Issue 16 | Summer 2011
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MINING AND RESOURCES Powering the engine that’s driving Australia’s economy
UNWIRING THE ENTERPRISE
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Are you prepared to lose control?
MANUFACTURING TECHNOLOGY KEY TO COMPETITIVENESS
CASE STUDIES GEORGE WESTON FOODS; CENTRELINK
YEAR AHEAD PREDICTIONS FOR ICT PRIORITIES IN 2012
Who will be our Top 10 Most Influential People in SAP for 2012?
We are looking for the most influential people in the ANZ SAP community during 2011 in the following categories:
• Most Influential Community Contributors: those who have led the way through speaking, writing, blogging and consulting
• Most Influential Project Leaders: those on the
customer side who have had a significant impact on SAP projects
• Most Influential Partners: representatives of ANZ
partners who have taken a leading role in innovation
Send your nominations to editor@insidesap.com.au by Friday 20 January 2012.
A shortlist will then be published on www.insidesap.com.au for voting from Monday 23 January, and the Top 10 will be named in the March edition of Inside SAP.
The independent magazine for SAP professionals
CONTENTS
10
12
15
16
28
36
4 5
Editor’s note Quarterly news roundup
8 News in focus: IDC’s predictions for 2012
10 Centres of influence: SAP Influencer Summit 2011
Perspectives
15 C ase study: Fighting fraud at Centrelink
13 Rapid Deployment: Accelerating time to value – Steven Birdsall
14 Automation: Taking process automation to the next level – Carsten Nelk
26 How SAP Business ByDesign will change the way SMEs do business
Industry sector feature: Manufacturing 16 C ase study: Removing the pain from commodity trading at George Weston Foods
19 Modernising manufacturing
12 Business Intelligence: Outlook for 2012 – Vitaliy Rudnytskiy
SME Focus
Industry sector feature: Mining and resources 21 Capitalising on the boom 23 Case study: Meeting the challenges of maturity at Idemitsu Australia Resources
Technology 27 The world at seven billion 28 HANA in action: big bang or a slow burner?
30 Unwiring the enterprise: are you ready?
33 On the Move 36 Ecosystem raises over $35,000 in support of Redkite
38 Event calendar
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EDITOR
The independent magazine for SAP professionals
Managing Editor
From the Editor As most people started winding down for the year, SAP was amping things up at its Influencer Summit 2011. In keeping with the dominant themes of the year, its focus was cloud and HANA, with a dash of mobility thrown in. Our round-up of the event, including feedback from the influencers themselves, is on page 10. In this edition, we also take up some of these threads. As HANA sales worldwide surpass US$100 million, IBM’s Keith Murray gives us some insight into the ‘early adopter’ projects he has seen around the world, and where companies are gaining real value from its use. Consulting Networks’ Brian Pereira discusses how SAP Business ByDesign could change the way SMEs do business, while in a more wide-ranging article, Todd Hewlin and Scott Snyder discuss how enterprises can “ride the wireless wave” as the mobile revolution takes hold. In our industry sector features this month, we focus on two important industries for Australia – mining and resources, and manufacturing. As our mining boom continues, it is not only the giants of the industry that are opting for SAP, but junior miners who are also choosing to set their foundations as they make the tricky transition from exploration to production. Local coal mining company Idemitsu Australia Resources, while well-established, had to address new challenges around organic growth with an implementation of SAP Business All-in-One for Mining. Read the case study on page 23. Already struggling to maintain a foothold in Australia in the face of global competition, the manufacturing sector is facing a tough time over the coming year as economic conditions around the world tighten further. Plaut’s John Broadbent argues that Australian manufacturers need to leap ahead in their thinking if their systems are to support the competitiveness of their operations going forward. Our case study on food manufacturer George Weston Foods shows how it can be done – an industry-first implementation of SAP Global Trade Management has delivered important efficiencies during the company’s busy harvest period. Finally, it’s time to start thinking about who you think has been most influential in the SAP ANZ community over the past year. We are seeking nominations in three categories: Community Contributor, Project Leaders and Partners, so please send your nominations to editor@insidesap.com.au by Friday 20 January. Voting for the 2012 Inside SAP Top 10 Most Influential People in SAP will open on Monday 23 January. Enjoy this edition – and best wishes for a great start to 2012.
Freya Purnell Managing Editor, Inside SAP
4 Inside SAP magazine
Freya Purnell t. (02) 9929 5465 m. 0412 602 579 freya.purnell@insidesap.com.au
Journalist/Editorial Assistant Anne Widjaja t. (02) 9929 5465 anne@flapjack.com.au
Creative Director Justin Knights t. (02) 9929 5465 m. 0425 292 075 justin@flapjack.com.au
Advertising Sales MW Media Darren Matthews t. 02 9029 6028 m. 0411 259009 darren@mwmedia.com.au Stuart Whitmore t. 02 9029 6028 m. 0403 003 703 stuart@mwmedia.com.au
Published by FlapJack Media Pty Ltd Suite 7, Level 9, 122 Arthur St North Sydney NSW 2060 ABN: 93 142 878 135 © 2011 FlapJack Media Pty Ltd. Inside SAP is published four times a year by FlapJack Media Pty Ltd. All rights reserved. No part of the publication may be reproduced in whole or part without the written permission of the publishers. FlapJack Media Pty Ltd makes no representation or warranties with respect to this magazine or its contents including, without limitation, material communicated by third parties. FlapJack Media Pty Ltd does not warrant that the information available in this magazine is accurate, complete or current. Opinions expressed are those of the respective authors and not necessarily of the publisher. Neither FlapJack Media Pty Ltd nor any persons involved in the preparation of this publication will be liable for any loss or damage as a result of use of or reliance upon advice, representation, statement, opinion or conclusion expressed in Inside SAP magazine.
NEWS
QUARTERLY ROUNDUP
What’s new in the SAP world SAP news SAP AG has staked its claim in the cloud space with its acquisition of SuccessFactors, a leading provider of cloud-based human capital management solutions, for US$3.4 billion. The transaction, under which SAP offered $40 per share, was unanimously approved by the SuccessFactors board of directors. Lars Dalgaard, founder and CEO of SuccessFactors, will lead the cloud business of SAP in addition to continuing his CEO role with SuccessFactors, which will remain independent and be named ‘SuccessFactors, an SAP company’.
At the combined SAPPHIRE NOW and SAP Tech Ed in Madrid in November, SAP revealed it will replace the traditional database layer underneath SAP NetWeaver Business Warehouse (BW) with SAP HANA. The replacement will enhance query performance, provide faster data loads, and significantly reduce the total cost of ownership (TCO) by simplifying and streamlining the IT landscape. Also at SAPPHIRE, SAP unveiled enhancements to the SAP HANA platform, including adding more core foundational in-memory computing technologies.
SAP also announced it will spend more than US$2 billion in the next four years to grow its business in China. SAP is aiming to scale its existing Chinese operations, in order to drive innovation in China’s SAP research labs and research facilities. The investment will focus on four key areas: SAP Labs in China becoming primary innovation centres; increasing its market presence by creating new offices and increasing recruitment; investing in services and support functions; and growing the IT ecosystem by building relationships with both traditional and non-traditional partners. Earlier in the year, SAP indicated that it would now avoid large-scale upgrades in favour of incremental innovation, through delivering new features for SAP Business Suite 7 on a quarterly basis. The company said the move is aimed at ensuring upgrades are as non-disruptive as possible, allowing businesses to determine what features they want to adopt without having to undergo major upgrade efforts. To ensure that customers will be on the cutting edge in running their business, the software enhancements will be introduced in areas where the company believes customers can benefit most, for example, in mobility, in-memory computing technology and cloud computing.
Project news A report by the NSW Auditor-General revealed that the NSW Department of Education and Communities’ eight-year IT transformation program has failed to meet expectations. The implementation was set to occur in two phases, with the SAP Financials implementation delivered in the first phase to TAFE NSW and in schools, and then to schools and state and regional offices in phase two, with an original go-live date of mid-2011. However, the report said the system did not meet the needs of users, requiring manual workarounds to be built, which resulted in lost time and additional costs. Following a review of
the project earlier this year, the Department changed direction on the project, instead opting to appoint a provider to manage the implementation of an integrated, end-to-end solution instead of separate SAP systems. IBM and Accenture were reportedly competing to provide the integrated solution, with the new system expected to be piloted by late 2012.
www.insidesap.com.au 5
NEWS QUARTERLY ROUNDUP
Project news Australian water utility company TRILITY has selected an SAP Business All-in-One solution, implemented by Oxygen Business Solutions, to better integrate its business functions and provide improved service to customers. TRILITY sought out an advanced business management software solution to extend its leadership position in the water industry. The system is expected to go live in March 2012.
Device Technologies, a major supplier of leading edge medical equipment and consumables to hospitals and healthcare professionals, will implement SAP Business Communications Management for its contact centres in Australia and New Zealand. Device Technologies already uses SAP ERP, CRM and Warehouse Management technology, and needed a solution that could seamlessly integrate with these existing systems to provide an end-to-end client interaction system with full visibility of all client actions. SAP partner BluLeader has been engaged to implement the solution, with the project expected to go live early in 2012.
Partners expand capabilities SAP and leading data consulting and services provider Utopia, Inc., have announced they will expand their partnership to cover Australia and New Zealand. In response to growing demand for enterprise information management (EIM) and enterprise asset management (EAM) services, Utopia will be opening new offices in the region to provide EIM and EAM services to local SAP customers. Utopia will be targeting mid-size to large organisations and pursuing a go-to-market strategy that positions its services alongside the SAP EIM software toolset. Utopia has already begun staffing efforts to fulfil local demand for 2012 and beyond.
Vesta Partners, a global SAP Enterprise Asset Management (SAP EAM) technology specialist, has expanded its operations into the Asia-Pacific region, establishing an office in Melbourne. Former BHP Billiton executive and international consultant Peter Dunford will be managing director of Vesta’s Australia AsiaPac operations. Dunford will be supported by Craig Anderson, as director of operations, and Drew Parkinson, director of professional services for Vesta Australia AsiaPac.
SAP’s largest Business Intelligence implementation partner, Innogence Limited, has signed a partnership agreement to add the SAP HANA platform to its offering. Innogence director Ian Markram said the company has successfully completed an SAP HANA proof of concept, and is currently in the blueprint stage of the HANA deployment. In order to cater for the rise in demand, Innogence has established an in-memory computing practice that will build on the current HANA capability within Innogence, and ensure ongoing alignment with SAP technology.
Oxygen Business Solutions has launched an SAP Business All-in-One implementation capability in New Zealand, following the signing of a channel partnership agreement with SAP. The partnership will allow local, growing mid-sized companies access to a complete portfolio of SAP solution. The company has appointed a new business development manager, Nicole Seselj, to lead the mid-market product.
www.jobs.insidesap.com.au 6 Inside SAP magazine
Industry trends IT analyst firm IDC predicts that by 2015, the cloud will no longer exist as a standalone concept, and will instead be integrated into every facet of a business’s service delivery. IDC also predicts that the technologies of cloud will become intrinsic parts of the IT infrastructure landscape. These moves will result in CIOs being required to manage a hybrid environment comprising on-premise, outsourced, managed and cloud-sourced services. The first Insights Quarterly report, commissioned by Fujitsu and Microsoft Australia, found that whilst the alignment of ICT with business aims remained the primary objective of many CIOs, it was noted that business issues are often stronger drivers than technology issues. Almost half of the 200 CIOs surveyed saw these changing requirements as the most difficult challenge. The report also found that virtualisation will be the most relevant future technology, and that business intelligence remains an area of significant investment. However, while cloud computing was named as one of the most important technologies, it was also regarded as “overhyped”.
A panel of experts concluded that the rapid adoption of mobile and remote access technologies, and the subsequently increasing mobility of the workforce, would continue to redefine the face of the Australian workplace over the coming 12 months. In particular, it foundthat Generation Y wants access to information when convenient for them, and they expect minimal rigidity regarding when and where work is performed. To attract these younger candidates, organisations will need to respond by offering greater choice in remote work and telecommuting.
