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SAP gets the message: The “cool” factor doesn’t justify technology investments

by Graceanne Bowe

April 24, 2013

Graceanne Gatz, Senior Director, SAP Events
SAPinsider/WIS Publishing

. NET.  WebTV.   The Newton. 

These are just a few examples of how even the best, most innovative, promising technologies can fail…or at least fail to reach their full potential.  It’s not enough that a technology be “cool” in order to get the market to bite.  There needs to be a perceived value that goes beyond the “cool” factor.

This scenario is being played out at the enterprise level with SAP HANA. 

Just two years ago, SAP launched its revolutionary in-memory computing platform and along with it, a marketing and awareness blitz designed to get HANA in the door at as many large companies as possible.  Early presentations and demos from SAP were focused almost exclusively on speed.  See HANA analyze data and provide results in minutes, or even seconds. 

In early 2012, it was no secret that SAP was putting a lot of its revenue eggs into the HANA basket. And in the first quarter of 2012, the financial results weren’t promising when SAP North America missed its revenue projections. Uncertainty resonated throughout the IT and business community: Perhaps SAP had made a mistake counting so heavily on HANA.  Sure, the platform could process and analyze data really fast, but was the price tag worth it?   Could—or would—IT executives justify HANA’s expense for speed?

SAP didn’t give up.  In early 2012, it announced HANA as the basis for a host of business applications.  CO-PA on HANA.  BW on HANA.  BPC on HANA.  And those were just the tip of the iceberg.  Revenue results were better in Q2, and by late in Q3, there were already rumblings of  a much bigger announcement that came at SAPPHIRE Madrid:  SAP Business Suite on HANA.

On the heels of this announcement, SAP finished the year with a strong Q4 and overall growth for the entire fiscal year.  It seemed that SAP heard its customers loud and clear:  Unless HANA was linked to specific business process improvements and achievement of business goals and objectives, it could only go so far.

Today in Prague, SCM 2013, PLM 2013, Procurement 2013 and Manufacturing 2013 keynote speaker Kai Finck, SAP Senior VP of LoB Solutions for Corporate Functions revealed SAP’s plans for revolutionizing its planning technology by running it on SAP HANA, clearly demonstrating that SAP understands very well the necessity of proving HANA’s business value to customers.

Take Faurecia, a global supplier to the automotive industry. The company runs MRP on HANA in the form of an MRP Controller cockpit, which provides updated service level, inventory turnover, open sales, open purchase, and actual inventory KPIs—in real time. 

The results? A reduction in stock and improvement of on-time delivery in a “just-in-time” and “just-in-sequence—“ all critical factors to compete and win in highly competitive industry with a complex supply chain.

Then there’s HSE24.  For Europe’s largest home shopping network, HANA’s analysis speed was attractive but only part of the story.  The company’s head of broadcast and IT, Norbert Paulus, was quoted in a video, saying basically that HANA’s ability to quickly analyze unstructured data from social media sources has empowered the company to know its customers better and respond to market feedback in real-time, thereby protecting its competitive advantage.

For Bayer, the goal was all about simplification.  The global pharmaceutical giant is using SAP HANA to simplify its landscape and reduce data infrastructure cost, reducing the IT burden by eliminating cumbersome batching and indexing processes, and providing users with a simpler experience by giving them access to real time information.

In none of these cases did a company adopt HANA simply because it was faster or to keep up with the “cool,” cutting-edge technology. 

They are leveraging HANA as a driver of cost savings, customer retention, revenue growth, and overall business value.   This is the key to justifying new SAP HANA investments.  And by keeping its eye on the ball, SAP just might outrun its competitors—and win.

Follow the latest from SCM 2013, PLM 2013, Procurement 2013 and Manufacturing 2013 Prague on Twitter at #scm2013

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