In Memory

SAP GRC Solutions Leverage HANA for Fraud Management

According to the 2012 Report to the Nations on Occupational Fraud and Abuse, published by the Association of Certified Fraud Examiners (ACFE), $3.5 trillion worth of fraud occurs every year. Industries such as insurance, public sector, banking, healthcare and utilities bear more than their share of this risk and often spend millions in their attempt to detect, investigate, analyze and prevent it, with varying degrees of success. Investigators are forced to wade through massive amounts of data, which potential perpetrators count on to shield them from detection and prosecution. To help companies face this challenge, last month SAP announced SAP Fraud Management, leveraging the power of its HANA platform. The goals:

  • reduce the cost and effort of investigation, by providing tools to better detect new and changing fraud behavioral patterns
  • redirect efforts away from false alarms in order to deter and possibly even prevent a fraudulent transaction from being completed
  • and of course… earlier detection by processing high volumes in quasi real-time

What Is It?

SAP Fraud Management is part of SAP’s Governance, Risk and Compliance (GRC) product portfolio, along with Process Control, Access Control, Risk Management and Global Trade Management. It is part tool (for the IT department) and part analytic application (for fraud investigators).

The potential for the solution was demonstrated at the SAP Insider GRC 2013 conference in Las Vegas using an example from the insurance industry. Michael Lortz, Sr. Director, Solution Marketing for the GRC portfolio of products played the role of an investigator tracking down a potentially fraudulent automobile insurance claim. A young policyholder had submitted a claim after an accident that had occurred between 1:00 and 5:00 AM. The detection engine flagged it as suspicious due to the combination of the age of the operator and the time of day the accident had occurred.

The first step Michael, as the investigator, took was to do a “network analysis” to look for the same set of circumstances in any other claims. Come to find out this young claimant, and two others involved in the accident were also participants in four other claims. What are the chances this kid had five different legitimate accidents involving the same people? Slim to none? Obviously the perpetrators of the fraud were counting on the sheer volume of claims processed to mask this. In fact, they were successful the second, third and fourth time. The fifth time around, with the help of some enabling technology, somebody noticed.

As a result, the transaction could be flagged as fraudulent before any payout on the claim was made. But more importantly, the engine that triggered this as a suspicious claim could be recalibrated to change the thresholds that trigger audits that would prevent, if not the second claim, at least the third and fourth. And through recalibration of the rules, the likelihood of any transaction flagged as suspicious turning out to be fraud is increased substantially. Tracking down “false alarms” is costly and unproductive. So the ability to reduce those “false positives” can represent a huge savings.

Part Application, Part Platform

So, is SAP Fraud Management an application or is it a set of tools from which a clever customer or an SAP partner can build an application? The answer is, “Yes.” It is part application and part tool and it relies on the HANA platform for some of its functionality. Of course, this example provides a compelling business case for the insurance industry. While this was automobile insurance, surely it could be tweaked for homeowners and other kinds of liability insurance. The net result is a complete, working application for this industry.

However, the processes of detection, investigation and deterrence are similar in managing any kind of fraud and can be pre-built into a framework:

  • Detection based on a set of rules
  • Analysis of a network of objects looking for similarities (participants in insurance claims in this instance, but just as easily dinner guests on an expense report, deductions on a tax return, etc.)
  • Combined with a timeline (in what period of time were all these claims filed?)
  • Documentation of decisions (e.g. not to pay a claim, to reject an expense or to conduct a tax audit)
  • Add deterrents and refine the process by recalibrating the rules for identifying possible fraud

But the team building SAP Fraud Management didn’t have to create all this from scratch. It also looks to HANA to speed the investigation with its ability to process and analyze massive volumes of data, seemingly in real time since there are no spinning disks to traverse. All data is stored in memory, speeding the process. Rules are defined natively in HANA, while the “calibrator” is a specific tool created for Fraud Management.

Similar scenarios could be constructed for public sectors and the detection of tax evasion or perhaps abuse of social services such as food stamps or disability claims. Or it could help private companies detect fraudulent expense reporting or questionable purchases. Given the ACFE estimates the average organization is at risk of losing up to 5% of its revenue to fraud, the potential payback is more than significant. It can be huge.