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17.11.2011 10:26:16
NEWS IN FOCUS BY ANNE WIDJAJA
Outlook for 2012 for Australian ICT: IDC predictions Analyst firm IDC has predicted that despite market volatility being at an all-time high, companies should expect growth in information communication technologies (ICT) within the region in the coming year, in its 2012 Australian ICT Predictions report. Matthew Oostveen, research director for IDC Australia, believes that while Australia has survived well through turbulent economic conditions, economic uncertainty will change the way companies invest in ICT. “As we head into what looks to be a turbulent 2012, the only certainty is uncertainty. While this region is becoming increasingly resilient to the economic woes of other regions, companies are likely to hedge their bets when investing. As consumers and workforces are becoming smarter and more demanding companies will need to match their efforts with intelligent spending to avoid getting their fingers burnt in case another world-wide crisis hits,” said Oostveen. IDC forecasts ICT spending in the APJ region to reach US$653 billion in 2012, a rise of 10.4 per cent over 2011 figures. However, it appears that growth will gradually slow in the future. The growth predicted for 2012 is already below that of 2011, and it is predicted that rate will continue to drop over the next four to five years, but will still remain above 9 per cent by 2015. Among the top 10 key ICT predictions from IDC for 2012, those expected to have the biggest commercial impact on the Australian ICT market are: 1. Data variety will become a manageable entity ushering in a new set of decision platforms for organisations. Big data, business analytics and business intelligence will converge to become knowledge and decision-making strategies. IDC expects a newer wave of platforms to emerge combining both ends of the decision management model and bridging the gaps between the strategic, operational, and tactical decision management. 2. 2012 is the year mobility will come of age. The mobile enterprise will eventually accelerate the pace of workflow digitisation and increase the need for device management solutions in the workspace. As these strategies mature, CIOs will look for ways to effectively produce utilisation metrics for their mobile strategies. 3. The mobile enterprise will create the hottest security threats in 2012. The number of mobile devices and the nature of their usage will come under scrutiny as data loss and leakage incidents rise rapidly. As a result, securing and managing mobile devices within the enterprise will become a core focus for IT departments.
8 Inside SAP magazine
4. 2012 will be the year enterprises automate their environments en masse. During 2010-2014, IT employment, now at 35 million, will grow by a factor of 1.3 worldwide. This is a constraint in an industry that will grow by a factor of 1.1 by spending, but by more than a factor of 2 by devices managed, 5 by information created, and 8 by networked interactions between customers. IDC views this as a long-term structural constraint that will create an incentive for IT organisations to invest in automation and keep up with the increasing scale and complexity of operational IT environments. 5. The carbon tax will place energy use at the core of ICT decision-making for manufacturing, utilities and transport organisations. 6. Opportunities in the mining sector for ‘high performance computing in the cloud’ will accelerate. This is because a fundamental requirement of the activities involved in exploration and discovery within the mining, and oil and gas sectors is the collection of data to inform investment decisions. 7. Services contracts must demonstrate business value KPIs in 2012. Operating in a mature economy, Australian enterprises understand the dynamics of leveraging the full benefits of outsourcing. In 2012, these relationships will increasingly mandate that business value outcomes are included as KPIs in commercial contracts. 8. Everything communication moves to the cloud. 2012 will be the year communications (for example, IM, presence, collaboration, and conferencing) move to a cloud delivery model. Services will be increasingly provisioned and deployed from the network through automated tools and priced by the seat to deliver a pay as you go commercial model. 9. A desire for simpler, flatter network architecture and bandwidth scalability, flexibility will drive carrier-grade WAN ethernet services. IDC forecasts that metro ethernet services will grow by 13 per cent in 2012 to reach in excess of $1.1 billion. 10. Network separation in Australia will force operators to take on an entirely new identity unseen anywhere else in the world. IDC predicts two specific outcomes: firstly, the agreement with NBN will accelerate the roll-out of next generation mobile broadband services, specifically LTE, and secondly, carriers will redouble their efforts on promoting IT services in areas such as cloud computing, security, and collaboration, with additional capabilities around professional services.
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EVENT
INFLUENCER SUMMIT
Centres of influence Last year’s two-day SAP Influencer Summit gathered an audience of over 100 of the industry’s top analysts, media professionals, academics, business thought leaders, and bloggers. This year’s expanded online presence made the 2011 Influencer Summit SAP’s biggest yet. But did SAP’s announcements measure up to the hype? Anne Widjaja reports on what the influencers themselves had to say. The ‘new’ SAP Jonathan Becher, chief marketing officer, SAP, opened the Boston summit by trumpeting a “new” SAP that “thinks outside in more than it thinks inside out”. Becher emphasised that most importantly, the new SAP was “a company that puts our customers and our partners first”. This new outlook was matched by the ambitious goal for SAP to become the world’s second largest database vendor by 2015 – a claim made by Steve Lucas, global GM and senior executive, business analytics and technology, SAP.
Mobility One of the most touted SAP achievements of 2011 was SAP’s mobile expansion. Sybase executive vice president and head of SAP mobile applications, Dr Raj Nathan highlighted in his keynote speech that SAP had met its goal of releasing 30+ line-of-business mobile apps and currently had 17.5 million total end user seats sold. Nathan suggested that the SAP/Sybase platform is meeting these ambitious goals by responding to mobility trends, including the need to manage the entire lifecycle of both consumer and enterprise apps, improve the user interface of apps, and accommodate developers who want to use HTML5 technology.
HANA While bloggers were surprised that the summit did not become the “HANA-lyst” event expected, Dr Vishal Sikka, SAP executive board member and chief technology officer, did focus in his keynote on an important discussion of HANA. Announcing that HANA sales had just reached US$100 million, Sikka explained that the platform’s unique ability to hold data and process it in RAM instead of reading it off disks meant that it was capable of performing 1000 times faster than conventional
10 Inside SAP magazine
relational databases. Social ambassador for SAP HANA and technology, Dorothea Sieber, commented on a blog post, “even though Vishal was streamed virtually, influencers were very pleased with his keynote and said it was the most realistic and comprehensive discussion of SAP HANA they’ve seen”. The HANA in-memory database was also positioned as the centre of the reinvention of SAP’s software architecture. Sikka explained that HANA architecture could serve as more than a database, functioning as a platform used for both existing products and applications, and for building entirely new applications. Sikka announced the comeback of renewed apps such as Dynamic Cash Management, and the development of entirely new HANA-based apps. He used as an example an app for Chinese retail customers, which compares different retailers and their collections in real time, and highlighted the increasing level of industry adoption of SAP HANA, with new clients such as TIBCO, Tableau and Jive. While little was revealed about the new partnership between SAP and TIBCO, blogger Dennis Howlett spoke to Murray Rode, COO of TIBCO, and discovered that TIBCO is expected to help “SAP fill gaps in analytics and social computing in the context of customers needing insights from huge volumes of data going through the SAP HANA system and in real time”.
The cloud Although influencers were hoping to hear more on SAP’s recent US$3.4 billion acquisition of SuccessFactors, the largest enterprise cloud apps vendor in the world, SAP executives revealed little about the move, despite the focus of the two-day summit being SAP’s cloud strategy.
Jim Hagemann Snabe, co-CEO, SAP, announced in his keynote address: “The combination of our assets and SuccessFactors moves us from a company that has been trying to get it right… to one that will accelerate rapidly in this world. We’re now going from a defensive mode to an offensive mode.” Blogger Brian Sommer believes that this move has the potential to make SAP a “more formidable and relevant competitor to Workday and Salesforce. com”. Peter Lorenz, executive vice president, OnDemand and corporate officer, SAP, announced that SAP plans to roll out services that will integrate both SAP applications running on the cloud, and third-party applications running locally in a customer’s data centre. Simultaneously, SAP is also developing a new platform-as-a-service (PaaS) which will be based on the in-memory computing technology in HANA, allowing developers to create cloud applications in either SAP’s ABAP language or Java. This focus on developing SAP’s cloud ecosystem also involves collaborating with partners such as Google, which will leverage SAP’s BusinessObjects processes and the Google App engine in order to integrate document and data flows. Greg Tomb, recently appointed head of global ondemand sales and go-to-market, SAP, also announced the recruitment of a new sales team of almost 500 people dedicated solely to cloud apps, such as Business ByDesign, Sales OnDemand, and Sourcing OnDemand. However it may not all be sunshine and roses in the OnDemand space – bloggers have commented that this new direction may be indicative of the death of Career OnDemand.
SME: a growth story Snabe said in his keynote speech that the largest growth in the market would come from SMEs. According to Snabe, SAP Business One is one of the most successful reporting systems for SMEs in the industry, with more than 32,000 customers currently using the system, growing by 15 new users a day. In a video blog wrap-up on day one of the summit, Howlett critiqued SAP for lacking in their development of SME-targeted software. He argued that they could learn more from basic SME software developers, in areas such as cash management, in order to better meet the needs of SMEs. He wrote on his blog: “SAP is going to need hundreds if not thousands of apps to support vanilla solutions like ByDesign and BusinessOne. While SAP has millions of developers in its community, it doesn’t have enough of the right kind of developers who can work in agile fashion.”
By contrast, Howlett praised the number of SAP executives that recognised the subsequent need to “radically simplify enablement of the developer community in technologies like HANA, Sybase Unwired Platform, Gateway, NetWeaver and others”.
The wrap-up Commentators have been generally positive about the outcome of the 2011 SAP Influencer Summit. SAP’s announcements show a clear vision for the year ahead. However, critics like Sommer have suggested that SAP’s creation of more on-demand apps will cost businesses more money without delivering any additional value, as these apps are not replacing any existing modules. Sommer also argues that while SAP’s development of their cloud strategy is notable, SAP is still far behind competitors such as salesforce.com and NetSuite. Howlett also raised the issue of encouraging developers to create apps using SAP software, and said it is unlikely that SAP can overshadow players like Apple. With the challenges and opportunities ahead, it seems that 2012 will be an interesting year for SAP. Only time will tell how successfully they will execute these plans for next year. The independent magazine for SAP professionals
Top #SAPSummit tweets Last year’s summit was tweeted about 8000 times, and the tweets attracted two million views. So what were influencers tweeting about this year? @lauriemccabe (lauriemccabe) Is IT the only industry in which every time we solve one problem, we create another? :) #sapsummit @monkchips (James Governor) 3 out of 4 SAP ByDesign partners have little beards. you heard it here first, guys. #sapsummit @jameskobielus (jameskobielus) #SAPSummit Cloud & tablets. Some guy named Moses got some tablets that descended from a cloud. Long time ago. Or so the story goes. @sapdba (David Hull) Every screen I see has twitter open. The times they have a-changed. #SAPSummit @finnern (Mark Finnern) Reflecting on amazing #sapsummit: conversations with all these smart people was best. They challenge your thinking. More breaks please.
www.insidesap.com.au 11
COLUMN BUSINESS INTELLIGENCE
Outlook for 2012: a reality check for SAP BI technologies and our skills By Vitaliy Rudnytskiy Recently I participated in recording of the podcast ‘Debating the Value of SAP HANA’ (www.jonerp.com/content/view/417/89/). At the end, everyone was asked to give a brief insight into what they should expect in 2012. I shared my view there: “2012 is going to be the year of customer stories, not testimonials.” Perfectly recorded customer testimonials, as we saw them during last year at SAP events, will give way to real customer stories. More and more customers will be implementing the latest and greatest from SAP in the Business Intelligence space: SAP BusinessObjects 4.0 and applications powered by SAP HANA, including SAP NetWeaver BW 7.3, as well as cloud applications. The well-oiled SAP production machine is going to throw on the market many long awaited functionality and integration capabilities. Let’s look in more detail at what may develop in 2012. 1. Recently the focus of SAP marketing messaging shifted from their in-memory technology and SAP HANA platform to the cloud-based products. It certainly makes sense, as SAP’s cloud offering is much closer to traditional SAP’s domain of business applications software, comparing to the technobuzz-intensive language of in-memory processing. SAP’s major focus in the cloud is on their ERP offering, like Business ByDesign, but BI professionals should keep an eye on SAP BusinessObjects BI-onDemand solution. Not that actively promoted yet, it will be an interesting proposition for the SME market. 2. SAP HANA will keep growing in the business analytics world, but mainly through the SAP project code-named ‘BW Orange’ – SAP NetWeaver BW 7.30 powered by SAP HANA. Currently in the ramp-up, BW Orange is expected to become generally available around Spring 2012. It has been rightfully called “the killer app” for HANA already by many. I cannot agree more. Although the ABAP-based analytics engine of BW 7.30 is not yet fully optimised for the power of in-memory computing, even current results available from early adopters are impressive. Almost every BW customer is asking about it, and with SAP adjusting HANA pricing towards market adoption, BW Orange will be a matter of when, not if, for many customers. 3. Also in Spring we should expect Feature Pack 3 for SAP BusinessObjects BI 4.0. Earlier announced as Release 4.1, this Feature Pack will combine customer fixes with new functionality. An interesting aspect of this new functionality will be the possibility of using the SAP HANA database as a repository for CMS and auditing data. It has been long expected, because today you can use SAP HANA only as a reporting repository with SAP BusinessObjects BI Platform 4.0.
