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Reflections on the SAP Supply Chain Management Summit Meeting

by Bob Ferrari

July 26, 2011

Last week I had the opportunity to attend the SAP Supply Chain Management Summit held at SAP’s North America headquarters in Newtown Square PA.  Attendance was good, by my estimate about 150 or so attendees.  The agenda featured a three hour deep-dive session in select SAP SCM applications including the newly announced Solution Extension, SAP Supply Chain Response Management by ICON-SCM as well as the newly upgraded SAP Transportation Management 8.0.  The most widely attended deep dive was that covering SAP Supply Network Collaboration (SNC). Day Two included a number of customer presentations that shared learning and experiences with different SAP SCM applications. You are welcomed to read our Supply Chain Matters blog commentaries regarding this event, titled Part One and Part Two.

One area of importance to the SAP Insider community is the fact that change within the SAP SCM suite is occurring perhaps faster than supply chain functional and IT teams can absorb.  Constant change in business activities, continual consolidations or acquisitions doe s not help. What really drove that point home was the session summarizing all the changes incorporated in SAP APO Version 5.0 to 7.0.  Eric Simonson of SCM Solution Management demonstrated superb and detailed knowledge of various APO enhancements, but even he was challenged to give ample time to summarize all of the changes in just 45 minutes.  APO users are probably aware that APO Release 7.0 is a threshold release, described by SAP as the ECC core release, and that once customers move to 7.0 they will be able to henceforth take advantage of SAP’s less disrupting Enhancement Release Paks which promise to make future upgrades less disruptive.   

Dwelling on all of the new functionality changes, two impressions come to mind.  First, SAP is listening to both customer input, as well as each of its various Industry Business Units (IBU’s).  Many of the new enhancements have obvious industry targets and are responses to customer’s inputs for important enhancements.  Shelf-life planning, tracking and optimization in SNP, the MLR with POS and Customer Forecast Management enhancement in DP are each examples. Making APO more competitive and closing the gap with ‘best-of-breed’ applications is also an obvious motivation. SAP is also setting the new foundation for enhanced supply chain analytics and business intelligence in subsequent releases, including in-memory computing.

 In my last Insider blog post in March, I noted that the gap in SAP’s roadmap vs. the reality of customer instances continues to widen.  The issues are process, people or technology in scope, and most likely also include the overall cost to upgrade.  Here lies the dilemma.  While SAP is urging SCM customers to move to the current 7.0 Release in order to take advantage of less disruptive future enhancements, customers have to decide on the cost tradeoffs for upgrading to the current level. Higher maintenance costs equate to more enhancements, and more enhancements equate to additional project and disruptive change management activities.  For the business functional as well as the IT teams, it is a constant challenge.

Our view is that teams need to view upgrade enhancements in the lens of what the business requires. If the enhancement solves a business process need, or leads to more responsive or efficient supply chain process, that should be the criteria. As noted previously, the most important consideration of the “new normal” is the faster clock speed of business, the increased need to respond to business and market changes.

SAP marches to the drum of its business growth and revenue needs. Similarly, the SAP Insider community must match the cadence and supply chain process requirements of their company or industry.  The important consideration is to map technology and upgrade needs to your required business cadence.

Bob Ferrari

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