Chances are SAP will not speculatively develop these industry-specific versions themselves. It is more likely for some of its partners to develop them. Most notably, we might expect to see some of the larger management-consulting firms with large risk management practices develop these for industries they serve.

Conclusion and Recommendations

If your company is at risk for significant financial loss as a result of fraud, SAP Fraud Management is certainly worth a look. First quantify the risk and then assess the cost of your current efforts to contain and mitigate that risk. If you employ fraud investigators, you must have some measure of their success and chances are you measure the number of potential cases investigated, along with the number of real occurrences of fraud. The goal should not necessarily be to increase the number of cases of fraud detected, but to detect fraud more quickly and to minimize the number of cases you chase that lead to no fraud (fewer cases of false positives). SAP Fraud Management, powered by SAP HANA can help you stop chasing down rat holes. This will allow you to set thresholds of risk lower and investigate more cases that can be proven fraudulent. Ultimately the goal is to maximize the amount of fraud prevented.

 

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SAP Business Suite on HANA: Software that Reinvents Business. Reinvented.

Really? Yes, Really!

On January 10, 2013 SAP announced the availability of SAP Business Suite powered by SAP HANA, a new option for SAP Business Suite customers and an opportunity for SAP to deliver “transformative innovation without disruption.” That’s a mouthful, but one that has the employees at SAP super excited. While the announcement was well-received and the audience seemed to like what it heard, this group of IT influencers didn’t seem to exhibit that same level of excitement. But influencers can be a jaded bunch. All too often as you start to dig deeper you find the story just isn’t all that new or different. In this case I believe the tables will be turned. As influencers and SAP customers alike begin to explore and understand the new and very real possibilities, what first appeared to be just “interesting” will truly become exciting. And there is no limit to those opportunities to innovate.

The HANA Story: What It Means to Business

Part of the reluctance to “feel the excitement” might stem from the fact that we’ve been hearing about HANA for a few years now. Six years ago Hasso Plattner, cofounder of SAP and Chairman of its Supervisory Board, had a vision of what the system of the future would look like. That vision included:

  • All active data must be in memory. In Hasso’s words, he wanted to “get rid of the rusty spinning disk.”
  • Full exploitation of massively parallel processing (MPP) in order to efficiently support more users
  • The same database used for online transaction processing (OLTP) and analytics, eliminating the need for a data warehouse as a reporting tool for OLTP to support live conversations rather than “prefabricated briefing books”
  • Radically simplified data models
  • Aggressive use of math
  • Use of design thinking throughout the model

But such a vision obviously took time to deliver, so for the first few years the world heard about this transformative technology, but couldn’t touch, feel or see it. In 2011 we started to see some results as HANA for analytics became a reality and pioneering companies began to see performance improvements previously unheard of in terms of speed and the ability to handle massive volumes of data.

In 2012 it became real as SAP released HANA as a platform for developers. But the vision was still one of powerful technology and much of the talk over the past six years has been presented in very technical terms. “Here is this super technology; let’s work together to find ways to use it.” That’s not necessarily how business executives and non-technical decision-makers think. Instead they think in terms of business problems. “I have this problem. How are you going to help me solve it?”

While the ability to “support live conversations” and efficiently “handle more users” might resonate with a business executive, these messages were often over-shadowed. Business executives don’t necessarily perceive the value of eliminating disks, simplifying data models or using math. They don’t know what MPP is or design thinking.

So now, with this announcement, SAP is trying hard to change the conversation to be less about the technology and more about the business value.  What is the real value? In the words of one early adopter: HANA solves problems that were deemed unsolvable in the past.

It is in uncovering these types of solvable business problems that the excitement will build. As Dr. Vishal Sikka, member of the SAP Executive Board, Technology and Innovation said, “Now the software at the heart of thousands of the world’s best-run companies can work and think as fast as our imagination.” But many business executives simply don’t have the same kind of creative imagination as a Vishal Sikka or a Hasso Plattner.