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4. For further adoption of SAP HANA for custombuilt data mart solutions, SAP has to deliver a complete Integrated Development Environment. The current modelling environment in SAP HANA Studio is missing debugging and code management functionality. It will be difficult to use the HANA Studio as an enterprise tool without these features. While waiting for this functionality, as a BI developer in the SAP space, you should start learning SQLScript – SAP’s new language for pushing application logic down into the HANA database engine. If your organisation does not have a HANA installation yet, you can start learning by signing up for https:// www.experiencesaphana.com/ and by requesting your access to a trial developer box to practice HANA on your own. 5. “Developers are back” said one of my colleagues, summarising his experience at the SAP TechEd conference in Madrid. Indeed. As just mentioned, SQLScript skills are just one of many that will be required among developers. According to SAP’s roadmap, many SDKs will be delivered in 2012, including the way to integrate BI data into your ERP and mobile applications. 6. Through SAP’s efforts to simplify system deployments via cloud and an appliance-like approach on one hand and then automating many tuning, integration and administration tasks, we should see shift of the “middle men” – people who were busy with these repetitive tasks – either into the higher layer of more business-focused development or into the deeper layer of technical system management in consolidated data centres. 7. Just a few weeks ago, SAP announced that new partners for their in-memory technology will include Tibco and Tableu (www.sap.com/corporate-en/press/newsroom/press-releases/ press.epx?pressid=18063). After years of integration of BusinessObjects with SAP products, it is a step in a new direction of re-opening SAP platforms for vendors who are competitors with SAP in some other areas. In a nutshell, the speed of change is increasing and the responsibility for building lasting yet adoptable solutions lies on both side: on SAP as they are developing their software, and on ours as we are implementing it. The independent magazine for SAP professionals
Vitaliy Rudnytskiy is master technology consultant with Hewlett-Packard, SAP Mentor at SAP Developers Network (sapmentors.sap.com), a blogger at Vital BI (VitalBI. wordpress.com) and a speaker at many industry conferences. He lives in the city of Wrocław in Poland.
RAPID DEPLOYMENT INTERVIEW
Accelerating time to value About 70 per cent of IT implementations are unsuccessful because they are behind schedule, over budget or do not meet planned goals. SAP senior vice president of rapid deployment solutions and customer ops, Steven Birdsall, recently visited Australia to discuss how SAP is repackaging the rapid deployment solutions model to provide more innovative and flexible products to SAP customers. Anne Widjaja reports. SAP first began offering Rapid Deployment Solutions (RDS) in 2010, to provide what customers wanted most from an SAP implementation – predictability, flexibility and choice. “We are building solutions so that we can implement rapidly and get a very quick time to value for our customers in a predictable and flexible way. It’s important to customers to have that modularity and flexibility, so they can add to those packages. They want to know, ‘How do I quickly consume this new innovation that is coming out of SAP, along with the core products that I want to implement’, and that’s really what our RDSs are here to do,” Birdsall says. The applications take core functional elements from an existing solution, and include additional features for customer useability. “For example, with CRM, we took account opportunity management, which is the core of what companies want, and with a fixed price and fixed scope, built that into a package which included the additional tools that were necessary for the implementation, such as best practice wizards and project templates.” With Rapid Deployment Solutions, customers benefit from fast IT implementations, but they must balance this speed with the limitations of working only from a core functional package – although they are able to add flexible options. Currently, the solutions are offered across the various lines of business – from sales service and marketing, to engineering and human resource management. SAP plans to double the number of rapid deployment packages on offer in 2012, with new packages being released every quarter in order to respond to the dynamic needs of businesses. “We work with the local leadership of industries to identify packages that are relevant for a given market. We create
packages to deliver them back into the field, so we have the ability to implement those in a quick time to value fashion,” Birdsall says. This field-driven methodology also requires an expansion of the ecosystem, so that SAP can cover the market more broadly. He says the new solutions now enable value added resellers such as Business One or Business All-In-One partners to offer new solutions such as a CRM or supply chain relationship management offering into their current install base. “They can penetrate new markets for their own capabilities based on their industry or solution expertise. It gives them a much broader array of products they can sell, because we give them the ability to have products that are relevant to the market and in high demand, like our new in-memory products or mobility,” Birdsall says. Birdsall also believes that this new tack reflects the changing preferences of the market. “The demand from our customers to have on-demand solutions and more of a subscription-based model is something that we are adapting to. The opportunity is not only to bring new products, but also to offer them in a cloud-based environment so that however the customer wants to consume the software, we make it available to them,” he says. The success of rapid deployment solutions in specific lines of business also reveals shifting trends in the industry. “CRM was really the area where we began, and it’s really grown into Human Capital Management – employee self service and manager self service – and our manufacturing intelligence product, MII. Those solutions are clearly on the rise,” says Birdsall. In particular, SAP has seen a massive uptick in terms of customer adoption of its Treasury Management solution. Typically a complex implementation, customers are clearly seeing the benefit of instead using a scaled-back version which can be up and running in a matter of weeks. “Not only do we take some of the more simple solutions like Spend Performance Management but we also take some complex products like Treasury Management or MII and offer those through a rapid deployment solutions, and those are selling very well.” The independent magazine for SAP professionals
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INTERVIEW Automation
Taking process automation to the next level With shared service centres in particular looking to gain control and visibility of a wider range of processes through automation, Freya Purnell spoke to ReadSoft SAP Solutions Lab CEO Carsten Nelk about the company’s solution to this issue. As more organisations move to a shared services model to manage not only financial processes, but HR and other processes such as lease management, the benefits of automation become more attractive as a means of gaining control and increasing speed and efficiency. While ReadSoft is perhaps best-known for its account payable (AP) automation solutions, the company decided to go broader – to address the entire ‘purchase to pay’ and ‘order to cash’ process chains. In designing its new Process Director solution, which acts as a single platform for a whole range of processes, ReadSoft also had the opportunity to provide a better, more flexible business analytics solution. “Previously we didn’t have a good integration into SAP BI. Now we can provide clients with good numbers and reports so they can actually improve performance. It is very important to know where the bottlenecks are, and you can try and change the processes and get more efficiency later on,” Nelk says. This is particularly relevant for shared service centres – which may have deliver an initial uptick in efficiency improvements when first established, but then plateau. By focusing on optimising processes, further gains can be made. In addition to streamlining administrative processes by only allowing requests to be submitted if they contain the correct data and approvals, the solution provides the business with much greater transparency and visibility of the status of requests – rather than using paper-based processes that are slow, virtually invisible to management, and which don’t follow defined, repeatable processes. Frank Volckmar, managing director of ReadSoft Oceania, says this standardisation is critical for shared service centres. “If people can do [a process] different ways, you have no standardisation and you have no governance over the process, and then you can’t really measure the performance of the process either,” he says. For enterprises running SAP, there are some common pain points which it addresses. “For document-driven processes, it is usually that the interfaces into the SAP environment are not as flexible as they to be in order to accept some wrong data from a symantic point of view,” Nelk says. “Our solutions can take all the data in and try to correct as many problems as we can automatically. Very often we can do the job completely, and automate from beginning to end. If we are not able to do that, we can show the user in a user-friendly way what the problem is. “For request-driven processes, the pain point is ease of use. Because we have one common interface for the entire organisation, we are able to add different process types as we go forward, but users continue to use the same interface.” According to Volckmar, many customers also see a great deal of value in being able to access a consistent set of online forms with one workflow engine. “A lot of customers are using Adobe, Word, Excel, and they can’t control it. We’re giving them a solution that they can control. If they can control it, they can measure it. If they can measure and improve it, they can charge for it. That’s huge,” he says. This capability also allows shared service centres to create a tiered pricing model depending on the complexity of requests and the amount of time and resources they take to process, charging cost centres different amounts. Hear Carsten Nelk talk more about driving procure-to-pay performance in a shared service centre in a video available through YouTube (http://youtu.be/B32KhtxJRAo) or through the ReadSoft website (www.readsoft.com.au/shared-service-centres.aspx).
14 Inside SAP magazine
CASE STUDY CENTRELINK
Fighting fraud Through an implementation of SAP’s Investigative Case Management Solution, Centrelink has improved its investigation processes and systems, which will mean fewer taxpayer dollars lost to fraud. Freya Purnell reports. As a program of the Department of Human Services, Centrelink distributes over $120 billion in social security payments on behalf of the Australian Government. To ensure that payments are made to the appropriate recipients, Centrelink has a team of over 500 case officers and investigators, who together manage more than 22,000 cases of fraud or serious non-compliance. Prosecutions arising from these investigations result in an estimated saving to government of approximately $100 million.
Challenges Centrelink was implementing a strategy to improve payment accuracy and reduce fraud and non-compliance. In addition, an audit by the Australian National Audit Office had found deficiencies with the current system, which included a lack of rigour in following procedures, limited ability for management to oversee investigations, and investigators relying on locally managed databases, paper-based processes and old technology. These issues had led to a number of high-profile court cases, where citizens were able to prove that investigations were not conducted in accordance with the department’s stated guidelines. The challenge was therefore to provide a system to enforce processes, and support Centrelink’s increasing workloads, reduced budgets and demands for greater accountability.
Implementation SAP was contracted by Human Services to provide a solution that offered consistent workflow, efficient management oversight, enhanced operational visibility, policy compliance and systems support. The SAP Investigative Case Management solution, which is a relatively new solution, addressed most of Centrelink’s business requirements, and offered additional functionality by supporting operational issues with targeted, tailored solutions designed to meet its specific needs. The solution’s interoperability with Centrelink’s existing SAP footprint, which include SAP HR and Financials, was an advantage. In one of its first implementations globally, the SAP Investigative Case Management solution, installed within SAP CRM, was deployed in just four months. The project began in March this year, and the first investigation team went
live in July, with a national roll-out currently underway to complete the system’s functionality. A team from SAP Consulting spent a month completing the business blueprint, then proceeding quickly to implement. The blueprinting process was made simpler due to the Centrelink investigations team’s solid process knowledge. “They have known how to run investigations for many years, they just didn’t have a proper system to support it. They were really excited that they could access even simple functionality like search,” says Klaus Wigand, solution manager, public security, SAP, says. Designed to help investigators automate processes, streamline intelligence gathering and increase productivity and efficiency, SAP Investigative Case Management includes key business processes and tools to manage resources, assets and exhibits across the investigation lifecycle; to manage large volumes of information as part of daily operations to support intelligence gathering, grading and storage processes; to provide investigators with intuitive, role-based access to investigative information; and to manage and protect the distribution and sharing of information across the investigative ecosystem. Mike Brett, national manager, business integrity applications at Centrelink said, “SAP was able to demonstrate solution capabilities specific to Centrelink’s business processes and issues, and quickly established itself as a partner, rather than just a software vendor. The easily configurable framework and user interface have already been described as ‘next generation’ by the people using them. The fact we went from development to testing in six weeks was also a great achievement.”
Organisational benefits The benefits for the department are significant, including increased data integrity, an improved quality of management information, more consistent case management work practices, increased productivity through automation, assured compliance with policies, and the possibility of future interoperability with other government agencies. Importantly, according to Wigand, the end users were “extremely happy with the solution”. He says the system has now established new decision points, and provides users with much more process support. The independent magazine for SAP professionals
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CASE STUDY GEORGE WESTON FOODS
Removing the pain from commodity trading In an industry first, an implementation of SAP Global Trade Management helped major food manufacturer George Weston Foods gain the visibility they require to manage their busy harvest period. Freya Purnell reports.
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Their position reporting becomes absolutely critical – what their demand is, what they currently have contracted, what they have delivered and what their exposures are. Brian Dickinson, Extend Technologies
Background As one of Australia and New Zealand’s largest food manufacturers, employing around 8000 employees in around 60 sites, George Weston Foods (GWF) produces some of these countries’ best-known household bread and smallgoods brands, with other divisions including flour and milling, food service, and cakes and ingredients. Following the Global Financial Crisis, many large agrisector players shifted their focus to risk management, and with the majority already using SAP for their back office functions, demand to expand the SAP footprint to address core business operational activities and functions unique to their industry increased. The milling division of GWF identified three pain points to be addressed through a system upgrade – grower registration, general administration and processing, and position reporting for grain procurement. Extend Technologies was engaged as the implementation partner on the project, and according to Brian Dickinson, business development manager for mining and agribusiness at Extend, the initial business case revealed the need to undertake a two-stage project – which was labelled Project Novocain.
