is directly responsible for ensuring value delivery. Ths person should not belong to any of the triad players, i.e. SW, HW or Implementing partner as that by definition is a conflict position.
Properly engaged senior leadership and executive participation ensures that business takes a leading role in what happens and how BW deliverables are planned. It ensures that technology is used and designed to meet business needs and all tactical decisions are aligned to meet with strategic alignments.
Over the years it is surprising how SAP implementations still sometimes do not follow this simple guideline. I started with SAP R/3 in 1995 and have since heard it repeated, re-iterated, proposed and discussed how important executive participation is to the success of a ERP project. This is independent whether it be a SAP, APO, CRM or BI project. As I have focused on BI since 1997 I will delve on that aspect of SAP.
most companies erroneously believe that executive participation brings stamina and sustenance. That too but one of the most important aspects executive participation brings is strategic sustenance. The future plans, the future business needs and the future business goals that are integral to the development of all ERP configurations and along with architecture and modeling of the BI environments.
If you are a CEO, CIO, CTO or VP operations your active participation with current business needs, future business plans and strategic business goals can be the difference of success or heading down a road of technical delivery with difficult user and budget discussions as a predictable outcome. Fail to plan = Plan to Fail.
Business cases
In one of my SAP Projects while talking to the CEO and CIO over lunch I was told that this global manufacturing company was planning to invest into their own distribution network by possibly buying out their current small distributors.
I went back reviewed the configuration in R/3 and a couple of weeks later requested that if the company had any possibility of going to distribution then we would need to move from manufacture to order to manufacture to stock. There was also the need to set up new company codes. We extended the project timeline by 3 weeks and 4 months after go live the company did decide to implement their plans. Their ECC and BW was perfectly designed to accommodate such a scenario and the move went very smoothly indeed.
In another company in our weekly meetings the CEO came in unexpectedly and mentioned that they were working with a high tier company that was delivering all their manufacturing reports. he also mentioned in his conversations that the proposed plan was to deliver business content as it met most of the reports. In a subsequent meeting with the CEO I requested permission to review the new BW plans and deliverable's. The CEO offered me a 4 week time to part time work with the group and report back to him after 4 weeks. In two weeks I realized the new team had not talked to any business stakeholders, were planning to deliver metrics as their BI strategy and mostly standard business content. By week three I requested the CEO to arrange a meeting with business owners and we all agreed that the current path would deliver a lot of data but very little information. I was moved from my existing project and made PM for the new implementation where we totally changed path, increased business needs identification, ownership and participation and the outcome was a very smooth and successful BW implementation.
Without executive participation and communications all this would have been an absolute disaster. The failure to plan for direct business needs and for the future in the initial phases can lead to a form of architecture called 'Report marts' - something most best practices would not recommend going to.
Find the Missing Link
In every ERP and/or BW project find the ownership to Business Value Attainment. In the above two examples the reason success was reached is because of executive involvement. There are many stories some of them ending with a simple question "..can we sue the implementing partner..? and none of us want to go anywhere near that path or direction.
One of the critical aspects of all BI strategy is alignment to business goals. We see this missing in most BW implementation, but a few. We have seen many enterprises have.
According to a Gartner report of Feb 209, many multi-billion dollar, multi-nationals companies, have invested million of dollars into BI and potentially not attained their anticipated Business Value from their investments. We call this BVA or Business Value Attainment.
The three things essential for BVA are, [1] Executive participation and communication; [2] BI Value Owner or Architect, and [3] BI Strategy & best practice documentation.
Lessons Learned
1. Executive participation in IT projects creates ownership and visibility within strategic company directives. Just having an executive sponsor is not adequate, it must be leveraged, communicated and utilized.
2. The second most important criteria would be BI Strategy including best practice documentation and communication of it thereof.
3. BI Value Architect is possibly the second most critical component in BI success. In a 8 month research we came out with a clear finding that in current BW projects there is no BI Business Value Owner. No particular individual, or a group, that is directly responsible for ensuring value delivery. Ths person should not belong to any of the triad players, i.e. SW, HW or Implementing partner as that by definition is a conflict position.
Properly engaged senior leadership and executive participation ensures that business takes a leading role in what happens and how BW deliverables are planned. It ensures that technology is used and designed to meet business needs and all tactical decisions are aligned to meet with strategic alignments.
