The National Football League (NFL) and the big annual event called Super Bowl Sunday in the United States was abruptly superseded by the announcement of the contract termination and resignation of SAP CEO Leo Apotheker. Simultaneously the promotion of Bill McDermott, head of global field organization and Jim Hagemann Snabe, head of global product development were promoted to Co-CEOs as has been customary in past years. A dramatic change in such a short period of time since Leo Apotheker took the reigns as sole CEO of SAP just less than a year ago. Just last year Leo was on stage as the last CEO, Henning Kagerman left SAP and was part of my analysis (See: “SAP Communicates New Clarity for Business at SAPPHIRE”) and my colleagues analysis (See: “What Leo Apotheker from SAP Should Have Said”).

In a very quick move to shore up the industry rumor mill and spread of misinformation was an early morning conference call with the chairman of the board and co-founder of SAP, Dr. Hasso Plattner to briefly discuss the transition and address as many questions as possible across industry and financial analysts. There has been significant pressure in both Germany and investors around the world as Dr. Hasso Plattner outlined the three attributes of their strategy that are growth, innovation and margin which is obviously mandatory to adapt and grow SAP in a positive direction. The tone of the conversation by Hasso was a little mixed and was more defensive than re-assuring. The focus on ensuring ‘Trust’ with customers to stay committed to SAP and to not abandon a roadmap of solutions including upgrades and improvements using SAP was a strategic point by Hasso. The second point of emphasis was on ensuring growth and profitability through SAP being a ‘happy company’ which requires happier employees. In the questions and answers section it was revealed the employee satisfaction and annual survey of employees was not up to the level of executive board satisfaction. I was quite surprised to the level of detail on these trust and happiness issues which most of us know about at some level but was thinking the chairman would acknowledge issues quickly and then have a more positive position on the portfolio of opportunities in front of them. This reveals the issue is much larger than most of industry folks who cover SAP closely have realized.

Hasso on his pointed did provide some points of confidence on SAP investment to R&D and move to more agile product teams and that business decisions related to products need to be more swiftly executed and deployed throughout SAP. An emphasis on a range of advancements for usage of in-memory computing to SAP DB with SAP Business ByDesign and a reference to SAP BusinessObjects are part of what he believes will help the agenda at SAP. I actually see SAP has made many good advancements across their enterprise software portfolio and applications strategy that I have recently addressed (See: “SAP Broadcasts New Enterprise Software and Application Strategy”) along with advancements in BI (See: “SAP Brings Business Intelligence and Business Analytics Advancements to Industry”), solutions for enterprise class performance management and GRC (See: “SAP Promotes Value of EPM and GRC at SAP Reporting Conference“) and their On-Demand offering called SAP Business ByDesign that my colleague analyzed (See: “Business ByDesign is SAP’s Strategic Proof Point"). Like any technology supplier, SAP has very tough competition from dedicated niche providers and many of them providing very specific on-demand approaches for which it is no easy battle to get business closed let alone IBM and Oracle who have middleware and applications and operate at the global level. I have seen that SAP is not as aggressive or market engaging as they have been in past years but maybe the organizational changes and shifts of priorities in the last several years have them more internally focused than market focused.

I really believe that SAP largest challenge is allocation of focus with resources and budget into high growth markets. It appears that SAP is continuing to keep a large focus on industries and solution suites where their customers and the market has not just stalled but moved on from spending significant budget and time cycles beyond paying maintenance in these areas. This fact is easily seen in the declining application suite license revenue by all the major suppliers including Oracle and SAP and was evident in their year-end results which does not appear to stop declining based on activities across all vendors. But to make these organizational changes and headcount reduction and shift is no easy task as a significant number of people and the design of the organization is mostly vertical industry-centric around the world. This was good for SAP in the last 15 years but not what is needed for the future of where the market is heading. Customers have shifted more responsibility to business for technology based solution rather than just IT buyers who are looking for unique ways to apply applications and tools to their function and role rather than standardizing across industries or buying a large multi-year upgrade. Just look at adoption of Analytics across business areas like customer, sales and workforce or the specific needs of GRC in finance, operations or IT.

