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Touching the Cloud - Part I

Having worked in ERP domain for most of my IT career, I always thought Cloud is hype! While I appreciate various benefits Cloud technology offers, I wondered how can large enterprises, with heavy investment in on-premise ERP landscapes, adopt this Cloud innovation. What happens to their current IT investments? Do these fancy cloud offerings rip & replace their existing on-premise solutions? What happens to current process design and the historical data they have amassed over number of years? In fact I believed Cloud is only for small companies who can't afford to have their own IT infrastructure. I was convinced Cloud is just as distant & misty for large ERP customers as the real clouds in sky! 

However last month, when I was required to prepare for a customer meeting, I broke my myth. I had to propose Cloud adoption options for one of our large pharma customer having highly complex & heterogeneous IT landscape with myriad of ERP & legacy applications. Frankly I was clueless hence I decided to check how SAP plans to address this dilemma.

SAP started the cloud journey in 2007 - that's when they launched the first SaaS solution SAP Business ByDesign targeted towards the mid-size companies looking for SaaS ERP.  After initial bumpy ride, ByDesign got rolling in 2010 with introduction of multi tenancy feature. In the meantime, SAP built a portfolio of cloud based solutions to address the four pillars of business - My People, My Customers, My Suppliers & My Money. These Line of Business (LOB) solutions include Employee Central (EC), Financials on demand, Sales on demand, Sourcing on demand, Travel on demand etc. SAP reinforced its cloud focus with acquisition of SuccessFactors, a SaaS only HCM solution in Dec 2011 and by appointing its CEO, Mr. Dalgaard to oversee SAP's cloud offerings.

In March 2012, SAP announced 'on-demand' availability of SAP Business One, characterized as it's 'most affordable ERP solution for small & growing businesses'. With competitively priced subscriptions offered on monthly named-user basis, this on-demand version has around 50K customers across globe. SAP Business ByDesign is now matured and stable with over 1000 customers. It is positioned for mid-size businesses, professional services organizations and as a subsidiary solution. ByDesign along with Business One forms the fifth pillar of the SAP cloud portfolio - Business Suite.  For large customers, SAP offers Rapid Deployment Solutions - proven industry flavor products; packaged, preconfigured and deployable in virtualized environment. As recently announced in SAPPHIRE 2013, SAP currently has a comprehensive portfolio of Cloud applications with 20+ solutions, covering 60 industries, supporting 168 countries and 34 languages.   

 

It is interesting to note the way all SAP cloud solutions are designed. In contrast to traditional on-premise ERP, user interface is highly intuitive and mobile enabled. It has built in analytics based on social data. All products are loosely coupled and SAP provides end-to-end integration with prepackaged content (SAP iFlows). SAP is leveraging HANA platform to power these cloud applications to enable Google-like user performance. These solutions are designed to connect people, data & documents in 'location and device agnostic manner' to drive better business decisions and actions. SAP customers can pick & choose from best of the breed solutions suitable for their specific business needs, as they want, at their own pace. Customers with specific business problem can start with pointed LOB solutions (eg. Employee Central or Sales on demand) while customers who want to go for one integrated solution for all their business processes can opt for suites (eg. Business ByDesign, Business One). 

 

After all Cloud is not as far-flung as I used to think - SAP is helping its customers to touch and feel the Cloud with a diverse solution portfolio and a clear roadmap. In my next blog (Part II), I will share more about how exactly on-premise SAP customers are leveraging this Cloud innovation.

 

References

SAP Business One Heads Into The Cloud, by Cindy Jutras of Mint Jutras LLC (published Mar'12)

SAP Cloud Strategy and Road Map presentation (TEC102) by Sven Denecken (TechEd Sep'12) 

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