user experience

QAD Channel Islands: Multiple Stops on the Journey to the Effective Enterprise

QAD defines the Effective Enterprise as one “where business processes are operating at peak efficiency and perfectly aligned with strategic goals.” Yet given the ever-accelerating pace of change in our world today, QAD also recognizes that the Effective Enterprise is more of a journey than a destination. The journey is one of continuous improvement and carefully balanced objectives.

The same could be said for the software that runs the business. Which is why its “Channel Islands” initiative is divided into milestones that have QAD (figuratively) hopping from one island to the next. A year ago it released Anacapa and this year Santa Cruz is ready for early adopters. Next year, it will navigate to Santa Rosa and in 2018, San Miguel. With two releases a year planned, chances are San Miguel will simply be another stop along the never-ending journey, but by then QAD will likely be on to other additional adventures suitable to whatever the future might bring.

Channel Islands: An Appropriate Metaphor

In the meantime, QAD appears to have chosen the name of its latest initiative well. QAD’s Channel Islands initiative has a dual purpose. The metaphor is perfect because the first goal of the initiative is to re-invent the entire user experience of QAD ERP, making it more natural (intuitive), visually appealing and easy to use. The Channel Islands of California are a chain of eight islands located in the Pacific Ocean off the coast of southern California along the Santa Barbara Channel near QAD headquarters. The main attraction of the real Channel Islands is their natural beauty, providing relief from the cluttered, hard-to-navigate urban setting.

But the second goal of the initiative makes it even more appropriate. The islands are divided into two groups—the Northern Channel Islands and the Southern Channel Islands. The four Northern Islands used to be a single landmass, but as water levels rose (thousands of years ago), Anacapa, Santa Cruz, Santa Rosa and San Miguel emerged and evolved as separate islands. While QAD ERP was originally developed as a single, tightly integrated solution that needed to move forward in lock step, the goal now is to support more modular upgrades, allowing different modules and disciplines (think finance versus purchasing or production) to move forward independently at their own pace. Mint Jutras often refers to this approach as “loosely coupled” versus tightly integrated, but it should not be confused with a collection of point solutions with arm’s length interfaces. Just like the Northern Islands, under the surface all these different functional areas are still connected.

In fact that was why QAD named the first phase Anacapa. Of the four Northern Channel Islands, Anacapa appears to be the smallest, but in fact has an enormous land mass hidden under the surface of the water. This is representative of the work done to re-architect the underlying infrastructure, reworking the application programming interface (API) structure and protocols, and future proofing the user interface (UI), including the framework for connecting devices. This supports the theory that sometimes the best UI is no UI at all and paves the way for succeeding phases (Islands).

To better understand how QAD is delivering on this modular upgrade approach as well as a new and improved user experience, read the full report (no registration required):

QAD Channel Islands: Multiple Stops on the Journey to the Effective Enterprise

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Welcome to the New World of Exact Macola

Did you ever walk purposefully into another room and forget what you came for? It happens to me all the time. My pantry is less than 20 steps from my kitchen, and yet, 9 times out of 10, I open the door, step in and wonder what I came for. I wind up stepping out, looking back into the kitchen to see what I was doing. Usually that will trigger my memory. It’s gotten worse with age, but I’m not that old. It happens to all of us. When something we need is not visible and clearly within reach, it’s easy to get distracted and lose track of what you’re looking for.

It’s bad enough when you’re puttering around the house or making dinner. It’s even worse when it happens when you’re sitting at your desk at work. You get a call or an alert on your smart phone, or something doesn’t look quite right on that report you’re scrolling through, or you’re preparing to present performance results to your boss and you need to dig a little deeper. You have a question in mind but even though you know the answer is buried someplace in your enterprise data, it’s not immediately visible and clearly within reach. If you have to hunt and peck, traversing a series of menus, to find what you’re looking for, it’s easy to be distracted along the way. Sometimes you wind up going down a rat hole and 2 hours later, you realize you still haven’t answered your own question. No wonder the days just seem to get longer and longer.