I do think the first call from SAP should have been an introduction by Dr. Plattner to the new Co-CEO’s of SAP who most of us know that could have outlined the commitment to strategic areas of growth from On-Demand and Cloud Computing with applications from SAP, Analytics and BI designed for business and not just IT, GRC and Performance Management for business and growing need of specific applications within and across the suites of solution areas. What is clear is that less technology and infrastructure discussion is needed and focusing more on solving business issues by these buyers will be a key area of growth if SAP decides to further engage into growth markets.

Let’s see what is next for SAP as I believe more change is required to adapt and grow profitability while re-assuring the employees the confidence they have for their future in the global enterprise software and applications business. There is plenty of existing solutions in the portfolio, and more focused and savvy marketing with dedicated inside sales teams will jump start their growth opportunity. SAP opportunity is there if they decide to make the changes to effectively operate in 2010 and addressed the new opportunity as I outlined recently (See: “Seek Innovation and Optimization in 2010 at the Intersection of Business and Technology”). My best to Leo for his dedication and hard work over the years as he dates back over good and challenges times at SAP and now this period of economic uncertainty and continued technology pessimism is no easy environment for anyone to be CEO.

Let me know your thoughts  or come and collaborate with us onLinkedInand Facebook.

Regards,

Mark Smith – CEO & EVP Research

MicroStrategy, a leader in the business intelligence (BI) market, recently added an array of new capabilities, performance and scalability to its product suite (See: “MicroStrategy Brings Future Vision and Reality of Business Intelligence to Customers”). I had a chance to review in-depth how these new capabilities apply to BI running on top of SAP BW, formally called SAP NetWeaver Business Warehouse. MicroStrategy has expanded the range of BI products that integrate into applications from SAP (See: “Leverage Every Transaction from SAP for BI”). This use of BI has great potential, as the insights from applying analytics and building metrics and key performance indicators are essential to achieve operational and financial performance goals and objectives.

MicroStrategy Version 9 brings to the table a range of methods to integrate with SAP as part of the MicroStrategy Solutions for SAP. They range from supporting robust reporting, analytics, dashboards and applications that access SAP BW to integrating BI into SAP Enterprise Portal. Its MicroStrategy SAP Services also offers support from within SAP NetWeaver Visual Composer to integrate data with SAP BW. MicroStrategy meets the criteria for SAP Certified NetWeaver integration, following the approved integration points defined by SAP. Its MicroStrategy Intelligence Server integrates to SAP BW through a technology standard for data access called MDX. MicroStrategy uses a Java-based connector to pass MDX to the online analytical processing (OLAP) interfaces of SAP BW, which allows it to operate across Microsoft- and Unix-based platforms.

Accessing SAP BW this way, IT staff or analysts using MicroStrategy Data Explorer can browse metadata structures such as cubes, hierarchies or attributes from SAP BW to assemble similar business metadata within MicroStrategy. It is simple to visually browse and map logical data structures between the two technologies. This approach enables the rapid integration and use of existing SAP BW InfoCubes and associated business queries that the user organization might have spent significant time to develop. To make the business metadata available in SAP BW from MicroStrategy requires only checking a box in SAP BW; an administrator can make it available for discovery by ODBO, which is turned off by default. MicroStrategy also can inherit presentation and display formats from SAP BW, along with pre-existing security and authentication in SAP BW to authorize access to existing investments. Of course, in mixed environments blending data from SAP BW and other sources will require a higher level of security than can be managed within MicroStrategy. Currently MicroStrategy does not directly read and map to the “atomic” level of detailed data in SAP BW called the operational data store (ODS), but it can use or create queries based on SAP BW InfoCube to the ODS.