Monday, October 19, 2009
Where is the missing Link for BW Success
BW Success has been elusive since its inception. Customer blame SW, SW blames HW, HW and SW Blame vendors and Vendors blame Business. But no one has been able to identify the culprit.
In 2007 BI was the # 2 priority of CEO's this remained until Aug 2008 when Forrester reported that BI had been relegated to the # 5 priority of CEO's. It was not that information was getting any less important but companies continued to invest into Oracle, Informix, SAP and other DW solutions but all they got is lack of BVA (Business Value realization).
BVA is very different from Value Attainment. Value Attainment may be the vendor view of what will bring value to your company - and most companies may have been led astray by this singular investment. What it may end up doing is bringing value to the adviser's.
Anyhow there is a brief article on the missing link and if you like it you can request for the longer version.
https://www.box.net/shared/fctnd7tsnx
See if you agree that the fundamental Value componet is currently missing from BW implementations
In 2007 BI was the # 2 priority of CEO's this remained until Aug 2008 when Forrester reported that BI had been relegated to the # 5 priority of CEO's. It was not that information was getting any less important but companies continued to invest into Oracle, Informix, SAP and other DW solutions but all they got is lack of BVA (Business Value realization).
BVA is very different from Value Attainment. Value Attainment may be the vendor view of what will bring value to your company - and most companies may have been led astray by this singular investment. What it may end up doing is bringing value to the adviser's.
Anyhow there is a brief article on the missing link and if you like it you can request for the longer version.
https://www.box.net/shared/fctnd7tsnx
See if you agree that the fundamental Value componet is currently missing from BW implementations
Notes from DSAG
In contrast to last year, when there were very visible signs of revolt against the arrogant and monopolistic behaviour of SAP and its management, the mood this year at the DSAG (German speaking SAP User Group) Annual Congress was more realistic: customers continue to be very dissatisfied but realize that DSAG is no source of miracles. In his presentation, Prof. Karl Liebstückel continued to emphasize the need for lower cost of ownership, lower complexity and higher sustainability of SAP solutions. He reiterated the lack of evidence of additional value of SAP’s enterprise support. The chairmen of the special interest groups added to this list – the lack of SOA in Business Suite 7, the disappointment about Business by Design (the work group has too few members), the inconsistenrt state of verticals. No surprises – all very well known issues. DSAG management made every attempt to sell the stretching of SAP’s maintenance increase intervals as an achievement of its negotiations with SAP.
The current DSAG chairman is no CIO and apparently a number of CIOs felt poorly represented and threatened to create their own SAP CIO group – separate and without relationship to DSAG. DSAG, now representing about 50% of the German SAP users and 15% in Austria and Switzerland respectively, was quick to embrace the separatists: Prof. Liebstückel announced the creation of a CIO advisory board to balance his more academic and technology oriented origin.
And then Léo Apotheker made his first speech in front of about 3000 quite critical users. He was nervous, mixed up places (mistook Bremen for Berlin) and after one or two minutes of warming up delivered quite a good pitch. After bashing the press for all the unnecessary criticism about SAP he went on to emphasize how important customer relations, sustainability, agility and service quality are in a time of economic crisis. A lot of ”tikkun olam” a day after yom kippur.
Very convincing, very much to the point for everybody who had no idea about the real issues of the SAP users or had not listened to the lengthy list of top concerns the DSAG board had laid out in the session before Léo’s. His pitch was a good sales pitch but a poor example of positive vendor reaction to customer needs. He gave himself very high marks for the revolutionary, KPI-based enterprise support (no customer yet has really reported advantages that were quantifiable and higher than the extra costs) and cited positive verdicts from Gartner on the KPI system (without mentioning that Gartner had a key role in developing the KPIs).
Senior DSAG members noted that while the presentation was well delivered it continued the tradition of widening the mental gap between SAP’s management and the SAP users. A certain amount of resignation could be felt and customers I spoke with expressed a more realistic view than a year before: they start to understand that there is no substitute for their own, very personal strategy. Emancipation is not an easy process. It requires a lot of information (not sourced from the vendor’s marketing department), thinking and reflection and, above all, determination.