This is clearly the problem Exact Macola is trying to solve in its newest version of Workspaces. A Workspace in Exact Macola 10 gathers together all the data you might need to perform a process, make a decision or monitor performance… in other words, to do your job. Some will come right out of the box. But because your role in your organization and your job is unique, new Workspaces must be easily constructed and standard Workspaces must be easily tailored.

Exact Macola describes Workspaces as “one of the most unique and powerful pieces of Exact Macola 10 – allowing personalized role-based views of your business information and creating a natural and intuitive experience.” I came into the Exact Macola Evolve conference last year with a pretty favorable impression of this technology and that impression became even more favorable as I watched the “Dueling Developers” session this year, which pitted a senior consultant (Thijs Verberne) against product manager David Dozer, in creating Workspaces on the fly as the audience watched.

That exercise proved development was fast and easy. But how does this keep users from wandering into the pantry and forgetting what they came in for? A new feature of Workspaces 2.0 is the ability to add Workspaces menus to transaction screens and/or perform transactions directly from Workspaces. Do you have a job where you spend the majority of your time in transaction screens (e.g. you’re a buyer researching and creating purchase orders)? You can stay there all day doing your primary job, but when you need to do some further investigation, (right from a transaction) you can bring up a Workspace from a pull down menu and it appears as a popup. This feature alone drew a huge round of applause from the audience.

Or maybe you are a manager that prefers to monitor status of a series of key performance indicators (think dashboard). But occasionally you need to perform a transaction like approving those purchase orders or requesting a change. You can stay in your dashboard-like Workspace, and attach a drop down menu (or 2 or 10) that allows you to divert and run a transaction without ever leaving your preferred space.

Marry these two features together and you don’t have to worry about anticipating all your needs up front. Get the basics set up and let your work naturally direct the evolution of your Workspaces. At first you might not think you would ever have a need to go directly to a transaction. But sure enough…. No problem, it can be added in minutes (really!)

While Workspaces 2.0 was (in my mind anyway) the highlight, it is not the only innovation that has been delivered by Exact Macola over the past year. Here are some other areas the team has been working on:

  • Phase 1 support for IFRS
  • Workflow conditional statements (rules, if-then statements, more control and flexibility)
  • Financial consolidation across divisions
  • Business Intelligence delivered through a partnership with Qlik, but sold by Exact under the Exact Insights brand
  • Forecast Pro integration
  • Avalara integration
  • New web services and some underlying architectural changes

All this innovation (and more to come) seemed to infuse a new energy and vibrancy into the Exact Macola community and created more urgency for those still running older solutions like Exact Progression or the Enterprise Suite (ES) to upgrade/migrate to the newer Exact Macola 10.

Not only has the Exact Macola team been delivering innovation at a much accelerated pace, it has also been responding to several trends in the market today. Beyond those features listed above, Exact Macola has been working on full web enablement and the overall user experience. In addition to Workspaces, the company has renewed its focus on ease of use, bringing in experts to help deliver a more natural user experience (UX). This includes both the access anytime, anywhere convenience of the cloud, as well as more mobility. After delivering mobile functionality on iOS last year, it added Android this year. And it has been delivering more analytics, as well as a more end-to-end integrated solution.

Indeed these are exciting times for Exact Macola and its customers. But for those still running those older solutions (Progression and ES), the excitement might soon fade, unless of course they decide to make the leap forward. I would strongly encourage them to do so.

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What is Unit4’s “Self-Driving” ERP?

Empowering People in Service Organizations

Today we live in a world where automobiles can drive themselves across the United States. These same cars can parallel park far more skillfully than their human drivers. Airplanes spend most of their time in flight on autopilot. Small, self-directing vacuum cleaners systematically clean our floors while we are at work or play. Fitness devices tell us when it is time to move and warn us when we are over-exerting ourselves. Some of those fitness devices are smart phones equipped with apps – the same smart phones that keep us constantly connected. We get spoiled by all this automation in our personal lives and then we go to work and wonder why the software and technology that is used to run the business doesn’t empower our work lives like consumer technology empowers our personal lives.

