Issue 1 | 2010
A Little Tip for Great Efficiency in SAP Operations: FlexFrame for SAP
www.sap-spectrum.com Issue 1 | 2010
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“We want to get users excited about our software”
SAP co-CEO Jim Hagemann Snabe reveals how SAP is transforming itself.
Reduce costs, increase performance: That is easy to do with FlexFrame for SAP . You can now plan, implement, operate and modify your SAP© systems more flexibly and economically than ever before. Consolidate and virtualize your SAP environment gradually to precisely match your changing requirements. Offer your SAP users tailor-made performance and reliability that is efficient and affordable. Challenge your SAP operations with us now, and make them the best they can be. E-mail: expert.sap@ts.fujitsu.com
Internet: ts.fujitsu.com/sap
Special
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SAP Product Strategy
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IT and Business Trends Supply follows demand. The only successful providers are those who fulfill their customers’ needs. David and Goliath 2010 The midmarket cannot afford to be mediocre. Companies reveal how IT helps them flex their performance muscles.
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COCKPIT
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Contributing to Sustainability With the help of the SAP Carbon Impact solution, SAP could establish early this year how many tons of carbon dioxide the company had emitted in 2009. Not only the economic crisis but also numerous initiatives on the part of SAP and its employees led to a drastic reduction of carbon emissions.
million euros were saved in 2009 through the reduction of carbon emissions.
kilowatt hours of renewable energy were purchased by SAP in 2009 in addition to its regional energy mix.
less carbon dioxide was emitted in 2009 compared to 2008.
thousand tons of carbon dioxide were emitted by SAP in 2009 in the maintenance of office buildings; through business trips by car, train, or plane; and through paper consumption and logistics.
By this year SAP will have reduced its carbon emissions to the level of the year 2000.
of newly installed servers in its computer centers last year were virtual servers, enabling SAP to reduce energy consumptionand thereby drastically lower energy costs. thousand tons of carbon emissions is SAP’s goal for 2020. This corresponds to a reduction of its CO2 emissions by about 50% compared to 2007. video conference facilities and 12 telepresence rooms at SAP made it possible for SAP employees worldwide to attend international meetings in their own locations, thus reducing the necessity for, and number of, business flights.
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48 StyleWest relies on SAP
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12 With Lego, logistics is child’s play
Special
SAP Product Strategy
18 Trendsetters CIOs have a long wish list, starting with cloud computing, BI, and mobile applications
26 We need to become much faster Jim Hagemann Snabe talks about instant value for SAP customers
30 Competitive through innovative It A look at hardware costs and IT trends
32 Extending the reach SAP’s holistic, innovation-driven strategy helps companies get solutions that keep them competitive
36 Stamped, Sealed, and Delivered Writing letters is out - and the Italian postal system is fighting back with innovative products and services
38 Full steam ahead A focus on business processes ensures success of SOA
41 Networking is key for smes SAP’s midmarket strategy helps companies hone their competitive edge 32 Extending the reach
44 David and Goliath 2010 Three SMEs show that flexibility and agility are their slings and stones
26 Jim Hagemann Snabe on SAP’s transformation
56 DHL – touching lives with technology
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Contents Compass
Strategies, Ideas, Trends
08 An Interview with David Kelley The Stanford professor explains the concept of Design Thinking
10 The psychology of design Poorly-designed software is costly for companies. Error rates increase and motivation drops. A look at how this can be improved 08 David Kelley explains how Design Thinking enables innovation and why it’s just like playing the piano.
12 Where Logistics is child’s Play Using Lego blocks, students reconstruct a supply network
Challenge
Challenges, Opportunities, Solutions
48 Come Rain or Shine With swimwear and rainwear, StyleWest has created quite a splash, but its IT system couldn’t keep pace with the increasing sales
52 Emerging with the market 74 The Tiger Report by a JSUG workgroup tackles global implemen tation.
High growth rates push the legacy applications of the successful Vietnamese company ICP to their limits
56 Touching Lives with technology Blind and visually impaired call-center agents manage their work with the help of technology and special aids
SECTIONS
60 Kaizen, Cars, and Corporate Collisions Automotive manufacturers have to find new business models to survive and focus on new growth markets
64 The head of the class A university relies on SAP software to increase enrollment Konstantin Guericke, founder of LinkedIn
03 Cockpit 07 Editorial 67 Lets talk business: Chittur Ramakrishnan 76 Portrait: Konstantin Guericke 79 Masthead 79 In our eyes... 80 Cartoon, next issue
Cosmos
People, Markets, Communities
68 The best of both worlds ASUG CEO Bridgette Chambers on developments and goals
72 Mapping Innovation with needs SAP’s revamped road map for industries and lines of business
74 Grabbing the tiger by the Tail Japanese customers benefit from a new team and a book of secrets
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EDITORIAL
Dear Readers, This issue of SAP SPECTRUM sees a big change: We’re back in print. With this step, we are following your wishes, since the large majority of our readers have indicated that they prefer a print version of the magazine. Four issues a year will keep you up to date on topics and trends in the SAP world. And SAP itself is seeing a big change: On February 7, Jim Hagemann Snabe and Bill McDermott were appointed as co-CEOs of SAP. They will also continue to carry out their previous responsibilities as members of the SAP Executive Board, with Jim Hagemann Snabe being responsible for product development and Bill McDermott for sales. In addition, SAP chief technology officer Vishal Sikka was appointed to the SAP executive board, underscoring SAP’s commitment to technological innovation. The main focus of this issue – SAP product strategy – dovetails nicely with these developments. In an interview, Jim Hagemann Snabe reveals how SAP is transforming itself to be faster and more customeroriented. Find out why he is convinced that SAP is as innovative as ever. In other articles in our strategy special you can read about the road map of such important products as SAP Business Suite and the midmarket solutions – and get to know about customers who have benefited from them. Best regards, Johannes Gillar, Editor-in-chief For your free subscription to SAP SPECTRUM, please register at www.sap-spectrum.com/subscribe. There you can also download PDFs of the magazine.
Johannes Gillar
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The Bauhaus Side of
the Brain David Kelley, head of the Hasso Plattner Institute of Design at Stanford University, explains the concept of Design Thinking, how it enables innovation, and why it is just like playing the piano. Interview: Christoph Zeidler
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culture of creative ideas. That’s hard for Design Thinking is intended to nurture people to swallow, because the assumpinnovation in companies and in people. tion was always that the creative part How does it work? David Kelley: Let me start with design, came out of atmosphere instead of bea word that has a very broad meaning. ing the end result of a process. My students at Stanford call themselves How do you build on natural talent, and designers, but they are really engineers. how do you encourage innovation? Art school students call themselves designers, too. Design Thinking is a com- It’s our premise that everybody is inherbination of the two, a methodology for ently creative. If you ask kids in a kinroutine innovation. It brings together dergarten class how many of them are the right side of the brain, responsible creative, everybody will raise their hand. for creativity, with the left side of the And they really are artistic. Our school brain, where scientific method, math, system trains it out of us, but everybody has that child’s mind inside of them, and science reside. It’s the creative side of the brain, the and we want to get back there. To unlock that creativity, you have to Bauhaus or Mozart side, which is haphazard, imaginative, fanciful, which break the habit of considering yourself as noncreative. People tend to trust their analytical side. We help them break this habit. It’s like quitting smoking. It’s hard, but it can be done. Students are surprised with how creative they are, as individuals and as a group, when they approach a problem with the Design Thinking methodology. Once you’ve exceeded your expectations a few times, you start to trust your innovative side and to use it more and more.
Design Thinking eliminates the notion that design is a talent that some people get and some don’t.
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Design Thinking
What is your advice to employees who want to be more creative in their day-today work? In addition to being the founder and That’s a complex question, because as chairman of IDEO, a global design an employee you have to do what’s exconsultancy, David Kelley is also a pected of you. But I like people who are Stanford University professor in the makes the mind leap forward and jump rebels, or rule breakers, who want to do school’s innovative Product Design to new places worth working on. But things differently from the way they’ve program and creator of the Hasso it’s the analytical side of the brain that been asked and who want to prove their Plattner Institute of Design (or solves problems and shows how to get way is better. I must admit I haven’t “d.school”). The California-based things done. It’s the implementation seen this as a successful strategy in the entrepreneur, educator, designer, side. We need both to successfully inno- workplace. People who are successful and venture capitalist has been vate. We need to think and to design, to at their jobs and innovative at the same recognized as one of America’s time are usually the ones who do more think design. leading design innovators. than is expected. They work persistently on their own ideas. In the end, they can What is so special about this concept? Design Thinking eliminates the notion deliver to the boss, and show him or her that design is a God-given talent that an alternative solution that is hopefully tive companies have done this. 3M, for some people get and some people don’t. just as valid. example, I think they were the first to It moves design to a methodology that do it. They allowed their people 17% of So what you are saying is that people you can follow like learning to play the time to do something unrelated to their need time and space to develop their piano or doing anything that requires job. Almost all the cool innovations creativity? you to have confidence in a process. As came out of that aspect of the person’s a design thinker, you say: I have a meth- Yes, absolutely. It sounds like a no-brainer, job, not the 83% when they were doing odology that I know will resolve in a but that’s why some of the really innova- what they were told to do.
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The Psychology of
Design
Businesses pay dearly for poorly designed software: Employees do not buy into it, error rates increase, and motivation levels drop. But it doesn’t have to be that way. Author: Bernd Seidel
Rüdiger Pfister, professor of business
James Garrett, however, most enter- something of immediate use,” says Pfispsychology at Leuphana University prise resource planning software falls ter. But there almost always seems to be in Lüneburg, Germany, studies how far short of this vision. “Most applica- the same sad result: Users generally repeople use products. Where software tions are poorly designed,” says the quire several days of training, backed up is concerned, “design and usability are cofounder of Adaptive Path and pioneer by hundreds of pages of documentation, 90% psychology,” he says. “Designers of Ajax programming techniques. Many if they want to learn how to work with a of systems involving human interaction programs are complicated to use and new application. “By now, learning new with computers have long overlooked crammed with functions. “Developers applications should be intuitive and fun,” the importance of behavioral psychol- tend to include too many functions be- Pfister emphasizes. From a practical ogy and motor skills research.” Why a cause they don’t understand what us- perspective, Garrett can see economic user clicks on one icon and ignores an- ers really need,” says Garrett. “No one reasons for promoting good software other, what constitutes a user-friendly asks everyday users what an application design. “Users are more likely to accept navigation structure, and which func- should be like so that they can work with programs that they enjoy working with; tions people find confusing are mainly it productively. And it’s the people at the error rates decrease significantly,” he determined empirically in experiments. top who decide what software to buy – says. Conversely, “poorly designed software results in substantial costs.” “The vision is to design products that not although they only use it occasionally.” The design specialist advises organi“When software engineers or proonly do their job but that users actually enjoy working with,” comments Pfister. grammers are asked to design an appli- zations to check how much training is In the opinion of design guru Jesse cation, they’re expected to come up with necessary for complex programs. “What
No...
Well, maybe...
Actually, no...
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is the cost of errors or inefficient pro- money businesses lose by deploying bad cesses that are caused by such unwieldy software. “Users spend roughly 10% of applications?” he asks. He also believes their time dealing with problems,” he that aesthetic and emotional factors are says. And more often than not, these neglected during the design process – problems are caused by poor usability not enough attention is paid to the user rather than by programming errors. Heiexperience. “I’m not saying that working necke has calculated that for a company with software always has to be fun, but with 300 computer workstations and good design can dramatically improve human resource costs of € 200 (approxiefficiency,” he adds. Andreas Heinecke, mately U.S. $ 290) per employee per day, professor of computer science at the the cost of error management alone toTechnical University of Gelsenkirchen, tals nearly € 1.25 million (approximately Germany, has worked out how much U.S.$ 1.81 million) a year. His conclusion: “Investments in usability are more than compensated for by savings in user service.”
Human interaction with computers: guidelines EN ISO 13407: Human-centered design process for interactive systems EN ISO 9241: Ergonomics of human-system interaction EN ISO 9241-11: Requirements for office work with visual display terminals EN ISO 9241-110: Dialog principles
But, what if...
Involve users in the design process Garrett sees rigid design processes as a major reason for the discrepancy between user expectations and usability. “How often were we convinced that we had understood the users, only to discover that we were wrong?” So-called agile software development focuses more on the user perspective: Part of the design process is to pause in what you’re doing and to ask yourself again and again what it is that the user really needs. “Agile methods use short iteration cycles to fine-tune software,” Garrett adds. Hierarchical factors often have an adverse effect on the choice of software. Managers do not realize how
important it is to consider users’ needs. “IT systems are expensive. People lower down in the hierarchy don’t usually have a say in what the company buys,” says Garrett. There is no process for regularly reviewing and evaluating their experience. Yet there is a simple solution: First, IT managers should find out who uses the software on a daily basis and ask them what they think of it. Second, a feedback loop should be built into the procurement, installation, and go-live phases. And third, “translators” are needed – people who know how to support and implement users’ requirements. Heinecke also believes that the answer is to involve users in the design process right from the start. Development teams should include specialists from different fields – product designers, ergonomics experts, workplace designers, and software engineers. Ideally, their combined input would result in users interacting efficiently with computers – and enjoying the experience.
Lüneburg University Web site www.leuphana.de
Research and bibliography www.dicelab.org
Adaptive Path
www.adaptivepath.com
Wow! Software development has overlooked behavioral psychology and motor skills research for too long.
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Where Logistics is Child’s Play How can you depict abstract terms such as integration and continuity? Students in the Department for Business Information Systems at a German university manage to do just this – by reconstructing a supply network using Lego blocks. Author: Iris Nagel-Martin
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Although still in her fifth semester
of business studies, Christiane Soika is already the founder of multiple companies. The young woman launched her career by opening a furniture factory. No sooner had the first chairs rolled off the assembly line than she expanded into the area of automobile production and was involved in building two other plants. What makes these three businesses so special? They were all built with Lego blocks. And they are also fictitious, operating within the Department for Business Information Systems at the Zwickau University of Applied Sciences, Germany. Forming a supply chain that mirrors those of the real-life companies they are based on, the three companies ship and receive their parts along the Lego streets according to their daily business requirements. “The full supply chain can be tracked – from transport through warehousing to production,” says Professor Tobias Teich, who heads the project. “While real organizations often don’t have an overview of the collaboration between companies, our Lego laboratory provides insight into how logistics integration works.” It was during a vacation in Denmark two years ago that Teich got the idea for the project. At the time, Legoland was showing its latest Mars Mission product line, which featured robots that were particularly useful for modeling transport systems. Upon his return to Zwickau, the professor promptly ordered crates of colorful Lego blocks to the tune of € 32,000 (approximately U.S. $ 45,000). “Needless to say, the procurement department contacted me about the order,” he remembers. However, once Teich explained his project plans in detail, the material requirements were approved.
Cranes, forklift trucks, and SAP software The project began. Diligent hands assembled, block for block, a 20-squaremeter area of factories that could be used to model a wide range of logistics details. Motor-driven cranes and forklift trucks controlled by programmable multisensor modules (NXT systems) transport the goods, moving along
streets or tracks from one business to the next. But the most ingenious thing is that the entire logistics process is modeled and coordinated using an SAP system. Soika is in her element. “I really enjoy programming,” she happily admits. While her fellow students were busy assembling the Lego blocks, Soika was busy deriving the logistics processes from the SAP system and applying them to the Lego constructions. In the meantime, student assistant Andreas Herrmann optimized vehicle production. The driving force behind switching the conveyance of the plant’s cars from shaky cranes over to a more robust assembly line system, he spends three to four hours in the laboratory each week. Before the two-week beginner course even started, Herr mann had familiarized himself with the project. He believes this enabled him to acquire skills that the other students must first work hard to acquire. To date, only highly motivated students have participated in the course, since many students
Our Lego laboratory provides insight into how logistics integration works. — Tobias Teich
are put off by having to work intensively on the complex SAP-based case study from 7:30 in the morning to 9:00 in the evening. Teich emphasizes that although the course gets very difficult toward the end, he has no problems recruiting new students. In fact, there are about five times more course applicants than there are places. The main attraction, in addition to the credit awarded, is the prospect of being offered a student assistant contract or even a permanent contract. Such contracts are highly sought after, since the miniature logistics construction is largely run and maintained by students alone. Actually, what these students earn for their work doesn’t cover the number of hours they put in, since many of them also spend a lot of their free time in the Lego lab. “Our students aren’t just motivated by good grades,” says Teich. “And since only the best students are selected to work on the project, everything runs perfectly.” Teich’s philosophy of fostering the talents of motivated students has paid off. The students benefit from and appreciate what is offered. “Working in the Lego lab has given me both a broad understanding of logistics and solid SAP knowledge,” says Soika, confident that the experience will improve her career opportunities. Herrmann also believes that his additional commitment was well worth his efforts. “Let’s be honest. SAP is the market leader in business software,” says Teich. “And while a sound knowledge of SAP software doesn’t guarantee job offers, it certainly gives students a competitive edge in the job market.” The university also benefits from →
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1 Light sensors trigger the manufacturing order. A forklift then picks the underbody from the high rack warehouse...
