SAP will have to convince users that that there's an unmistakable business case for running its Business Suite...
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software on the SAP HANA in-memory database if they truly want the new platform to succeed, according to a group of experts and customers.
SAP yesterday announced the immediate availability of the SAP Business Suite software that runs on HANA, in a global announcement and press conference held in Palo Alto, Calif., New York and Frankfurt. Experts say the success of the platform will likely depend on SAP's ability to convince business people that the reasons for using Business Suite on HANA go beyond speed and flexibility.
"One of SAP's challenges is going to be explaining to businesspeople how this is going to help them, as opposed to IT people, who are mostly interested in speed," said Jon Reed, an independent SAP analyst and head of JonERP.com. "A business group may be able to report faster, but it is it worth the money to make the transition to HANA?"
Reed added that SAP considers the new platform a real breakthrough in the ERP marketplace. "It fulfills [SAP co-founder and chairman of the board] Hasso Plattner's vision of handling [online analytical processing, or OLAP, and online transactional processing, or OLTP], breaking down the division of analytics and transactional systems," he said. "This is his grand vision."
Making the business case for the Business Suite on SAP HANA
During the announcement, Plattner emphasized that forward-looking companies would know what to do with faster performance.
"When companies say, 'What do we do with all this speed?' I provokingly say, … 'If you don't know, then HANA's probably not right for you,'" Plattner told the audience. "But there are many companies that have been waiting for years that we could provide something like this. These companies will be on a winning path."
But that may not be enough for a lot of companies, especially those without big IT budgets, according to Cindy Jutras, head of Mint Jutras consulting.
"There are not necessarily a lot of companies that are looking at their current transactional systems and saying, 'Oh, my system's too slow,'" Jutras said. She added that SAP will have to show customers how to dig into massive amounts of transactional data to grow revenues.
For example, companies that have been doing budget forecasting at a very high level could begin looking at more detailed forecasts at the product, or even at the individual-customer level, she said. "The sheer volume of data involved may have prevented them from working with that level of granularity," she added, saying that with HANA, those barriers start to fall away. Not only can organizations manage tremendously large volumes of the structured data they are accustomed to using, but they also can start to incorporate unstructured data as well. Organizations "will likely need some help in recognizing the opportunity for business innovation," she said.
Customers: One on board, one not sure
John Deere, a global manufacturer and seller of lawnmowers and other farm equipment, has been one of SAP's early Business-Suite-on-HANA customers, and was on hand for the announcement as a reference customer.
The company was looking for something its existing SAP ERP system wasn't delivering, according to Derek Dyer, the director of global SAP Services at the Moline, Ill.-based company. "Our existing solution was good, it was solid, but it wasn't delivering everything we needed. The end-user satisfaction with the performance was not there, and the reporting aspect of it was dated, and in most ways, static," he said. "Not exactly an optimal solution."
Among other advantages around faster financial closings and other benefits, the company began looking at HANA primarily for its new program management, the lifeline in which new products are brought to the marketplace. "We're now able to manage those programs in real time," Dyer said. "And that was the 'wow' that we were seeking."
Mike O'Dell, the incoming CIO at Raley's, a privately held chain of supermarkets based in Sacramento, Calif., has mixed feelings about the issue. "It's certainly an ideal I'll entertain," he said. Speed is important, he said, but so is a raft of other concerns he has, including landscape simplicity.
Among O'Dell's concerns is that his new company is in the process of replacing its legacy systems, including Oracle PeopleSoft for its financials, with SAP. O'Dell wondered if it was worth it to go back and redesign the system around SAP HANA, and risk going one more day without a more optimal system in place. "It's tempting to go with what I got," he said. "A lot of it depends on the migration path. How non-disruptive is it going to be for me to do later? That's part of the due diligence I have to do." If it's a matter of simply switching out databases, it may make more sense to wait, he added.
That said, O'Dell saw a potential benefit of being able to run Raley's operations on HANA, given the hyper-competitive nature of the retail supermarket business, where margins are typically very thin and demand can change on a dime. "We have to be able to sense the demand that's out there already, and we need to be able to shape that demand and execute on that demand," he said. "And that's an awful lot of data we have to pay attention to."
The life of HANA
That lifespan of HANA, and SAP's goal of introducing Business Suite on HANA, have taken a number of turns, including the introduction of applications specifically designed to run HANA, as well as the ability for customers to custom-design their own software. That process took another move forward recently when SAP announced that customers will be able to run its data warehousing software, SAP Business Warehouse, on HANA.
As a part of the process of moving toward ERP on HANA, SAP demonstrated an SAP BusinessOne system running on the in-memory platform before thousands of SapphireNow conference-goers last spring in Orlando. SAP announced late last year the advent of the SAP 360 Customer package, which includes a version of SAP CRM that runs on HANA.
Customers who want to move forward on running their ERP system on HANA will need to be current on all the available updates, SAP analyst Reed said. "You're going to have to be up-to-date on the latest enhancement and support packs," he said, "so there are going to be some baseline requirements."
How SAP HANA will merge with SAP Business Warehouse over time