SAP Business Suite might be reinvented on HANA but how does that help customers reinvent their businesses? The trick will be in unleashing their imaginations and helping them see the possibilities. Yet in its attempt to make the message universal and relevant at the highest levels of its customers’ organizations SAP often introduces a level of abstraction that is lost on its audience. So we need to translate some of these high level messages into something that might be a little more concrete.

Becoming a real-time business

SAP’s brochure says, “Becoming a real-time business requires managing daily business transactions of your core business processes in real time, such as finance, sales and production – and as well, to capture data from new sources like social media, mobile apps or machine sensors.” However, how many enterprises today have a stated goal of “becoming a real-time business?” They don’t. They have goals such as growing revenue or reducing costs to improve profits. They may or may not be able to connect the dots between those goals and collecting and analyzing data in real time.

For those dealing directly, or even one step removed from an actual consumer or consumer product, the value of data from social media and/or mobile apps might be intuitive. For these companies, their brand is of paramount importance and they take great risk in ignoring social media or opportunities to connect directly with potential customers through mobile devices. So adding this dimension to the decision-making process should be well-received once you get the customer to think in those terms.

For manufacturers of industrial products… not so much. The world is changing, but slowly. It is entirely possible for them to think “social” isn’t business; it is something someone does on their personal time. And mobile devices are what their kids use to text their friends, play games and listen to music. For those same manufacturers, machine sensors and automated data collection (ADC) devices may have been on shop floors for many years. Those sensors and devices may in fact have the ability to shut down a line of production before bad product is produced. But can the data be effectively analyzed in order to improve products and processes? It is very possible that vast quantities of collected data have been underutilized for years, for one simple reason – there is just too much of it. And because it is collected continuously and automatically, it is constantly in a state of flux.

That thought actually brings to mind a parallel in history that dates back to the 1970’s.

Will HANA Bring to IT what MRP brought to Manufacturing?

The business world hasn’t seen something with this kind of potential impact emerge on the market since the introduction of MRP in the 1970’s. Those outside of the world of manufacturing might not appreciate the real significance MRP had, but there are a lot of parallels between the potential for HANA and the automation of the planning process that MRP brought about.

In a nutshell, MRP (material requirements planning) takes a combination of actual and forecasted demand and cascades it through bills of material, netting exploded demand against existing inventory and planned receipts. The result is a plan that includes the release of purchase orders and shop orders and reschedule messages. While the concept might be simple enough, these bills of material could be many layers deep and encompass hundreds or even thousands of component parts and subassemblies. Without automated MRP there is simply too much data and complexity for a human to possibly work with.

As a result, prior to MRP, other ways of managing inventory became commonplace. You had simple reorder points. Once inventory got below a certain point, you bought some more, whether you actually needed it or not. You also had safety stock as a buffer, and the “two bin” system was quite prevalent. When one bin was empty, you switched to the other and ordered more. These simplistic methods may have been effective in some environments, but the net result was the risk of inflated inventory while still experiencing stock outs. You had lots of inventory, just not what the customer wanted, when it wanted it. And planners and schedulers still had to figure out when to start production and they knew enough to build a lot of slack time into the schedule. So lead times also became inflated and customer request dates were in jeopardy.

Once MRP entered the picture, these were seen as archaic and imprecise planning methods. Even so, most didn’t rush right out and invest in MRP when it was first introduced. In fact now, decades later, the adoption rates of MRP in manufacturing still sits at about 78%. Why? The existing practices were deemed “good enough” and, after all, that’s the way it had always been done.

It required a paradigm shift to understand the potential of MRP and the planning process executed by MRP was complex. Not everyone intuitively understood it. And if they didn’t really understand, planners were unwilling to relinquish control.

Yet over time, MRP brought a new dimension to material planning. It brought a level of accuracy previously unheard of and helped get inventory and lead times in check. Manufacturers can experience an average of 10% to 20% reduction in inventory and similar improvements in complete and on-time delivery as a result of implementing MRP.

Now with HANA we’re introducing the potential to improve processes, not by 10% to 20% but by several orders of magnitude. But it also requires a paradigm shift.