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2 ... and sets it on the conveyor belt, where assembly begins.
3 The finished cars roll out of the factory, with the NXT computer in the background controlling the belt motor.
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4 Touch sensors start the loading process. As the finished cars leave the conveyor belt, a crane lifts them onto a freight wagon for transport.
5 A train delivers the finished cars. If its battery drops below a certain charge level, the train automatically steers into a charging station on a side track.
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left: Christine Soika and Andreas Herrmann feel quite at home in the midst of their Lego factories. below: Tobias Teich discussing Lego vehicle production with Andreas Herrmann.
its highly qualified graduates: The information logistics research group has recruited all 10 of its members from its own ranks.
The system
The lab
“You really don’t see anything on a computer.”
The construction is physically con- Once the first buildings had been trolled by 16 NXT systems with motors. erected in the Lego lab in 2007, the Signals recorded by sensors trigger SAP components materials manageThe intensive course is compulsory for the relevant processes. A production ment, production planning, and sales all business information systems stu- order, for example, is started by and distribution were implemented. dents majoring in enterprise resource means of photo sensors, whereas tac- These were followed by the modules planning. Each student sets up a ficti- tile sensors trigger the loading and for human resources, accounting, contious business, and three fellow students shipping processes for finished cars. trolling, and workflow management. collaborate to form a supply chain. “This Once shipments are made, the freight The goods receipt and goods issue makes for visible continuity,” explains containers return automatically to the processes were linked to warehousTeich. If students were only to track the factory. Numerous ideas about how ing, employees were hired, and master processes on computers, they would the plant could be improved come data was entered. SAP Supply Chain not gain insight into logistics principles from high school students who attend Management and SAP NetWeaver and integrated operations. Or as Teich the lab’s annual summer course. All Business Warehouse later replaced says: “You really don’t see anything on a the professor needs to complete the previous software versions. The computer.” Once students have grasped logistics landscape are a customer Zwickau team is particularly proud of how SAP software works, they can give relationship management system and its SAP NetWeaver implementation and the radio frequency identification a presentation on their work under the a master data management system. technology they use to support exsupervision of the professor. Teich also change of goods. The applications ofpromotes his students beyond Zwickau: fer six clients and run on an industry Through his network of personal consystem that was originally developed tacts, he helps set up internships abroad for healthcare. with Daimler and VW. Fast updates for SAP ERP
Despite such prospects for a privileged career launch, Soika has opted to remain at the university for the time being. She thoroughly enjoys her work there. Once she has completed her bachelor’s degree, she hopes to go on for another four semesters to complete a master’s degree in accounting and logistics. Who knows what path she will eventually take? Maybe she will choose to remain loyal to the university, where her talent was discovered and fostered.
Link list: www.sap-spectrum.com
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Special
SAP Product Strategy SAP is as innovative as ever. In the SAP Spectrum Special, you can read about the company’s road map for major products such as SAP Business Suite, SAP solutions for small businesses and midsize companies, and the SAP BusinessObjects portfolio.
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special
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Next Stop:
New Trends in IT In the end, IT is like any other field of business: Supply follows demand. The only successful providers are those who fulfill their customers’ needs. And at the top of most customer wish lists are cloud computing, business intelligence, and software for mobile devices. Author: Johannes Gillar
In market research, the term “trend” refers to
velop the right products and be at the forefront of changes in consumer behavior. If software devel- the eventual upswing. IT plays a key role in crisis opers can identify and accommodate such shifts management by helping companies future-proof early on, they will have a competitive edge in stra- their business processes. While managers are tegic planning and product development – all the tasked with pointing their companies in the right more reason for market researchers to continually evaluate the significance of technical innovations and their market potential. A current technology trend is augmented reality (AR), the interaction of people with machines through mobile interfaces such as smartphones, head-mounted displays, and clothing, which collect and display information. They enrich the user’s field of vision with camera images or computer data. Even though AR research projects and related products for cell phones already exist, the commercialization of this technology is still in its infancy. Gartner and other market research firms anticipate its breakthrough in five to 10 years. Should developers succeed in providing companies with AR solutions – scalable diagnostic systems for ma- direction, providers of hardware and software, netchine tools, for example – Juniper Research analyst work technology, telecommunications, and other Windsor Holden expects a market volume of nearly services need to come up with solutions quickly to U.S. $ 700 million by 2014. support a return to prosperity. With the economic potential of technological In a Gartner survey of 150 company decision progress so great, it is not surprising that there makers in the U.S. and U.K., 60 % of the responis high motivation to keep a close eye on trends, dents said they were dissatisfied with their IT sysparticularly in the current crisis, in order to de- tems. The CIOs of these companies undoubtedly →
In a Gartner survey of 150 company decision makers in the U.S. and U.K., 60% of the respondents said they were dissatisfied with their IT systems.
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A head-mounted display enriches the user’s field of vision with camera images or computer data.
SiWear SiWear is a research project aiming to develop computer-integrated work apparel. It also seeks to determine how such systems can be used in industrial applications and how user buy-in can be increased. Worn directly on the body, intelligent IT can support processes in production and warehousing. Forward-thinking and based on SAP NetWeaver Mobile, this technology is currently undergoing testing at Daimler AG in Mannheim, Germany. The SiWear project has the support of the German Federal Ministry of Economics and Technologyand partners such as SAP AG, Daimler AG, teXXmo Mobile Solution GmbH & Co. KG, the Mobile Research Center Bremen, and Neo Business Partners GmbH.
have their plates full for 2010: cost reductions (also in IT), improved company image, innovation – and, above all, optimized workflows and productive employees.
Increasing expectations of IT Managers expect IT to provide tools they can use to respond quickly to changing conditions and to make the right decisions. While this is as true today as it was 10 years ago, it is no longer enough.
CIOs now expect – and are required to procure – innovative systems that are affordable and pay for themselves within a short time. This can be challenging because the needs of CIOs are as diverse as the departments and tasks in their companies. New software is supposed to make everything better: data utilization, transparency, company reputations, performance, customer and supplier relationship management, business processes, logistics... the list goes on and on. And many CIOs are demanding service-oriented architectures (SOA) in which they can fulfill business requirements faster and more cost effectively. The pressure to economize is also making technical options such as server virtualization and cloud computing, as well as alternative forms of software procurement (software as a service, for example) increasingly attractive. Based on discussions with CIOs, market research firms such as AMR, Forrester, Gartner, and IDC report annually on the new trends facing the IT industry and the economy at large. Germany’s Federal Association for Information Technology, Telecommunications, and New Media (Bitkom), which represents around 1,300 German companies, also projects trends in IT. For 2010, these organizations have declared cloud computing and virtualization, business intelligence (with its current focus on advanced analytics), and mobile applications to be the major trends.
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In-memory computing
special
Environmentally-friendly information technology, or “green IT,” is also seen as being increasingly important, as is its contribution to sustainable business practices. Meanwhile, only Forrester views software as a service (SaaS) as a megatrend. Nevertheless, virtually every expert still considers it an important topic – after all, SaaS makes it possible for business users to implement and customize applications.
In the record-based data processing model commonly used today, all record fields are loaded from a disk into the system’s main memory. However, business software systems only need around one-tenth of the fields in each data record. Column-based data models are much faster and more efficient: All data enters the main memory in sequence, where a query then searches through it by column. This Clouds and virtualization avoids the slow process of accessing disk storage media, which alAs for the megatrend of cloud computing, how exways involves importing entire data records. SAP BusinessObjects actly does it benefit companies? While cloud comExplorer, for example, demonstrates the performance edge attainputing does not eliminate the cost of IT solutions, able using systems’ main memory: The solution can search through it can reduce them significantly. Users can access 366 million data records in just 0.015 seconds. SAP Business Suite external data storage, processing power, or indi7 and the on-demand software SAP Business ByDesign also use invidual applications as needed “in the cloud.” Acmemory technology.
cording to Bitkom president Dr. August-Wilhelm Scheer, eliminating the necessity of in-house IT resources makes this approach more cost →
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effective for companies. Working in managers only use such tools if it’s fast and easy to do so. the cloud also makes companies more “Real-time BI,” as Forrester calls the trend toward regular flexible during mergers or other orga- data analysis, is making fundamental changes in business. nizational changes. But without vir- The U.K. analysts predict that companies will continue to use tualization, there would be no cloud computing. Like the cloud, it reduces costs and increases performance. According to U.S. market researcher GartGartner’s own projections indicate ner, the maximum server uptime that virtualization offers enables companies that 1.2 billion people will be able to migrate systems in real time – freeing to access the Internet using mobile up resources they otherwise would have invested in hardware and software back- devices by the end of 2010. ups. For Gartner, virtualization is the key to lowering costs, reducing complexity, and increasing agility. an increasing number of BI tools. Gartner, meanwhile, reports that the forecasting and simulation functions offered Next-gen BI by the latest generation of advanced analytics solutions will By collecting, assessing, and processing lead the way in giving users added security in their manageinternal datasets and external market ment decisions. This represents a new dimension in operative information, BI software gives company management support, as it becomes possible to look into the managers an overview of their oppor- future. In addition, data analysis is set to become faster and tunities, risks, and resources. However, simpler, thanks to innovations such as in-memory comput-
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bile use. SAP offers “BI to go”, including SAP BusinessObjects Explorer for iPhone. Recently introduced, this compact app enables users to search database servers. Other smartphone apps provide functions for customer relationship management or RFID applications in logistics. Meanwhile, IT is also providing valuable support in optimizing energy provision. Smart energy grids are better equipped to balance supply and demand to avoid peak loads. Smart meters provide readings current up to the day as needed and enable targeted monthly billing.
Market watchers scrutinize providers In addition to the three major IT trends of 2010, many other technologies are influencing companies’ plans – master data management, social computing, and green IT, for example. Their impact, however, is currently not all that significant. Because the operational requirements of organizations are generally so extensive, it is often only global corporations of substantial size such as SAP, IBM, Microsoft, and Oracle that can fulfill these requirements – particularly in view of the fact that most companies want to have seamlessly integrated systems. But users don’t have blind faith in the industry giants. They and other market watchers regularly scrutinize providers and their products to see if they are up to standard, focusing thereby on product strategies and innovation. Companies need solutions that are easy to use and quickly pay ing, which is currently in development for themselves. That is the idea behind SAP enhancement packat SAP. New paradigms in data management based on technical advancements ages, which enable customers to get select funcsuch as blade servers with multicore tions without having a full upgrade. Customers also processors now make it possible to expect their providers to give them a clear sense of process large quantities of data in mere direction. Innovation is less about how fast a proseconds. Paul Greenberg, CEO of the vider can develop its products than about bringing California consultancy Fifty-Six Group, real utility to the user. That’s why customers and even sees this as the basis for the next analysts alike want to know about the road maps revolution in how companies interact and innovations of the IT heavyweights. And with the scope of innovation including context-sensiwith their customers. tive computing, statistical artificial intelligence, human-machine interfaces for complex working Mobile applications environments, mobile robotics, and augmentedSince knowledge workers are often on reality systems, information technology is setting the move, Forrester considers software one powerful trend after another. tailored to mobile devices as one of the most important trends in IT. Gartner’s own projections indicate that 1.2 billion people will be able to access the Internet using such devices by the end of 2010. Many business applications that were previously only available on stationary IT business trends 2010 Link list: www.sap-spectrum.com devices are now being designed for mo-
Customers also expect their providers to give them a clear sense of direction. Innovation is less about how fast a provider can develop its products than about bringing real utility to the user. That’s why customers and analysts alike want to know about the road maps and innovations of the IT heavyweights.
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Less Hardware. More Future. How cloud computing helps companies save money.
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We want to get users
excited about our software
Following its new mantra of solutions with instant value, SAP is transforming itself to be faster and more customer-oriented. SAP Spectrum talks with Jim Hagemann Snabe, co-CEO at SAP and responsible for product development, to find out how the company aims to achieve this. Interview: Stephan Magura
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the key to unlocking the potential of SOA. For example, we’ll How will a new product strategy and be able to extend the lower level through our enhancement road map benefit SAP’s customers? Jim Hagemann Snabe: Basically, through packages, a unique way to deliver extensions without necesour new product strategy we’re trans- sitating an upgrade. With service-oriented architecture, we forming SAP to be much faster. Our can extend the reach of those applications for on-demand mantra is to create solutions that gener- solutions that are tightly integrated into the back end to ate instant value for people everywhere different user experiences. So with this approach, service– in other words, solutions that are easy oriented architecture is becoming a huge asset for us and to install, easy to use, and have business our customers. relevance for our customers. SAP is investing heavily in cloud computing and on-demand solutions. How do they fit into the new product strategy? Technology is changing rapidly. How They are the centerpiece of the strategy. In the current finandoes SAP’s new product strategy fit in? First of all, we want to use the new tech- cial situation, customers are looking for ways to get faster valnologies as much as possible. At the ue without large implementation projects – and on-demand is same time, we want to create stability very well suited for this. How ever, in contrast to many other vendors, SAP is creating solutions in a way that allow them to interact with the back-end on-premise solution as if it were one solution.
We want to show the value of consistency and orchestration.
Sounds good. Nevertheless, it appears that the market no longer perceives SAP as an innovator ... As I said, we need to become much faster. We have grown into a very large company. Our teams are sometimes too large, our communication and production cycles too long. So our 2010 approach basically combines the benefits of the entrepreneurial company, where you have small teams that are empowered for our customers. While it seems coun- to run very fast, with the benefits of the large company, where terintuitive to do these things simulta- you have consistency, so that you can scale much more rapidly neously, we can achieve this by an archi- than any entrepreneurial company can. tecture we call timeless software. This How will end users influence SAP’s product strategy? is an architectural principle that allows three layers of applications to evolve at So far we’ve been basing our strategy largely on relatively complex sales through companies and enterprises. With our new different speeds. The lower layer refers to the core pro- focus on reaching many people, we want to come from the cesses, which are typically supported by other side as well and get users excited about our software. on-premise solutions. The middle layer The combination is really powerful. On the one hand, it’s a represents extensions to the core pro- push-oriented model where you talk about the infrastructure cesses, where you need more rapid evo- for customers, how they can get the lowest TCO, and the conlution of the solution. Here we have an sistency between pieces. On the other hand, it’s a pull-based on-demand delivery model. The upper strategy, where end users get excited about SAP software, layer focuses on the end user, where the where they start wanting to use more and share the experience notion is on-device – in other words, we with others. That’s where we need to evolve ourselves into. create solutions for any device and any All the pieces of the new strategy will be evolving and changing user experience. The lower level probat different speeds. How can SAP ensure consistency? ably doesn’t evolve too often, maybe every five to six years, the middle layer This is exactly where I think we benefit from being a large every five to six months. As for the upper company that has evolved many solutions organically. We layer, we’re probably talking about five have a very consistent data model in all of our different soluto six weeks’ innovation time for user tions today, which enables us to get very flexible on the edges. We can rapidly evolve new solutions while repurposing those experiences on devices. data models. We don’t have to translate data between different data models all the time. Three layers sounds like potential for What we are actually doing is putting a bunch of teams in disruption … Oh no, not at all. We’ve been working on place that build individual solutions, but each team has to service-oriented architecture for the past follow data consistency and stick to the integration points five years, and our layer model is actually while working within the framework of service-oriented
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In February 2010, Jim Hagemann Snabe (photo) and Bill McDermott were appointed as co-CEOs of SAP. Both already members of the SAP Executive Board, Snabe will remain responsible for product development and McDermott for sales.
architecture and our timeless software. So we’re following a kind of Lego principle – each piece is defined and developed for its specific purpose, but they all have a common surface that allows them to fit together by design.
cycle, bringing in customers during the design phase. That has proven to be very valuable to SAP because we get customer feedback very early and can build according to their expectations. And we get early references. This approach will be continued in 2010. We anticipate that solutions will fit better and that, when we launch a product, we will have customers who already have experience with the product.