Implementation and challenges The first phase of the project, which began in March 2009 and went live in October of that year, was focused on fixing some of the problems in GWF’s existing SAP environment, which had been installed more than a decade earlier. This included adding front-end components such as the National Grower Registry interface, which provided a means to automate validation of grower registers and update the SAP vendor master data with the growers’ details. While they hit some unexpected integration issues, the changes made in phase one were up and running in time for the harvest period in October 2009 – a critical and very busy time for the GWF milling business. In 2010, they moved onto phase two, which involved removing the back-end legacy system, and replacing it with a more standard SAP engine in SAP Global Trade Management (GTM), an orchestration management solution. While the solution has been widely used in the oil and gas industry, it had not been successfully implemented for commodities in Australia before. “We decided to keep the solution to all standard SAP
tools, so we built it with a Web Dynpro front end. This exists outside of the GTM solution, but still within SAP, and then orchestrates through GTM into the SAP back-end. Ultimately, it looks like standard Sales and Distribution (SD) and Material Management (MM) contracts, but they are all done through the GTM engine,” Dickinson says. The system allows around a dozen different grain procurement contract types to be captured, ranging from track through to some grower specific type contracts such as hectare and variety. These as an example allow buyers to contract growers for specific varieties and tonnages with an estimated yield factor, from which the total tonnage is calculated. The solution then automatically generates the formatted contract in PDF format and automatically forwards it to the relevant counter-party through the appropriate communications channel: email, fax or mail. Another aspect concerns the process of grain deliveries – or tickets, as they are commonly known. “The Australian market is fairly unique in the fact that it is not just tickets to their own mills, they are also receipted at third parties such as the bulk handlers,” Dickinson says. “The solution provides for a ticket upload program which processes external electronic files, accommodating all the major Australian bulk handlers and provides a mapping component for GWF to map their own formats and changes in the future.” This includes a front-end error correction procedure. “All tickets process through GTM and are automatically matched against the relevant contract. The transactions then flow through automatically to update inventories and process vendor payments based on the agreed contracted terms,” Dickinson says. “Likewise, when a contract is struck, the contract pricing is automatically populated, including all deductions, freight estimates and levies, such that the ‘delivered to mill price’ is known at the time of writing the contract. We are also incorporating in the latest release unpriced contracts with pricing generated through an automatic feed from the Chicago Board of Trade. Another key component of the project was position reporting. For GWF, the harvest period – from October to January each year – is a crucial period, as they receive the majority of deliveries during this time. “Depending on their purchasing strategy, they may have decided going into the harvest that they would purchase 50 per cent of their stock through contracts,
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and maybe the other 50 per cent would be purchased through the spot market. They need to know what their position is – what their demand is, what they currently have contracted, what they have delivered and what their exposures are, so their position reporting becomes absolutely critical,” says Dickinson. Previously, because the administration was largely manual, simple things like pricing changes to tickets, such as updated storage and handling charges would have to be manually looked up, calculated and re-entered. The manual processing was causing a significant backlog in ticket processing during the harvest, resulting in the position report being several weeks out of date – meaning they were essentially flying blind. “Now all those pricing conditions are set up and automatically applied, including changes, so there is minimal to no administration required to process all those tickets,” Dickinson says. From a reporting perspective, the data is now fed into SAP Business Warehouse, and the position report is created using Portal and some Business Explorer reports. These improvements mean that the position report now accurately indicates their procurement position, and at most, is 24 hours behind. With phase two of the project kicking off in April 2010, the team faced a challenging timeline to have the system ready to go live for the harvest period beginning in October 2010. In addition to these tight timeframes, the company was also undergoing a number of other changes concurrently, therefore requiring very hands-on management to implement a brand-new solution on time. Dickinson attributes a large part of the project’s success to the Steering Committee, led by executive sponsor Hugh Robertson. “The Steering Committee was certainly empowered very well, which was a credit to the GWF management,” Dickinson says.
Business benefits Among the critical success factors for Project Novocain was having contracts standardised and ready for the 2010 harvest. By formalising their business rules and terms and conditions through these contracts, some of the discretionary elements would be removed from buying negotiations, resulting in more consistent contracts across the business. Another was being able to minimise the number of back office administration staff required, which automation of previously manual processes delivered. And just how essential having up-to-date information on procurement is for a business like GWF was demonstrated during the project itself, according to Dickinson, when commodity prices shifted $60-80 overnight. “That change is significant, and represents tens of millions of dollars for an organisation such as GWF, hence why the position reporting is so critical,” he says. The independent magazine for SAP professionals
INDUSTRY SECTOR MANUFACTURING
Integration still the focus for manufacturers Technology holds the key to efficiency and the competitive edge for many manufacturers, but are they ready for it? Freya Purnell reports. With economies under pressure around the world, manufacturers face new pressures as they try to find the most cost-efficient, competitive frameworks in a global market. Saj Kumar, VP of discrete manufacturing for SAP APJ, says that over the last 12 months he has observed a drive towards 24x7 manufacturing operations, and obtaining real-time visibility into these global operations has become non-negotiable. This has resulted in IT departments needing to integrate multiple plant systems into a central business system, and provide realtime analysis and reports to management. “Under current economic conditions, the pressure to globalise is immense and the rate at which companies have either moved their operations to lower cost product centres or outsourced operations has increased exponentially,” he says. “In the last 12 months, we have seen IT investments in the areas of global manufacturing visibility for compliance and reporting, and supplier collaboration platforms with outsourced partners and contractors.” Plaut IT Australia national solution lead – manufacturing integration, John Broadbent, agrees that some of the major concerns for manufacturers are supply chain visibility and distributed manufacturing. The Fukushima nuclear disaster early in 2011 was also something of a wake-up call for companies who had all their eggs in one basket geographically. “Now they have realised that remote control of smaller discrete plants close to market is actually a better model,” Broadbent says. Among Australian and New Zealand manufacturers, there is also a drive to improve efficiencies to remain competitive. Broadbent says using overall equipment effectiveness as a measure of operational efficiency, Australian manufacturers are typically averaging between 30 and 50 per cent, lagging well behind the global average of 60 per cent and world’s best practice of 85 per cent. However, there is a consciousness that work is needed to return these operations to world-class standard. “I’m finding that most manufacturers are stretched to capacity because they are not running efficiently and so they are focusing on fire-fighting,” Broadbent says. “My sense has been that manufacturing organisations particularly have now basically taken all the low-hanging fruit through budget cuts and headcount reduction, and now they’re looking at simply doing
what they do better through improved efficiencies.” Broadbent also says manufacturers expect to see quick wins from projects, with typical return on investment shrinking from two years to three to six months. Manufacturers are also looking beyond core efficiency improvements in transactional processing through ERP, according to Kumar. But the siloed nature of manufacturing systems is creating problems. “Plant workers typically are disconnected from enterprise systems and are not in tune with requirements or demand. This disconnect between plant and enterprise can create serious challenges. Significant opportunities for streamlining operations exist when you solve the information gap between the plant and the business,” Kumar says.
The benefits of integration It is this information gap that SAP has sought to bridge with its Manufacturing Integration and Intelligence (MII) solution, which connects to systems in the plant as well as to enterprise systems to provide a unified view of all the information relevant to manufacturing. MII provides a single view of information from multiple data sources, simplifying the process of relating orders and materials to real-time operations. “Our customers have seen increased productivity in manufacturing, continuous optimisation of processes and
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INDUSTRY SECTOR MANUFACTURING
performance, better equipment utilisation, faster, more reliable operational compliance and reduction in energy consumption,” Kumar says. With solutions such as MII, Broadbent believes SAP is responding “exceptionally well” to the need of manufacturers, as the type of integration it provides is critical for companies to progress along the manufacturing intelligence journey. Plaut has created a roadmap detailing the different stages of this path – from information, to knowledge, insight and wisdom. “The fifth step is actually foresight – you know now that the data you are receiving is real-time, it’s valuable, it’s the single version of the truth, and it’s used not to report on your business, but to actually guide your business,” Broadbent says. IDC Manufacturing Insights head – international, Dr Christopher Holmes, believes in 2012, we will see companies increasingly linking technology with efficiency improvements. “These companies will be focused on driving out cost and becoming even more productive with the increased use of analytics and automation. To increase top line growth, they will also be centering their efforts on satisfying domestic demand within the region, and exploiting new business opportunities in the after sales and support market.” Kumar also believes that over the next 12-18 months the focus of manufacturing CIOs will change from efficiency improvements through an ERP platform to strategic initiatives to drive competitive differentiation. This view supported by IDC Manufacturing Insights, which also says vendors must have a clear strategy on how they can assist companies to do this. In addition, vendors should look at how they can help manufacturers capture, store, analyse, and deliver data across functions to support decision-making. “The role of the CIO is becoming critical to the future of manufacturing companies. The key areas of focus are central manufacturing visibility to drive global operations; real-time information management tools to drive real-time sales and operations planning; mobile applications to support an increasing global and mobile workforce; and energy management in production operations through energy KPIs and dashboards,” Kumar says. From the ANZ perspective, Broadbent is not positive about the potential for increased IT investment by manufacturers over the next 12 to 18 months. He expects to see some attrition in the market, as those who don’t keep up their investment in their operations find it impossible to be competitive. But emerging requirements around areas such as traceability, which are now coming to the forefront, may force manufacturers to embrace technology faster. “Traceability takes on a bigger role in today’s supply chain given that they are extremely complex with many operators networked through complex relationships, an increasing number of cases of products manufactured through non-compliant manufacturing practices and poor quality of raw material, and increased regulatory pressure,” Kumar says. “Complete product traceability needs tight ‘closed loop’ integration between plant and enterprise systems. This is driving
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Manufacturing trends in 2012 In IDC Manufacturing Insights’ report, Asia/Pacific Manufacturing 2012 Top 10 Predictions, some of its key predictions were: The need for better decisions at strategic and tactical levels will drive the use of predictive analytics: Asia-Pacific manufacturers are expected to continue their efforts to counter supply chain risks in 2012, leading to a greater use of predictive analytics tools among the region’s manufacturers. The drive to serve domestic consumption will lead Asia-Pacific manufacturers to rethink their product and supply chain strategies: With countries in the west battling sluggish economies and high unemployment rates, to do well, manufacturers will need to reconfigure their product development and supply chains to meet local demand. For some companies, this may be an opportunity to embark on vertical integration. Investments in business intelligence and analytics will be used to improve manufacturing processes: these will be mainly used to support process improvements in supply chain, manufacturing operations and product development.
CIOs to invest in manufacturing integration solutions to connect the ‘shop floor’ to the ‘top floor’.”