Enterprise applications like Enterprise Resource Planning (ERP) are meant to capture transactional data and streamline and automate business processes. Yet while ERP was originally meant to make our business lives easier, many old ERP systems just can’t seem to get out of their own way. Unit4 is setting out to change that, at least for its customers. While it has always prided itself in its modern and flexible architecture and its solutions’ ability to accommodate change, it is now taking a page from consumer technology. A revitalized Unit4 is intent on delivering “self-driving” ERP, where user interaction is minimized and limited to activities where people make the difference.

People Are at the Core of all Unit4 Does

Unit4 has always targeted people-centric businesses, where services are the primary product delivered. These targets include professional service organizations, governments, higher education, not-for-profits and real estate. In each case, the key ingredients are people; processes are fluid and dynamic. By its very nature, outcomes are unpredictable. The last thing you want is your people doing manual tasks that add no value to the service delivered.

And yet that is exactly what happens when ERP can’t get out of its own way. What do we mean by that? Legacy ERP solutions that are rigid and cannot adapt as business changes, or that don’t allow business processes to evolve, or that force people to work in very unnatural or counter-intuitive ways, are more of a hindrance than a help to your business. They get in the way.

This has never been more true than it is today as we enter the digital age. Everywhere we look we see the pace of business accelerating and business models being disrupted. This is all fueled by digital communication. And yet many ERP solutions installed today lack the ability to participate in this revolution. They still force companies to transact business the way it has been transacted for the past 50 years. And they don’t contribute much insight in how to break that cycle, or insight into how to more profitably grow the business.

Unit4’s products have always been designed for change, but now they have a new goal: to help companies transform themselves in the digital age. This new goal is actually a natural progression, but is also fueled by the transformation of the company itself. Jose Duarte, Unit4’s current Chief Executive Officer (CEO) took the reins about two years ago. He made a clean sweep of his executive committee. A few very key players remain one level down from the top, which makes the transition smoother, but in the end, the Unit4 of today is very different than it was two years ago.

Today Unit4 is clearly energized, innovative, confident and aggressive. And it is on a mission: To empower people in service organizations.

The 6 Pillars of “Self-Driving” ERP

So what is this thing called “self-driving” ERP? Can software really make business decisions to drive the business? Of course not. Even an airplane on autopilot still needs a pilot. That car driving itself across the United States still has a driver. The homeowner has to decide which room to set up the little roaming vacuum cleaner in. Those fitness devices don’t do your workout for you. But all these technological wonders have a common theme: they make people more efficient and productive. People with these devices can do more, accomplish more. That’s what self-driving ERP is all about: better productivity, improved efficiency and better, more insightful decisions.

Unit4 likes to refer to the following as the six pillars of self-driving ERP:

  • Automation of manual tasks. Don’t make the human driving ERP do repeatable, repetitive tasks if they can be automated.
  • Drastically reduce the amount of input required; eliminate it entirely if possible. Ask for input only on an exception basis.
  • Use the moment of action to ask for the input. Ask a person when that exception actually occurs, not hours or days later.
  • Sense potential problems or bottlenecks.
  • Sense potential opportunities.
  • Make intelligent and sensible recommendations.

 How Does Unit4 Do This?

If you ask Unit4 how it will deliver on the promise of these pillars, Unit4 will talk about the four layers of its People Platform, announced back in April. After you hear the folks at Unit4 describe these layers, you may still not understand, particularly if you are a businessperson and not a technologist. Don’t feel bad. It’s not you. Some of these are tough concepts. But that’s okay. It is much more important to understand what it can do for you than to understand how it does it. You didn’t know how the transporter worked on Star Trek’s USS Enterprise. But you knew exactly what would happen when Captain Kirk said, “Beam me up Scottie.” If you understand the potential conceptually, a myriad of potential use cases might immediately spring to mind.

