Unified – Comprehensive – Transformational
On May 16, 2011 at SAPPHIRE® NOW in Orlando, Florida, SAP announced the latest version of its enterprise performance management (EPM) solutions. The 10.0 release represents the culmination of a journey that originated four and a half years ago as SAP began to assemble a broad portfolio of products, beginning with the acquisition of Pilot Software and Outlooksoft. Later, in 2008 the merger with Business Objects expanded this portfolio and in June of that year SAP announced a longer term road map. Release 10.0 is the last major milestone of that journey in delivering a suite of products that SAP describes as unified, comprehensive and transformational. The goal of 10.0 is to “move EPM best practices beyond the finance department to managers throughout the company, helping people make risk-aware decisions that positively impact enterprise-wide performance.” The tools are now in place, but are companies ready and willing to be transformed?
A Bit of History
Effective management of enterprise performance, by its very nature, is dependent on consolidating data and providing visibility. An EPM application can never be effective as a completely stand-alone function. The better it can consolidate data and present it in the proper context, the more effective business execution and decision-making. Therefore the journey of SAP’s EPM solution covers a lot of ground.
The first stop on the journey was Release 7.0, which was delivered in August 2008. This first release honored prior commitments to enhance functionality and incorporated the underlying technical architecture of NetWeaver. Specifically 7.0 focused on ERP and NetWeaver and NetWeaver Business Warehouse (BW) integration into legacy SAP applications (Business Planning and Consolidation and Strategy Management). It also delivered Business Intelligence (BI) integration into legacy Business Objects applications (Financial Consolidation and Profitability and Cost Management).
Release 7.5 followed later and was the first to bring the various components of the portfolio together as a suite of products, adding integration of SAP applications and BI. Then Business Objects applications were optimized for ERP (often the source of the transactional detail upon which decisions are based), NetWeaver and BW. EPM 7.5 also introduced cross-application scenarios between EPM and Governance, Risk and Compliance (GRC). But the various components were still separate applications, although with “best-of-breed” integration.
Keeping this all straight is tricky and somewhat confusing, but also reveals the extended scope of the task at hand. EPM 10.0 brings to fruition a true suite, making the heritage of each component a non-issue. The suite brings a harmonized user interface across all components, along with next-generation productivity tools. In addition to the development efforts specific to EPM, it also leverages development efforts from other parts of SAP:
- In December, SAP launched the SAP® In-Memory Appliance software (SAP HANA™). HANA is now the technological root of everything SAP develops. The message of HANA was always about “big data”. Indeed it allows people to analyze huge amounts of data in real time even at the lowest level of non-aggregated detail. But customer examples highlighted at SapphireNow prove it is also about speed: Examples like reducing the time to retrieve data from 77 minutes to 13 seconds or from 8 hours to instantaneous.
- In February, SAP launched the culmination of three years’ development in BI and enterprise information management (EIM) software. These were critical components of the of SAP® BusinessObjects™ analytic applications which started rolling out in the fall of 2010 and continue to be built out for specific functions and industries. Strong BI tools are important but applications ready-built with these tools are more easily consumed by the audience for EPM – namely executives in charge of strategy and execution.
- In March, SAP launched GRC 10.0 -solutions to help organizations move GRC practices out of the hands of a few so everyone in the organization can participate in mitigating risk and increasing corporate compliance. In concept and practice these functions should be attached at the hip to performance management.
So given this firm foundation built over the past four and a half years, how does SAP substantiate its claim of unified, comprehensive and transformational?
Unification in EPM 10.0 goes beyond the harmonization of the user interface across the various components of EPM. Yes, a shared user experience does indeed reduce learning curves and a familiar look and feel reduces the intimidation factor of something “new.” But equally important is the unification of EPM with other tools, including NetWeaver and ERP as well as desktop productivity tools. Indeed Microsoft Excel has become a universal management tool, often in place of or in spite of applications that are implemented.
Exporting data from any application to a spreadsheet has become basic functionality that is expected of modern enterprise applications, as is using spreadsheets to import data. But EPM 10.0 goes beyond this simple extract and Excel essentially becomes the user interface.
Several early customers of EPM 10.0 expressed this as one of the major benefits and also key to user adoption.
Case in Point: Under Armour, Inc.
David Roberts, senior manager from Under Armour points out most business professionals have had some exposure to ERP, which provides much of the content for performance management. “But there are a host of ERP players, and there are often very distinct differences and a steep learning curve in moving from one to another. But if the user interface is Excel, even kids right out of college know it and use it. In fact that is how we have built our Business Analytics Team (BAT). It consists of a bunch of kids out of college. We take them from all departments and teach them to collect and analyze data. BPC [SAP BusinessObjects Planning and Consolidation] is the tool used most because they have the skills to use it. We expand their knowledge, taking advantage of add-ins. [EPM can become an add-in to Excel.] User adoption is driven by the fact that it looks so easy. In fact that can become an Achilles heel. As they see it do so much, they want it to do everything.”