HANA and the supply chain With its real-time capabilities for managing big data, SAP HANA could be utilised in manufacturing operations and across the supply chain, particularly in relation to Sales & Operations Planning – an absolutely critical part of managing supply and demand for any manufacturing company. “We believe that the ability to run S&OP in real time will dissolve traditional boundaries and silos and create a loosely coupled organisation that is quick to make rapid changes throughout the value chain,” Kumar says. “Some of the capabilities include constraint-based supply/demand balancing in real time at detailed and aggregate levels, instant company-wide financial impact analysis and real-time what-if scenario analysis on a full S&OP data model.” With suggestions that the next approved connector into HANA will be MII, this could be a reality for manufacturers soon. But Broadbent warns that many Australian manufacturers simply are not ready for a closed loop process incorporating HANA. “One company we were speaking with recently is running SAP Advanced Planning and Optimisation, but they can’t optimise their supply chain because the data from the factory floor doesn’t come in for five to six days,” he says. “They have got a long way to go to do the change management necessary on the factory floor itself to get the systems in.” The independent magazine for SAP professionals
INDUSTRY MININGSECTOR AND RESOURCES
Capitalising on the boom In Australia’s two-speed economy, the resources sector is the tearaway performer. After establishing itself as the ERP vendor of choice for the big end of town, SAP has shifted its focus to the new kids on the block to capture more of this dynamic market. Anne Widjaja and Freya Purnell investigate. As the clear market leader in the resources industry, SAP counts among its customers Rio Tinto, BHP Billiton, Fortescue Metals, MMG, Newcrest, Woodside, Caltex, Iluka, Inpex, OneSteel, and BlueScope Steel. Not content to rest on its laurels, back in 2010, SAP announced it would increase its focus on the resources sector, with the aim of expanding its position in the mining, metals, oil and gas industries. With this push, it targeted the growth sectors of coal seam gas, liquid natural gas and emerging Tier 2 miners. In line with this direction, in August last year, SAP also announced it had entered into a partnership with Extend Technologies and Courtland Business Solutions to provide a new subscription-based delivery option for the Business All-in-One Mining offering. The model was designed to allow small and mid-sized miners to implement and run the solution without needing to hire dedicated IT staff to manage it, and achieve a rapid return on investment with an efficient implementation timeframe. While mining giants such as BHP Billiton and Rio Tinto have opted for a single global instance of SAP rolled out across all their business units, elsewhere in the sector there is a move towards getting up and running fast and securing quick wins, according to SAP industry principal – mining and resources, Peter Hodgins. “The industry has moved away from the multi-year, multimillion dollar implementations where the companies start off with a blank piece of paper and go through long blueprint processes and then to implementation. More and more of what customers are looking for are some core configurations that they can put in, where almost 80 per cent of what you do is typical of everybody else, and you look for the 20 per cent where you want to differentiate yourself,” Hodgins says. Although SAP has maintained its commitment to the large multinational resource companies, Hodgins says its focus on the smaller end of the market is paying off. “We’re supporting those junior miners as they get up and running and gain their financial independence. ,” he says. CSC ERP solutions director, Iain Macleod, also believes that this will be the growth area for the sector, particularly as the number of junior miners increases, with SAP able to provide new
players with a more stable platform for growth. He expects SAP will also see growth from encouraging larger companies to move beyond traditional ERP into new types of solutions. Project activity is dictated by the geographical centres for mining and resource projects – with iron ore projects concentrated in Western Australia and coal in New South Wales and Queensland. In terms of project size, those underway at Rio Tinto are the biggest – particularly as the company looks to roll out the SAP system through their Alcan business and some other acquisitions, according to Hodgins. Earlier in the year, Rio Tinto migrated its key IT systems, including SAP and a number of associated systems such as EMC Documentum and talent management solution Nakisa, back to Australia in a major regional centralisation push. The company is also part-way through its global SAP roll-out, with more than 29,000 of its more than 50,000 users now migrated to the system, according to Accenture, which is supporting Rio Tinto’s program.
Growth prospects According to Accenture’s Australia Capital Projects lead James Arnott, the mining and energy industries are experiencing unprecedented levels of capital investment, “a welcome sign of market health in these sectors”. Forrester predicts Queensland and Western Australia will benefit from the IT services market for the mining and resources sector more than doubling to nearly US$650 billion by 2015. To benefit from this growth, Forrester says, vendors and partners need to demonstrate domain expertise and provide industry-specific solutions, rethink engagement models to match the long development and production timeframes of mining, oil and gas projects, hone their focus on mobility and advanced
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INDUSTRY SECTOR MINING AND RESOURCES
analytics and forecasting solutions, and feed skilled resources into regions where demand is highest. From SAP’s perspective, Hodgins is predicting growth of around 15 per cent from this market sector over the coming year. But with China driving much of the demand for Australia’s resources, is there concern that the current global economic volatility and European debt crisis could infect China and result in a slowdown? Hodgins doesn’t believe so, arguing that not only will demand from China remain stable, but India will also begin to play a stronger role as a consumer of resources. “My view is that China and India have worked very differently. In China, they’re about building the infrastructure, and that consumes a lot of natural resources. India didn’t so much attack the infrastructure issue as look at educating their population. What they are doing now is starting to look at improving their infrastructure, so India will become a much bigger consumer of natural resources in the next two years than they are currently,” Hodgins says. And from the perspective of resources companies, ensuring they have the capability to meet demand is an important priority. “From the customer’s point of view, the big focus at the moment is on growth and getting more product out to market. The focus shifted a bit off containing costs, which has always been a big issue for miners, but at the moment it’s all about growth and expanding the capability to deliver product,” he says.
Hurdles ahead Although the resources sector appears to have a bright future, Hodgins still recognises some of the challenges that the sector is experiencing. “One of the biggest issues with mining at the moment is not just the availability of resources, but going through the logistics processes to get the product to customers and increasing their capacity, and rail and port facilities,” Hodgins says. In the short term, another challenge for the resources sector is the availability of credit. With the Euro debt crisis continuing, money is becoming harder to find. “The European banks in particular aren’t lending as they were and so a lot of that $90 billion worth of projects that are about to happen or have already started in Australia are finding that obtaining the money to back those projects is more of a challenge, as opposed to finding the demand,” Hodgins says. Looking ahead, the carbon tax is just one aspect of changing regulation that will also require the mining and resources sector to manage their information and data better, such as stricter reporting on occupational health and safety regulations. “Governments are looking at regulations around what mining companies can and can’t do… that’s not just around carbon emissions but also other emissions, whether its ground, water or air, ” says Hodgins. “The Federal Government denies they’re becoming much more onerous, [but] the typical spreadsheet solutions that customers have had in the past will not be adequate anymore.” The independent magazine for SAP professionals
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CASE STUDY
IDEMITSU AUSTRALIA RESOURCES
Meeting the challenges of maturity Organic growth may be the dream of every bright company. But after 30 years in business, having achieved that goal, coal-mining firm Idemitsu Australia Resources (IAR) found itself confronted by new challenges. Organisational change and corporate governance requirements spelled the need to consolidate IT systems. With the SAP Business All-in-one for Mining solution, IAR realised not only company-wide commonality but greater speed, efficiency, and a whole new era of cross-enterprise communication. A subsidiary of Japanese company Idemitsu Kosan Co Ltd, IAR operates two 100 per cent-owned mines and two joint ventures in Australia. Altogether, the Australian mines produce some 10 million tonnes of coal per annum. One of its 100 per cent-owned mines, Boggabri Coal, had been growing exponentially: from 1.5 million tonnes in 2010 to 3 million tonnes in 2011 and, subject to approvals, a predicted 6.5 million tonnes by 2013. And a recent reshuffle of the finance group had IAR’s main joint venture, Ensham Resources, moving in to share the IAR head office. Yet Ensham was running different enterprise resource planning (ERP) software. At this point, IAR recognised the need to both future-proof and consolidate its IT systems.
A need to streamline the business Alongside these challenges was the innate complexity of IAR’s business itself. Just 5 per cent of its coal is sold domestically, with the rest shipped predominantly to Asia. The company juggles development and production at its sites, as well as the complex distribution chain of rail, ports, and shipping, and extensive marketing in multiple countries. Improving and streamlining internal corporate governance requirements had become essential. And since its parent company had listed on the Japanese stock exchange in 2006, IAR needed to comply with both Australian and Japanese regulations. “We’ve been through a period of significant development in the last few years, mainly through organic growth,”
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CASE STUDY
IDEMITSU AUSTRALIA RESOURCES
The value of a team approach
says Trevor Smith, CFO at IAR. “We also had to address increased corporate governance requirements resulting from the listing of our overseas parent. And the other major change occurring in our business was the move to shared services.” Each of the mine sites acted autonomously, to a greater or lesser extent. “Effectively, we all had different systems, so the push became to standardise those systems. We looked at the core systems in our business, and what we wanted was commonality,” Smith says.
The move to a common system In searching for commonality and a shared services model, IAR took a look at its two existing ERP systems. One was the company’s standard, a platform provided by Pulse Mining Systems. This served the head office and the firm’s two fully owned mines. The other was the SAP software that Ensham Resources had put in place about a year before. It would, of course, have been possible to stay with both. And many within IAR were happy with their existing setup; for example, Muswellbrook Coal Company, another of IAR’s fully owned mines, had been using its ERP software for more than 15 years. But IAR was impressed with the benefits SAP software had brought to Ensham Resources in just a year. Whereas previously Ensham ran a number of different applications, with separate payroll and manual preparation of accounts, Ensham had achieved full integration in moving to the SAP solution. What’s more, a changeover to SAP software across IAR offered not only commonality, but a genuine foundation for growth. What SAP offered, Smith says, was an elasticity that would grow with the company. “SAP offered a product with more functionality and greater flexibility for integrating some of the other subsystems and information systems we wanted to use going forward. We felt it provided us with a better platform for where we wanted to take the business.”
24 Inside SAP magazine
Implementing the new system had its complexities. Two mine sites and corporate headquarters needed to migrate to the new software, and that involved a change in the company culture. “We were challenging people to change processes and the way they had done things for a number of years,” Smith says. “We had some very sophisticated ERP users who had been using Pulse Mining Systems for a very long time and couldn’t see the need to move. So it was complex in that we had software in place that served individual business needs, but the consolidated enterprise required moving to a common system.” Adding to the complexity, IAR wanted to incorporate into the new scheme various aspects of the old. “We wanted to take the good of the old system and replicate that in the SAP software along the way,” says Smith. This included a popular web-based invoice and purchase order module and mobile applications for maintenance planning and inventory management. “That was considered important functionality that we didn’t want to lose,” says Smith. “And using SAP workflow processes and the tools that SAP provided, we were able to achieve something that is very similar.” After eight weeks of scoping, implementation was completed on schedule in just 16 weeks. The implementation was multidisciplinary, including functionality encompassing maintenance planning, materials management, payroll, finance, and accounts payable. A multidisciplinary project team included key people from IAR as well as implementation partner Extend Technologies. And it was this team, and the high-calibre skills and commitment of the people involved, that ultimately made the implementation so successful, Smith believes. IAR ensured that key internal employees from the head office and mine sites were involved in the implementation from start to finish. “It was important to have those people there, because at the end of the day, it was their knowledge of the business, their knowledge of outcome requirements, that guided us through the blueprinting phase of the project,” Smith says. Extend Technologies brought a wealth of experience – and continuity – to the table. “The experience on that team was invaluable in solving problems and issues as they arose,” Smith says. “In this project we managed to go through five months with the same people involved. That continuity was key, since those in scoping and blueprinting took it all the way through to configuration. The involvement of the consultant project manager was also key. His experience in SAP implementations and knowledge of the mining business, as well as his relationship with Extend, ensured that the project kept on track against both schedule and budget.”
“Even though we designed this platform for shared – and improved – communication, we could never have foreseen the positive outcomes that resulted.” Trevor Smith, Idemitsu Australia Resources
FACT FACTS Company: Idemitsu Australia Resources Pty. Ltd. Location: New South Wales and Queensland, Australia Industry: Mining Products and services: Coal mining Revenue: Approximately A$1- $2 billion (US$1.1- $2.1 billion) Employees: 850 Website: www.idemitsu.com.au Implementation partner: Extend Technologies
CHALLENGES AND OPPORTUNITIES
Simpler system, streamlined processes, better communication One of the major benefits to IAR has been simplification. All finances are now on the same system, with staff members able to report and source common data right across the business. Mobile applications for maintenance staff were replicated at Muswellbrook and will be implemented at other mine sites. And the time taken to produce month-end results has been reduced by 30 per cent. “We haven’t yet met our ultimate objectives. But to realise these efficiencies in just six months since going live is certainly an achievement – given that we also had yearend reporting and audits thrown in,” Smith says. Just as powerful, in a qualitative sense, has been the surge in company-wide communication. “One of the biggest benefits for us has been that people at our various mine sites are talking to one another,” says Smith. “We really never had a platform before to do that.” Previously autonomous sites are now regularly communicating and sharing information. The success in this area has almost surprised IAR, particularly in the way it has connected teams from the joint ventures. Smith says, “It’s a great communication forum for people and their counterparts at other mines to forge relationships. They now know the right person to contact and just pick up the phone.”