So here are the layers, as concisely as we can present them:

Personal Experience

The very top layer is the personal experience. This is all about a new, improved and modern user experience, which Unit4 has been working on for the past two years, improving existing functions; efforts will continue as new and different ways of engaging with ERP and new functions are introduced. This includes access through mobile devices of all sorts. But Mint Jutras believes the best user interface is often no user interface, and Unit4 is also heading down this path in automating those manual, repetitive tasks. But ultimately it is all about making software easy to use.

Of course ease of use means different things to different people.

Figure 1: “Top 3” Factors Influencing Ease of Use

Unit4 Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Note on defining generations:

  • Baby Boomers: born between 1943 and 1964
  • Generation Xers: 1965 to 1981
  • Millenial: born in 1982 or after

This is most apparent when we compare what is most important across different generations participating in our 2015 Enterprise Solution Study (Figure 1). While perceptions vary, minimizing time to complete tasks is right at the very top of the list across all generations. So Unit4 is right on track in automating manual tasks and reducing the amount of input required. In fact complete automation of many of these repetitive tasks is really the ultimate goal.

Business Capabilities

The second layer is business capabilities. Mint Jutras research confirms this as an appropriate focal point. Our latest study confirms that the most important selection criterion for choosing an ERP solution today is “fit and functionality,” followed closely by “the completeness of a solution.”

Expanding the footprint of its ERP remains a priority for Unit4, but it will pay particular attention to individual vertical markets. Some of these business capabilities will be developed by Unit4, some will be acquired, and some may in fact come from partners. The recent acquisition of Three Rivers Systems is a perfect example of how Unit4 can take some giant steps in business capabilities, in this case, significantly expanding Unit4’s solution for higher education.

Who is Three Rivers Systems and what does it do?

Three Rivers Systems’ solution is called CAMS Enterprise. CAMS is short for Comprehensive Academic Management System. As the name implies, it is a comprehensive higher education solution that automates the entire student lifecycle into a single system. It can be run on-premise or hosted in the cloud.

A few facts about Three Rivers:

  • Founded in 1985
  • 55 employees
  • Serving over 200 clients in North America, South Africa, Europe, Middle East, Asia
  • Serving all institution types from under 1000 students to over 40,000

 Smart Context

The third layer is called Smart Context. This is perhaps the toughest to explain and yet its name provides some clues. “Smart” implies intelligence. So the Smart Context layer adds some intelligence, but in the context of a specific task, question or problem. Think about the following:

  • You’re preparing your expense report. Smart Context can suggest the majority of the line items (mileage, airfare, meals, etc.) You simply confirm the amounts.
  • You leave your customer’s site where you have been working on a project. Smart Context asks you if you just spent three hours working on project XYZ. A simple click on yes or no completes your timesheet.
  • You are asked to deliver a detailed project plan (for resources and costing) before the close of day. You enter several characteristics and Smart Context reveals the closest fit to previous projects. You select one as a model and create the plan in a fraction of the time it would take if you built it from scratch. And you even have a complete workforce assignment.

Smart Context is all about removing the clutter, making complex things simpler, and requiring your input only for exceptions. By making suggestions where possible, enriching data with additional context, the information you do see is more relevant and complete. This is the real engine behind the concept of “self-driving” ERP.

Unit4 delivers this type of intelligence by bringing the latest technology together through a variety of components:

  • An alerts engine to keep you up to date with smart business feeds
  • A rules engine establishes and configures the rules to be invoked during data entry, allowing for dynamically altering the UI based on conditions, or proactively assisting the user in entering consistent data. Adding machine learning even makes it self-configuring.
  • Definition of communities (defining who cares about what) and the capture of conversations within the communities (no more lost threads after you hang up the phone). This creates a social context.
  • Mobile context, through technology that can detect location with a time stamp. This allows for location-based filtering and time tracking and can push information automatically (e.g. customer configurations pushed to a field service technician arriving on-site).
  • Predictive analytics, capable of pattern detection. This can involve complex analysis, bringing together technologies such as machine learning and event stream analysis for sensing problems, bottlenecks or opportunities. Or it can be as simple as pre-populating an expense report or suggesting a project plan.
  • Cloud and crowd context through capture of peer analysis and customer sentiment.
  • A workflow engine.