Manufacturers, as well as other types of companies, are quite accustomed to making decisions from a snapshot of data, usually in report format, possibly through spreadsheets. They have become desensitized to the fact that this snapshot is just that, a picture of the data, frozen in time.

What if you never had to run another report? Instead, whenever you needed a piece of data or an answer to a question, you had immediate and direct access, not to the data as it was at the beginning of the day, or the end of last week, but to the latest data in real time? That’s what Hasso envisions when he talks about “live conversations versus prefabricated briefing books.” But those used to making decisions from those briefing books need to be educated on the possibility of the live conversation.

And, oh, by the way, traditional MRP, a game changer in the 1970’s and 1980’s is in for a major transformation.  Early MRP, and even versions of MRP today took and still take a long time to run and need exclusive use of the data. So it is typically run overnight or over a weekend. Think of the possibilities if it could now run in minutes or even seconds. Is that possible? With HANA, yes.

“Transformative Innovation Without Disruption”

In his opening remarks Hasso introduced the concept of “transformative innovation without disruption.”  In fact innovation was a key driver for John Deere, the early adopter of HANA mentioned previously in the context of solving previously unsolvable problems. Derek Dyer, director, Global SAP Services, Deere and Company outlined three ways in which the company views HANA as a game changer:

  • Bringing new innovation to the business by solving problems deemed unsolvable in the past
  • Simplification of the IT stack while introducing the ability to deal with huge volumes of data
  • Better serving the business by providing real-time access to data for better decisions

John Deere was originally attracted to HANA based on the performance aspects of the platform. The “Wow!” it was seeking was speed. It has had some initial success with its early projects, but sees a new world with ERP now on HANA. It intends to transform itself from a manufacturing company to a solutions based business. An example: It plans to take data from sensors in equipment in the field, determine how the equipment is being used, under what conditions. Not only will the data be real-time, but it will also allow them to answer back to the customer with very personalized, specific answers, and also support better collaboration with suppliers, dealers and customers.

Seeking Innovation

John Deere and other early adopters can provide some examples and perhaps some motivation, but each company will have to discover its own possibilities for changing the game. This is where SAP’s reference to “design thinking” comes into play. It is a protocol for discovering new opportunities and for solving problems.  It starts out with defining the problem. Because these problems might, as John Deere points out, have been previously deemed unsolvable, this step might not be as simple as it sounds. But it is the first critical step in finding that “excitement.” It can also be the most difficult. SAP and its partners can help.

What about Disruption?

The very term “disruption” is a source of controversy these days. Many talk about “disruptive technology” and refer to it as a good thing. But there are different kinds of disruption. A new technology that disrupts the way you think about problems and processes can have a very positive influence. But when new software (for example a new release of ERP) disrupts your business because you can’t ship a product or support your customer, it is definitely a bad thing. Upgrades to software like the SAP Business Suite are often viewed as disruptive in the bad sense, rather than in a good way. This is the kind of disruption SAP is promising to avoid.

Customers can take advantage of the Business Suite on HANA without upgrading their existing Business Suite. Current reports and customizations are preserved, including integration with other applications. And even partial migrations are possible. And there is no forced march now or in the future. SAP remains committed to supporting the customer’s choice of databases, including database technology and vendors. So the choice is left to the customer.

Yes, there is a cost associated with moving the Business Suite to HANA, but pricing for the new database works similarly to pricing for other databases even though the customer will experience huge improvements in speed, including 10 to 1000 times faster analytics.

Key TakeAways

It is clear that a key value proposition for SAP HANA is speed, but the vast possibility for business innovation trumps the value gained for improved performance. But each SAP Business Suite customer will have to identify its own possibilities for innovation. For some these opportunities for innovation may be staring them in the face. Others will have to dig deep into existing processes and identify those problems they have been living with for so long that they might appear to be unsolvable. Once uncovered, ask the very real question, “Can I solve this problem today with HANA?”

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Making Sense of SAP Business One with SAP HANA. Why Two Versions?