What are the top priorities for 2010 Economic conditions are still tough, so companies are sometimes when it comes to executing on the reluctant to invest in upgrades. How can SAP help its customers product strategy? get the most out of their existing SAP investments? In 2010 we have to demonstrate the new SAP in our products. First of all, this On the one hand, we need to evolve their landscapes so they means delivering some world-class get a service-oriented architecture that allows us to connect on-demand solutions. We already have to the newer solutions. We’ve done a lot to make sure that some in the pipeline. The key differen- the upgrade from the SAP R/3 world to the SOA-enabled SAP tiator is going to be how we evolve these Business Suite is a simple upgrade. We already have 18,000 solutions so that they prove the value of productive systems using the latest version. Here, more than the integration between the on-demand half of the installed base was upgraded. In most cases, we found that the effort to upgrade was less solution and the back-end on-premise one. The second focus is the end user. than companies had anticipated. And, of course, we help cusWe want to create beautiful software. tomers to perform their upgrades as efficiently as possible. We want to create applications that can That being said, if customers choose not to upgrade, we alinspire for viral adoption. People will ways help them extend the reach and the value of their solustart sharing them. A lot of that will be tions. However, we don’t have the same opportunities because mobile-oriented. And finally we want they don’t have the same technological base. But of course we to show the value of consistency and will not leave them behind. orchestration. In other words, business Social networks like Facebook and Twitter are hip. They spread process management, master data manthe word and bring people together. What is their relevance for agement, and lifecycle management SAP’s product strategy? tools that will allow us to manage onpremise, on-demand, and on-device as People are beginning to use technology to interact and to collaborate. That kind of collaboration is unstructured. You can’t one landscape. predict how the process works. People connect, they share experiences and information. This is a huge opportunity for According to user group executives, SAP customers want better visibility of SAP’s IT to reach out to more people. And it’s even more important that we integrate this unstructured world, where people colR&D efforts. How can SAP improve its laborate in multiple ways, with a structured world, where colcustomer orientation? In 2009 we experimented with a very laboration leads to a decision or a transaction. SAP is uniquely different approach to the development positioned to combine these two worlds.
We want to create stability for our customers.
Innovative IT Equals Greater Competitiveness While cloud computing and business intelligence are megatrends in the IT branch, software as a service (SaaS) is becoming an increasingly attractive option.
Cost of energy could soon exceed hardware expenses Costs for electricity and cooling could soon leapfrog the purchasing price for hardware as the largest cost factor in operating servers. While hardware costs increased by 8% in the last five years, spending for energy and cooling
more than doubled. Worldwide research to check mushrooming energy costs is focused on new energy-efficient hardware and optimizing distribution within server rooms.
Cloud computing and BI tools rising fast Cloud Computing: Market researcher IDC forecasts that cloud computing will grow by 30% annually on average until 2013. Saas: Software as a Service (SaaS) is growing by 20% per year and accounts for much of the growth in cloud computing. Business Intelligence Tools: While not expanding as fast as cloud computing, BI software’s annual growth rate of 10% still greatly outpaces many other IT sectors. Datacenter Network Revenue: Cloud computing is lifting datacenters’ revenues worldwide.
Sources
Global spending on servers and energy / cooling IDC Presentation, The Impact of Power and Cooling on Data Center Infrastructure, 2006 Cloud computing revenues worldwide IDC, Cloud Services: Global Overview, 2009 Saas – worldwide revenues with enterprise applications Gartner, Market Trends: Software as a Service, Worldwide, 2007-2013 Global revenues with Business Itelligence Tools 2003–2013 IDC, Business Intelligence and Data Warehousing Strategies: Excerpt , 2009 Worldwide Enterprise Datacenter Network Revenue, 2007–2012 IDC, Datacenter Networks Service, 2009
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Extending
the Reach SAP is moving quickly. The unforgiving global economy brokers no excuses, and SAP customers are in a hurry to get IT solutions that help them keep competitive. SAP’s answer to their needs is a wide-ranging and holistic product strategy that addresses all layers of business software – for 2010 and beyond. Authors: Susan Sills, John Martin
With customers demanding value from their
investment in solutions and services, SAP is compelled to think fast, act fast, and develop software that delivers those benefits. To achieve this, the company has developed a multifaceted, innovation-driven strategy. This strategy strengthens current on-premise and on-demand software offerings, accelerates customer-driven innovation, and provides options for companies to make real-time strategic decisions based on business intelligence. Co-innovation with customers and partners alike plays a major role, with SAP aiming for rapid, lowTCO applications that provide instant value for people everywhere.
Customers have more choice in how they deploy SAP solutions. The SAP product strategy for the future rests on four pillars. The first pillar is the focus on the delivery of best practices beyond just standard ERP. Here SAP aims to strengthen its on-premise offerings by delivering SAP Business Suite solutions in more modular pieces that deliver rapid, instant value and by improving integration to make the Suite less expensive to run. SAP is continuously modernizing the suite with new industry-specific and line of business functionality to ensure relevance for customers. A unique element here is SAP’s delivery model of enhancement packages. With them, cus-
tomers can have the latest functionality without having to upgrade. On top of that, 2010 will see SAP accelerating its on-demand delivery capabilities, including SAP CRM on-demand (probably SAP’s most important delivery in 2010, featuring collaborative elements) as well as on-demand solutions for sustainability performance management, expense management, talent management, and business intelligence from SAP BusinessObjects. The second pillar is the focus on extending the reach of the SAP Business Suite and the SAP BusinessObjects portfolio to deliver more solutions to the on-demand market. This allows customers more choice in how they deploy SAP solutions, whether it be on-premise or on-demand. The ondemand suite (cloud-based) SAP Business ByDesign can help companies with limited resources compete by providing them with best practice processes – without any need on their part to install or implement software on-site. SAP will offer the SAP Business ByDesign solution as the standard choice for SMEs looking for an integrated on-demand suite. An application-based, platform-as-a-service model includes a partner development infrastructure to ensure partners can create content and build add-ons or micro-vertical solutions based on the SAP Business ByDesign core. For SAP, the on-demand model is key to enhanced innovation. Jim Hagemann Snabe, co-CEO at SAP and responsible for product development, sees the benefit of on-demand delivery in much faster iteration of solutions. No longer dependent upon the upgrades of a customer, the company can innovate much more rapidly. The third pillar of SAP’s product strategy for 2010 and beyond is what SAP calls on-device – in other words, developing software that can be used by customers on-the-go and on any device. Extending the reach of the solutions also applies to today’s mobile workforce, which uses new tools to get information from numerous sources. Software solutions must adapt to multiple devices and services, ensuring a consumer experience for users. With its recent innovation SAP BusinessObjects Explorer for iPhone, SAP is riding the crest of this trend. In addition, the company’s on-demand solution SAP Business ByDesign is coming to the iPhone, BlackBerry, and other devices, giving users the power to manage tasks as if they were at the office. In 2010, SAP will be reaching out to many people, providing them with solutions that are, in the words of Hagemann Snabe, essentially beautiful experiences. While SAP will provide some of these experiences, its strategy allows for customers, →
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partners, and even end users to extend the reach of SAP applications by building their own user experiences on their own devices. The notion here is that software has to be so easy users can implement it themselves.
SAP’s strategy is to innovate and evolve its product portfolio to offer its customers the solutions they need for their competitive edge.
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world, go to an on-premise world, and end up again in an on-demand world. What is important here is that these sets of solutions are consistent for business process management. Hagemann Snabe emphasizes that SAP is also aiming to make sure that these solutions have the lowest TCO in the industry. SAP orchestration solutions enable customers to quickly adapt SAP best-practice processes to their own processes. The solutions serve as the basis for network process orchestration across SAP software and third-party applications.
Setting the agenda
Current SAP product developments reflect IT trends such as business intelligence, software for mobile applications, and cloud computing. But the company also has a sharp focus on next-generation IT, aiming to accelerate data analysis significantly through in-memory computing. A further field of innovation is so-called augmented reality – interacting with machines through mobile interfaces such as smart phones, headmounted displays, and intelligent clothing that can display and record information. The user’s field of vision is “augmented” by camera images or computer data. Experts are predicting a substantial market potential for this technology in the near future. SAP is currently working on a research project to develop computer-integrated work apparel. Whether in-memory computing, augmented reality, mobile applicaThe fourth pillar of SAP’s product strategy is pro- tions, or business intelligence solutions: All these developments uncess orchestration. Here SAP connects master data derscore SAP’s strategy to innovate and continuously evolve its product across all applications, whether on-premise or on- portfolio to offer its customers the solutions they need for their comdemand, by focusing on the architectural blueprint. petitive edge – while focusing on quality and offering high flexibility at Business processes can start in an on-demand low costs.
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Stamped, Sealed, and Delivered Now that Poste Italiane deploys SAP Customer Relationship Management, business is booming. The traditional Italian postal service is adding innovative, tailor-made offerings to its portfolio and capturing profitable market segments. Author: Uta Spinger
5,000 ATMs
13 daily air routes
32,000,000 customers
44,000 vehicles
14,000 post offices
Do you still send greeting or birthday cards to your nearest
AT A Glance The Situation With traditional postal services on the decline, the Italian postal service is adding innovative products and services to its portfolio. It is hoping to win new midmarket and retail customer business in the financial sector and is targeting business customers with tailor-made services. But to do this efficiently, Poste Italiane must know the requirements of its customers. The IT solution The implementation of the SAP Customer Relationship Manage-
ment (SAP CRM) application has helped the company sharpen its focus on the customer. Now the marketing department can create plans for new offerings, including, for example, product combinations that encompass mail, mobile, and financial services. the Result SAP CRM manages the data of the company’s 31 million customers,
including elements such as opportunities, contacts, agreements, sales processes, and complaints. A company-wide service catalog and standard rules make data comparable, and consolidated data can be accessed daily. Customer segmentation and campaign generation functions support a tailored customer approach.
and dearest? Or do you prefer just to send them a quick e-mail? While many of us still put pen to paper to honor a special occasion, there has been a striking change in our habits when it comes to everyday communication. E-mails, text messages, and the phone are rapidly taking the place of traditional mail. Postal services all over the world are affected by this trend and are looking for ways to respond to the changed market situation and new customer requirements. Their strategy? To offer new services to compensate for the decline in the traditional mail business. The Poste Italiane Group, the Italian postal service, is pursuing this strategy very successfully. Says Stefano Sappino, head of customer relationship management at Poste Italiane, “Our aim is respond faster to market developments and customer expectations.” To do this, the group implemented a
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radical restructuring program, gave its local organizations greater autonomy, and integrated its operational business with its marketing activities. While it plans to make its postal service faster and more efficient, its primary goal is to develop innovative products and services.
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tomer data that showed how customer data from all areas of the business was integrated in SAP CRM and could easily be accessed. Today, SAP CRM manages the data of the company’s 32 million customers, including opportunities, contacts, agreements, sales processes, and complaints. Customer segmentation, campaign generation, and action interpretation functions support a tailored customer approach and custom product development. But that’s not all, says Sappino. “We drastically reduced the time needed to access information.” While consolidated data had been previously available only once a month, it can now be accessed daily. Sales staff log on to the system to see what tasks are waiting for them and are better informed. It is much more difficult to make a mistake now, says Sappino.
Sappino and his colleagues are fully aware that to remain competitive, the postal service must focus on its customers and their expectations. But what are these expectations? Previously, each unit – from the bank to the logistics department – operated separately, says Sappino. “We couldn’t see the complete customer picture, and there wasn’t any company-wide customer segmentation or company service catalog. But the implementation of SAP Customer Relationship Management Change as an opportunity has helped us sharpen our focus on the customer and enabled cross-selling.” The marketing department now comes up Despite the success of the new system, the Italian postal serwith ideas for new services that at one time would have been vice has further ambitions: In addition to driving internal unthinkable, including product combinations that encom- process optimization, it wants to extend its Internet business pass mail, mobile, and financial services. portfolio and target offerings to business customers. The The Italian provider is also targeting tailored services at company also wants to integrate virtual channels to enable specific customer groups. One of these services is Posta Time, customers to access its CRM system online. designed for large customers with special requirements. Its According to Sappino, his organization can now respond main feature is that the mail deliverer uses a handheld com- faster to legislation. For example, with the introduction of a puter to record precise delivery times. Poste Italiane is also new regulation in April 2010, Poste Italiane can take advanresponding to customer requirements in the financial sector tage of new business opportunities and start to build up finanand is hoping to win new SME and retail customer business cial advice services. The SAP Customer Relationship Managewith its personalizable BancoPosta service. And the postal ment application is providing the group with the tools it needs service has gained a strong foothold in the mobile market by to counter its electronic competition. developing innovative offerings.
Acting in unison The Italian postal service has gradually rolled out SAP CRM to all its national branches, from major post offices to oneperson operations. With 20,000 users, it is one of the largest SAP CRM implementations in the world and proves that huge projects of this kind can be successful. Poste Italiane has used SAP ERP for its core processes for many years and also deploys SAP NetWeaver Business Warehouse. The CRM project team defined processes that enable all Poste Italiane units to act in unison and collaborate across departmental boundaries. “Significant processes that were once seen as entirely separate are now converging almost naturally with the CRM-based ones,” notes Sappino. The project includes definitions of sales and back-office processes as well as the introduction of a company-wide service catalog and standard rules to make data comparable. As a result, the boundaries between departments are disappearing, and everyone is benefiting from increased automation.
Winning hearts and minds But Poste Italiane first had to persuade its staff to buy into the project. To showcase the benefits of the new system, Sappino’s colleagues built a demo application managing real cus-
Poste Italiane Group With headquarters in Rome, the Poste Italiane Group offers a global postal service and integrated communications as well as logistics and financial products and services throughout Italy. It boasts a network of 14,000 post offices, over 200 sorting centers for mail and packages, over 44,000 mail deliverers, 5,000 ATMs, 38,000 point-of-sale terminals, 13 daily air routes, and over 44,000 vehicles.
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Full Steam Ahead
To the disappointment of some critics, service-oriented architectures have proven their worth in recent years. A focus on business processes has helped the underlying concept to bear fruit – both quickly and with measurable success. Author: Marcus Winkler
From IT hype to real business utility: A sum-
mary of service-oriented architecture (SOA) could be based on this core statement. Having started as one of the biggest trends in IT, this paradigm was long discussed from a primarily technical perspective. The difficult economic circumstances of more recent times have since pushed the subject of SOA to the desks of the right people: operational departments and business managers. The fields of SOA and business process management are growing together to achieve their common goal of flexible business process orchestration. During recessions, it’s hard to find affirmative managers. Carsten Linz, however, continues to exude enthusiasm for innovation-related topics. As head of the Center for SOA-/BPM-based Practices, his job is to grow SAP’s solution business based on SOA globally. “Innovation is a combination of
invention and market success. New solutions often need first to find a problem to solve – their use case. That’s why people have made SOA a topic of heated discussion; some have even written it off too early. However, more than 1,800 SAP customers across nearly every industry have since proven that SOA offers attainable added value,” Linz says. This is also why those who criticized the technical hype surrounding SOA have lowered their voices. “SOA is now a standard for service orientation for companies. It serves as an interface between business areas and IT,” explains Linz. “For example, if our customers evolve from offering products to providing solutions, they have to comply with comprehensive service-level agreements that they have agreed upon with their own clients. This requires a reliable orchestration of business processes across functions, departments, and companies.”
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He goes on to note that when SOA is involved today, business area managers are more often the driving force behind projects than in other IT initiatives. “When implementing SOA and business process management, companies should first carry out manageable projects meant to improve a single business process. If they keep a general eye on the topic of governance, their IT will progress in constant increments along with the business world’s changing reality,” says Linz. Thanks to its specific focus on business problems, SOA can already help companies achieve sustainable benefits on the order of €25,000-50,000. “These tough economic times have given a boost to the concept of SOA,” Linz reports.