The net result is filtered, contextualized data that can be presented in a simple, relevant and complete experience.

Elastic Foundation

At the base, the fourth layer is the Elastic Foundation. The concept of elasticity is commonly associated with cloud and software as a service (SaaS). Unit4 does offer a variety of cloud options, including what it calls “cloud your way,” which lets the customer choose the deployment option without compromises. Used in this context, the elasticity comes from the ability to grow and consume resources as needed, without additional purchases of hardware, middleware and the associated maintenance.

But Unit4 takes elasticity one step further and uses it in the context of the application itself, which can easily be changed and/or extended without disrupting the installed solution.

The elastic foundation has evolved from the architecture on which Unit4 Business World (formerly Agresso) was built. This is where you define your organizational structure, information requirements, and the relationship between the two. Traditionally these types of structures, relationships and processes tended to be hard-coded in solutions or embedded in codes like the general ledger account, using a “once and done” approach that made future changes difficult and costly. But reality says they need to be fluid, and that is the elasticity that the People Platform delivers.

With Unit4’s Elastic Foundation, no source code changes are required and even if it means changing the business rules, the data model and how the data is presented, this does not constitute multiple changes. You make a single change and it is permeated throughout all the necessary components of the solution. All are on the same page. No delays. Nothing can be out of sync.

Nothing Tells the Story Like an Example

While all this discussion may provide good background, nothing illustrates what Unit4 is doing better than an example. Let’s explore the project plan example mentioned earlier in a bit more depth.

Projects are common in many services organizations. For some, projects are simply internal. But in many companies, particularly in professional services organizations, these projects are core to their business. Unit4 has been listening to these types of customers as they expressed a desire for better ways of winning profitable business. When your business is project-based, that means coming up with more accurate estimates faster. This is one of the scenarios Unit4 has been working on that will showcase all the layers described above.

To better understand this endeavor, put yourself in the shoes of a project manager at a project-based business that has identified a new opportunity. You need to come up with an estimate of cost, resources and schedule in order to propose a price that is both competitive and profitable. And you need to do so quickly and efficiently or either your window of opportunity will close, or your current projects will suffer, or both. If you are smart you don’t start completely from scratch. Instead you find a similar project, hopefully one that was successful, and start from there, modifying it to reflect the current needs of your prospect.

Sounds simple, but in reality, how do you go about finding the right project to use as a starting point, especially if it was a project in which you had no personal involvement or experience? Unit4 is developing a scenario where you will be able to enter a few key characteristics of the project including the customer (if you have done business with the prospect before), type of project, time frame required, cost range, etc. Using these parameters, Unit4 will present you with potential reference projects, each assigned a rating of how closely they match your criteria. They do the legwork; you pick the closest, most profitable and start from there.

But have you ever managed a project that looked great on paper, but in reality it was the project from hell? You can’t tell everything from the numbers. So Unit4 uses sentiment analysis to assist. The solution will be able to look at conversations and pull up up the five most positive things and five most negative things said. What is the most common word used? Perhaps you find it to be “team.” It can look for certain words used in comments and conversations, including words like “complaints” or “excessive overtime.” Perhaps the team is complaining about too much overtime.

Projects under consideration may also not yet be completed; in which case, Unit4 will simulate a completion to predict schedule and cost accuracy, along with projected margins. While all of this might seem relatively simple, when done manually, there are numerous assumptions and opinions that get inadvertently filtered that can result in overlooking the best model, choosing the wrong project or making bad predictions.