Future plans Now that the company is familiar with its new software, IAR is looking forward to reaping the benefits. “Going forward, I think we’ll see a lot of qualitative benefits,” says Smith. “And that means faster recording time, greater level of detail in transactions, and the ability to drill down into costs.” But that is just the start. IAR aims to use its new system to reduce inventory levels, initiate group procurement, build common processes, and create commonality in materials management. The company is also looking at a major reporting review, potentially extending its SAP software landscape with the use of SAP BusinessObjects business intelligence solutions. Ultimately, with its goal of shared services now achieved, IAR is returning to its journey of organic growth, this time relying on SAP solutions for faster results, greater effectiveness, and smarter communication. This case study was prepared by SAP.
yy Create a platform to manage significant projected company growth yy Unite different business units into one company-wide enterprise resource planning (ERP) solution yy Move to a shared services model yy Meet internal corporate governance requirements OBJECTIVES yy Achieve commonality in company systems, introducing a service shared by all business units yy Migrate different company units to a new ERP system yy Ensure that the strengths of the previous ERP system were recreated in a flexible manner yy Accomplish standardisation of systems across the company yy Accelerate and streamline monthly reporting cycle SAP SOLUTIONS AND SERVICES SAP Business All-in-one for Mining solution SAP ERP Human Capital Management solution (for payroll) WHY SAP? yy Strong and capable solution to support current and future business growth yy Comprehensive and powerful reporting tools in an integrated environment yy Flexible system ensuring that strengths of the company’s existing ERP software were incorporated into the new solution BENEFITS yy Monthly company reporting reduced by 30 per cent yy Surge in effective company-wide communication yy Simplification of systems across the business yy Ability to report and create common data across the business yy Replication of mobile applications used at one site, to be introduced for the first time to other site staff yy Company poised for future growth and smarter management, including plans to raise efficiency, reduce inventory levels, and initiate group procurement and common materials management
The independent magazine for SAP professionals
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SME FOCUS BUSINESS BYDESIGN
How SAP Business ByDesign will change the way SMEs do business By Brian Pereira The launch of SAP Business ByDesign (BBD) in Australia in August 2011 has provided our small to medium enterprises (SMEs) access to a new Software-as-a-Service (SaaS) option, designed specifically for them.SAP has its eyes now set firmly on over 85,000 SMEs in Australia they have identified as potentially interested in the product. Yet their penetration rate with the SMEs will be largely determined by the real business benefits derived from SAP BBD. So how exactly will the latest cloud offering from SAP change the way SMEs do business? yy It provides access to a large enterprise capability at SME prices. yy It helps SMEs achieve speed to market. yy It helps professional services businesses stem revenue leakage. yy It’s mobile device friendly, enabling SMEs to access key business information from virtually anywhere. BBD will also, in some cases, provide flexibility to large enterprises when considering their business systems use and deployment. Far from the traditional methods of deploying and using an ERP system, the BBD platform and associated business solutions provide a step change in the way businesses can be run.
Affordable access to a full ERP solution One of the biggest challenges that SAP has to face is the common misconception that ERP is only for large businesses. The truth is that businesses of all sizes can benefit from ERP. They just never had affordable access to it. With the launch of SAP BBD, SMEs have been given unprecedented access to the infrastructure, streamlined and accelerated processes, and real-time visibility that ERP provides and that every business craves. Yet BBD extends beyond traditional ERP modules as it features embedded functionality that would normally be delivered through separate applications such as CRM and Project Management. It enables businesses to manage each of their key functions such as finance, HR, supply chain and procurement, through one software solution. In doing so, it gives SMEs the functional depth of a large scale organisation, just without the price tag and implementation time that comes with heavy, onpremise IT infrastructure. As SAP hosts and maintains BBD on its IT systems, it is cheaper, more secure and easier for SMEs to move to an ERP business solution, and eliminates the need to forecast upgrades. Another key benefit is the flexibility BBD has to grow with the business without the constraints on capital or capability, by allowing add-on apps that businesses may need to meet specific business needs. It also enables them to take advantage of mini-
26 Inside SAP magazine
apps developed by other businesses elsewhere using the BBD SDK.
Transparency and improved communications SAP BBD provides SMEs with increased transparency and control over their operations, allowing them to immediately identify and respond to issues and opportunities, which otherwise would have been missed. Information can be shared throughout organisations, opening up communication between departments, regardless of staff functions. By providing prebuilt analysis of key business drivers and the ability to share that information with their team, BBD enables SMEs to focus on cash flow and profitability.
Scalability As the software has been designed with SMEs in mind, the functions of SAP BBD are aligned closely with the objectives and actions of businesses of this size. SMEs are able to pursue goals of achieving organic revenue growth and profitability, mainly by reducing costs and increasing market share, concurrently. The software is delivered by a flexible monthly per user subscription so there is no upfront capital expense and no operating cost of hosting it on premise. SMEs are therefore able to ensure that they only invest capital in the direct growth of the business, without having to sacrifice the foundation which will support them as they grow. It is also easy to deploy and can be up and running in just four to 12 weeks.
Competitive advantage SMEs that move fast and adopt BBD open themselves up to gaining a newfound competitive advantage, by moving past pressures that normally would have hindered their growth as they have access to advanced, integrated software functions. As an adaptable solution, BBD enables SMEs to easily change workflows and even core business processes. This speed enables them to stay ahead of the competition and adapt quickly and almost seamlessly to new opportunities. SMEs from around the world are experiencing the big business benefits of moving to ERP with BBD. This on-demand cloud model eliminates the major cost barriers by allowing SMEs to treat ERP implementation as an operating expense and take advantage of the operational capabilities only previously associated with more mature solutions. The independent magazine for SAP professionals
Brian Pereira is CEO of CN Group, the first Australian partner appointed for SAP Business ByDesign.
ANALYTICS TECHNOLOGY
The world at seven billion When the world’s population grew beyond seven billion people in October this year, SAP and the United Nations Population Fund (UNFPA) unveiled two online, interactive population dashboards that allowed public users to freely access UN demographic data on the impact of this historic rise. Anne Widjaja reports. The UNFPA’s aim in launching the 7 Billion Actions campaign was to recognise that the world’s population of seven billion was a milestone in human history. Most importantly, however, the campaign highlighted that this remarkable figure represented global opportunities and equally sizeable challenges. Using SAP business analytics technology to create the dashboards, the UNFPA has pooled together, into one single online platform, data that would have taken months to collate from hundreds of schools, government departments and UN agencies (www.7billionactions.org). With just a few clicks, anyone around the world can access and interact with the data on their mobile or laptop, and learn about the impact of the population increase in key areas such as education, healthcare, literacy and age and gender development. Vijay Kanal, director, ICT advisory services, BSR, says that the technology will be valuable for experts, regardless of industry. “SAP has provided a useful, intuitive tool that provides important global demographic data. I can imagine that planning and policy experts in both the public and private sectors will find it helpful for analysis and projections.”
Using the data Released on the first day of the ‘7-Day Countdown to 7 Billion’, the dashboards have the power to inform and inspire policymakers, academics, citizens and businesses to consider the social effect of their policies and initiatives. The data produced by the SAP Crystal Reports dashboard design software can be used to highlight important insights into developmental issues, and helps to create added transparency and awareness around core UN population data and trends. For example, the snapshot tool reveals that two-thirds of the world’s population (1.8 billion) is currently under 40, the biggest generation of young people in history. The UNFPC has reported that this poses potential challenges for poor developing nations in Asia and Africa, where the population of young people aged 10-24 is predicted to increase 60 per cent between 2010-2050. The ‘Trends’ tool on the dashboard can also be used to examine correlations between economic, social and demographic variables, specific to any region or country in the world. For example, in Pakistan 21 per cent of its 42 million children are enrolled in secondary school, 43 per cent of which are girls. This data presents a powerful argument
for policymakers to recognise the need to increase education levels amongst children, and to rectify the gender imbalance in these education statistics. This modelling demonstrates how SAP analytical technology can help users easily interact with data and understand the opportunities and challenges associated with a complex array of variables.
Innovating for the new world The UNFPA’s global campaign has enlisted a diverse group of UN actors, corporations, organisations and individuals to inspire action on key issues related to population growth. Together with the Churchill Club, SAP and UNFPA recently presented at an executive roundtable titled ‘Innovating for a World of 7 Billion’, which saw experts sharing ideas and information on emerging markets, sustainability and impact investing. Following the event, SAP, UNFPA and social entrepreneur organisation Ashoka held a social InnoJam, which was focused on the importance of using mobility solutions to educate, connect and empower youths. “The world’s population reaching 7 billion people presents an excellent opportunity for technology to play an active role in the global commitment for a healthy and sustainable world,” says Steve Lucas, general manager, Business Analytics and Technology, SAP. Although technology is not the only answer to solving the world’s problems, this project shows just how it can play a part in helping us to secure a brighter, globally sustainable future. The independent magazine for SAP professionals
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IN-MEMORY COMPUTING TECHNOLOGY
HANA in action: big bang or a slow burner? 2011 has been the year of HANA for SAP. As worldwide sales surpass US$100 million, it is clear that the appliance is starting to get traction in the market. For such a “game-changer”, why has the take-up been relatively slow, and what are some of the factors affecting its adoption? Freya Purnell reports. SAP HANA was announced with much fanfare 18 months ago, and SAP has taken every opportunity to tout its benefits since then. While this has generated enormous interest across all regions and industries, sales and implementations have lagged behind the level of enthusiasm. Based in Germany, Keith Murray is IBM’s global product manager for SAP in-memory computing and lead SAP solutions architect, business analytics, and has been closely involved with many of the SAP HANA ‘early adopter’ program customers globally. Murray says that while the adoption had probably taken longer than was initially thought, the fourth quarter of 2011 has seen customers begin to engage partners to get HANA installations in place. “The dam has now burst,” he says. But why has it taken so long to take off? “It’s not a solution that I would call plug and play – it does require some support from a consultant group to help customers to actually design and build a solution based on the technology from SAP. Everybody involved – customers, partners and consulting companies, and SAP – had to build up that knowledge, and that simply took time,” Murray says. While the hype around HANA may have put some customers off, many are now actually recognising it does have the potential to benefit their business, and have worked through the internal processes to determine where it will deliver the greatest value. With the momentum building, Murray expects to see a lot of customer activity on HANA moving into 2012. He says Australia has certainly been ahead of the curve, with more implementations underway than might have been expected, given its share of the global SAP market. However, it’s not just customers getting their heads around where HANA would work best in their business that has hampered adoption. For partners and consultants, getting to grips with the solution, especially
28 Inside SAP magazine
as it evolved quickly, was a challenge. As HANA is sold as an appliance, combining SAP software with infrastructure from various partners, Murray says the IBM team developed a workload optimised solution in collaboration with the SAP development team. “We’ve got specific components that we put into these configurations to meet the requirements of the typical workload. That was the process that took time, because SAP was developing the solution as we were going, so it was a constant moving target. From an application point of view, there is a lot of new technology that’s part of this solution,” Murray says. In the year since HANA’s release, it has been through a significant number of versions. “We’ve been seeing updates every other week coming out as that code was modified, matured and stabilised. For anybody that was initially working with a solution, it was bleeding edge, so there were a lot of issues,” Murray says. “But we’re seeing customers now going live with the solutions, and it has reached a level of stability where there are no issues in the production environment.”
Adding value with HANA To date, there are three main market segments where HANA is being adopted, according to Murray. The simplest scenarios, and where two-third of the HANA projects are focused, are where SAP has made applications available to work natively on the database – the SAP Cost and Profitability Analysis (COPA) Accelerator, and smart metering in the utilities sector. Adoption in the latter area could be driven further by new laws. “All the European countries have adopted legislation for smart metering as of March 2012. Accordingly, the suppliers, the brokers, the vendors that are engaged in that business are grasping with the challenge of working with all this information. It’s a potential differentiator for them, so that’s automatically going to create
demand,” Murray says. “That is a very focused use case and business scenario. The remaining third of projects is very mixed – from sales-driven analysis through financials, logistics, and campaign planning,” Murray says. Obviously in this category, where solutions must be custom built, the time to be up and running is much slower.
Future growth and applications Over the next 12 to 18 months, Murray expects to see many customers building their own solutions, as well as SAP and its partners beginning to make more applications available natively against the database. “I don’t think SAP would be able to do that on their own, as there is only so much resource capability available. It will probably start to work with some customers initially but turn it into an industry best practice template. So as those projects mature, I think we’ll see those coming out,” Murray says. In addition to utilities, which has the ‘big data’ to make a HANA installation worthwhile, retail is another area he sees as a natural fit, given the amount of data on a very wide range of products. Although the initial target for HANA is large organisations, this may change in the future, if mediumsized companies can see the value in using the appliance to solve major problems. “If a mid-size company is faced with a challenge that the solution could really help them with, they’ll be able to find the business case to justify the investment,” Murray says. “In general we observe the majority of customers are looking for a return on investment of between 12 to 18 months.”