More buses on the streets Mario González Fernández, IT director of Empresa Municipal de Transportes de Madrid (EMT Madrid), has learned to appreciate the advantages of SOA-based solutions. After having its first experience with service-oriented architectures – in areas such as ticket sales and timetable generation – the Spanish capital’s municipal transport authority now also relies on SOA in maintaining its bus fleet. “We were actually able to speed up our bus maintenance and automate spare-parts provision. Since some repairs are now 80% faster, we can deploy 10% more buses every day. All in all, our workshop
SOA is now a standard for service orientation for companies. It serves as an interface between business areas and IT. — Carsten Linz productivity has increased by a third,” González Fernández states. As a result, the citizens of Madrid now enjoy a higher quality of service in their local public transport. “Faster bus maintenance is an important part of reliably sticking to our highfrequency timetables,” González Fernández adds. To achieve all this, EMT Madrid interfaced the special applications in its buses with the SAP software used in its workshops and spare-parts warehouses. Wireless LAN provides the mechanics with advance word of the damage they need to repair and the checks they need to perform. When a bus arrives at a shop, the maintenance team is ready with
the necessary spare parts. “The system is flexible and easy to use, which is another point in favor of SOA,” says González Fernández. “Our warehouse employees and mechanics can use PDAs and data terminals with special user interfaces to access our maintenance solution. Comprehensive integration has replaced tracking slips.”
Clever mix of IT and process competence Linz sees a combination of SAP Best Practices and customer-specific processes (“own practices”) as the catalyst of EMT Madrid’s success with SOA. “Based on our process experience, the SAP standard covers up to 70% of our customers’ requirements. In situations where companies once started custom developments, they can now shape their own unique businesses processes with the help of SOA in order to differentiate themselves. This enables them to cover up to 100% of their business process. SAP Consulting often backs them with this demanding task. Since we support companies from numerous industries, we have in-depth, industryspecific process competence to offer. We see ourselves as a partner and advisor,” Linz explains. As a further advantage over conventional development, SOA-enabled applications communicate using open standards and hence can be extended by further building blocks. SOA thus meshes numerous providers within a heterogeneous and hybrid IT landscape. This gives companies the increased process flexibility and superior integration capabilities they need to rise above their competitors.
Motor for agility At Coca-Cola Erfrischungsgetränke AG in Berlin, Oliver Seidel, head of the Client/Server & Web Services team, appreciates that flexibility: “We took a proactive approach to SOA. The flexible deployment options and easily adaptable specialized solutions enabled by SOA convinced us very early.” Seidel concedes, however, that the idea of SOA is sometimes not immediately clear, not until you take a second look. You have to take the time to explain the strategy to everyone involved, especially the expected benefits for the business. “To support our advertising campaigns, we set up an SOA solution based on our users’ requirements and established it on top of our system landscape. In the end, the users don’t care which source the data they need is coming from,” Seidel says. Behind the scenes, users’ queries are handled in SAP NetWeaver Business Warehouse, the company’s enterprise resource planning solution, and various legacy systems. The more than 2,800 enterprise →
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services in the SAP Business Suite form the build- ticularly important to invest in employees’ know ing blocks for scenarios such as this. Enterprise ledge and understanding of both business and IT services – Web services enhanced with business topics. Consequently, you have to spend time maklogic from SAP – can be used to map the most com- ing sure that people are ready to learn new things, mon working steps. “You need a certain degree of challenge old perspectives, and change the status discipline, because you have to assign an enterprise quo. “We knew that we had to work closely with service to each process step,” Seidel says. “If your SAP to build up our SOA know-how quickly. We’re now already in a position to handle future projects without external support,” says Seidel.
To support our advertising campaigns, we set up an SOA solution based on our users’ requirements and established it on top of our system landscape. — Oliver Seidel services don’t bundle a sufficient number of operations, it’s easy to lose track. If the services are too big, it is harder to reuse them elsewhere. But with SAP’s help, we were able to strike that balance.” Coca Cola’s IT is now more flexible, and software updates take half as long as before, he reports. He emphasizes that setting up an SOA also requires diligent change management procedures. It is par-
Paving the way for the future Satisfied customers including EMT Madrid and Coca-Cola serve as proof that SAP has chosen the right path with SOA. “In 2009, SAP Consulting helped see through several hundred new SOA/BPP projects delivering on process orchestration. This year, we expect a further increase,” asserts Linz, as SOA’s function is a technical prerequisite for virtualized business process platforms. SOA is also at the core of concepts such as cloud computing and software as a service (SaaS). It is clear that when IT enables companies’ lines of business for a better and more flexible handling of business processes, it becomes even more key to success. This is the precise goal of service-oriented architectures: laying the groundwork for sustainable innovation. “SOA is less a revolution than an evolution,” Linz says in summary.
EMT Madrid
Coca-Cola Erfrischungsgetränke AG
Empresa Municipal de Transportes de Madrid, S.A. is responsible for public bus transportation in Madrid. EMT is one of the largest municipal transportation systems in Europe.
CCEAG is Germany’s largest beverage company. It supplies around 95,000 trade customers and 550,000 restaurants through its extensive sales and distribution network.
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Business networking is key for SMEs It’s a tall order. To remain competitive, midmarket companies must decide and act fast. They need easy-to-consume software, and they need to network. SAP Spectrum catches up with Peter Lorenz, executive vice president of SME, SAP, to find out how SAP’s midmarket product strategy helps these companies hone their competitive edge.
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Capital expenditures and time to value for investments are always critical, especially in the current economy. On-demand or hosted models are one way to deal with these challenges and seem to be gaining considerable traction in small businesses and midsize companies. How is the growing demand for these pay-as-you-use solutions reflected in SAP’s SME product strategy? Fast implementations, very easy-to-consume software, and a fast generation of value for the customer have always been key priorities of SAP’s midmarket product strategy. In fact, they’ve driven our road map in the last few years. The big change we see is that new deployment models such as on-demand and hosted deployment are not only technically feasible but also increasingly trusted and financially attractive. So we’ve decided to accelerate different deployment options, including on-demand, hosted, and on-premise, across the entire SME solution portfolio. In addition to SAP Business ByDesign, our complete, integrated suite for midsize companies exclusively delivered on-demand, the SAP Business All-in-One fast-start offering is now also provided as subscription-based hosting through qualified partners. This additional option is available in about 20 countries, and we are continuing the global rollout. As for SAP Business One, partners are offering a hosted service through the Citrix application delivery model. Some partners have also developed on-demand add-ons, which are highly integrated with this on-premise solution for small businesses – and thus leading the way to hybrid deployment models.
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ness network. SAP Business One and SAP Business All-in-One deliver out-of-the box integration scenarios, with the latter built on the SAP Business Suite technology and supporting the same number of different industries, countries, and languages. While many subsidiaries are already working with SAP Business All-in-One, we have now developed some out-of-the box scenarios to further facilitate integration. In the course of 2010, our customers
Fast implementations, very easy-to-consume software, and a fast generation of value for the customer have always been key priorities of SAP’s midmarket product strategy. will see some more. For smaller subsidiaries with streamlined business processes, SAP Business One, currently available in more than 40 countries, is the right choice. We will also offer SAP Business ByDesign to subsidiaries that do not want to support their own IT organization. The advantage here is that there are quite a number of integration scenarios from SAP Business One and SAP Business All-in-One that we can follow with SAP Business ByDesign. We will be pursuing this topic in 2010.
Are business networks important for the companies SAP is working with an ecosystem of about 5,400 in the midmarket? companies worldwide to fulfill the heterogeneous Definitely. They are essential for small businesses demands of small businesses and midsize customers. and midsize companies, which are particularly What is the role of partners in this ecosystem? dependent on tight integration into business networks of suppliers, partners, or customers. SME Partners are vitally important to the SME market companies run their own networks in sophisti- because customers in this space want to buy locally cated, global processes; they can be partners or from a partner who understands their challenges are subsidiaries of large enterprises. All these and speaks their language. In the long run, we companies need strong process integration, low expect the SME space to be a 90% channel busiTCO, compliance, and transparency. The subsid- ness. We see particularly strong revenue opportuiary scenario is known from our customers in the nities in co-innovation and in the development of enterprise application space, which manage large industry-specific or general add-on solutions. Usportions of their company with the SAP Business ing a software development kit, our SAP Business Suite. Smaller and autonomous subsidiaries need One partners have already developed more than to adapt to local conditions independent of head- 500 add-ons for customers to choose from. SAP Business All-in-One partners enjoy a powerful quarters’ standardized processes. framework to build and deploy vertical, qualified SAP Business All-in-One solutions by leveraging What help can these subsidiaries expect from content, tools, and methods from SAP and its ecoyour solution portfolio? We’re offering them the same portfolio we offer in- system. Currently more than 700 of these qualified dependent SMEs that need to integrate into a busi- solutions are available. We will continue to pro-
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vide more tools, methods, and content through- will become generally available in 2012. Minor reout 2010 to further facilitate development based leases in the meantime will ensure fast customer on our offering for existing partners and those benefit of new functionality and co-innovation. interested in joining our ecosystem. Also for SAP And SAP Business All-in-One customers? Business ByDesign, we see great opportunities for What is awaiting them? our partners to demonstrate their specific industry expertise and expand the reach of our solution. For SAP Business All-in-One, we will be making In the second half of 2010, we will provide them 76 enhanced new packages available for certain with a Microsoft Visual Studio-based software industries or cross-industry use. This portfolio development kit and integrated development en- will include an extended set of user experience and vironment – and expect to see the first partner- data migration capabilities. We also leverage the SAP NetWeaver Business Client together with SAP developed add-ons soon. Business All-in-One, which will be generally available around CeBIT to deliver a radically improved is executive vice Should these partners be jumping on the user experience that also covers integrated Web 2.0 president of Small and on-demand boat? Midsize Enterprises For sure! In general, we see a clear need for our capabilities, embedded real-time analytics, dash(SME). As head of SME, partners to adapt their business strategy and ac- boards, and seamless mobile integration. Lorenz is responsible commodate customer demands for on-demand for all aspects of SAP’s SME solutions - SAP What can SAP Business ByDesign customers and hosted deployment options. As I said, SAP Business ByDesign, SAP expect to see? Business ByDesign as well as the SAP Business Business One, and SAP All-in-One fast-start program offer impressive op- The next version of SAP Business ByDesign will be Business All-in-One, portunities for partners willing to build their next- available by mid-2010. It will be multitenancy en- including development, abled, which means that SAP software can support solution managegeneration business model. ment, delivery, and multiple customers, or tenants, on one single infradeployment, as well as structure. Customers will be able to enjoy response service and support. What solution highlights can your customers look times for data queries in a subsecond range, thanks forward to over the next nine months? Insight and transparency are as important for mid- to the fact that all data will reside in main memory market companies as they are for large enterprises. at any point in time, and all analytical applications Making well-founded decisions based on the right retrieve data from this main memory. Increased flexKPIs and on an analysis across all operations is es- ibility will allow customers and partners to easily sential for all of our customers. As we could already adapt the solution according to individual needs. see in 2009, it’s particularly important for SMEs to quickly analyze customer demands and market requirements and react fast. That gives them an advantage against competitors. That’s why we have focused on building a set of capabilities based on the integration of SAP BusinessObjects solutions, including Edge, Crystal Reports, and Xcelsius dashboards. A strong focus of both the 2010 SME product port- SAP BusinessOne folio and SAP’s mobile solutions is on staying con- This application provides functions covering financials, sales, customnected to the business for fast reaction and short ers, inventory, and operations. For companies up to 100 employees. cycle times. Another focus is on superior user ex- SAP Business ByDesign perience, so we will present all SME solutions with A fully integrated solution that gives the benefits of large-scale businew and improved user interfaces. ness applications without the necessity of a large IT infrastructure. For companies with 100 to 500 employees. Specifically, what can SAP Business One SAP Business All-in-One customers expect? This solution fits the needs of midsize companies looking for compreWe are currently in ramp-up of version 8.8 of SAP hensive, integrated industry solutions to power their businesses end-toBusiness One, which will be generally available end. For companies up to 2,500 employees. in Q3 2010. With this version, we are providing a new upgrade wizard that allows a 30% decrease in upgrade time compared to the previous versions. A remote support platform will support customer installations and system monitoring as well as health checks and healing tasks to reduce support costs SAP Business ByDesign goes mobile for customers and partners. The next major release Link list: www.sap-spectrum.com
Peter Lorenz
SAP Solutions for the midmarket
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David and Goliath 2010 Small businesses and midsize companies cannot afford to be mediocre. Examples from the U.S., Germany, and the Netherlands illustrate how information technology can help these companies flex their performance muscles. Author: Stephan Magura
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The tale of the seemingly doomed
So David prevailed over the Philistine with a sling and with a stone, and smote the Philistine, and slew him … (1 Samuel 17)
youth who triumphed over the powerful giant is cited time and again when small takes on big. The power struggle between Porsche and Volkswagen is one example, even if David did fail in this case. Meanwhile, the two car companies demonstrated how fine the line can sometimes be between competition and cooperation. Other comparatively small companies are facing the economic crisis with brave defiance – but for how much longer? Many suppliers are hemorrhaging orders, and with banks continuing to hoard their loans, even long-established organizations are in danger of closing their doors. On December 2, 2009, a headline from the news agency Reuters read: “In 2010, Bankruptcy Wave to Affect Mainly Midmarket.” Those who have used their expertise to become an indispensable partner of a larger firm will find themselves in a better position. Smaller companies can turn their supposed disadvantage in size to an advantage by occupying lucrative niches more quickly than major corporations. Flexibility and agility are thus the sling and stone of the 21st century. Now, let’s send David and Goliath back into the arena to tell a different story – one that is often played out in today’s world.
Variation 1: David nips at Goliath’s knees With names like Skullcrusher, Full Metal Jacket, and Double Agent, Skullcandy products are targeted to a young audience of snowboarders, skateboarders, and action sports enthusiasts. Founded in 2003 by Rick Alden, a passionate snowboarder and entrepreneur, the company offers products that integrate audio and mobile technologies into snowboard gear, including headphones, ear buds, and helmets, and are known for their portability, durability, and style. One of the hottest consumer lifestyle brands available – by late 2007, the company was rivaling Sony in the U.S. in the number of headphones sold monthly – Skullcandy went live on SAP Business ByDesign in 2008 to manage its supply chain and provide scalability for expected growth ahead. The small company of 57 employees wanted to be able to work on a browser since it employs a number of remote users. According to IT implementation project manager Beth Siron, the company’s “vision is to design headphones, not to have an IT department.” She adds: “This is where SAP Business ByDesign came in. We didn’t want to have to hire staff to support a big internal ERP system, but the SAP solution gives us the tools to get to where we want to be.” From its pencil-and-paper beginnings, Skullcandy is now outfitted to manage the demand for its brand through its process-driven infrastructure. Channel expansion, international growth, and a retail boom are expected ahead. But some things remain the same: At their offices in the vicinity of some of the finest ski resorts in the U.S., Alden, Siron, and other Skullcandy staffers still skateboard around the office and head out to the slopes → together when the powder falls.
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Skullcandy
One of the hottest consumer lifestyle brands around, the company offers headphones, earbuds, and other products that integrate audio and mobile technology.
Rösler
The Rösler Group is the world's leading supplier of surface finishing equipment and consumables.
Kompak
The Dutch company offers custom packaging concepts for a wide range of consumer brands and products. More information on these companies Link list: www.sap-spectrum.com
Potent software ready when needed Consol, a midsize South African manufacturer of bottles and glass containers, has found in SAP BusinessObjects Explorer the ideal tool for ad hoc analysis. IT manager Johan du Plessis is particularly pleased with the software’s processing speed and ease of use, which he feels makes the new solution comparable to an Internet search engine. Since SAP BusinessObjects Explorer loads the data to be analyzed into the memory of the server in use, it can search through even massive amounts of information in just seconds. In a test run on select data, du Plessis rapidly discovered that Consol was selling a certain size of bottle at different prices. With this information, the responsible business area can now calculate an optimal standard price. Constantly striving to optimize his own area, du Plessis plans to use SAP BusinessObjects Explorer to accelerate and simplify complex queries in SAP NetWeaver Business Warehouse. www.consol.co.za
Variation 2: David gets a better sling Stephan Rösler would never think of letting the recession get him down. On the contrary, he’s using the downturn as a chance to prepare his company for better times ahead. Rösler says that now is the right time to examine and optimize processes and map these improvements in his IT landscape. The German company Rösler Oberflächentechnik is reinventing itself. Using SAP Business All-in-One, the company has put the finishing touches on its plans. Rösler is implementing the solution as part of a restructuring, preparing to go back on the offensive in the specialized mechanical-engineering and batchmanufacturing sectors as soon as the economy recovers. Rösler is expecting specific improvements from the software: “We’re going to use it to network our locations, divisions, and processes, which will help us work more efficiently. We’re taking elements that used to run in separate systems – causing ineffective coordination and duplicate work – and mapping them in a homogeneous solution.” He sees the “integrative mapping and management of our vast manufacturing depth” as a primary objective – one that will facilitate optimized production and company growth.