The current DSAG chairman is no CIO and apparently a number of CIOs felt poorly represented and threatened to create their own SAP CIO group – separate and without relationship to DSAG. DSAG, now representing about 50% of the German SAP users and 15% in Austria and Switzerland respectively, was quick to embrace the separatists: Prof. Liebstückel announced the creation of a CIO advisory board to balance his more academic and technology oriented origin.
And then Léo Apotheker made his first speech in front of about 3000 quite critical users. He was nervous, mixed up places (mistook Bremen for Berlin) and after one or two minutes of warming up delivered quite a good pitch. After bashing the press for all the unnecessary criticism about SAP he went on to emphasize how important customer relations, sustainability, agility and service quality are in a time of economic crisis. A lot of ”tikkun olam” a day after yom kippur.
Very convincing, very much to the point for everybody who had no idea about the real issues of the SAP users or had not listened to the lengthy list of top concerns the DSAG board had laid out in the session before Léo’s. His pitch was a good sales pitch but a poor example of positive vendor reaction to customer needs. He gave himself very high marks for the revolutionary, KPI-based enterprise support (no customer yet has really reported advantages that were quantifiable and higher than the extra costs) and cited positive verdicts from Gartner on the KPI system (without mentioning that Gartner had a key role in developing the KPIs).
Senior DSAG members noted that while the presentation was well delivered it continued the tradition of widening the mental gap between SAP’s management and the SAP users. A certain amount of resignation could be felt and customers I spoke with expressed a more realistic view than a year before: they start to understand that there is no substitute for their own, very personal strategy. Emancipation is not an easy process. It requires a lot of information (not sourced from the vendor’s marketing department), thinking and reflection and, above all, determination.
SAP Starts customer loyalty programs in Germany
In a few days, SAP will send out letters to all those German customers who have remained on standard support. Recent surveys indicated that this is over 60% of the installed base. In this letter, SAP will enforce a hitherto never used clause in their maintenance agreement. This clause allows for a salary-index based increase of maintenance.
SAP plans to apply this clause retroactively. This means: old agreements will see a higher increase. Hence, loyalty is not rewarded – rather, it is penalized — a first in the industry. Another rather bizarre effect is that customers will pay different percentages – even though they have purchased the same product.
The only comfort is that SAP will cap the increase to prevent standard maintenance from getting more expensive than Enterprise Support.
The retroactive application of the index-based increase is not without legal issues. The jury is still out on whether it will pass and I strongly advise customers to contest this practice.
When will SAP become smart enough to understand that molesting customers is not to their advantage? Well, in a recent article InformationWeek’s Bob Evans ventures an interesting speculation: http://tiny.cc/wsrlo
SAP plans to apply this clause retroactively. This means: old agreements will see a higher increase. Hence, loyalty is not rewarded – rather, it is penalized — a first in the industry. Another rather bizarre effect is that customers will pay different percentages – even though they have purchased the same product.
The only comfort is that SAP will cap the increase to prevent standard maintenance from getting more expensive than Enterprise Support.
The retroactive application of the index-based increase is not without legal issues. The jury is still out on whether it will pass and I strongly advise customers to contest this practice.
When will SAP become smart enough to understand that molesting customers is not to their advantage? Well, in a recent article InformationWeek’s Bob Evans ventures an interesting speculation: http://tiny.cc/wsrlo
t-Systems takes over SAP Hosting
After about 10 years of soul searching, SAP has finally decided to pull out of the hosting and outsourcing business. The original goals of this endeavor were:
Gain experience on the costs of operation
Developing best practises for service providers
Influence the product development process to improve the suitability of SAP products for hosting and outsourcing
Host beta-versions of new SAP products to improve time-to-market
Help partners and customers during the implementation process by providing the development environment scaling it gradually up until production capability was reached
Of these goals, only the last goal was achieved beyond the shadow of a doubt. The hope to develop this business into the directions of both SaaS and BPO was never fulfilled. It remained an illusion.
Why did this happen? First and foremost, SAP’s margin aspirations are just not attainable – a 30% margin in a hosting business is way out (especially, if it is burdened with SAP’s high cost of manpower and the need to pay for licenses at par with other system houses). Secondly, all hosting, outsourcing, and SaaS offerings start with investments creating negative cash flow way before a single Euro hits SAP’s accounts. Thirdly, there are partners competing with better cost structures that bring more business and frequently were irritated about SAP’s own hosting business. And, finally – SAP is primarily focused on selling licenses and, as of late, maintenance. SAPHosting never had the sales force it deserved.