HANA or BWA? In the brave new world of HANA, some have questioned the role of Business Warehouse Accelerator (BWA) in
the future roadmap. But there are some key differences between the solutions which may mean that they can happily coexist, according to Murray. “BWA is designed mainly to improve the performance of reporting and queries in SAP BW. It is an easy to implement solution with a ‘plug and play’ type design, fully compatible with all the tools that customers are already using in their SAP BW environment. It is possible to load data from other data sources into BWA but in this case customers are restricted to the use of SAP BusinessObjects Explorer to access and work with the data, and BWA does not help customers to improve the time it takes to load the data into SAP BW,” Murray says. “The design of HANA is more open. It is possible to load data from any data source and access and work with the data through any end user tool that supports SQL or MDX. In addition, by supporting the ‘near to instantaneous’ replication of data from an SAP Business Suite instance, information can be made available for reporting and analysis much quicker than with BWA.” And despite the focus on HANA, Murray says customers are continuing to adopt and invest in BWA, specifically because it is the best solution for their particular issue. “If the major challenge is the ability to improve the response times of queries and reporting on data which is already available in an SAP Business Warehouse, then BWA provides a much more attractive solution today and in the foreseeable future,” he says. “If, however, customers also want to reduce the time required before information is available for queries and reporting, this is addressed by the real time replication of the HANA solution. “Although the solution can make data available immediately, you’ve got to build the interactive layer to the user in order to work with that data. So it’s swings and roundabouts.” The independent magazine for SAP professionals
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MOBILITY TECHNOLOGY
Unwiring the enterprise: Are you ready to lose control?
Armed with powerful mobile devices, consumers and employees have become the force behind a wireless wave of change. Whether they are seeking discounted prices or looking to coordinate a sales campaign, these mobile end-users are growing impatient with companies that are still trying to control behavior and the sharing of information. Enterprises that fail to learn how to give up some of that control and innovate to meet the evolving needs of their constituents could soon find themselves in the back of the pack. According to Todd Herlin and Scott Snyder, there are five ways to ride this ‘Wireless Wave’. When Tawakkol Karman was named a winner of the Nobel Peace Prize, it was fitting that The New York Times carried a front-page photo showing her talking excitedly into a mobile phone. Karman, a leader of the anti-government protests in Yemen, has become a standard-bearer for the Arab Spring, and the mobile phone was one of the key weapons in the battle. Fuelled by the rapid proliferation of the mobile and social web, the Arab Spring demonstrates the collective power of technology-enabled citizens. The clash between empowered and connected end-users and controlling governments has led to regime changes throughout the Middle East (though not yet in Yemen), producing one of the most dramatic and unpredictable waves of socio-political upheaval since the fall of the Berlin Wall in 1989. While the events of the Arab Spring are still making headlines, another less-publicised technology-enabled revolution is unfolding that also pits connected masses of people against large organisations trying to control them. This revolution is occurring in the business world, and the end-users who are rising up are consumers and employees. These end-users, equipped with powerful mobile devices, are enabling a new wave of disruptive innovation that is transforming the companies they buy from and work for. If you do not give your customers a way to easily compare and search for discounts on your products, they will use Red Laser or Amazon Price Check. If you do not give your sales team better ways to share knowledge and coordinate efforts, they will use Facebook or Flipboard. Fail to give patients a better way to manage their chronic disease, and they will use Welldoc or Patientslikeme. Mobile technology is creating both an expectation and impatience in users that never existed before. Immediacy is not just desirable; it’s fundamental to the mobile experience. If you fail to deliver on that expectation, impatience will grow -- and you will risk losing the business of
30 Inside SAP magazine
We have to strike the right balance between being in touch and being in control. The irony is the more in control we are, the more out of touch we become. A.G. Lafley
customers and the loyalty of employees. In another context, former Procter & Gamble CEO A.G. Lafley summed up the situation this way: “We have to strike the right balance between being in touch and being in control. The irony is the more in control we are, the more out of touch we become.” The notion of relinquishing control in order to win is counterintuitive for most large companies. They have spent their corporate lives putting controls and processes in place to regulate behavior, maintain a common identity/brand and drive efficiencies. But the very controls that define them are also the ones that may impede their ability to innovate around wireless, given that such innovation is all about allowing the end-user to discover what new and useful things they can do with the technology. As enterprises will
come to realise, control is just an illusion in the digital world.
Wireless as the forcing function The Wireless Wave is expected to be bigger than the earlier technology waves by anywhere from 10 to 100 times, just based on the number of connected devices, from smartphones and tablets to appliances and game consoles. The size of the opportunity and the pace of disruption have drawn in a new set of players that are now dominating the mobile opportunity space – Apple, Google, Amazon, Microsoft and SAP, with Intel, Cisco and Dell readying their own mobile offerings. All in all, mobile is shaping up as the next showdown that will define the winners and losers in the technology sector. And we’ve only just begun. The Wireless Wave is about reshaping the landscape. People who are wireless-enabled are living and working differently than they did before. In fact, there are striking parallels between the internet and wireless waves in terms of how long-term innovation came together seemingly overnight. Understanding these parallels will help business leaders anticipate where wireless is headed and position their organisations for the big changes under way. Innovation is not always a good thing. If you owned a music store, you likely did not celebrate the 1994 launch of Napster, a ‘poster child’ for user-driven platforms. Napster popularised the sharing of music files by making it easy and free. Enter Apple, which saw the consumer demand for the instant gratification of downloading music online. Its hugely successful iTunes franchise makes illegal downloads less necessary, thus capitalising on the seismic shift consumers were already driving.
Three disruptions to plan for Three major disruptions are bringing about the rise of empowered end-users: the New ‘Last Foot’, the Rise of Mobile Personas and the Fall of Entry Barriers. Each one poses tough questions to be considered as you plot a course through the Wireless Wave. The New ‘Last Foot’ Wireless is becoming the ‘last foot’ for moving information from the cloud to within arm’s reach of every person on the planet. It connects the physical and virtual worlds, providing real-time access to systems and resources while acting as the ‘eyes and ears’ for centralised IT systems. How much could you save if your ERP systems had real-time visibility for all of
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MOBILITY TECHNOLOGY
your assets, inventory and people? What are the breakthrough wireless-enabled solutions that redefine your buying criteria? Are you taking into account how quickly decisions get made across your management team? Rise of Mobile Personas Mobile devices have blurred the lines between personal and professional use. Phone numbers are now people, not places. Wireless brings individual-level, real-time detail on location, presence, activity level and preferences that no PC ever had. What new opportunities exist to build direct relationships with your end customers and your channel partners? How can mobile social networking build more employee loyalty? Have you thought through security and privacy issues? Fall of Entry Barriers The barriers to entry for attackers are a step-function lower in the Wireless Wave than in the preceding ones. This shift is partly based on the free-rider effect that wireless enjoys as it leverages all the cloud-based services from prior waves (virtual desktops, corporate private clouds, online services like Google and others). It is also due to the remarkably small investments required to develop and bring to market disruptive offers. With off-the-shelf tools and the distribution of the App Store and its imitators, a small team can produce a wireless innovation that has a major impact. You have less time than you think to meet these challenges. Your organisation needs to immediately assess the ramifications of each disruption and develop a top-down plan for playing offense and defense in the Wireless Wave.
step-function improvement in customer value. Focus IT on systems of engagement: For the past three decades, your IT group has focused on implementing systems of record. That is, digital systems that record all transactions making up your business. The next two decades will be about systems of engagement – the communication, collaboration and interaction systems that enable your people to work with each other, partners and customers more productively regardless of location. Co-innovate with end-users: The most glaring capability hole in most enterprises is what might be called user experience design (UED). The Wireless Wave provides opportunities for mass customisation of the user experience. Think about how different your iPhone is from mine, even if it is the same model number. Beyond just modules/apps that can be combined by the user, simple composite apps or ‘mashups’ are making the jump from the consumer world to the enterprise. UED allows customers, partners and employees to tailor their wireless experience based on their unique needs and preferences. Co-innovation with end-users will be critical to future success in the Wireless Wave. Adopt a pull-training model: In a time of disruption, a great premium is placed on flexibility. The Wireless Wave will demand new skills, processes and roles within your workforce. The challenge is to keep training flexible. The customer, partner or employee should be given information on a need-to-know basis. As the Arab Spring dramatically changed the Middle East’s political landscape, the change in wireless will reset the playing field for enterprises as well as the underlying business models that define their industries. Are you ready to lose control? The independent magazine for SAP professionals
Preparing for the Wireless Wave The Wireless Wave is busy shifting power to the ‘new edge’ of an enterprise’s customers, partners and employees. However, in a recent survey of more than 100 senior executives in a broad range of sectors, 70 per cent said that they believe their current wireless readiness is insufficient to drive wireless innovation in their organizations. What can you do to prepare? Across industries, leaders are moving ahead on five key fronts. Scan broad and deep: This front involves searching nontraditional sources, such as millennial/native digital users and emerging markets for future user needs and innovation examples. These sources are your best bet for seeing over the horizon to how wireless will change your industry and company. Engage young employees and users in identifying new mobile opportunities, collaborate with players outside your traditional market or industry and leverage emerging markets as a window into the innovations from unwired societies like India. Decide where to stand out: To play good offense, you need an aggressive plan for differentiating or disrupting in attractive areas. Win where you can – and be good enough everywhere else to meet the minimum expectations of mobile users. Pick markets that are big enough to matter, early enough to lead and a good fit with your crown jewels – assets or capabilities that you control and are essential to delivering a
32 Inside SAP magazine
Todd Hewlin is managing director of TCG Advisors, a boutique consulting firm in Silicon Valley, and Scott Snyde is a senior fellow at Wharton, author of The New World of Wireless: How to Compete in the 4G Revolution and president and chief strategy officer of Mobiquity, a mobile strategy and applications development firm. This article first appeared in Knowledge@Australian School of Business, an online journal which is a joint venture of the Australian School of Business at the University of New South Wales, and the Wharton School in Pennsylvania.
ON THE MOVE CAREERS
On the Move
Brought to you by
the SAP people specialists
Here we bring you our regular round-up of who is going where in the industry. If you have changed jobs recently or hired some new staff, email us at editor@insidesap.com.au. By Anne Widjaja. Chris Smith and Ron Mannix, StoneBridge Systems After having spent the last decade at Canon Australia, Chris Smith has been appointed southern region sales manager at StoneBridge Systems to support enhanced services to customers across its range of SAP, OpenText and Baynote solutions. Smith will be bringing a range of experiences to his new Melbourne-based sales role. As account manager at Canon, he successfully managed the company’s document lifecycle and held document service contracts at Gateway, Consulcad and Equal Access Communications pr. Ron Mannix has been appointed the role of northern regional sales manager, based in Melbourne. With over 15 years of experience in IT, Mannix has an impressive track record in the industry. He previously held the role of sales director at Elcom Technology and has been involved in high profile projects with the Australian Taxation Office, Hewlett Packard and Austrade. He also established the government division and express office division at Squiz and Corporate Express. Craig Broadbent, director, StoneBridge Systems, says he is delighted to welcome Chris and Ron to the Stonebridge business. “They have the requisite skill set and extensive experience to capitalise on our new SAP, OpenText and Baynote opportunities. We look forward to benefiting from the experience that we believe they are both uniquely able to provide.”
Adam Fraser, Plaut IT Australia With 20 years of finance and accounting experience under his belt, Fraser has been appointed CFO for Plaut IT Australia and will take responsibility for all aspects of the company’s financial reporting. Fraser completed his education in the UK, and is a qualified chartered accountant with an honours degree in Economics and a graduate diploma in applied finance. He was most recently self-employed, successfully running his own e-commerce enterprise. In his career, Fraser has attained an impressive array of experience in a wide range of operational, strategic planning, and corporate finance and private equity roles.
Phillip Lee, SAP Australia Following the Australian launch of SAP Business ByDesign in 2011, its on-demand cloud-based application for small to medium size companies and subsidiaries, SAP Australia welcomed Phillip Lee to the team as SAP ANZ partner manager. Lee previously worked for IT giant Microsoft, where he held the position of Dynamics specialist. Lee welcomed the opportunity to join SAP following the BBD launch, and looked forward to helping “shape the SAP Business ByDesign market in Australia and New Zealand, and offer support to our partners who will be instrumental in the success of the solution”. Tim Ebbeck, president and chief executive officer, SAP ANZ, says that Lee’s experience and his work with partner networks would help “SAP Business ByDesign hit the ground running following the official launch”.