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Variation 3: David and Goliath learn to get along Describing the Dutch packaging specialist Kompak “custom work” – an approach that is based primarily as a simple subcontractor of consumer products on customer trust and company flexibility. Kompak corporations does not do it justice. The company uses SAP Business One and has just augmented the acts much more like an integral part of the empires solution with additional industry-specific producof market-leading consumer brands. Kompak is tion functions delivered by SAP partner Produmex. flexible enough to accommodate virtually any spec- “With an annual growth rate of 20%, we need softifications. Shampoo, cacao powder, emulsifiers: ware that helps us keep this pace without losing The company packages the products, packs them our focus on the customer,” says manager Steven into boxes, and organizes their delivery to retail. If Nijweide. (By the way, giving an SAP solution a try needed, it can also develop entire packaging con- was a tip from the company’s bank. Since more or cepts. Kompak calls this “maatwerk” – Dutch for less all of Kompak’s potential customers use SAP software, the financial consultants there thought it would make plenty of sense for the company to do the same.) Nijweide says it was the right decision. He reports that although Kompak has expanded its core business, it is basically getting by with the same administrative resources as before. Since the company’s platforms are standardized, it can easily share product information with its customers. Its warehouse stock is under control, and it can foresee its long-term order situation. SAP Business One gives Kompak an up-to-date overview of its business. Says Nijweide: “We’re constantly on top of things, and customers can see what’s happening with their goods.” Skullcandy, Rösler, Kompak: All three are convinced that SAP has given them the tools they need to leave their competitors swinging at air. Looks like David still packs plenty of punch.
With an annual growth rate of 20%, we need software that helps us keep this pace without losing our focus on the customer. — Steven Nijweide
Software for the midmarket, Part 3: SAP Business ByDesign Link list: www.sap-spectrum.com
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Come Rain or Shine
Whether life’s a beach or a puddle, it’s all the same to StyleWest. The Oxnard, California, company supplies swimwear and coordinated rainwear to high-fashion retailers across the United States. But while the company was making a big splash in chic circles, behind the scenes it was mired in an IT swamp.
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“I wanted software that had one database capable of supporting multiple divisions. It had to let us run reports, view each division individually, review its merits, make decisions accordingly – and then look at the big picture of the company as a whole.” – Robert Angstadt
SAP SPECTRUM
rowth is gratifying, as Kerri and Dave Sengstaken can atG test – especially so when the beginnings were so humble. In 1998, the couple decided they wanted to have more time to devote to their family and to work on their own terms. They quit their jobs and founded a marketing and public relations agency, which they initially operated out of the spare room in their beach house in California. The couple soon expanded their brand to include high-end, fashionable beach footwear and colorful coordinated footwear: StyleWest was born. Since then, the company has been twice listed by Entrepreneur Magazine as one of the fastest growing companies in the U.S. But the Sengstakens were to discover that growth also has its price. The company’s IT system could no longer keep pace with the increasing number of sales. “Our customer service department was the heaviest user of the platform, which was QuickBooks,” recalls Dave Sengstaken, president of StyleWest. “And we had really pushed it to the max. We had as many users as it would accommodate, and the files were so big that the system was really getting bogged down. So entering an order, for example, was an excruciatingly slow operation. The system was also prone to crashing, particularly as our files got larger and larger.” Faced with inefficiencies, multiple instances of software, and unconsolidated data, StyleWest management decided it was time to take action. They went into the market to look for a more capable replacement for the software they had outgrown. “We had two goals,” says Robert Angstadt, director of operations at StyleWest. “We needed a system that was professional and based on generally accepted accounting principles. Our previous system was well-known but not preferred by banks and accountants for the size the company had become.” The other goal Angstadt had in mind was to consolidate the entire company on one platform. “I wanted software that had one database capable of supporting multiple divisions. It had to let us run reports, view each division individually, review its merits, make decisions accordingly – and then look at the big picture of the company as a whole.” StyleWest reviewed several packages, including the next step up in Intuit’s QuickBooks line, as well as Sage, MAS 90, and SAP Business One. The selection was narrowed down to SAP and a local company called OMS, Office Master System. While OMS had expertise in the footwear industry and a lower price tag, StyleWest management nevertheless decided in favor of SAP Business One and selected SAP gold partner Softengine Inc. to implement it for them. “From our research, we felt that SAP Business One would be the most easily expandable and flexible solution to work with,” says Sengstaken.
Meeting needs out of the box “We were able to demonstrate to the people at StyleWest that the SAP Business One application takes care of a very high percentage of their needs right out of the box,” says Barry Lederman, vice president of business development at Softengine. “Then, when they finally made their decision, they wanted it implemented right away.” Softengine delivered. The company
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made the quote on February 26, 2008; completed and tested the application on March 22; delivered user training and other requirements; and went live the first week in April. Essentially, it was a one-month timeline to implementation.
The SAP Business One application really unified StyleWest. — Dave Sengstaken
“Softengine was always there to hold our hand and listen to our concerns, both from a budgetary and a customization standpoint,” remembers Angstadt. StyleWest was keenly aware that customization was going to cost not only money but, even more important from the company’s viewpoint, time. So company management appreciated the fact that SAP Business One supports best practices within the industry with minimal customization. Coordinating with Softengine, management staff created a clear implementation outline that established minimum customization while still tailoring those top areas where rapid payoff might result. Accord-
At a Glance The Situation Continuously expanding its business, StyleWest management found that its legacy IT system could not keep pace with the increasing number of sales. The company needed a solution to streamline its operations and support future growth. The IT Solution StyleWest opted for SAP Business
One to benefit from industry best practices and to establish better control and compliance across the enterprise. The Result StyleWest now has a single version of truth in place that provides consistency, clarity, and up-to-the-minute information enabling management to make better-informed decisions – and to continue to push for growth.
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Dave and Kerri Sengstaken surrounded by their stylish products.
ingly, customization was confined to the look and feel of the sales and accounting functions.
Control and compliance SAP Business One also established a level of accountability within the StyleWest organization that hadn’t been there before. With QuickBooks, for example, it had been possible to place an order even if the inventory wasn’t there. The SAP Business One application does not allow that. If the inventory isn’t there, it will not permit a shipment or an invoice. Better inventory control also leads to better customer service because now it is clear which products are going to ship and when. Customers know exactly when they will be receiving stock. And staff can respond more intelligently to customer queries, simply because the information is now available to them. There are similar new constraints on the accounting side. “We now have a software package that is in line with our internal GAAP principles,” says Sengstaken. “This is good for us – and for the banks we talk to about company growth.” The SAP Business One application also enables a new consolidation of the files from sales, marketing, distribution, and accounting. All that information is now in one database that each department can access as required; in transdepartmental discussions, everyone is literally on the same page. Sengstaken is pleased with the new environment at StyleWest and the prospects it offers. “If you look at where we started, the departments were a patchwork of different functions and different data,” he says. “Everything was pieced together with spreadsheets and databases. The SAP Business One application really unified StyleWest. Now we have muchimproved, up-to-the-minute information at hand to help us make better business decisions down the road.” And as far as growth is concerned, the sky is now the limit at StyleWest. “There’s an unbelievable number of components that you can add on to SAP Business One to help your business,” says Sengstaken. “So as we continue to expand, the application will keep up with us and enable us to manage that growth without any surprises.”
Rainwear never looked this good.
StyleWest Founded in 2000, StyleWest is a unique company that brings marketing, public relations, product development, sales, and distribution all under one roof. The brands represented by StyleWest are sold in better boutiques, specialty stores, and department stores throughout the U.S. They are featured in top fashion media outlets and on the world’s most recognized celebrities.
www.stylewest.net
Software for the midmarket, Part 1: SAP Business One Link list: www.sap-spectrum.com
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Ho Chi Minh City-based International Consumer Products Corporation has ridden the wave of economic growth in Vietnam. With diverse and creative lines of products and a new SAP ERP system in place, the company continues to meet the evolving demands of better-informed domestic consumers. Author: Perry Manross
You splash it on your spinach. Not dressing, but
a rinse that cleanses fruits and vegetables. Vegy, as the product is called, rids produce of unwanted chemicals and other potentially harmful substances. Released in 2002, it was the first product Vietnam-based International Consumer Products (ICP) brought to market. One year later, ICP introduced its X-Men shampoo line for men. Vegy and X-Men were the first of now several product lines from ICP to reflect the increasingly cultivated tastes of Vietnamese consumers. Between 2004 and 2008, Vietnam’s economy averaged more than 8% in annual GDP growth. Although poverty and unemployment are on the rise since the onset of the global financial crisis, →
At a Glance The Situation Enjoying relative economic prosperity in Vietnam and harvesting the benefits of a newly-extended product range, consumer goods manufacturer ICP regularly achieved annual growth rates of 30%. But as volume increased, its legacy enterprise applications reached their limits. Getting the necessary information from ICP's three standalone solutions – for accounting, sales, and manufacturing – had become difficult and time consuming. ThE IT SOLUTION The SAP ERP application provided the foundation that the company needs to
grow. With the help of the system reseller OPTEC and the Vietnamese management consultancy CSC, ICP switched all of its business operations to SAP solutions in just six months. The RESULT In addition to integrating ICP’s systems, streamlining the value chain was one of the
major objectives. All processes are now connected, and ICP can efficiently manage its products’ design, manufacturing, marketing, and shipment to customers. With a few clicks, management calls up profits and losses according to brands, business areas, or sales channels. Inventory data and prices are up-to-date and visible. ICP’s product planners can now see which raw materials are required and in which quantities.
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Vietnam’s surging economy helped lift 34 million Vietnamese (40% of the total population) out of poverty between 1993 and 2006. Higher standards of living and better education have followed, which ICP vice president of Finance and Control Le Quang Hanh feels has played an important role in the success of ICP’s products. “The success of Vegy is an indication that consumers in Vietnam have become more conscious of the importance of having clean, healthy food,” Hanh says, “while the strong performance of our X-Men line demonstrates consumers’ heightened awareness in the area of personal care.” Before X-Men, no personal care products existed in the country that were specifically developed for and marketed to the Vietnamese population. “As a domestic company, we understand not only what products consumers want but also how to present these products in a way that is appealing to them,” Hanh says. “We always look for unique features to satisfy domestic customers and make our products full of creativity.” ICP has since released spin-off products Dr. Men and X-Men Boss, as well as shower gels, body sprays, and cologne. The company has also introduced a homecare solution called OCLEEN, a line of cosmetics under a subsidiary, and has even ventured outside Vietnam with exclusive bottling
As a young company, we are always on the lookout for the best processes in the industry. — Le Quang Hanh
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drawbacks – especially when the company’s IT infrastructure is ill equipped to deal with it. “We were running our business on three different standalone systems,” Hanh explains. “One for accounting, one for sales management, and one for production. It was very difficult and time-consuming for us to get the data we needed from these disparate systems – data we needed to aid us in our decision making.” ICP recognized that they needed a single solution that could integrate all processes, and opted for SAP ERP. With the support of OPTEC, a seasoned SAP solutions implementation partner, and CSC, a local consulting firm, ICP got its entire business up and running on the SAP software within six months. But it wasn’t just the integration that ICP was after. For Hanh, the central consideration was and always is the improvement of ICP’s value chain. As he notes, ICP is always in search of the latest innovative processes for getting a product from development through manufacturing, marketing, and distribution, and into the customer’s hands. SAP was known in Vietnam for being process-savvy, he says, so it was one of the first contenders. “As a young company, we are always on the lookout for the best processes in the industry,” Hanh says. “SAP software ensures that our value chain is operating in the most effective way.”
Knowing how many materials are needed
With improved processes and an integrated solution, ICP had the insurance of data integrity across its solution landscape – data on which it could now confidently base decisions. With SAP ERP, ICP can now view inventory levels and product prices at any time. Management knows exactly when and how many materials are needed thanks to SAP ERP’s production planning capabilities. “We also depend on our SAP system when preparing our sales and distribution rights throughout Southeast Asia plans,” Hanh adds. One of the initial difficulties for the carbonated drink Orangina. This product after implementation was in users’ acceptance of diversification not only triggers added growth: As the solution, as management information systems Hanh explains, new product lines are necessary for senior manager Chinh Phan Cong explains. “A ICP to stay viable among encroaching competition large amount of data must be entered into the SAP in the Vietnamese market from larger consumer system, and this can consist of several mandatory products players such as Proctor & Gamble and steps,” he says. With the old systems, there wasn’t Unilever. always a need to enter everything as prescribed, so users would often ignore steps in data entry. “It is Addressing integration extremely important that you not only train your staff in the proper use of the system but that you and the value chain also demonstrate why it is important to use the sysIncreasing product breadth has brought about as- tem correctly,” Chinh advises. “We have done this tounding growth, 30% annually since 2003. But as within ICP, so the integrity of our processes and is the case with many young companies in emerg- information is now sound.” Management can now ing markets, exploding growth isn’t without its call up up-to-date financial data segmented into
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profit and loss by brand, strategic business unit, and channel. Chinh has advice for Vietnamese customers thinking about doing an SAP implementation. Because domestic businesses are relatively new to integrated solutions, he recommends the aid of a consultancy with deep SAP expertise and experience as well as a local partner knowledge-
CHALLENGE
Vietnam’s Economy
able about Vietnamese governance and regulations. “This is why we chose to go with OPTEC and CSC," he says. "OPTEC has a wealth of SAP knowledge, while CSC is very astute in local regulation.” ICP averted a potentially serious faux pas by applying this method. As Chinh explains, in most other countries, subsidiaries’ reporting is consolidated with the parent company’s reporting, which is then submitted to the relevant authorities. But in Vietnam, each subsidiary, including ICP’s cosmetics business, must submit its own reporting to the government. Thanks to CSC’s local insight, OPTEC was able to adapt the financials component of SAP ERP accordingly. “The implementation would have failed if we had not had both of these partners,” Chinh says.
Vietnam began the transformation from a centrally planned economy to a Socialist-oriented market economy in the early 1990s. The gradual reforms, Doi moi, have achieved impressive results, exemplified by high economic growth rates (2007: 8.5%, 2008: 6.25%) and huge increases in foreign direct investments. State-owned companies continue to comprise the lion’s share of the economy. Although at least a quarter of these companies are not profitable, they account for 40% of the nation’s industrial output and 35% of all exports. Just over half of the 6,000 state-owned companies have been part-privatized. In terms of employment, Vietnam remains an agricultural society, with agriculture employing 65% of the population. However, it generates just a fifth of the GDP. The industrial and service sectors each contribute 40% of the GDP, with textiles, footwear, steel, cement, and automotive assembly being the primary fields.
A growing company in a growing industry in a growing market
Vietnam’s economy is highly dependent on exports, which provide 75% of the GDP. The United States continues to strengthen its position as the leading importer of Vietnamese goods, importing goods totaling U.S.$11.6 billion in 2008. In the same year, Vietnam exported goods totaling more than U.S.$10.2 billion to its ASEAN partners. Other major importers in 2008 were the European Union (nearly U.S.$10 billion) and Japan (U.S.$8.8 billion). Vietnam imports primarily from its Asian partners – China being by far the largest source with U.S.$15 billion worth of merchandise in 2008. Singapore (nearly U.S.$10 billion), Taiwan (U.S.$8 billion), and Japan (nearly U.S.$8 billion) followed. The European Union exported goods to the tune of U.S.$5.4 billion.
If macroeconomic indicators hold true, things are looking good for businesses in Vietnam. In the first seven months of 2009, the country’s total retail sales jumped 18.3%. Adjusted for inflation, the figure is still an impressive 8.3%. This seems to fly in the face of the difficult economic conditions prevailing globally, but executives like Hanh are definitely not complaining. “With our lines of creative and innovative products, tailored and marketed to local demands,” he says, “we project that growth will continue at 30% annually.”
