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Will SAP HANA Lead to a Big Data Revolution?

December 17th, 2012 by

SAP HANA – Big Data

Lots of folks focus on HANA as a competitor to Oracle, and it is.  Even if HANA adoption and sales were to completely devastate SAP’s biggest competitor (Oracle) that would not be HANA’s biggest impact–, the HANA product has the potential to disrupt entire industries in the context of Big Data.

Unlike Big Data, I’ve been skeptical about the benefits and use of social media in the enterprise, writing about it in Why Social Media Marketing Success Is Elusive for Business and Social Media Fads and the Risk to the Enterprise.  On the other hand, Big Data hasn’t gotten anywhere near the attention even though it has a fairly clear business case.  Big Data has the capability to transform enterprises, organizations, and even entire industries.  We are not talking about abstract “build it and they will come” theories here either.  We are talking about a revolution in the way business is done.

Big Data will have huge impacts on customers, products, even whole regions of the world.  What do I mean when I refer to Big Data?

BIG DATA:  The ability to analyze large volumes of both structured data (like transactional data streams) AND unstructured data (social media, industry information, news trends, etc.) leading to market makers and market losers across virtually all industries.

This ability to synthesize structured and unstructured data streams with technology advances WILL transform companies and industries.
 
Over the next 5 – 10 years:

  • Computing power will continue to grow.
  • High speed memory processing (like in SSD drives) will improve.
  • Massive memory storage will come down in price.
  • In-memory database technologies will mature.

This “perfect storm” of Big Data know-how and technology advances will lead to the ability to identify:

  •  Subtle and even unknown market segments.
  •  Market and sales trends.
  •  Customer sentiments, needs, and wants.
    • Leading to new product or service opportunities.
  • Competitor strengths or weaknesses.
  • Etc., etc., etc.

Big Data will be part of the ERP iii [FN1] technology innovation driving customer focus related to customer acquisition, customer retention, and marketplace performance.  Big Data represents a business transformation shift in how business will be done in the future–, it represents a potential seismic shift in business performance in the marketplace.

The Big Data Revolution

The struggles are the semantics in how to synthesize the information and filter the nuggets from the noise.  Big Data allows you to understand what the keys are in terms of words, concepts, and ideas.  It then allows you to synthesize those keys with the various data sources.
 
In other words, how do you take the product sales information (transactional data), customer demographics (transactional), corporate market knowledge (unstructured internal), key word search (semi-structured internal and external such as with Google or Bing), with marketplace intelligence (unstructured external, including external social media), and innovate new or existing products and services?  That is the challenge that some folks are beginning to work on today.  That is the challenge that SAP’s HANA product enables for the future enterprise. 

Big Data means “Business Intelligence” will finally become, well, intelligent!

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[FN1]  For more information on ERP 3 see this comprehensive ERP treatise ERP vs. ERP II vs. ERP III Future Enterprise Applications.




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Building an Effective SAP ERP Delivery Organization

November 5th, 2012 by
Effective SAP Delivery

Effective SAP Delivery

There are generally 3 big components for improving SAP delivery.  These 3 components have the capability of improving SAP and technology delivery in general while impacting corporate business performance and marketplace success.

  • Delivery Approach
  • Delivery Methodology
  • IT Organizational Development

The following content is written with a focus on SAP, however it can be completely generalized to virtually any IT organization.

  1. A careful focus on the delivery approach is needed.  Here there are 2 key paradigms to focus on.  The first paradigm is service delivery vs. value delivery (SAP Service Delivery versus Value Delivery), and the second paradigm is software engineering vs. business process engineering (SAP Implementation Focus: Engineer Software or Business Processes?).
  2. A formal, structured, internal delivery methodology.  This should include a “checklist” of all project requirements including templates, tools, and resources for project delivery.  Because I know SAP I use it, however they have a powerful methodology which can also be generalized to virtually any IT project.  For more information see Why Use the SAP ASAP Methodology?
  3. A strong focus on IT organizational development.  The current “best practices” around IT Organizational Development includes a 3 tiered maturity structure:  Service provider, Business Partner, and Business Peer (Organizational Change Management Inside the SAP IT Support Organization).  The second part of that is a structured approach to creating the premier IT “Center of Excellence,” converged business-IT delivery organization (see SAP Service Provider to Business Peer Through Center of Excellence Maturity).  You can use 3 Development Phases for SAP Center of Excellence Maturity as a completely structured organizational outline.  It includes key activities and maturity steps.

Adopting these three pillars will create a great foundation for your company or organization for the long term.  They will also help immediately and transform your enterprise in the mid-term.




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Steps to Achieve SAP IT Convergence

August 22nd, 2011 by
SAP IT Convergence Best Business Practices

SAP IT Convergence Practices

Last week’s post on SAP IT Convergence is About Business Focused Integration provided an overview of Business – IT Convergence and why it is important.  This week we look at some of the key principles around creating SAP IT Convergence including some steps on the path to convergence.

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What is the Difference Between Business to IT Alignment and Business – IT Convergence?

There is an important distinction between convergence and alignment. Business to IT alignment works to mature the IT organization for synergy in applying technology to business goals.  Convergence on the other hand seeks to blur the lines between IT and business–, IT becomes a key component of the business itself.  The alignment seeks to get IT and the business to work together, convergence seeks to fully integrate the IT organization into the business.  Alignment is more like transactional processing and is focused on operations, convergence seeks to integrate IT functions so they have a direct impact on customers and markets.