Inside SAP Jobs For all the latest jobs in SAP, check out the Inside SAP jobs board www.jobs.insidesap.com.au
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ON THE MOVE CAREERS
Brought to you by
the SAP people specialists
Wilhelm Hamman, Excel4Apps
Greg Ryan, SAP ANZ
Excel-based reporting software provider, Excel4Apps, has appointed Wilhelm Hamman as sales director for the Asia-Pacific region (APAC). Hamman will be responsible for driving sales and revenue growth through direct and indirect sales channels in the region. This will involve working with users such as Deloitte Touche Tohmatsu, DHL, and Bossini Enterprises. Hamman has had more than 15 years’ experience in the technology industry, with a focus on business development, project management and consulting in the software industry. He also has an impressive list of educational qualifications, having earned an ITIL foundation certificate in IT service management, completed IT programs at Wits Business School and Gordon Institute of Business in South Africa, and received sales training with the FranklinCovey Institute in Paris. According to Excel4apps president Michele Buson, it’s an exciting time for the company, with the region having recently recorded a 40 per cent jump in sales over 2010, fuelled by the company’s GL Wand product. Buson said, “With a solid client base in over 13 Asia-Pacific countries, we’re experiencing ongoing growth as more Oracle and SAP business users recognise GL Wand as an easy way to independently create their own financial reports from enterprise system data. “We are excited to bring Wilhelm on board to further accelerate our regional presence through the development of partnerships and new customers.”
Now in his seventh year at SAP, Greg Ryan has been appointed to the position of director of ecosystem, SAP ANZ. Ryan takes responsibility for leading all strategic and operational aspects of the SAP ecosystem and partner programs, and will also manage third-party software go-to-market strategies across ANZ. Before joining SAP, Ryan led sales of new business for Intentia/Lawson and gained experience in sales and business operations roles at IBM Australia. Since joining SAP, Ryan held the position of account director, dealing with direct sales for SAP’s strategic accounts. Speaking about his new role, Ryan believes that the next three to four years will be an exciting time for SAP and its partners, “as we drive a fundamental transformation across the marketplace with HANA, mobility and cloudbased solutions”. “We work closely with leading innovators, developers and resellers of SAP technology across markets, regions and industries to create a vibrant partner community – and deliver value to our customers. I am looking forward to driving this part of our business forward as we look to grow the ecosystem share of SAP’s revenue.” Upon Ryan’s appointment, Helen Masters, vice president, commercial and emerging markets, SAP ANZ, acknowledged the integral role of the ecosystem and thirdparty software suppliers in SAP’s strategy. “I am confident that Greg’s leadership skills, strategic knowledge and comprehensive experience will build on the success of the ecosystem, and SAP as the leading partner of choice,” she said.
Moving jobs? Hiring new staff? We’d love to hear about them.
Send your ‘On the Move’ news to editor@insidesap.com.au 34 Inside SAP magazine
Kim Salter, SAUG After nine years as operations manager of the SAP Australian User Group, Kim Salter has left the organisation to pursue other interests. Since managing the group’s activities from the early days, Salter has become an integral part of SAUG. She established SAUG as a successful community with over 375 member companies and 3700 SAP professionals, and was instrumental in building valuable offerings for members to enable them to effectively engage with SAP. SAUG chairman Ian Harvison said some of Salter’s notable achievements included creating an impressive national event portfolio, featuring the mustattend SAUG Summit, working closely with the SAP User Group Executive Network (SUGEN) to build formal SAP influence programs, and establishing the SAUG CIO Council to build stronger engagement with CIOs and SAP executives. SAUG is now looking for a CEO to drive the organisation in the coming year.
REDKITE REGATTA COMMUNITY
Ecosystem raises over $35,000 in support of Redkite
On 11 November, the SAP ecosystem converged on Middle Harbour Yacht Club (MHYC) in Mosman for the inaugural SAP Regatta for Redkite. With thanks to key sponsors Dimension Data and RIM, the event saw over 150 people take part in a fantastic day of sailing on the harbour and the postregatta function which followed in the sand at MHYC into the evening. The SAP Regatta for Redkite 2011 was the culmination of 12 months of planning by the newly formed SAP Ecosystem Foundation, which brings together member companies including Articulate, Ciber, CSC Australia, Everjoy Consulting, Extend Technologies, Oxygen Business Solutions, Plaut IT Australia, Redkite, SAP Australia, Stream Technologies and Wipro. While entries came from a range of companies, with many SAP customers on each of the boats from a diverse array of industries, special mention goes to the team from SCA Hygiene in Melbourne, who self-funded their entry and travelled to Sydney from Melbourne specifically to support Redkite. Redkite (www.redkite.org.au) provides real and practical support to children and young people with cancer. Redkite is there to support the individual and their families from the moment of diagnosis, through treatment and on return home to the community. They provide practical, grassroots support including financial assistance, emotional support and educational assistance. With a mixture of sailing experience across the fleet, it was not suprising that we soon saw a few boats raise the Kevlar racing sails as they sped past some of the less serious entries in the pursuit handicapped race structure. Starting at MHYC, the yachts raced out towards Sydney Heads then turned and raced down the Harbour, around Fort Denison and back to the yacht club. The light, shifting breeze favoured the smaller craft and it was the 36-foot Northshore owned by SAP’s Helen Masters that tore across the finish line almost half a kilometre ahead of second place-getter, Extend Technologies. Coming in third was the boat from Oxygen Business Solutions, and no race is complete without a wooden spoon, picked up by the Everjoy Consulting entry – which of course had more fun on the harbour than everyone else combined! “The concept of the Regatta for Redkite is to channel the energies and talents of companies working in the SAP ecosystem for the benefit of a charity doing fantastic work in the community,” said Adrian Everett, chair, SAP Ecosystem Foundation. “The day was an outstanding success, raising enough money to support 14 children and their families going through the cancer journey. We’ll build on this to make it an even bigger and better event next year. “Getting involved in the Regatta is more than a ‘feel good’ exercise – it’s also a great opportunity to network and build relationships with customers, partners and suppliers. Post-race, there probably isn’t a better place than Middle Harbour Yacht Club on a warm summer’s evening. Cold drink in hand, feet in the sand.” The independent magazine for SAP professionals
Visit www.sapef.org to find out how you can get involved in next year’s event.
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EVENTS
What’s On Each edition of Inside SAP includes a diary of upcoming events for the SAP community around Australia and internationally. To have your event listed, email editor@insidesap.com.au. Mastering HR & Payroll with SAP 27-29 February 2012 Sofitel Sydney Wentworth, Sydney A uniquely curated three-day program where business and IT people from organisations using SAP HR & Payroll come together, face-to-face, to immerse in a thriving community. Mastering SAP HR & Payroll is thoughtfully designed to encourage you to look outside of your organisation and your industry. Someone in this community has the answer to your most pressing business or technical challenge. w: www.masteringsap.com/hrau SAP Insider Cloud & Virtualization 2012 28 February – 2 March 2012 MGM Grand Hotel & Casino, Las Vegas, United States Don’t miss Cloud & Virtualization 2012, the definitive event for evaluating and implementing cloud-based services and technologies with SAP. In-depth sessions and labs, a packed agenda of networking events, and hundreds of demos showcasing the latest updates and best practices for SAP business intelligence solutions. Cloud & Virtualization 2012 is hosted with BI 2012, Administration and Infrastructure 2012, and Mobile 2012. Registration at one conference admits you to all four events. w: www.sapcloud2012.com SAUG 39th Plenary 21-22 March 2012 Hilton Hotel, Brisbane Each year, the SAUG Plenary in Brisbane covers pertinent local topics including innovative customer experiences and the latest SAP updates. Hear about new concepts and exchange ideas with 200+ delegates representing more than 90 Queensland companies. As users of SAP technology, the daily challenges you face are an opportunity to learn and grow and what a great forum this event is to discuss how you face up to them. Join the SAUG community for the premier SAP event in the region. w: www.saug.com.au/Events_Calendar. aspx?mode=overview&id=347 Mastering SAP Technologies 2012 26-28 March 2012 Sofitel Sydney Wentworth, Sydney The training, education and networking conference for IT professionals who
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implement, develop, optimise and upgrade SAP systems. A vibrant community where people learn from international experts and from each other about the latest SAP innovations and to build practical skills on a wide range of SAP solutions in handson workshops, case study lectures and demonstrations. Focus on SAP solutions for small and midsize enterprises and SAP solutions for sustainability. w: www.masteringsap.com/tech SAUG Canberra Forum ‘12 1 May 2012 Canberra This one-day annual event provides a forum for public sector professionals to discuss challenges unique in their SAP landscape. Attendees include representatives from Australian federal, state and local government agencies. Whether you are an SAP programme director, a business process manager or a solution architect, this event will hold information that is valuable to your role. Join the Canberra public sector community at this unique event. w: www.saug.com.au/Events_Calendar. aspx?mode=overview&id=346 SAPPHIRE NOW and ASUG Annual
topics and SAP ERP Financials. w: www.masteringsap.com/financials/ Mastering Business Intelligence with SAP 2012 22-24 July 2012 Melbourne Specially designed to enhance decisionmaking and organisational performance using SAP BusinessObjects BI solutions. Includes presentations and sessions from local and international companies, roundtable discussions and special sessions and SAP Business Intelligence partners showcase. w: www.masteringsap.com/biau Mastering SAP BusinessObjects 2012 July 2012 Melbourne A three-day program for SAP BusinessObjects professionals. The event will focus on how to create effective business solutions for businesses of all different sizes and needs. Topics will cover the use of BusinessObjects products such as SAP BusinessObjects analytic apps for industries, BI solutions, EIM solutions, EPM solutions for small/midsize companies, and GRC solutions. w: www.masteringsap.com/bobj
Conference 2012 14-16 May 2012
Mastering Supply Chain Management with
Orange Country Convention Centre,
SAP 2012
Orlando, Florida, United States Join the ANZ delegation at the world’s premier business technology event. Hear directly from global and local customers about their challenges and successes. Make the most out of the opportunity to meet oneon-one with SAP experts and ask detailed questions about SAP solutions and your business. Try out applications and get an indepth look at future SAP applications that will support your strategy.
17-19 September 2012
w: www.sapandasug.com
Mastering Project & Portfolio Management
Mastering SAP Financials 21-23 May 2012 Melbourne A vibrant and thriving community where Business and IT people have important conversations, form lasting relationships and pinpoint new and different ways to use SAP for financial reporting, planning, compliance and governance – to get business results. Focus on general finance
Sydney A three-day program coordinated with the purpose of enabling supply chain excellence. The event will provide SAP partners, customers and business management with the chance for networking, learning and sharing ideas about SAP Supply Chain Management tools. w: www.masteringsap.com/scmau
with SAP 22-24 October 2012 Sydney A three-day program for networking, training and development for business managers and project professionals. The ideal event for project, engineering and finance people to discuss effective ways to use SAP Portfolio & Project Management tools. w: www.masteringsap.com/ppm
PARTNER DIRECTORY
ReadSoft ReadSoft is a world leading supplier of Document Process Automation solutions, specialising in Accounts Payable Automation for SAP. Their AP automation solution seamlessly integrates with SAP and has been selected by an impressive range of multinationals seeking to improve control, efficiency and overall performance, along with an attractive ROI. We invite you to contact us for a free consultative workshop and to “squeeze more from SAP”.
Systems and People Systems and People specialise in providing SAP resourcing solutions for SAP-run organisations across Australia. We offer a complete SAP resourcing service encompassing SAP Recruitment, SAP Consulting and Contractor Management. Systems and People can help you to unlock the true value of your SAP investment with the right SAP people, build your internal SAP expertise with experienced contract and permanent SAP resources and reduce overhead with a contractor management solution for your contingent workforce. To get the best in the business working for you – call Systems and People.
BPSE Consulting BPSE Consulting is an SAP Services Partner and part of the SAP® PartnerEdge™ program, which provides us with access to resources, services and opportunities for deeper engagement with SAP. This helps BPSE Consulting to optimise our services to our clients and strengthen our focus on Application Lifecycle solutions to help reduce the cost and risk associated with our client's SAP lifecycle events. BPSE Consulting has a range of skills related to SAP offerings with focus on ERP, SCM, PLM and Solution Manager.
Retarus Retarus is a leading global provider of professional messaging services. Faxolution for SAP is a certified, secure, fully integrated cloud fax service for SAP systems. Any document that appears on the SAP fax queue will be retrieved by Faxolution for SAP and transmitted anywhere in the world via one of our 4000+ fax lines.
Sky Technologies Sky Technologies provides code-free “configure once, run anywhere” mobile enterprise applications to mobilise any SAP process. Sky’s solutions are backed by more than 13 years of mobility experience, deployed in over 35 countries, and available on-premise or via the SkyCloud. Mobility made easy – it’s what we do.
Everjoy Consulting The leading SAP recruitment specialist in the ANZ recruitment marketplace. As an SAP specialist consultancy, you can be sure that your recruitment consultant at Everjoy has a deep understanding of the roles that you require and can work with you to meet your organisational goals and targets with effective people solutions. For the best people or the best opportunities in SAP, contact Everjoy Consulting today.
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