By automating the process, Unit4 delivers on all of the pillars of a “self-driving” ERP, from automating manual tasks to reducing input and asking only for input at the moment of action. It can sense problems, as well as potential opportunities and give intelligent recommendations.

This is just one of many possible scenarios. Mint Jutras anticipates more and more of these types of scenarios will be identified through working with actual customers. Once some are delivered (later this year), this could have a snowball effect, with one idea generating many more. Then it will be up to Unit4 (and possibly some select partners or customers themselves) to deliver against the promise of “self-driving” ERP.

Summary and Key Take-aways

Unit4 has truly transformed itself into a new company, one that is energized, fresh, innovative, confident and aggressive. And yet it has done so by building on the strengths it has exhibited in the past. It has always targeted people-centric businesses, particularly those that are “living in change.” It has a strong, modern architecture and understands the trends rocking the world today. We are truly entering the digital age. Social, mobile, cloud and analytics all play a key role. Unit4 is leveraging all of these and delivering a solution with a simple goal: to empower people in service organizations.

But probably most importantly, Unit4 is now focused on execution. That focus is centered on:

  • Delivering vertical solutions for service industries
  • Building applications for people
  • Designing its underlying architecture for agility
  • Delivering cloud solutions “your way,” with no compromise

The recent acquisition of Three Rivers Systems is evidence it is indeed moving into major execution mode. Don’t be surprised to see others and expect some very significant partnerships to be announced soon as it aggressively builds its partner ecosystem.

During the past two years, as this transformation was underway, Unit4 was quite “quiet.” Expect the company to significantly turn up the volume, particularly in North America, where there is tremendous opportunity that has yet to be tapped.

Expect the pace of product innovation to accelerate as it starts to aggressively leverage its prior investment in architecture and technology.

If you are a services organization with an ERP solution that seems to just get in the way, Mint Jutras would agree with Unit4 when it says, “To adapt to the speed of change, ignore the old restrictions.” Perhaps you need to get into the driver’s seat of a new “self-driving” ERP.

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Infor: On a Mission to Go the Last Mile

Cloud-enabled Industry Functionality People Actually Want to Use

Infor is on a mission to “build beautiful business applications with last mile functionality and insights for select industries, delivered as a cloud service.” Supporting this mission are three strategy pillars:

  1. Specialized micro-vertical suites
  2. Powered by the architecture of the Internet
  3. That create experiences people love

In constructing these pillars, Infor hits on all cylinders of the go-to-market messaging surrounding the key technology trends today. But for Infor, this is much, much more than just marketing hype. Its portfolio of business applications is broad. Its executive team has a very deep understanding of the products, the underlying technology and the business itself, and has invested heavily in development. That investment includes a creative design team, which is large (about 100 people) and in-house. It’s all about bringing value to its current and future customers and growing its business.

Here we examine each of the three elements of its strategy in terms of the value it brings to Infor’s current and future customers.

Industry-Specific Features and Functions

Much of the functionality required in software that runs your business is quite generic. All companies must record basic transactions that create a system of record, and in some departments that are subject to regulatory requirements (e.g. operational accounting), creativity is frowned upon. This generic functionality has become a commodity today. Any good ERP solution today covers the basics, although the basics aren’t so basic any more.

However, no two businesses are identical and most growing companies actively seek competitive differentiation. Infor acknowledges these differences. In promoting its new CloudSuites, it likes to say, “No two clouds should be alike…because manufacturing tires is different than growing kiwis.”

And yet, one of Infor’s stated objectives is to eliminate customization. In order to do that, it needs to offer an unprecedented range of features and functions, some of which are very specific to certain industries. As a result, Infor is dropping down a level or two in its definition of industry. For example, some vendors refer to manufacturing in general as an industry. Others might concentrate on certain manufacturing sectors like automotive, aerospace and defense, high tech electronics, or food and beverage. But Infor thinks a bit more granular and will, for example, break out food and beverage into sub-verticals such as produce, dairy, beer, processed meats, etc., because each faces its own set of challenges. Dairies must worry about the variability of fat content, while breweries manage fermentation processes and measure alcohol content. Growers need traceability back to the field, or ideally, even a row picked on a certain date. Some food processors combine ingredients through formulas and recipes, while others have the equivalent of a reverse bill of material. How much bacon or pork loin you get will vary pig by pig.