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Some of the people who work the phones for Deutsche Post DHL’s human resources hotline are blind. Along with special resources for the visually impaired, they use the SAP ERP Human Capital Management solution to carry out their daily tasks. Author: Johannes Gillar
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<article _ 03>
It’s an uncomfortable truth: People
with disabilities are often thought of as less reliable under pressure – a grave misconception, considering the successes of disabled athletes in the Paralympics or other projects. Take the blind mountain climber Andy Holzer, for example, whose goal is to conquer the Seven Summits. The Austrian has already crossed five of the highest peaks in the world off his list. The disabled are showing what they can do in a wide range of fields, including the business world. And more and more companies are realizing that by not giving them the chance to develop their potential, they are leaving untold talent and motivation untapped. Deutsche Post DHL, one of the world’s leading mail and logistics groups, has initiated a project to support colleagues with disabilities. It is doing this together with the BIK (“breaking down barriers in information and communication”) project of the German Federal Ministry for Labor and Social Affairs and the expert support of the Münster Integration Office. Personal Direkt, the company’s personnel service center in Fulda, Germany, now trains blind or visually impaired employees to become call-center agents. Working for Deutsche Post DHL's human resources hotline, they answer questions on subjects such as payroll, parental leave, and travel expenses.
<sidebar _ 04>
At a Glance The Situation Deutsche Post DHL initiated a project
to support colleagues with disabilities, cooperating with the BIK (“breaking down barriers in information and communication”) project of the German Federal Ministry for Labor and Social Affairs and with expert support from the Münster Integration Office. The IT SOLUTION The application SAP ERP Human
Capital Management running in the systems Open and Pluss, the magnification program Zoomtext, the screen reader Jaws, and specialized Braillex EL 80s braille keyboard from Papenmeier Reha Technik, as well as special headsets with mixing amplifiers, 21inch monitors on pivot arms, and voice output. The Result Six blind and visually impaired employ-
ees work as call-center agents in the personnel service center of Deutsche Post DHL in Fulda, Germany. They answer questions on subjects such as payroll, parental leave, and travel expenses.
“We figured call-center employment would be ideal for colleagues who are blind or visually impaired,” explains project coordinator Karsten Warnke, himself visually impaired. The project first started, he continues, with a search for appropriate candidates. This included phone conversations and subsequent preselection discussions, which also involved individual counseling. Finally, the candidates had to fulfill a variety of requirements: “Computer skills were absolutely essential; they also had to be able to write in Braille and work with technical resources such as screen readers,” Warnke says. The company’s works council and representatives of the severely disabled were constantly involved in the process.
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Did you know… ? Approximately 150,000 blind and 500,000 otherwise visually impaired people live in Germany. Around 10,000 people lose their ability to see every year. In such statistics, vision is measured as a percentage or fraction. The vision of someone who needs to be five yards away to see an object a person with normal eyesight can see from fifty yards would be measured as onetenth, or 10%. Those with 2% vision even when using corrective lenses are considered blind.
Six months training In the actual pilot project, three blind and three visually impaired employees received six months of training at Personal Direkt in preparation for their future jobs. Two coaches and seven other Personal Direkt staff members gave training in a broad range of subjects, including pay scales, civil-service law, taxes, social insurance, and IT/ SAP applications. The technical side proved particularly challenging, but the coaches and trainers were always ready to lend a hand or word of advice. “There was a lot to absorb in a short amount of time,” says Susanne Kullmann, director of Personal Direkt. So it’s not surprising that project participants also do plenty of learning on the job. Fortunately, however, they can count on the support of their mentors. Today, the six colleagues are putting their skills to use at specially equipped workstations in their home locations in Germany. None have had to move from their familiar surroundings. Meanwhile, they regularly participate in further training courses and assignments in Fulda with the Personal Direkt team. From now on, the company will maintain two workstations: one for the visually impaired and one for the blind, along with technical support equipment. Personal Direkt also wants to make it easier for the employees “in the field” to stay in touch with the rest of their team.
Experienced colleagues mentor their new apprentices starting right from the training period – an approach the candidates appreciate. “Whenever I get stuck in the system, I call my mentor, and he explains how I can fix the problem,” reports Andreas Pottel. He found this support particularly helpful at the beginning. All six participants now work in everyday call-center operations. Blind agents such as Pottel answer e-mail or voicemail inquiries by phoning back. They do not, however, answer any incoming calls. “When you’re completely blind, you reach your limits faster – such as when the caller gets angry and puts pressure on you because of a mistake they think you’ve made,” Pottel explains.
A technological doorway The fact that blind and visually impaired people can work for a phone service hotline at all is thanks to modern technology. In addition to the SAP ERP Human Capital Management application, they have screen readers, magnification tools, Braille, large monitors, and speech output solutions at their disposal. Using special software, Pottel can even hear the caller’s voice and the text on his screen at the same time. “That does get pretty difficult, though,” he admits. As usual, it was the little things that proved tricky in Deutsche Post DHL’s →
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Here you can see Andreas Pottel showing a colleague how a screen reader works. They are sitting next to each other at a table with a monitor in front of them. Andreas Pottel has placed his hands on the keyboard.
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Special software and devices help the blind and visually impaired manage their workday.
support project. “Screen readers can only reproduce text,” Warnke says, pointing out the incompatibility of the purely graphical data found in many ap-
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I learned how to read with my fingers back in elementary school. — Andreas Pottel plications. He also stresses the importance of focus tracking in software for blind and visually impaired computer users. “Wherever the cursor is – wherever the system displays a message or data
needs to be entered – the corresponding Braille output or magnification window has to be right there,” Warnke explains. If an application is not programmed to accommodate this, it has to be rewritten – a complicated process. In search of a solution, Deutsche Post DHL worked with Papenmeier Reha Technik of Schwerte, Germany – an SAP partner specializing in support resources for the blind – on testing Open, Pluss, and Employee Interaction Center, DHL's human resources applications based on SAP ERP. “The practical tests could only be carried out during the actual training; only then could the target group try everything out and provide specific feedback on how we should adjust the screens, menus, or individual documents,” says Warnke. Following their evaluations, Papenmeier Reha Technik modified the screen reader Jaws to enable visually impaired service agents
to access information in SAP solutions. However, technology alone is not enough to turn a visually impaired employee into a computer whiz; mastering Braille is just as important. In Braille, every character is formed on a matrix of two sets of three points each, similar to the six on a die. The points are 2.54 millimeters apart. There are six millimeters of space between the characters, and 10 millimeters between lines. “Since I was born blind, I learned how to read with my fingers back in elementary school,” Pottel reveals; he deftly “reads” the information on his screen using the Braille row on his keyboard.
Learning for the future Warnke, meanwhile, has declared what he calls an “experiment” a success. “That said, if we could do it all over again, we’d do some things differently,” he ad-
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Here you can see Karsten Warnke with the six call-center agents in front of the DHL headquarters.
Here you can see a close up of a keyboard with Braille row.
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Six blind and visually impaired DHL employees were trained in a three-month course to work as call-center agents in the personnel service center of Deutsche Post DHL in Fulda, Germany.
mits. The training courses were carried out by instructors from Deutsche Post DHL and Papenmeier Reha Technik. In future, Warnke says, he would have his trainees learn the basics at a vocational advancement center before being further qualified on the job. Warnke also sees room for improvement in the software. “Many so-called accessible products provide only theoretical access for the blind,” he criticizes, calling most of these products unusable for blind people. However, Warnke is optimistic about what SAP could deliver. His biggest hope is that future SAP barrier-free software can be used by the blind and visually impaired without any customization. “I know SAP is working on a solution to this problem,” Warnke says. The enthusiasm of everyone involved in the project, from the branch director to the call-center agents themselves, fas-
In Braille, every character is formed on a matrix of two sets of three points each. The points are 2.54 millimeters apart.
cinated Warnke. “When you’ve got the motivation and will to succeed, chances are you’ll get where you want to go,” he says. It was this willpower that broke down barriers at Deutsche Post DHL. “Our project was seen as a community effort – and as such, it was a unique opportunity for our disabled colleagues,” he concludes. As for Andreas Pottel, he’s more than satisfied. “Being a call-center agent is good and meaningful work – and it’s even fun!” he says.
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Computer resources for the blind and visually impaired www.incobs.de/en
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Deutsche Post DHL Headquartered in Bonn, Germany, the postal and logistics group Deutsche Post DHL operates in 220 countries and territories. Its service portfolio ranges from express international business and contract logistics to freight transport by air, sea, road, and rail. With 500,000 employees, this global company achieved total revenues of more than € 5 4 billion (approx. U.S.$75.8 billion) in 2008.
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Kaizen, Cars, and Corporate Collisions The glory days are well and truly over for automotive manufacturers. Companies have to find new business models to win the fight for survival. Toyota Tsusho saw the writing on the wall and is investing in new fields of business, supported by a global IT platform based on SAP software. Author: Uta Spinger
It is often said that opposites attract,
ties? The solution: a wide-reaching and the old adage even seems to apply communications plan, including changeto companies. When Toyota Tsusho management measures to unify staff Corporation (TTC), the sole trading from the two companies and help them company of the Toyota group, acquired understand their respective strengths. The two portfolios also complement the Japanese trading company Tomen in April 2006, two worlds collided. Junzo one another. By acquiring the broadly Shimizu, CEO of Toyota Tsusho, de- diversified Tomen group, Toyota Tsuscribes how it was when the two com- sho has opened inroads into growth panies of near equal size were brought markets such as food and renewable together: “Toyota Tsusho is a value in- energies. Such new markets are critical tegrator. We have a more long-term, al- to survival because, as TTC realized, the most agricultural, mentality. Tomen, on automotive sector was stagnating even the other hand, is a value trader. It has a before the turmoil created by the global economic crisis. The company’s strategy hunter’s mentality.” How to unite the two without sacrific- is now to generate half its revenue in new ing too much of their individual identi- growth areas by 2015.
At A Glance The Situation With the automotive sector stagnating, Toyota Tsusho, the trading company of the Toyota group, is focusing on new growth markets such as food and renewable energies. An important step in this direction was the acquisition of the broadly diversified Tomen group. Innovations such as hybrid cars are high on the company’s list of priorities. The IT solution Supported by a global IT platform based on SAP software, the company invested heavily in modernizing its IT processes in order to remain competitive. the Result The software brought about a transformation of the company. New processes are rolled out in all locations using a standardized template, significantly reducing costs and inventory. Managers benefit from detailed and fast information that they can easily access.
The philosophy of improvement To ensure the success of the transformation, TTC is applying the philosophy of Kaizen – Japanese for “improvement” – to the new areas. Kaizen is a process of continuous improvement in all areas of a company, including administration, procurement, manufacturing, distribution, warehousing, and sales. One well-known example of Kaizen is the Toyota Production System, which has produced high-performance, innovative automation models. Continuous improvement of IT processes is equally important to Toyota Tsusho. “You →
Finding the New Cruising Speed Junzo Shimizu, CEO of Toyota Tsusho Corporation, talks about the future of the automotive industry –and reveals where his company sees potential for growth. The automotive industry has been hit hard by the financial crisis. How has this affected your business?
Let’s face it: The automotive industry has been significantly damaged. The daily production of Toyota Motor Corporation (TMC) in Japan used to be 18,000 units. After an adjustment in stock level in December 2008, the daily production from January to May 2009 dropped to 7,000 – a 40% decline. Although production is currently increasing, the production mix is totally different. In the past, big cars, such as V8 and V6 engine cars, were selling well; now, the demand is mainly for four-cylinder
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cars. The automotive industry shows some signs of recovery, but the structure of the market will be totally different. This is our new cruising speed. As a trading company, Toyota Tsusho has to meet new demands from customers and succeed in a highly competitive market. What are your priorities here?
Because of the reduced volume and the resulting decline in profitability, our customers, the manufacturers, demand that we find ways to help reduce costs. On top of that, new technology and new materials are required to produce hybrid or electric cars, an area in which we see increasing demand. New materials, including rare earth elements such as dysprosium and neodymium, are needed for the magnetic part of electric motors. In 2008, TMC produced 300,000 hybrid cars and consumed about 20% of the total Japanese import of rare earths. TMC is now planning to manufacture one million hybrid cars annually. That would mean that most of the current Japanese import would be consumed by TMC – which, of course, is not possible. Currently, 90% of global rare earth production is dominated by China, and they might restrict exports in the future. That’s why Toyota Tsusho, as a trading company and a member of the Toyota Group, is trying to find new sources of rare earths. Toyota Tsusho wants to gain more profit from nonautomotive areas. How do you intend to achieve this?
The biggest investment area for Toyota Tsusho is new energy, such as natural gas as well as solar and geothermal energy. We are also looking
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have to make IT a management issue,” says CEO Shimizu. “It’s like water or air, you need it to live.” When Shimizu joined Toyota Tsusho from Toyota Motor Corporation in 2001, he felt that the company’s IT system was 10 years behind the times and the competition. In his first five years, he pumped ¥ 10 billion (approximately U.S. $ 107 million) into modernizing the system. The total investment under his helm is now up to ¥ 15 billion (U.S. $ 160 million). “If we hadn’t pushed through that aggressive growth, we wouldn’t be in business to- — Junzo Shimizu day,” Shimizu says.
SAP software combines the best practices of the industry, so it’s like a designer suit off the rack.
An even playing field
novations such as hybrid cars. “IT can By 2007, all core processes such as fi- bring transformation, and it enables nancials and logistics were state of the things that were not established before, art, both in the Japan headquarters and such as supply chain management, risk in locations worldwide. Says Shimizu, management, and early book closing,” “That established an even playing field he emphasizes. “As a manager, I benefit from the detailed and fast information for taking on our competitors.” According to Shimizu, defining goals IT provides.” for IT is crucial to achieving the business By using integrated, standard software goal of establishing a strong presence in solutions such as those from SAP, comgrowth markets while remaining strong panies can standardize their processes in the automotive industry through in- and differentiate themselves from the
Toyota Tsusho Corporation Toyota Tsusho Corporation, based in Nagoya and Tokyo, is the trading company of the Toyota Group. One of the largest trading companies in Japan and the sixth largest in the world, it has about 20,700 employees. Toyota Tsusho has a global presence through its subsidiaries and operating divisions, maintaining over 100 offices and 500 subsidiaries and affiliates around the world. Its main business is supporting Toyota Motor Corporation’s automobile business and other Toyota Group companies. Additional business areas span the industrial, commercial, and consumer sectors from industrial raw materials and agriculture to high tech. The company acquired the Japanese trading company Tomen Corporation in 2006 to expand its nonautomotive business.
www.toyota-tsusho.com
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competition. Many Japanese companies still have catching up to do in this respect, says Shimizu. “SAP software combines the best practices of the industry,”he says, “so it’s like a designer suit off the rack.” His advice to companies: Avoid the temptation to alter this suit. Instead, companies should get their corporate bodies into shape to fit the suit. To do that, TTC has been establishing a global IT platform since 2008 that consists of SAP and other components. New processes are rolled out in all locations using a standardized template, significantly reducing costs and inventory. TTC installed a global IT department in 2008. “In-house knowledge is important,” Shimizu says. “In the future, the IT department will supply new ideas and advocate new processes.”
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for new opportunities in the food sector. Today, Japan imports huge volumes of grain. More than 80% is imported from the United States and Australia. In light of the fact that the global population is still growing – which means the demand for grain is growing – we are acquiring other sources for Japan’s import. We also see some potential in the Chinese market. Interestingly, we are now exporting high-quality Japanese ramen noodles to China. In Japan, 80% of ramen is made in China. But there are wealthy Chinese consumers who can afford to buy high-quality ramen made in Japan. Japan has large shopping districts in Tokyo like Ginza and Shibuya, and many Chinese tourists come here to shop. We plan to open similar fashion stores offering good quality at reasonable prices in China.
Link list: www.sap-spectrum.com
How do you think IT, and SAP software in particular, can support you in reaching your business goals?
KAIZEN Kaizen is a philosophy of continuous change and improvement, such as the addition of new functions to an electronic device or the reorganization of a business. It enables a high speed of development and ever-shorter product life cycles, which in turn produce product innovations.
For a sustainable company, IT is a must for survival. It plays a key role in making informed management decisions. SAP provides us with a mission-critical system that we use for business processes in most of our headquarters’ and domestic and overseas subsidiaries’ systems. We are currently developing a nextgeneration platform mainly based on SAP software. We think that SAP software is the best enterprise resource planning solution. And while we enjoy its stability and high quality, we feel the cost should be more competitive. SAP is like a Mercedes, but we’d rather drive a Volkswagen.
Easy Terminal B-web 93 40 The new definition of time recording Time recording 2010 is easier to use, easier to adapt, easier to install and easier to maintain. Contact us for more information or visit us at the CeBIT in hall 6, booth C16.