Bottom line: the financial analysts will like this move. Not too many customers will dislike it. But SAP will be missing out on an opportunity to have continuous first hand insight into what it takes to actually tame the beast. That could have been turned into an edge over competition and a source of true COO improvements – too bad it did not happen. But, maybe, SAP did not even want to get smart about this. Ferri Abolhassan, up until recently SAP EVP EMEA, and now at the helm of T-Systems, can show his old employer what to make out of it.
Gain experience on the costs of operation
Developing best practises for service providers
Influence the product development process to improve the suitability of SAP products for hosting and outsourcing
Host beta-versions of new SAP products to improve time-to-market
Help partners and customers during the implementation process by providing the development environment scaling it gradually up until production capability was reached
Of these goals, only the last goal was achieved beyond the shadow of a doubt. The hope to develop this business into the directions of both SaaS and BPO was never fulfilled. It remained an illusion.
Why did this happen? First and foremost, SAP’s margin aspirations are just not attainable – a 30% margin in a hosting business is way out (especially, if it is burdened with SAP’s high cost of manpower and the need to pay for licenses at par with other system houses). Secondly, all hosting, outsourcing, and SaaS offerings start with investments creating negative cash flow way before a single Euro hits SAP’s accounts. Thirdly, there are partners competing with better cost structures that bring more business and frequently were irritated about SAP’s own hosting business. And, finally – SAP is primarily focused on selling licenses and, as of late, maintenance. SAPHosting never had the sales force it deserved.
Bottom line: the financial analysts will like this move. Not too many customers will dislike it. But SAP will be missing out on an opportunity to have continuous first hand insight into what it takes to actually tame the beast. That could have been turned into an edge over competition and a source of true COO improvements – too bad it did not happen. But, maybe, SAP did not even want to get smart about this. Ferri Abolhassan, up until recently SAP EVP EMEA, and now at the helm of T-Systems, can show his old employer what to make out of it.
SAP Maintenance: All or Nothing
SAP (like Oracle) has so far refused steadfastly to accept partial maintenance cancellations. While this is (from the vendor’s point of view) quite understandable, it can lead to very unpleasant situations that are not without legal issues.
Case in point: a recent insolvency in Germany. A mid-sized company filed for insolvency and failed to revive the troubled enterprise. There are still orders that must be served but in a few months the lights will be out.
Most of the 350 users of their SAP system are gone. Only about 50 are left and, of course, the HR-system is required to pay the residual staff. Closer to year end, a few legal updates will have to be fitted to the SAP-HR-installation.
The administrator, in an attempt to make sure that staff can be paid, asked SAP to accept a partial maintenance cancellation for 300 seats – very appropriate especially in light of the upcoming increase for standard support.
SAP refused to accept the partial cancellation. Either you cancel in full or you pay in full. Under German law, the maintenace bill ranks way lower than salaries in an insolvency. SAP, however, has apparently found a way to circumvent this. The customer, while not requiring maintence for the 300 empty seats, needs the legal updates to pay his workers. If he does not pay them, he has to shut down immediatedly. Paying full maintenance, on the other hand, may mean that he may have to shortchange his workers in favor of SAP. This is clearly not what the lawmakers had in mind.
Case in point: a recent insolvency in Germany. A mid-sized company filed for insolvency and failed to revive the troubled enterprise. There are still orders that must be served but in a few months the lights will be out.
Most of the 350 users of their SAP system are gone. Only about 50 are left and, of course, the HR-system is required to pay the residual staff. Closer to year end, a few legal updates will have to be fitted to the SAP-HR-installation.
The administrator, in an attempt to make sure that staff can be paid, asked SAP to accept a partial maintenance cancellation for 300 seats – very appropriate especially in light of the upcoming increase for standard support.
SAP refused to accept the partial cancellation. Either you cancel in full or you pay in full. Under German law, the maintenace bill ranks way lower than salaries in an insolvency. SAP, however, has apparently found a way to circumvent this. The customer, while not requiring maintence for the 300 empty seats, needs the legal updates to pay his workers. If he does not pay them, he has to shut down immediatedly. Paying full maintenance, on the other hand, may mean that he may have to shortchange his workers in favor of SAP. This is clearly not what the lawmakers had in mind.
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