Unity in Diversity

January 4, 2008 by Hans-Josef Jeanrond, marketing consultant, Yerres, France

The Club des Utilisateurs SAP Francophones (USF) celebrated its 18th anniversary in 2007. It is only two years younger than SAP’s French subsidiary, but it is older than its German-speaking counterpart, DSAG. The German group was founded in 1997 because the established SAP R/2 user associations were ignoring the successor product, SAP R/3.

Nobody can accuse the former DSAG president Alfons Wahlers of a lack of interest in new topics. He knows that users need to keep up with technical and business innovations to remain competitive and negotiate with SAP on an equal footing.

Eight groups, one voice

The USF annual conference took place in Reims, France, in mid-October, 2007. Was Wahler’s guest appearance there a sign of a Franco-German axis being established in the SAP world? It appears not: Attempts by national user groups to work together on day-to-day matters have failed so far, because of language barriers and different priorities. The bilateral exchange was limited to the two groups’ structures and working processes.

In his speech, Wahlers publicized the SAP User Group Executive Network (SUGEN), which is currently being set up. Initially, it will comprise the presidents of eight of the 36 user groups worldwide and will represent them “with one voice” in communications with SAP on strategically important topics. Former USF president Didier Gamain confirmed that his club would attend the constituent meeting of SUGEN on December 4 and 5 in Boston, Massachusetts, at which the chairperson was due to be elected. According to Wahlers, one of the first matters that the umbrella organization will look into is simplification of the SAP price list.

SAP ERP in focus

What are the most crucial topics concerning the neighboring user groups? Where do their interests overlap, and where do they differ? DSAG and USF are both giving high priority to the migration to the SAP ERP application. Two reasons for upgrading are the platform, which will remain unchanged until 2012, and the possibility of being involved in the first enterprise service-oriented architecture (enterprise SOA) projects.

However, making a case in the board room for such a technical switch is difficult when there are no new functions offered – particularly since the budget and time required make such a project a major undertaking. In Germany, where there have been more migrations than in France, IT managers are facing increasing pressure to make greater use of the current SAP ERP spectrum. The focus is on the new general ledger, conformity with the Sarbanes-Oxley Act, portals, customer relationship management, and supply chain management.

While 30 percent of DSAG members have upgraded to SAP ERP 6.0 (or have made good progress toward it) and over 90 percent have signed the necessary licensing agreement, USF is concerned about the situation in France. In more than 60 percent of cases, members still use SAP R/3 4.6C or an even older version. Over the next two years, some 1,200 French companies will need to upgrade, which may lead to a shortage of qualified consultants and system resellers (see article “Catching Up).

Progress with enterprise SOA

DSAG members are taking a greater interest in the opportunities of enterprise SOA than their French counterparts are. For example, the German group has joined the SAP working groups involved in developing enterprise service bundles. These are Web services for cross-application processes, whose interfaces and semantics need to be carefully coordinated.

Talking about the new competences required for enterprise SOA, Wahlers says, “Both users and consulting and integration partners still need to make the transition from a modular to a holistic process understanding.” Moreover, he sees “a lack of suitable methods and tools.” Setting this right was one reason why DSAG helped establish the International Association for SAP Partners (IA4SP). In the future, this organization will provide a forum for SAP partners to discuss shared interests with SAP customers.

In the German-speaking countries at least, interest in enterprise SOA projects seems to be growing rapidly. In 2006, only five percent of participants in an online survey by DSAG reported such projects. In 2007, this figure rose to 13 percent. Moreover, 47 percent feel sufficiently informed about enterprise SOA.

However, the survey also showed that many users do not see the business benefits as sufficient motivation to upgrade. Approximately 70 percent of DSAG members are experimenting with integrating Web services in their own IT systems, but from an enterprise resource planning perspective, these services are provided by secondary applications, such as Google Maps. Knowledge transfer and provision of information about enterprise SOA must be increased, says Wahlers, and backed up by understandable, convincing examples taken from practice.

Targeting the midmarket

Both DSAG and USF have been focusing on the midmarket for some time and have established work groups. The German user group is further ahead with the SAP Business ByDesign solution. First, DSAG was always well informed during the development phase, thanks to its closeness to SAP. Second, midmarket companies in the German-speaking companies have been acquiring experience with the solution for a year, whereas it has been available in France only since mid-October 2007.

DSAG has set up a dedicated work group with separate membership for users of the new software. Does this approach correspond to SAP’s policy of aiming only at new customers with SAP Business ByDesign? Wahlers denies this: “We are informing all of our members about the new solution, as agreed to with SAP.” He understands SAP’s strategy of focusing on new customers but doubts its feasibility in the long term. He says that in a year’s time at most, large companies will push for implementing SAP Business ByDesign in subsidiaries for which SAP Business One is too small and SAP Business All-in-One too expensive.

Does this mean that business is ready for software as a service (SaaS)? Although Gamain and Wahlers have found that many companies still have reservations about allowing business data to be stored externally, they are confident that SaaS will be widely accepted in a year or so.

Companies are still not used to the SaaS price model. When they compare it to traditional licensing models, they need to take not only the license fee and maintenance costs into account but also the operating costs. Wahlers says that this model will be a good option in the long term, not just for the duration of the payback period of a license purchase.

Both Gamain and Wahlers assume that SAP will simplify its midmarket program. “It’s difficult to differentiate among the three offerings,” they say. SAP Business ByDesign seems to them to be the right basis for a single midmarket solution – or even for SAP’s entire future enterprise SOA portfolio.

What do Gamain and Wahlers think of SAP’s acquisition of business intelligence vendor Business Objects? The announcement, made two days before the USF conference, surprised them. They see benefits from the expected tighter product integration, although Gamain regrets the increasing concentration in the software market and the resulting loss of diversity and competition.

France and Germany obviously have different opinions on standardization and diversity – but what would Europe be without its cultural variation?

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