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The Head of the Class
To ensure high marks with student satisfaction and retention, while attracting the best and brightest, The University of Mississippi relies on SAP Business Suite software. Author: Tim Clark
What does it mean to be one of the best? For The University of Missis-
teaching. This information shows up sippi (UM), it means racking up a laundry list of impressive accomplish- in the core schedule and is available to ments that underscore the school’s passion for higher education. This students early so they can make more past year alone, UM was ranked among the nation’s top 25 public univer- informed purchases. Although this sities by Forbes.com, hosted a presidential debate, announced its 25th functionality was not part of the core Rhodes Scholar, trounced Texas Tech in the Cotton Bowl, and wound student product, it was easy to add given the extensibility of the system. down a successful $200 million school fundraising campaign. “We generate reports from this sysJust like any operation that competes on a global scale, UM’s accomplishments are realized through a tried-and-true strategy: people, pro- tem for the bookstore based on what cess, and technology. Kathy Gates, UM’s chief information officer, helps has changed in the last 24 hours,” says ensure that the university runs efficiently without compromising student Gates. “Anyone can visit the universatisfaction. Over the past several years, Gates has been busy creating sity Web site, see what textbooks are and running an integrated and highly flexible IT infrastructure for UM required for each class, and click on → that interfaces with students and faculty while connecting and running different departments. It was 10 years ago that UM decided in favor of SAP technology to accomplish its goal of effective IT. “When we made the choice to go with SAP, we wanted this decision to carry us for 15 to 20 years,” says Gates. At A Glance “We are now 10 years into this – and SAP has helped carry out our initial strategy and more.” The Situation The goal of The University of
At your (self ) service UM is currently using numerous core components of SAP Business Suite software, ranging from human resources to plant maintenance, materials management, and financials. Recently, SAP Student Lifecycle Management, also used by the UM Student Medical Center, has played a major role in attracting and retaining students. It automates and modernizes many academic processes, notes Gates, while providing enhanced selfservice options for more than 18,000 of UM’s students. With a single semester costing anywhere from U.S. $ 500–900, it’s not surprising that the additional cost of textbooks is a major issue for UM students. Fortunately, the SAP Student Lifecycle management tool helps both students and faculty when it comes to purchasing books. In the UM SAP portal, instructors can assign textbooks to the sections that they are
ississippi is to increase enrollment and retention M of students and to run efficiently without compro mising student satisfaction. It wants to create a good student environment through user-friendly tools, have more self services, and increase transparency into student admission trends.
The IT solution UM uses numerous core components of SAP Business Suite software, ranging from HR to plant maintenance, materials management, and financials. It adopts enhancement packages to run the latest SAP functionality. UM recently implemented SAP Student Lifecycle Management. The Result UM is now running an integrated and highly flexible IT infrastructure that interfaces with students and faculty while connecting and running different departments. Many academic processes have been automated and modernized; there are enhanced self-service options for the students. The UM SAP portal facilitates the assigning and purchasing of textbooks.
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The University of Mississippi Chartered by the Mississippi legislature in 1844, The University of Mississippi opened its doors to 80 students in 1848. Nearly 110,436 living Ole Miss alumni and friends represent every state in the nation and 80 foreign countries. The university awards approximately 3,408 degrees annually; nearly 150,000 degrees have been awarded during its 160-year history.
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case with preparing for our medical center student lifecycle management implementation. The switch to enhancement package 4 only took five months and required no outside help. Overall, we really believe in the concept, with new functionality and bug fixes delivered in much smaller steps. And since they are cumulative, you can skip one and still pick up previous updates. It provides a lot more choice in how you consume your upgrades.”
Innovation without disruption
Gates also ties UM’s continued success in matching IT with business needs to SAP’s rich development environment, transport structure, and debugging tools. “I don’t know of another vendor that comes close to this level of innovation and maturity,” she says. “When it comes to higher education, we think we’re special and that we need our own software. But for most purposes I think it’s better for us to go with a vendor like www.olemiss.edu SAP where there are established best practices across all industries. We benefit from all the years of development that have been invested in the base product both in terms of the underlying technology and the business processes.” For years, performance and development tools as well as transport them to get the ISBN numbers. It all comes from this integrated SAP envi- structure have been improved upon and tested across all industries, not just higher education, says Gates. Parts of UM operations directly benefit ronment we created.” from other IT areas such as HR and procurement. While there might be Unlimited flexibility slight differences in the software, “85% of what we do is the same, and we should be using best practices of other industries,” says Gates. UM and modularity will continue to rely on its SAP system and enhancement packages to inGates says many pleasant surprises have crease enrollment and retention of the best and brightest students, encropped up along the way with regard to hance the student experience with user-friendly tools, enable more self its SAP implementation – substantial services, and increase transparency into student admission trends. benefits that were never part of the initial goals – thanks to SAP’s extensible architecture. “Everywhere in the system there are small ways to extend the system in ways you hadn’t thought of when you purchased it,” she says. A few examples are user exits, customer includes in daReal results generated by SAP software tabase tables, and the ability to add customer objects and relationships. “It’s ideal in a university environment where Total amount of UM financial aid disbursed U.S.$134.6 million things change constantly, and you have in 2009: to react quickly – without generating a Total amount of financial aid disbursed for U.S.$59.02 lot of additional cost. I think this is a million the current fall semester: main differentiator between SAP software and other products on the market, Total amount of online student payments U.S.$7.7 million which are more out-of-the-box with very in 2009: limited capabilities.” Total number of official/unofficial online 18,850 / 22,771* Key components of SAP’s extensible student transcript requests in 2009: architecture are SAP enhancement pack20,889** ages – “bite-sized” pieces of function- Total number of degree audits generated ality that can be quickly implemented in 2009: without having to endure cumbersome upgrades typically associated with en- * Students request transcripts online and also request mailing of "official" transcripts. Transcripts are generated in the SAP system as PDFs. terprise software. “We’re usually out in ** Degree audits allow a student, advisor, and the Dean’s office to monitor student front adopting enhancement packages progress relative to program requirements. because we like to run the latest SAP functionality,” says Gates. “This was the
Fast Facts
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Let’s talk business Chittur Ramakrishnan
Challenges and goals
Chittur Ramakrishnan, CIO of the RWE Group, takes a close look at four issues that drive the work and success of today’s chief information officers.
Aligning Objectives In bridging the gulf between IT and business, the onus is constantly on CIOs to ensure that IT objectives align with those of their business. In their role as advisor or moderator, CIOs should make sure that IT and business work together closely. Certainly they should avoid merely receiving and carrying out orders. This would render the IT department superfluous and replaceable, because its services could then be obtained elsewhere. What makes a successful advisor? Many IT people have a good knowledge of functional processes. By temporarily transferring to a business department, they gain closer experience of how that business operates. And they have the expertise to take ideas from the IT world and apply them to business. The result is an ongoing exchange of knowledge and ideas.
Cutting costs Cost-cutting is a perennial topic. But necessary as it is, it should not have top priority. What is crucial is that CIOs should mastering a delicate balancing act. On the one hand, they should ensure that the IT setup is efficient by identifying and exploiting potential – even if that process is painful. On the other hand, CIOs must have a good eye for which innovations are necessary, how they can benefit the company, and how they can be implemented.
Creating Transparency It is more important than ever for IT departments to create transparency about what they do. They must show users that IT is not rocket science. But the IT profession has not done much to take the mystery out of its inner workings. Yet there is no mystery about the fact that you need to set up a network to support business processes, which costs money – or that handling large volumes of data leads to expenses. These are truths everyone can understand. In the past, too little was done to emphasize the link between IT and business – to highlight, for example, the simple fact that business processes are based on systems and that it costs money to keep them available.
Focusing on the Customer Today’s CIOs know that customer focus is an end-to-end chain. The company has a clear view of the end customer and aligns its processes accordingly. Meanwhile, CIOs have a clear view of their “customer” – the business. Cooperation and integration are required from beginning to end. The CIO must function as both manager and integrator. IT people are having more direct contact with end customers, which will increase their responsibilities.
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The Best of Both Worlds Bridgette Chambers, CEO of the Americas’ SAP Users’ Group, discloses how she and the ASUG Board of Directors plan on transforming the group in 2010, what ASUG’s position is on SAP Enterprise Support, and why the merger with the Global BusinessObjects Network made sense. Interview: Tim Clark
What have your first six months with ASUG been like? We’ve made significant progress toward strengthening ASUG’s financial position and member services. A number of things happened at the end of 2008 to create challenges for ASUG and its Board of Directors in 2009. The economy began to collapse, and there were some operational and leadership issues that were splintering ASUG and impacting the organization. Joining ASUG midyear, it was clear to me that several issues facing the organization needed immediate attention. Focusing on stabilizing the organization and creating a solid foundation from which to build was a priority. We reorganized the existing functional areas of responsibility from three siloed departments into five well-defined departments with strong leadership, transparency, and structure to drive ASUG’s goals. The management team and I subsequently built a framework to identify ASUG’s strengths and areas where we needed to improve, both operationally as well as in service delivery. Creating a strong management team has proven to be a critical component in steering the organization in the right direction for continued growth and success.
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What kinds of changes can ASUG members expect in 2010 and beyond? As a result of the management reorganization, we are now nimble enough to take on a number of tactical initiatives and make improvements that, while smaller in scope, will greatly improve our member and volunteer experience and satisfaction. There are several key areas of transformation that are priorities for ASUG in 2010. To that point, I am excited to announce that, for the first time, we have a fully dedicated ASUG HQ executive leader for ASUG communities. Tracy BarrettFranken, a veteran member of the ASUG team, has been named vice president of Community and Knowledge Management, focused solely on communities and education. In fact, we are well on our way to implementing a number of different community-focused initiatives that will drive long-term improvements in the education, Influence, and networking opportunities ASUG offers.
How will you differentiate ASUG within the SAP ecosystem? ASUG differentiates itself by offering unique and exclusive programs, such as Influence and Benchmarking, that benefit our members. In addition, we are an independent organization that leverages the collective voice of our members to influence and collaborate with SAP. These differentiators translate to a competitive advantage for ASUG members. ASUG may offer similar programs as other communities, such as blogs and discussion forums. However, we also provide the customer point of view and offer the opportunity for a candid dialog among members on competing products as well as those focused on SAP solutions. What’s more, we are the voice of objectivity, validation or, when needed, the voice of dissension to SAP. When SAP hears from its customers that there is a problem, we are that independent source of validation – which, I contend, is a strong point of differentiation → for ASUG.
CEO
Bridgette Chambers Bridgette Chambers has been involved with ASUG at regional and national levels for a long time, and now represents the interests of all SAP customers throughout North America. She brings to the position more than 20 years of professional experience in the service sector and in IT solutions. Before joining ASUG, she held the position of CEO at management and technology consultancy Voile Enterprises. Prior to her tenure at Voile, Chambers served as vice president of Enterprise Business Solutions at Comsys, where she was responsible for the company’s Enterprise Resource Planning, Business Intelligence, and Analytics divisions. Bridgette Chambers earned a Bachelor of Science degree in Education from the University of Houston and an MBA from Texas A&M University. She also served in the United States Army Reserves and the Texas Army National Guard. As ASUG’s CEO, she has vowed to work with the Board of Directors to devise a long-term strategy enabling the SAP community to grow further.
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Sustainability is a very hot topic. What guidance is ASUG providing its members on the subject? You can’t open a newspaper, magazine, or blog these days without running across people talking about sustainability. It can be hard to focus on the right conversations and get the answers you need. And while strategies are evolving rapidly, building a sustainable enterprise enables organizations to innovate and develop business models that will lead to success. That’s where ASUG comes in. We are committed to helping our members understand the business value of a sustainability strategy. ASUG community and education activities around sustainability are designed to help focus the topics and make the conversations more productive. We are taking the first steps with a multiyear strategy designed to guide members to drive greater efficiencies and become more sustainable in their operations. In fact, we have a Sustainability Webcast series that provides additional support to our members.
SAP SPECTRUM
What is ASUG’s position on SAP Enterprise Support? We recently collaborated on a global scale with the SAP User Group Executive Network (SUGEN), a network of 12 user groups. SUGEN created an SAP Enterprise Support Task Force to aggregate member feedback on the support offering. We are proud to say ASUG was a key player in the development of the SUGEN Enterprise Support Charter. With the creation of a benchmarking program, SUGEN provided a vehicle through which customers across the globe provided feedback directly to SAP and, subsequently, SAP made the decision to postpone a price increase. We support this decision and believe it demonstrates the power of channeling customer feedback to SAP. ASUG does not support a price increase for SAP Enterprise Support or any other initiative. Having said that, we will continue to educate the ecosystem about the value associated with KPIs derived from the benchmarking initiative. Further, we will continue to encourage and recruit participation in the SUGEN benchmarking program. While ASUG plays an important role in channeling customer feedback to SAP, each SAP customer makes its own business decisions with respect to terms of dealing with SAP.
We are proud to say ASUG was a key player in the development of the SUGEN Enterprise Support Charter.
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Other than creating a “bigger is better” mentality, how will the merger between ASUG and the Global BusinessObjects Network provide value to its members? Our primary motivation for merging GBN with ASUG was to keep in step with SAP – and actually take a leadership role in providing influence to SAP as it continues integrating Business Objects products into its portfolio. A consolidated user group provides the best resource to understand how the integration of these products affects our members’ organizations. We see this as a way to extend our core mission, serve the entire scope of SAP customers, and provide all customers – regardless of solution used or platform – the education, networking, and product-influencing opportunities they need to derive the most value from their investments. We recognize there is a tremendous opportunity for traditional SAP ERP customers and standalone SAP Business Objects customers to share tips and best practices because, as a member-driven organization, we thrive on providing content created by customers for customers so that they better understand opportunities and how to avoid potential obstacles. We are excited to foster the connection between customers who have been in the BusinessObjects space for quite a while and those professionals with extensive experience with SAP. In 2010 you will see ASUG focusing more time and attention on creating quality educational programs, spectacular content, and valuable opportunities to influence SAP and fully integrate SAP BusinessObjects into ASUG programs for the benefit of the entire ecosystem. In fact, we are creating an ambassador program to showcase the expertise of each group and foster collaboration within the communities. Ambassadors will attend chapter meetings and conferences and participate in virtual events in order to spread their expertise.
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I attended the 2009 SAP Business Objects User Conference in Dallas and was surprised to see the high level of attendance, interaction, and interest in the keynotes and sessions. How will you ensure gatherings like this remain relevant? We love seeing this kind of interest and participation. It demonstrates how important ASUG’s programs are to the community. The Dallas event had many standing-room-only sessions in addition to some sessions where the rooms were so packed, we couldn’t get people into the door. The demand for education is still high, even in a tough economy. People are trying to figure out how to make things work better, smarter, and faster, and they want to connect with other professionals who have that business knowledge. This event was one of many that ASUG offers throughout the year. Education is always in demand, and it’s our job to deliver a forum for members to connect and share – whether it is at a face-to-face event, a completely virtual program, such as our first-ever Virtual Education Summit last September, or on a daily basis through asug.com. Our members are eager for content and the opportunity to learn from one another.
Founded in 1991 by a group of long-time SAP customers
Today: 2,000 member companies Today: 75,000 individual members
January 1, 2010: Merger with the Global BusinessObjects Network
SAP’s new maintenance and support portfolio Link list: sap-spectrum.com
While 2009 will undoubtedly be earmarked in history as a year of tumultuous change on a worldwide scale, it’s comforting to know that organizations such as the Americas’ SAP Users’ Group (ASUG) are staying one step ahead of these severe and sudden shifts in business and IT trends. Formed in the early 1990s, ASUG operates as an independent, not-for-profit organization made up of more than 75,000 individuals and 2,000 member companies. To create a singular and powerful community of customers and partners in North America, ASUG completed its merger with the Global BusinessObjects Network on January 1, 2010. www.asug.com
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MAPPING
Innovation with Needs Like a street map for tourists in a strange city, a software company’s road map shows customers where the development of its solutions is going. SAP recently overhauled its road maps for industries and lines of business, so customers know what to expect and how to plot their itinerary. Author: Marcus Winkler
Ever got lost walking in a strange city? It’s usually because you didn’t have a street
map at hand. Drivers tend to rely on the polite but disembodied voice of Jane or Michael in their navigation systems. But without up-to-date reliable maps the electronic tour guides will still get you lost. The situation in the software industry is similar. Strategic road maps show users the evolution direction of their products and solutions. “By communicating SAP’s innovative direction, road maps aid our customers in their project and investment planning,” says Peter Maier, senior vice president of solution marketing at SAP. “We’ve always had overviews of our plans, but the new SAP road maps focus on the ongoing development of SAP’s entire solution portfolio rather than on individual applications.”
