IDC Manufacturing Insights recently attended a couple of SAP events that provided insight on its future direction - the analyst-only “industry base camp” held at SAP's US headquarters in Newtown Square, PA that concentrates on its vertical industry initiatives and a “customer value network” event in Chicago that featured customer case studies across a diverse set of industries and lines of business. This highlights our collective learning on how manufacturers can move forward (and are moving forward) with HANA.
The obvious conclusion from both events is that a large degree of SAP's innovation is being driven through the HANA platform and, to a somewhat lesser extent, its mobility capabilities. HANA was featured in many of the presentations and the strategy can be thought of as a three pronged approach:
- Suite on HANA - A great deal of core functionality is now available on top of the HANA platform. This investment creates the opportunity to embed analytic processing directly into the transaction systems. For customers, this means a greater ability to do in line analysis and alerting which over time will translate to better user interfaces and an ability to suggest a "next best action" for a process which is truly groundbreaking for ERP when realized.
- HANA applications - In memory technology represents, at its most basic level, the opportunity to speed up compute and storage intensive processing. The value of speed is most apparent in planning applications and early case studies are demonstrating impressive improvements in cycle times, leading to the ability to iterate more frequently and improve decision making. HANA based appliance like applications include areas like sales & operations planning and rapid MRP.
- BW on HANA - Less discussed but perhaps having the greatest potential is the opportunity for modeling an entire business and its extended network. The development of a broad analytic data model, with specific industry starting points, will allow SAP (or any ERP vendor following a similar path) to create a point of integration for decision making across all functions not just in the individual line of business areas. Today, this is the domain of enterprise data warehouse providers like Teradata or IBM (Netezza) and will be interesting to see how companies plan to invest to achieve this competitively critical capability.
The HANA led innovation can already be seen in industry efforts:
- The chemical industry represents one of SAP's strongest and oldest customer markets, and pilot projects with SAP HANA in the chemical industry are in the areas of integrated sales and operations planning (S&OP), profitability analysis, compliance checks, and laboratory data analysis (from LIMS data).
- SAP's high tech customer base is also showing strong interest in bringing HANA into its SAP investments. Pilot and in-process projects in high tech already include many of these areas - CRM on HANA, S&OP, profitability insight, and inventory and backlog analysis.
- In the industrial machinery and components (IMC) segment, similar progress is being made with HANA. Specific SAP HANA investments from SAP's IMC customers are in predictive maintenance and service, service parts planning, variant configuration analytics, remote diagnostics, and machine to machine (M2M) communication.
- In consumer products, where demand volatility and complexity is moving many companies to consider their efforts in both collecting and assessing downstream data, HANA is proving to be an asset. Pilot and in-process HANA capabilities relevant to the consumer products industry include S&OP, Advanced Planning and Optimization (APO), CRM, Promotion Management and Consumer Segmentation.
Overall, Idea to Performance is enhanced across all industries by SAP HANA - enabling users to more effectively connect processes from concept through delivery. From the use of real-time analytics during the design and manufacturing phases to support sustainable innovation and responsive manufacturing, to the predictive analytics used in product maintenance and service phases, the real-time insight made possible by SAP HANA is helping customers to work both "smarter and faster."
Going forward, we believe SAP's customers would benefit from a more holistic roadmap for HANA, how pricing models are changing, and continued investments in the user interface, particularly for power users. While these issues bear watching, we are fairly confident they will be addressed by SAP in the coming months.
If you are an SAP customer you have probably been approached and perhaps even participated in a HANA pilot. If the latter, we are eager to discuss your experiences so we can compile best practices (and you can reach out to us through the IDC Insights Community or by emailing me at kknickle .com).
Regardless of your activity to date, HANA will be the driver of broad innovations so having a HANA strategy is warranted. The next set of HANA driven, industry relevant innovations and improvements may be the most significant value delivery opportunity for SAP customers since Net Weaver was first announced. (This summarizes a longer Perspective that is available to IDC Manufacturing Insights IT Priorities & Strategies clients and is a collaborative effort from Bob Parker, Simon Ellis, Amy Rowell, and Kimberly Knickle).