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With On-Demand Solutions, One Size Does Not Fit All

by Jeff Stiles | SAPinsider

October 1, 2010

In this Q&A, Jeff Stiles, Senior Vice President of SME, Volume and Ecosystem Marketing at SAP, shares his insights on the state of the on-demand software market, provides an overview of SAP’s on-demand solution portfolio, and advises SAP customers on how to take the next on-demand step that’s right for their business.

Jeff Stiles
Senior Vice President
SME, Volume and Ecosystem Marketing

Q: Where is the on-demand market on the maturity curve? How are customers approaching it today?

A: In the past, customers were looking for more education about on-demand as a concept, to understand how it would work in their business. Today, the conversations we have with customers are focused on which particular on-demand solutions are available to help solve their business problems and grow with their business. Customers are much more forward-thinking now. It’s the natural maturation of this market.

At many companies, on-premise systems and investments are seen as highly beneficial to the professional user, but perhaps less so to casual users. But companies are starting to understand that on-demand solutions can really extend the value of their investments out to both the business user and the casual user. In fact, we use the term “business consumer” to describe those users because they have consumer-type requirements. On-demand solutions can increase productivity and collaboration for these consumers and let them complete their core tasks more efficiently.

On-demand is a consumption model, and we want to be able to support that “consume as you go” way of thinking. Companies today are more focused on finding the right solutions to fit their business needs and less focused on implementing solutions just because they are new or interesting. On-demand fits very well into that trend, offering a wide variety of business-specific solutions.

Q: How does the on-demand equation vary from small and midsize businesses to larger enterprises?

A: It’s definitely not “one size fits all” when it comes to the benefits of on-demand. Many large companies that have on-premise systems are using on-demand offerings in specific departments or lines of business, extending the value of their on-premise offerings. That could mean improving sourcing processes or managing T&E processes more effectively. In fact, one area in which we see larger enterprises really giving on-demand some consideration is sales — they want to better equip their salespeople and improve how they reach customers today through social networks, while also tying back to and extending the value of their on-premise systems. These on-demand solutions appeal to larger enterprises because they are cost-effective, deploy quickly, and can help specific business units or functions do their jobs.

For small and midsize enterprises (SMEs), on-demand — and especially SAP Business ByDesign — is being considered as a solution for the entire enterprise. We’re talking with CEOs and business owners at these companies about on-demand, and they’re considering it as the solution to meet their core business needs today, and to grow with them as well.

That’s not to say SME equals on-demand. My experience in the SME world has taught me that, again, one size does not fit all. Many SMEs compete based on the uniqueness of their value chains; automating those unique processes with software can often mean customization, which may lead them to an on-premise solution.

Q: Will SAP make its entire portfolio available in an on-demand model?

A: SAP expects the market to evolve into a hybrid model in which both on-premise and on-demand solutions are equally important but always working together to deliver  maximum business value. As a result, SAP will continue to invest in both models.

SAP’s on-demand portfolio ranges from complete business management solutions for subsidiaries and small offices, to business insight and collaborative problem-solving solutions for individuals and teams, to solutions targeted at problems in specific departments and organizations. On-demand is not meant to displace the investment companies have made in their on-premise systems. It’s meant to extend that investment. There is still a very compelling case for many companies to deploy on-premise systems.

The best strategy, I feel, is to deploy some capabilities on-demand where it makes sense to extend the value of the on-premise systems. And if it makes sense for a business, based on its business model, to deploy an entire end-to-end system on-demand, we can do that as well. You don’t need to compromise. Today, SAP’s on-demand solutions are available for businesses of any size, anywhere in the world. They integrate very well and are supported by an extensive network of partners. This allows customers to grow their IT as their business needs grow and change.

Q: With the wide range of options now available, what advice do you have for companies unsure of where on-demand may fit in their business? 

A: Every customer has a different set of business and technology needs, so there isn’t a single adoption path. I think the most important thing for a company in that position is to know what its options are before it goes ahead and selects a solution. In evaluating on-demand solutions, specifically, companies need to really understand the business pain points for which they are considering these solutions (see Figure 1):

  • If you are a large company with existing SAP on-premise systems, we have a variety of on-demand line-of-business solutions, such as SAP Sales OnDemand or SAP Sourcing OnDemand, that can help automate business processes and complement that on-premise investment.
  • Customers looking for a broader, integrated suite of solutions that is offered on-demand and that provides the core capabilities required by subsidiaries and SMEs would be more likely to consider SAP Business ByDesign.
  • And for customers looking to boost the productivity of their business consumers, we offer a set of solutions for personal productivity that are designed to work the way your employees do — in a collaborative, ad hoc, non-linear fashion.

Now more than ever, companies are not only looking for the right solutions for their changing business needs, but also finding solutions that work well together, whether they be on-demand, on-premise, or on-device. SAP’s approach is to support all of these environments to give customers the benefits and advantages of all three. Our solutions are designed to integrate with and complement each other.

Figure 1 SAP’s on-demand solution portfolio

Q: How is SAP Business ByDesign different from other on-demand solutions available in the market?

A: SAP Business ByDesign is a complete enterprise solution that addresses end-to-end business processes across all business functions. While it is on-demand, it provides the usability, performance, flexibility of deployment, and natively embedded analytics that SAP customers are accustomed to. That’s because it is based on the best practices SAP has collated and selected in developing ERP solutions over the past 35 years. Jointly with our ecosystem, we will continue to grow our industry functionality, as well as increase the number of countries where SAP Business ByDesign is available.

Q: You mention the ecosystem — where do SAP partners fit into the on-demand strategy and platform?

A: Partners are a big part of our future in on-demand. On-demand opens up customers’ options to include a wide range of services and solutions from the broader ecosystem. Our core strategy is to equip our partners with what they need to build solutions for the end customer. For example, with SAP Business ByDesign, we will offer SAP Business ByDesign Studio, a software development kit that allows customers and partners to build on top of SAP Business ByDesign.

SAP’s on-demand approach is to build an open, networked platform with a choice of shared technology services governed by a common framework of standards around quality, security, performance, integrity, ease of integration, openness, developer productivity, and extensibility. As such, we will continue to seamlessly integrate SAP and partner on-demand business solutions with customers’ on-premise and on-demand systems, as well as mobile devices.

We encourage partners to look at how they can bring their unique intellectual property or skills into the on-demand market. It’s a big part of our on-demand strategy, and we will continue to increase our focus on activities with partners to bring more value to customers. 

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