Once mapping from MicroStrategy to SAP BW is complete, you can use all the capabilities of MicroStrategy to design and publish reports, assemble dashboards and build in-memory cubes with MicroStrategy OLAP Services to access with MicroStrategy Office, which establishes access to Microsoft Excel or information from MicroStrategy’s RIM BlackBerry support. It is simple to design reports on top of separate SAP BW InfoCubes and then connect them for a uniform view within one table or chart. A business or data analyst can join the data by using a common identifier. You can use a MicroStrategy query using MDX on SAP BW as a filter to join, for example, data about employees, salary and length of employment with sales data to determine individuals’ contributions to revenue and profit. The dynamic access to the data with SAP BW happens automatically, but MicroStrategy enables administrators and analysts to readily see the actual MDX if they need to determine how it is querying SAP BW. In addition MicroStrategy can link reports so that clicking on a cell value enables you to drill down to another detailed report; this capability is useful to find formatted reports of detailed data within transactions or time periods.

Designing reports and dashboards likewise is straightforward using MicroStrategy’s broader capabilities for any source of data. Designing where derived aggregates and analytics are accomplished is not difficult, but you should build a plan for how to manage the synchronization of changed metadata from SAP BW to MicroStrategy. Doing this basically means that when new categories or changes to existing categories or attributes occur, the new data to be accessed is reflected properly in the resulting queries and reports.

MicroStrategy Version 9 Release 2 has dramatically improved the performance and scalability of the product suite in working with SAP BW. Organizations using SAP NetWeaver Business Warehouse Accelerator, which utilizes a memory-based approach, can improve the performance of dynamic access to SAP BW and have it be transparent to anyone using MicroStrategy. Among the details I appreciated in the design, you can build queries within MicroStrategy and then map them to SAP BW queries to ensure optimal caching and take advantage of the performance-enhancing capabilities of MicroStrategy 9.2. MicroStrategy Health Center helps monitor the server and integration points to SAP BW so you can further adjust performance and scalability as needed. I highly recommend that organizations examine the array of approaches offered here to see which best fits their environment.

That said, it is important to note that I have seen some confusion among those interested in using MicroStrategy on top of SAP BW, who are not sure if they need the MicroStrategy Multi-Source option. It is not needed for integration to an MDX source like SAP BW but is necessary for dynamic integration to data from multiple relational sources. If you want to integrate data from multiple SAP BW cubes, you must map them separately into reports from which you can then join the data. As before, if you want to extract data from SAP BW and SAP R/3, you can use data integration technologies such as Informatica PowerExchange in the Informatica PowerCenter platform to manage diverse operational, data warehousing and BI data. Another option not well known is Composite Software Information Server and Composite Application Data Services, which provide direct access to SAP R/3 and support SAP BW, which appears as just another data source to the MicroStrategy BI platform. In larger enterprises it is not unusual to see a combination of approaches being used to meet the timely needs of business for specific kinds of analytics on applications from SAP.

To benefit fully from MicroStrategy’s integration and support of SAP BW, organizations should use Version 9 Release 2, which has usability, performance, scalability and administration improvements. The advanced multilevel caching in Release 2 is where the magic happens for integration to SAP BW, so you can maximize the performance and scalability of BI against SAP BW. This functionality is essential for organizations combining these technologies. MicroStrategy has provided an extra level of specialized services to help organizations understand the range of approaches.  The company has been working over the last couple of years with many customers to leverage their SAP and SAP BW investments. I know personally of many companies busy with deployments; Coca-Cola, Intel and Pepsico are only three of them.

SAP is not sitting around either, working hard to advance BI support on SAP BW with a new generation of technology from SAP BusinessObjects that will surface later in 2010 as indicated in my recent analysis (See: “SAP Brings Business Intelligence and Business Analytics Advancements to Industry”). SAP has spent some $10 billion in the last five years on acquisitions and expanding its technology, and the company is completing a new unified platform, due for release later this year, that will extend the current SAP BI Explorer capabilities that I assessed last year. Though many organizations are deeply committed to SAP, a significant number are examining diversification of BI on top of SAP BW as options appear like those from MicroStrategy. I have been involved with a range of technologies accessing and integrating data since 1996 and am amazed that many organizations still are struggling to improve decision support and performance management on SAP using BI. With a little more market presence and refinement of its capabilities, MicroStrategy could find a significant opportunity to expand its business here. The demand for BI has never been higher and the information never been more valuable as all levels in organizations today seek the right content in ever shorter time cycles.