Who is Under Armour?
Under Armour is a sports clothing and accessories company, providing high-tech sports gear to professional and collegiate athletes in addition to offering its product lines in retail locations. In 2006 the company expanded its offerings to include footwear in 2006; it continues to expand those offerings, announcing its first line-up of basketball shoes in Fall of 2010.
Data can also be easily dragged from EPM to Microsoft Word or PowerPoint documents (Word and PowerPoint plug-ins are available as well), thereby saving time and effort in the effective communication of results.
While many in the finance department may be content to reside in and communicate via spreadsheets all day, it is also possible to construct personally tailored views that bring in other content, not only from SAP enterprise applications, but from the Internet as well. One could easily construct a dashboard from which 90-100% of the day’s activities, including e-mail and social media outlets, could be conducted.
Indeed, while Excel has become an almost universal “language” for the finance team, it is not just finance that EPM 10.0 is meant to “speak” to. SAP’s BusinessObjects EPM solutions are generally recognized as delivering one of the most complete and mature sets of solutions for the office of the CFO, including strategy management, planning, budgeting and forecasting, financial consolidation, and profitability and cost management. In addition, SAP added a Disclosure Management application to help companies go the last mile in finance in producing accurate and timely financial statements.
But SAP intends for EPM 10.0 to reach beyond the finance office, targeting key decision makers in other functional areas of the business, including supply chain management, procurement, sales, manufacturing and demand planning. The new EPM release powers newly launched SAP BusinessObjects analytic applications designed for role-specific users in a variety of industries and lines of business. These offerings are quite diverse, ranging from risk reporting in banking to trade promotions for consumer products to upstream operations performance analysis for oil and gas or intellectual property (IP) rights analysis for the media.
Across the SAP BusinessObjects portfolio, the 10.0 release encompasses new offerings such as SAP® BusinessObjects™ Sales and Operations Planning. It also further enhances previous releases of the SAP® BusinessObjects™ Spend Performance Management and SAP® BusinessObjects™ Supply Chain Performance Management.
While these specific applications naturally extend to other functional areas such as procurement and supply chain management, at least in some of the early adopters, the planning and overall corporate performance activities of EPM 10.0 haven’t made it too far past the finance department. These early adopters all point to the Excel interface as a means of user engagement. But not all walks of life live and breathe Excel. In some cases perhaps the finance department, which generally owns and runs the solution, isn’t willing to open the doors. Or perhaps the overwhelming volume of data, coupled with the growing complexity of dependencies and data relationships is enough to scare many away. While dashboards and user interfaces have become increasingly tailor-able, often executives simply don’t know where to start.
And the volume is not about to decline any time soon. In fact it only stands to grow and may even grow exponentially. While HANA is certainly capable of responding, interestingly enough, the majority of the testimonials to date have been by CIOs. So making this happen still requires an underlying understanding of how the data and the applications are organized. Without being led by the hand, most executives will simply not venture down the path. Simplification and contextual cues are keys to bringing the proverbial horse to water.
Which leads us to the final adjective SAP uses to describe EPM 10.0. Through unification of a comprehensive portfolio, SAP has put the power of transformation within reach of enterprises today. Functional components support risk-adjusted planning. In-memory computing has the potential to open new doors to companies in leveraging massive volumes of data for planning and decision-making, potentially making them more agile and responsive. New user experiences transform the way people interact with applications and data and expand views beyond the structured data within applications like ERP.
But top level executives have traditionally been hands off in terms of going to directly to the source for data. However, trends in mobility may be just the catalyst needed to prompt better engagement. EPM 10.0 includes applications for the iPad (by Apple) and the Playbook (by RIM). With the advent of newer devices that are easy to carry, even easier to use and allow for more graphical visualization, executives are increasingly going mobile and using those devices for more than email and phone. In a way, these unwired devices are tethering them more closely to the business. But the limited real estate on these devices, even on tablets, and the perspective of being “on the move” will force a cleaner approach to communication and perhaps reinforce the KISS principle – keeping communication short and simple.
In today’s global economy, where markets and technology are changing at supersonic speed, where we are bombarded with noise and drowning in data, transformation may be necessary for survival. Keeping it simple will become even more difficult in achieving the goal that David Roberts has set for Under Armour with its EPM 10.0 deployment. David asks, “How do I answer the question I don’t know to ask?”
Indeed EPM 10.0 has the power to transform the business into an efficient, risk-aware, performance-driven culture, but only if the enterprise is aware of the possibilities and open to transformation. Many have a long way to go.