Business & IT Alignment is the degree to which the IT applications, infrastructure and organization, the business strategy and processes enables and shapes, as well as the process to realize this (Silvius and Smit, pg. 2, 2011 citing Silvius, 2007).

In the last several years there has been progress in Business to IT Alignment through employing the “SAM” (Strategic Alignment Model) (Silvius and Smit, pg. 2, 2011 citing Luftman, 2000) but there is still much further to go.  Rather than alignment, the real domain of IT Convergence is around business value and one widely accepted academic definition around this is “[b]usiness value can only be derived from the efficient and effective utilization of information” (Hedman pg. 2, 2010 citing research from 2000).

What is Wrong with Business to IT Alignment?

As I continue to explore these topics a consistent theme continues to emerge–, SAP, IT, or the technology organization are supposed to “work with” the business toward alignment.  So what’s wrong with that?  This approach allows your technology organization to stay separate from the business –, true integration or convergence never really occurs.

IT Convergence occurs where business and technology grow together causing business opportunities to expand

Business to IT Alignment creates a focus on operations (which is important) but too many information silos continue to exist.  Convergence on the other hand creates efficient and effective utilization of information to affect business outcomes, not just measure business activity. 

Business to IT Alignment is focused on business activity (transactions) while Business to IT Convergence is focused on business outcomes (results).

Because of the lack of IT Convergence the separation of the technology organization from the business causes them to specialize in providing information, they leave the business portion of the “utilization” of the information up to the business.  Some of the symptoms of this are when IT waits for the business to tell them “we need x report in y format” or “we need to do z type of processing.”

SAP IT Convergence Integrates the Technology Organization and Busines

During your SAP project one of the key benefits to the business is the process oriented integration of all departments.  The whole business comes into a single database with opportunities for both improvement and standardization.  Organizational silos are broken down and dependence across the entire process chain is created.  Throughout this difficult transition  (and after the SAP go-live) the SAP or IT organization remains separated.  Beyond reactive support (help desk, enhancement requests, bug fixes, etc.) there is little done to create IT Convergence between the business and IT functions.

SAP IT Convergence is Focused on Business Integration and IT Innovation

Stop and think about this recent quote by Mark Dean, Engineer of the original IBM PC:

Innovation flourishes best, not in applications or hardware but, in social places where people and ideas meet and interact…

This is what SAP IT Convergence is about.  How does this apply to your SAP or IT organization?  This whole idea goes beyond technology and integrates the interaction of business and IT to converge the organizations.

A converged SAP organization uses technology as a change lever for business competitive advantage.  The primary focus is on innovation and customers by leveraging SAP, IT support staff, and other technology investments to achieve measurable business outcomes.

SAP IT Convergence occurs when IT is part of the business and not just SAP, IT support, or the IT organization.  A few of the characteristics of what an SAP IT Converged organization looks like:

  • SAP and IT staff communications, internally and externally, are more in business language rather than technology.
  • Proactively seeks out new business opportunities.
  • Able to interpret, and then implement, business marketplace requirements by turning them into technology solutions.
  • Adapts to business market conditions.
  • Not worried about the latest “techie buzz” like social media (Twitter, Facebook), cloud, etc. unless there is a direct business marketplace connection.

I describe this full SAP IT Convergence as an SAP Center of Excellence–, if you would like more understanding around the SAP Center of Excellence concept please see this SAP ASUG presentation on SAP & Business Convergence.

Conclusion on Steps to Achieve SAP IT Convergence

As time goes on I will address many of the items below in more detail.  Here are some of the key things to consider for creating IT Convergence within your SAP organization:

  • KPI full court press
  • Steering Committee Engagement
  • MBA in the organization
  • Mobile BYOD
  • Internal consulting on business direct buy technology solutions
  • “Exchange staff program” to integrate the IT organization into the business
  • Invest in technical and NON-TECHNICAL IT training
    • Facilitation skills
    • Questioning and Negotiation
    • Meeting skills
    • Conflict management and resolution
    • Managerial skills

This approach helps your organization develop business skills and business understanding which naturally leads to the better utilization of technology and information.  SAP IT Convergence is impossible if you can’t both speak the same language and have a similar cultural understanding.  Since it is unlikely that the business is going to learn ABAP, Java, SQL, or how to make settings in the IMG, it is up to you to be the Business IT ambassador to bridge the gap.

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For more information and background on the concept of IT Convergence in the SAP enterprise you might want to consider the following posts:

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Hedman, J. (2010), ‘ERP Systems: Critical Factors in Theory and Practice’, Center for Applied ICT, Copenhagen Business School.

Luftman, J. (2000), ‘Assessing Business-IT Alignment Maturity’, Communications of the Association for Information Systems, Vol 4, Article 14.

Silvius, A. (2007), ‘Business & IT Alignment in Theory and Practice’, 40th Hawaii International Conference on Systems Sciences (HICSS-40).

Silvius, A. and Smit, J. (2011), ‘Maturing Business and IT Alignment Capability; the Practitioner’s View’, 44th Hawaii International Conference on System Sciences (HICSS-44).

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