Targeting customers SAP’s road maps reflect the business requirements of individual areas, from financials and human resources to purchasing, sales, and industry-specific aspects. IT managers, for example, can obtain a uniform overview of developments involving SAP Business Suite, the SAP BusinessObjects portfolio, SAP technology, on-demand solutions, and products from SAP partners. “SAP hasn’t always spoken with one voice. Customers sometimes received different answers from every person they talked to,” Maier admits. “With our new road maps, we’re offering a comprehensive overview of our solution portfolio tailored to specific target groups and industries.” This also makes it easier for SAP to synchronize its innovations with the priorities of its customers. “Taking into account what our customers want while not losing sight of our strategic goals is always a balancing act,” adds Tilman Göttke, vice president of solution marketing for SAP Business Suite. Above all, it is the requirements of SAP’s customers and their representatives in various user groups that are taken into consideration. “Select customers and the German-speaking SAP User Group supported us in compiling the innovations we plan to introduce between now and 2012
With our new road maps, we’re offering a comprehensive overview of our solution portfolio tailored to specific target groups and industries.
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information on SAP’s planned innovations, so customers can dive into discussions on topics of particular relevance. “Customers can fill out feedback forms to let us know what’s really important to them,” says Göttke. “Their feedback helps us improve the quality and utility of our road maps.”
What’s in it for customers?
and mapping them to the needs of business areas and industries,” says Maier. “So the new road maps represent SAP’s commitment to providing its customers with transparency and investment security.”
From today to the future SAP divides its road maps into three sections: “Today,” “Planned Innovations,” and “Future Directions.” The “Today” section describes which functions and services are currently available, broken down by functional area and industry. “Planned Innovations” provides an overview of the advancements customers can look forward to in upcoming versions of SAP software. Finally, “Future Directions” is dedicated to medium-term innovations that address current market trends. “In every industry, we have a medium-term strategy for creating innovations that is oriented toward market and technology trends,” confirms Maier. “These innovations are part of ‘Future Directions.’ Meanwhile, the items under ‘Planned Innovations’ are already taking shape. There’s an 80% likelihood that they could be relevant to customers’ pending projects.” Each road map includes links to additional
Particularly in times of uncertainty, companies need planning and investment security. SAP’s software road maps play a major role in bringing that to its customers: By making its medium-term product strategy visible, SAP helps customers plot their future course. “In 2010, we’re talking with customers about topics we plan to realize in 2012,” says Göttke. As a result, transparency extends beyond the present, and SAP’s holistic approach is much easier to understand. And customers get to see that they are the undeniable focus of the new road maps.
SAP’s long-term road map Link list: www.sap-spectrum.com
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Grabbing the Tiger by the Tail The financial crisis, the drive toward internationalization, and SAP Enterprise Support services were three topics weighing heavily on the minds of SAP user companies in Japan last year. But SAP Japan’s new Customer Satisfaction Improvement Team and a useful book of secrets were on hand to help. Author: Uta Spinger
Last year was no cakewalk for SAP customers in
the SAP Solution Manager application. Kazuo Mitsui, director for influence Japan. Hit hard by the financial crisis, many CIOs struggled to make do with restricted IT budgets. activities on the JSUG board, is pleased The onus was increasingly on them to make the with the new direct line to SAP and the right decisions, because no company could afford clarity it has enabled: “A relationship of kyoshi takigawa mutual trust and understanding between jsug director for Global a poor investment. implementation An innovative initiative, set up by SAP Japan SAP and JSUG is the ideal starting point president Garret Ilg, came at just the right time: for productive discussions. JSUG needs Interview with Kyoshi Takigawa SAP Japan established the first ever Customer Satis- to be kept aware of SAP’s strategy and fuLink list: www.sap-spectrum.com faction Improvement Office and launched a cross- ture plans, and SAP needs to know what organizational Customer Satisfaction task force of its Japanese customers are thinking.” These customers are seeking ways to SAP experts from various lines of businesses. The team now meets with representatives of the Japan get the greatest benefits from their SAP SAP Users’ Group (JSUG) each month. “The in- solutions. That’s why, Mitsui notes, it is creased level of communication has really reaped important that they understand SAP Enbenefits for us,” says Yutaka Yasunaga, president of terprise Support and how it will cut their JSUG. “SAP and JSUG share the goal of achieving as TCO and increase business value: “The much value as possible. We work as one team. We true value of SAP Enterprise Support has only emerged through our discussions discuss any issues and find solutions together.” KAZUo mitsui with SAP and SAP Active Global SupJsug director for port. This really shows how influence influence Activities Direct line to SAP activities can work both ways.” Interview with Kazuo Mitsui The greater intensity of the exchanges between Link list: www.sap-spectrum.com customers and SAP paid off, especially when the Business beyond borders SAP Enterprise Support services were announced. The new services made headlines throughout the With Japan’s domestic market stagnat- and implementations of SAP global SAP community, including Japan. The effec- ing, many companies are seeking their solutions in international tive communication between SAP and JSUG quickly fortunes abroad and focusing invest- subsidiaries. To help compa provided the user group with precise information ment in growth markets such as China nies overcome them, the about how the new services would benefit custom- and India. But sometimes there are hur- JSUG special interest workers – for example, through the implementation of dles involved in cross-border business group Global Implementa-
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tion, headed by JSUG director Kyoshi Takigawa, published the Book of Secrets for Global Implementation – “tora no maki” in Japanese. Literally meaning “scroll of the tiger,” the book collates the experiences of 18 JSUG member companies and provides a checklist of valuable hints for preparing for the implementation for live operation. “Another stumbling block is a lack of planning of postimplementation operations,” says Takigawa. He adds, “As companies need to comply with international financial reporting standards and regulations, worldwide consolidation becomes mandatory.” China, in particular, is a land of great opportunity for Japan, but companies looking to invest there have to find their way through a jungle of regulations. Tax and accounting systems often differ between districts. Companies with several facilities also have to ensure that they roll out solutions quickly and cost-effectively. One JSUG report warns Japanese companies operating abroad about the most critical dangers they will face. The user group is also drawing up a report on global talent. Takigawa is looking for increased exchanges with other user groups and with SAP. As a first step in that direction, the “Tiger Report” is being translated into English. JSUG President Yasunaga fully supports Takigawa: “We place a lot of importance on participating in the SAP User Group Executive Network, SUGEN. We would like to deepen communication with overseas user groups to develop a global customer voice.”
9 lis h e d i n 1
The Japan SAP Users’ Group (JSUG) is an independent organization of SAP customers and partners, founded in 1996. It currently has 500 membership companies with 4,500 individual members. JSUG provides a forum for members to communicate mutual concerns to SAP, influence software development, exchange ideas and best practices, participate in face-to-face educational opportunities, network with members, and establish future priorities. JSUG is a SUGEN member.
www.jsug.org
3 Questions Customers finally see the value of SAP Enterprise Support, says Yutaka Yasunaga, chairman of the Japan SAP Users’ Group (JSUG).
Where do you see the value of SAP Enterprise Support? Are there clear benefits? Absolutely. The more time we spend coming to grips with SAP Enterprise Support, the more we appreciate its value for customers. The main issue for the majority of Japanese users, however, is that they lack the readiness to implement the foundation of SAP Enterprise Support, the SAP Solution Manager application management solution. Without this, they can’t enjoy the full value of SAP Enterprise Support, so we’re promoting implementation of SAP Solution Manager as widely as possible. Communication is key in these kinds of issues. I think this is something I’ve managed to address during the past year.
Apart from SAP Enterprise Support, what are the main concerns when you talk to members? Most members are facing a serious financial crisis, and it’s difficult for them to obtain budget for IT, so 2009 hasn’t seen a lot of new projects. 2010 will probably follow the same pattern. I think this is a time for customers to think about what needs to be done once they overcome the current crisis. Increasingly, they are turning their attention to carving out a future road map, a middle- or long-term plan for IT investment. What they need from SAP and other IT vendors is support for this forward planning and a road map for new technologies, such as service-oriented architectures or total enterprise architectures. If this can be achieved, 2011 might see new investment. In my opinion, streamlining is likely to be high on the agenda. A period of low investment can leave a lot of systems over-patched and overcomplex.
Do you think SAP could align its product road map better with customers’ needs? Definitely. I think any customer can put together a rough road map for themselves, but they really need help on the technical side. If SAP can present a potential system architecture for the future – how a customer’s system should look in five or ten years – and also incorporate a productive approach to achieving this road map, it would be welcomed by customers. This would also lead to a better alignment of the customer’s road map with SAP’s. Full interview with Yutaka Yasunaga Link list: www.sap-spectrum.com
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“We’re Social Animals”
Author: Bernd Seidel
— His motto? “Even the longest journey begins with a small step.” His passion? “Creating new services that are profitable, that leverage technological efficiency, and that are based on successful patterns of behavior.” As cofounder of LinkedIn, Konstantin Guericke has been able to live both his motto and his passion. — He’s a thought leader and a maverick. A creative spirit and an evangelist. After completing high school in the small north-German town of Zeven, Konstantin Guericke crossed the Atlantic in 1986 to study engineering at Stanford University, where he graduated with top grades. After completing his master’s degree, he started at graphics software company Micrografx, where he quickly rose from marketing associate to project director. — “That was an exciting time; we were breaking into a brand new world of graphics software. Unfortunately, Corel pulled the rug from under our feet, despite the fact that we had taken our product to market several years before they did.” Guericke still sees this as the heaviest defeat of his career. — But with the cofounding of the business networking portal LinkedIn in 2002, Guericke realized his vision and celebrated his greatest success. “We built up LinkedIn into the world’s largest profitable business network,” he says. The idea for LinkedIn stemmed from Guericke’s passion for combining new technologies with established behavioral patterns. At LinkedIn, these patterns are communication and relationships. “We’re social animals. But vital human elements, such as trust and social capital, were previously ignored in the IT world,” he says. “LinkedIn changed all that.” — “The human element is gaining ground. Thanks to the Internet, users have access to a previously unimagined array of online services. They choose services that are easy to operate and that bring real value.” Guericke places the “IT revolution” on a par with the industrial revolution. IT, he says, has the potential to help an ever growing number of people work independently and as entrepreneurs. — Nevertheless, he warns of the danger of being seduced by technology. His advice? “Products must serve the needs of individual users, otherwise they will not be put to best use – and the company will not reap the anticipated benefits.” He points out that companies must be realistic about user motivation and try tohelp their employees achieve maximum productivity levels. — From 2006 through 2008, he worked as CEO of jaxtr, a company that specializes in linking cell phones to the Web. “Voices are a very powerful and emotional form of expression, something that is missing on the Web,” he says. By registering your cell phone and other phone numbers with jaxtr, you can make and receive phone calls without revealing your telephone number or the number of the person being called. — Guericke returned to LinkedIn at the end of 2008 as an advisor, working to establish the company in the German market. He is also using this time to readjust his work-life balance. “I enjoy hiking and playing tennis. As a father of young children, I’m happy if I manage to do either of these even once a week!” he says with a smile.
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Editorial team: Johannes Gillar (editor-in-chief), Tim Clark, Stephan Magura, Perry Manross, Iris Nagel-Martin, Susan Sills, Uta Spinger, Christoph Zeidler, Michael Zipf Production manager: Sabine Vogler Other authors: Sebastian Keller, John Martin, Sebastian Nikoloff, Simone Ringelstein, Bernd Seidel, Marcus Winkler Translations: S AP Corporate Translation and Coordination Articles where names are given do not necessarily reflect the opinion of the editors. Unsolicited manuscripts will not automatically be published, nor does the publisher assume any responsibility for them. Cover: Handmadefont, Estonia Photo sources: alamy, Oxfordshire, UK: 40; Georg Flor, Vienna, Austria: 30-31; fotolia, New York, USA: 21; Getty Images, Munich, Germany: 5, 10-11, 48-49*, 74*; Jörg Gläscher Fotografie, Leipzig, Germany: 4, 12, 14-16; grasundsterne, Munich, Germany: 4, 7*, 16*, 17, 32*, 34*,44-47, 52-55*, 63*, 65*; iStockphoto, Calgary, Canada: 19*, 21, 22-23*, 36*, 38, 40, 60*, 62; JSUG, Tokyo, Japan: 74, 75; Carina Kircher, Wiesloch, Germany: 7, 41, 43; Martin Klimek Photography, San Leandro, CA, USA: 5, 77; Kompak Nederland BV, Etten-Leur, Netherlands: 46; MRC, University of Bremen, Germany: 20; OpenStreetMap. org: 72-73*; Reinhard Podlich, Frankfurt a.M., Germany: 68; Poste Italiane, Rome, Italy: 37; Edzard Probst, Munich, Germany: 24-25; Andrew Rae, London, UK: 8; Rösler Oberflächentechnik GmbH, Bad Staffelstein, Germany: 46; RWE IT GmbH, Essen, Germany: 67; SAP AG (Chris Kakol): 29; SAP AG (Wolfram Scheible): 4, 27; Skullcandy, Inc., Park City, UT, USA: 46; Ben Van Skyhawk, Mühlhausen, Germany: 4, 58-59*; StyleWest, Oxnard, CA, USA: 50-51; Jim Sugar, Mill Valley, CA, USA: 59*; Toyota Tsusho, Nagoya/Tokyo, Japan: 61; Wikipedia (Mdiagom): 40 * Artwork grasundsterne Cartoon: Dirk Meissner Produced by: grasundsterne Werbeagentur und Corporate Publishing GmbH, Munich Kapuzinerstr. 9 Tel.: +49 (0) 89 720 16 90 80337 Munich, Germany tim.sternefeld@grasundsterne.de Printed by: Colordruck GmbH, Leimen, Germany Subscription: Tel.: +49 (0) 62 27 7-4 63 13, E-Mail: sap.spectrum@sap.com Advertising sales: Signum communication Werbeagentur GmbH Caroline Westenhöfer Tel.: +49 (0) 621 339 74 112 Lange Rötterstr. 11 Fax: +49 (0) 621 339 74 333 68167 Mannheim, Germany westenhoefer@signum-web.de The publisher is not responsible for the accuracy or any information given in the advertisements. Copyright © 2010 SAP AG. All rights reserved. Reproduction allowed only with the publisher’s express permission. SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Intelligent Question, and Xcelsius are trademarks or registered trademarks of Business Objects in the United States and/or other countries. All other names mentioned herein may be trademarks of their respective owners. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.
Mat. No. 50098259 Print issue: ISSN 1869-7372 Online/PDF: ISSN 1868-3274
I have a hard time keeping up with progress these days. Sometimes I can’t even tell the difference between science and fiction. My microwave oven has got me flummoxed (how can it heat my soup without a flame?), and I have the sneaking suspicion that my cell phone knows more about contacting my friends than I do. Just yesterday I was reading about Augmented Reality (AR), one of those new-fangled technologies that are threatening to march into daily life with the self-assuredness of computer games. Sure, it’s still being developed, but its developers are ambitious. AR enriches what we see, hear, and feel with additional information – with the goal of making processes more efficient. My cell phone, which is considerably more intelligent than I am, will become even more so with an AR app and be able, for example, to tell me the height of the Eiffel tower. I’m not quite sure what this is good for, but I am impressed. And a diving mask will not only indicate oxygen levels but also point out beautiful coral reefs and their colorful inhabitants. Playthings, I hear you say. But AR will also have practical uses. AR in the OR will help surgeons keep an eye on things since the vital statistics of the patient will be displayed in surgery safety glasses. Hats off to firefighters, who will be able to see, thanks to an AR app in their helmets, where they need to concentrate their efforts. And thanks to head-mounted displays, technicians will make fewer mistakes because they will be able to see which plug goes into which socket. I’m convinced that this new technology has many advantages. In an AR-world, displays and monitors are superfluous, clearing up my desk for more coffee cups. And jogging through the park, I can decide whether I would like my virtual personal trainer beside me or prefer to be, old-fashioned as it may sound, alone with my non-augmented thoughts. And enough of heavy guidebooks: my designer sunglasses will tell me where all the sights are. This may be a naïve question, but what happens if AR technology should break down? Will highly-paid specialists search frantically for any books or notes that they still may have? Will technicians have to take refresher courses? The continuum that spans the real environment and the virtual one is called Mixed Reality, but I wonder if it’s more mixed up than mixed. Sometimes I strongly suspect that progress may be in the eye of the beholder. Author: Sebastian Keller
SAP TV: SiWear – augmented reality at Daimler AG www.natureOffice.com / DE-134-436848
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