HANA, SAP’s in-memory computing engine has factored into SAP conversations for a couple of years now. Often HANA and in-memory computing are associated with “big data”, and hence associated with big companies. So the introduction of a HANA product for SAP Business One, SAP’s Enterprise Resource Planning (ERP) solution for small to midsize enterprises (SMEs) might not resonate immediately. And yet SAP has  not one, but two Business One products for SAP HANA:

  • SAP Business One Analytics, powered by SAP HANA
  • SAP Business One, version for SAP HANA

Given 79% of its customers are SMEs, SAP must know this segment of the ERP market, particularly the lower end, which is the target market for Business One, does not buy or implement technology for technology’s sake. There must be a perceived business value. Read on to discover when, why and how either or both of these offerings can bring value to the small business running Business One.

What are These Two Versions?

SAP Business One Analytics powered by SAP HANA is currently available while SAP Business One version for SAP HANA is still on the (future) horizon.

SAP Business One Analytics powered by SAP HANA

Back in June, SAP Business One Analytics powered by SAP HANA was in what SAP calls its “ramp up” phase.  This phase sits between the beta version and generally available (GA). During this stage, the software is delivered to a limited number of customers. Once a significant number of those customers have gone live, the product exits ramp up and becomes generally available. Currently there are 24 live customers, with 20 additional implementations underway. SAP originally expected the product to become GA in the fourth quarter of 2012 but ramp up went exceptionally well and GA actually occurred in July.

Analytics for SAP Business One includes predefined content (reports and dashboards) and provides interactive analysis based on an online analytical processing (OLAP) data model (also predefined). You can also create your own ad hoc reports using Crystal Reports. Enterprise search is also provided, allowing structured and unstructured free text search. Think of it as a Google search that crosses the boundary between your enterprise applications and the public domain of the Internet.

Customers running SAP Business One Analytics powered by SAP HANA continue to run the (transactional) ERP solution on their existing Windows servers using the Microsoft SQL database. The Analytics will run on a separate appliance, a Linux-based server where the SAP HANA database will also reside. Pricing will vary based on the actual configuration of the hardware and SAP does have a special pricing model for the SAP SME HANA products, but there will be an investment required. But before you assume that level of investment is out of your reach, talk with the SAP Business One partner that supports you. SAP has gone to great lengths to keep the price tag within reach for the SME.

SAP Business One version for SAP HANA

The second product, which went into ramp up in late September 2012, is SAP Business One, version for SAP HANA. A beta version was demonstrated during SAPPHIRENOW in Orlando on May 16, 2012, also demonstrating that SAP HANA is not just for the big guys. It is expected to be generally available late 2013. Think of this as SAP Business One with “HANA inside.”

This version will allow both the transactional and analytical processing to be run on the same server, both of which will be super-charged for speed.  While normally associated with “big data,” HANA is as much about speed as it is big data. And with speed, it is normal to add more and more data, reaching beyond that which is normally stored in enterprise applications. Think about the enormous potential of useful but unstructured data that is floating out there via the Internet.

While generally a database is optimized either for transaction processing (e.g. ERP) or analytics, can one solution be optimized for both? SAP says, “Yes, with SAP HANA.” However, even though both will run on one box, SAP Business One version for SAP HANA will not run on the box that customers run SAP Business One on today. So again, there will be some investment required; explore those costs with SAP and its partners. If you feel this would be a path you might take, there is no reason to delay your purchase of the Analytics powered by SAP HANA. You can take full advantage of the speed and functionality available today with SAP’s assurance that your investment will be protected.

Those that are satisfied with performance today or cannot justify the expenditure and transition to SAP Business One version for SAP HANA may choose to continue running SAP Business One on MSSQL. They will still have the option of purchasing the Analytics powered by HANA on a separate appliance.

Case in Point: Nashua Communications (Pty) Ltd

Nashua Communications is a good example of an SAP Business One customer that has been and will continue to evaluate different options presented by SAP. As a leading provider of converged enterprise network and communications solutions, the company is based in South Africa. It specializes in the design, implementation and support of converged networking and security solutions that use open, standards-based architecture to unify communications and business applications for a seamless collaboration experience. Nashua Communications is running live on SAP Business One Analytics powered by SAP HANA.