Let me know your thoughts  or come and collaborate with us on LinkedInand Facebook.

Regards,

Mark Smith – CEO & EVP Research

SuccessFactors has taken a big step forward in the market for helping organizations manage their workforce’s performance and maximize the value of talent by acquiring Inform Business Impact. Originally named Infohrm, the company has been operating for 28 years, much longer than SuccessFactors, and has specialized in the last decade in selling software and providing best practices in the area of workforce analytics and planning, as well as offering benchmarking services. Having changed its name from Infohrm, which reflected its focus on HR customers, to Inform Business Impact was a move to indicate their broader focus and appeal. I find this acquisition very relevant as it places more emphasis on workforce analytics and planning, which are core tenets of what is called workforce performance management, an interest of mine for over 15 years.

Now Inform becomes a core component of what SuccessFactors recently classified  as Business Execution Software, which I analyzed in 2009 (See: “SuccessFactors and Business Execution Software: Confusing or Confused?"). That shift  by SuccessFactors was an effort to expand beyond Talent Management for HR and emphasize both business alignment and people performance for other areas of the organization; this acquisition is a further step in that direction. SuccessFactors is serious about expansion, as shown by the cost of the acquisition – over $25 million in cash and approximately $15 million in stock. SuccessFactors already has been successful in growing its core business of helping organizations manage performance through goals, performance reviews, compensation, rewards, succession and recently announced recruitment. Its recent fiscal year 2009 results indicated strong growth in the form of over $62 million in bookings in the fourth quarter and over $153 million in revenue for 2009. SuccessFactors also introduced a simpler method to migrate to performance reviews with EasyReviews, which is priced to be affordable for organizations of any size.
 
As well, SuccessFactors had recently brought to market Metrics Navigator for analysis of critical metrics, a necessary part of workforce analytics. Now Inform strengthens its foundation of planning and workforce insights from both historical and predictive analytics; it also brings reporting and a portfolio of thousands of metrics and benchmarking statistics applicable across 20 industries. Inform had grown its business to over 130 enterprise customers that apply its analytics to over 2.5 million employees. My assessment after tracking Inform’s software over the last five years was that it is functionally rich and had begun to become more useful for people who were not analytically savvy; the greatest value of the organization, however, was in its industry expertise and community of practitioners.

The combined SuccessFactors and Inform competes with vendors that combine workforce analytics and planning, including Acquire and Softscape and a new generation of workforce analytics from recently merged Peopleclick and Authoria (See: “Bedford Clicks Authoria Up a Notch of Talent with Peopleclick”). Many of the main HRMS providers also have moved in this direction. Oracle blended the analytics planning software acquired from Hyperion into Oracle Hyperion Workforce Planning, and SAP ERP Workforce Analytics has begun to incorporate the newer generation of analytics from SAP Business Objects. IBM Cognos has been advancing workforce analytics and planning for several years and it is part of a larger global services organizational effort called IBM Business Analytics and Optimization. Inform’s recent growth indicated that many companies desire to work with a dedicated provider with specialized sales and services departments and a strong community of users.

SuccessFactors is bullish in promoting its positioning of business execution software that focuses on business alignment and people performance. Whether or not you believe in their focus on “business execution,” you likely believe in the need to improve the performance and alignment of your workforce. Our benchmark research on workforce analytics had shown the importance of bringing this technology together and applying best practices, as we have been educating the market for many years. I have been working on a new revision of our workforce analytics benchmark to re-assess the maturity and competencies of buyers. Workforce analytics and planning is a core tenet of workforce performance management, which has evolved into a critical objective of many executives. SuccessFactors combined with Inform will be a strong player in this market, and organizations should consider further investment in this area.

Let me know your thoughts  or come and collaborate with us on  LinkedIn  and  Facebook.

Regards,

Mark Smith – CEO & EVP Research