The company has a long history with SAP. Up until a few years ago it was part of Siemens and its global enterprise communication arm (Siemens Enterprise Communications PTY).  As part of the Siemens family, it had been using SAP R/3 for the prior 15 years. This changed when Siemens divested this group and it became part of the Nashua Group (within the Reunert Ltd Company).

According to Darren de Vries, Nashua Communication’s Chief Information Officer (CIO), “During our 15 years on SAP R/3 we had accumulated a lot of IP [intellectual property] around reporting. When we migrated to SAP Business One, this was one of our biggest challenges – 15 years of custom-written reports and queries were no longer there. The challenge had not so much to do with functionality – we had all we needed with some customization to SAP Business One and add-on software, but the standard SAP Business One reporting just couldn’t replace 15 years’ worth of time, effort and knowledge.

“In response to the challenge, we purchased the Business Objects (BOBJ) Business Intelligence (BI) tool and started implementing it. We were working with a South African partner of SAP’s that had BOBJ skills but not in conjunction with SAP Business One, so we found the project not the easiest; and progress was slower than expected.”

At this point SAP approached them directly about SAP HANA. “HANA was all about speed, in memory. But what appealed to us the most was that we could buy it off the shelf to work with SAP Business One right away. It was a no- brainer to our CFO. He said, ‘I want this. Go ahead.’”

When Nashua Communications signed on with SAP HANA it was still in the ramp-up phase and therefore the company was instrumental in identifying some problems, but these were resolved. Most had to do with the customizations and add-on functionality it had added to SAP Business One. This was a thorough test since Nashua Communications puts the solution through more paces than the typical SAP Business One customer. At the 300 user mark, if not the largest, it is at least one of the largest SAP Business One customers.

Because of the “newness” of the solution both to the market and to the company, Nashua Communication chose to roll it out first to a selected group of about 10 power users. Mr. de Vries goes on to say, “We are running now on a live environment and once we resolve the odd little glitch here and there, we are very keen to roll it out to the entire user base. We see enormous potential in terms of enterprise searching, speed and access to real-time data. We will empower each and every user as much as possible, but will keep report and query writing to a more technology literate group of people.”

So what about taking the next step to SAP Business One version for SAP HANA when it becomes available? Mr. de Vries states, “We see value in taking transactions to SAP HANA; performance is like night and day. If there is a cost to upgrade, we would have to come up with a business case to justify, just as we have done for the analytics side.

“For the Analytics powered by SAP HANA, the basis for cost justification was our fairly complex needs in terms of data and reporting. Quite frankly, we had struggled to get Business Objects up and running on Business One. The improved speed we experienced was a major factor. Equally important was access to live data rather than data that was 12 to 24 hours old.

“We also experienced a benefit that is quite unique to the South African market. Unlike the US where good telecommunication service is expected and people talk (rather loudly) about bad service, it is just the opposite in South Africa. Expectations are lower and people sing praises when good service exceeds expectations. We are hoping this access to live information will give us a competitive advantage to provide excellence in products and service.”

Key TakeAways

It is clear that a key value proposition for SAP HANA is speed, and even small to midsize enterprises can be faced with a growing challenge of making sense from and managing more and more data. Whether you consider this “big data” or not, the ability to apply analytics in real time without bogging down the transactional system of record can lead to a competitive advantage.

If you are an SME running SAP Business One now, or considering transitioning to this solution, don’t overlook the added strength of analytics powered by SAP HANA today. The enterprise search capabilities alone may suffice to justify making the transition. As SAP Business One version for SAP HANA becomes available later this year, this version, together with speed and the ability to better handle the growing data challenge should be a no-brainer for those just starting out. Existing customers will need to carefully review the business case for making the transition. For these customers, don’t assume SME means small data and don’t overlook the need for speed.

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HANA, HANA, HANA! Can SAP prove the value to companies both large and small?

All the talk at SAPTechEd this week has been about HANA, SAP’s new in-memory computing engine. While there were plenty of “techies” at the event this week, you don’t have to be too much of a technologist to understand that processing data that is stored in memory is going to be a lot faster than processing it from disk. And results from early adopters have been more than impressive. Examples include Yodobashi who took the process of running incentive payments from 3 days down to 2 seconds. Or Nong-fu Spring who ran the same script in HANA and in an Oracle data mart and found HANA to be 200 times faster. In fact these results are so impressive, one SAP customer said to me, “It sounds too good to be true.”

I suspect many other SAP customers may have similar sentiments. This all sounds great but how does my company benefit? Indeed my colleague Laurie McCabe of the SMB Group summed it up with a question to Sanjay Poonen, President, Global Solutions and Go-to-Market. Laurie asked, “HANA, HANA, HANA. That’s all we’ve heard. Can you bring it down to earth for us?”

Sanjay did. Think of HANA as a platform that will power all that is SAP. You know that little sticker on your laptop that says “Intel Inside?” Mine says “Intel Pentium Dual-Core InsideTM”. I remember when Pentium processors first came out, eclipsing the performance of their predecessors. Today we just take Pentium processors for granted. And if you are like me, you probably don’t know much more about what’s inside, but you’ve come to expect a high level of performance from a brand that you know and trust. While making HANA an industry standard is an unrealistic goal, making it an SAP standard is not and SAP expects to boost performance in a major, game-changing way.

You won’t see SAP using the phrase “HANA Inside” (note the trademark symbol on my sticker and yours). But you will see it porting all its enterprise applications to this platform. Although with such a broad product portfolio, this is a huge task.  All on demand (SaaS) products including Business ByDesign and other “line of business” on demand products (e.g. Sales On Demand) will be powered by HANA. For Business Suite customers, it will become an option. For SAP Business One (SAP’s ERP solution running in over 30,000 small companies), it will be embedded. There won’t be any decision to be made and there won’t be a price tag attached. It will just come with HANA inside.

For existing Business One customers, it will be delivered through the upgrade/release cycle. As Sanjay put it, “It will be like taking your car to the dealership and driving away with a larger engine.” I suppose this analogy works for the Business Suite as well, but while that “larger engine” for Business One would be covered under an extended warranty (maintenance), there would be a price tag associated with it to power the Business Suite. And I would expect the engine embedded in Business One might not unleash the full power of the engine. That’s OK because I suspect many Business One and On Demand customers will simply benefit from improved speed and performance and never look beyond to take advantage of the full power of HANA. For that you need vision and a certain degree of creativity to see the potential. Indeed we’ve only seen a few glimpses of these so far.

Today HANA is only available in appliance form on hardware from several vendors and SAP still has a long way to go in terms of making its enterprise applications available on the platform. Even though we’ve been hearing about HANA now for a couple of years, it represents a major technology transformation and SAP is still in early stages of innovation.

Early projects have focused on analytics. This might be viewed as the low hanging fruit of in-memory computing, bringing speed and agility to big data. But while the power of in-memory computing might be intuitively obvious to IT, to be successful, it cannot be viewed just as a new and better toy for IT. IT needs to sell the value to the budget holders and SAP needs to win the hearts and minds (and wallets) of line of business executives.

SAP is open to performing proof of concept (POC) projects today, and the cost of the project can be applied against the purchase of HANA and a more extensive project. But also several purpose built applications represent a first step in proving that value. In fact two new applications were also released this week:

  • SAP Smart Meter Analytics: mines smart meter data to analyze customer energy usage patterns to improve system load forecasting
  • SAP CO-PA Accelerator: planned functionality includes real-time profitability reporting on large-scale data volumes , instant, on-the-fly analysis of profitability data at any level of granularity, aggregation and dimension and cost allocations

These join previously released Strategic Workforce Planning that supports analysis of the effect of changes to a company’s employee base.

These are all great examples that target specific use cases. But SAP wants the use case to be pervasive.  And in order to achieve that, the platform needs to make applications better and faster, easier to use at a lower total cost of ownership. These improvements will spur new ideas of how to take full advantage of the technology. That’s a tall order. So far the dramatic results of early projects have created a certain mystique, or what Sanjay calls “the halo effect” and with that comes differentiation. He welcomes the sentiment that it is “too good to be true.” Give him a chance and he’s anxious to prove it is not.

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