These types of special requirements are often satisfied through customization, or not addressed at all by enterprise applications. Adding this type of specialized functionality to a single, general-purpose Enterprise Resource Planning (ERP) solution would certainly add an unwanted level of complexity. On the other hand, maintaining many different solutions that share some common requirements is a waste of development resources for the ERP vendor.

Through many years of acquisitions, Infor has actually accumulated quite a few different ERP and financial management solutions and has made a commitment to existing customers to never force them to rip and replace them. And so, Infor is faced with a delicate balancing act in prioritizing its investments.

Some of these solutions are quite mature and continue to be based on technology that has become outdated. Investment in these solutions is (and should be) minimal. Others are very modern and technology-enabled. Some were originally designed with a certain industry in mind, others were conceived as more general-purpose solutions. Decisions surrounding these solutions require careful thought. Some will be more strategic than others.

As Infor attacks sub-vertical markets, it is critical to start with the ERP solution best suited to each one. The specific industry functionality provided will be a better fit, and easier to deliver. In the case of food and beverage, for example, M3 is the selected ERP solution. Infor then builds out the requirements for dairy or beer or processed meats as optional add-on components. More on that in the next section where we talk about architecture.

Before we do that, let’s explore what this means for customers and prospects looking for a new solution. Mint Jutras has been collecting data on priorities in selecting software for years now. In days gone by, “fit and functionality” always topped the list. But over the past few years another selection criterion crept up in importance and appeared to be running neck and neck with “fit and functionality.” That criterion was “Ease of Use.”

In many ways, this makes sense. All the features and functions in the world won’t do you any good if you can’t figure out how to use them. But the ranking of “ease of use” and “fit and functionality” were so close, we started to wonder what the priority would be if users were forced to choose between them – hypothetically of course.

So in 2015 we changed the format of the question, again listing the different criteria, but this time forcing the participants to stack rank them from 1 (least important) to 10 (most important).

Table 1: Selection Criteria Priorities (ranked from 1 to 10)

Infor Table1Source: Mint Jutras 2015 Enterprise Solution Study

It is quite clear from Table 1 that “fit and functionality” is still king. The top three criteria are all related to features and functions, which would indicate Infor is on the right track in terms of providing solutions that “go the last mile.” User experience (a broader criterion than ease of use) is still in the top half, which indicates it is much more than an afterthought. But getting the right software to do the job – the whole job – trumps all other considerations.

Infor needs to make the best of two worlds. It needs to be able to develop some generic functionality once and reuse it across multiple applications. And it needs to easily tack on new components of functionality, preferably making them optional. Infor’s answer to this is ION.

ION is lightweight middleware, providing common reporting and analysis, workflow, and business monitoring in one, consistent event-driven architecture (EDA). ION also provides an environment that enables new functionality to be developed once and shared by multiple products in the Infor portfolio, which helps in that delicate balancing act.

All of Infor’s strategic product lines have been appropriately “ION-ized.” This means Infor can develop functionality that can and should be shared across many of its different products, including horizontal solutions such as customer relationship management (CRM), human capital management (HCM), supplier exchanges and more, as well as localizations that deal with local country requirements in transaction basic business. This results in more innovation and a broader footprint than could ever be delivered by a single developent team focused on a single purpose-built product.

But Infor also feels it needs to go a step further: providing the architecture of the Internet.

Architecture of the Internet

Nobody today would argue the value of the Internet, bringing us “access any time, from anywhere” connectivity. Of course, the Internet implies “cloud” and Infor is moving into the cloud in a big way. As Infor (and also other major enterprise software providers) vie for leadership in the cloud, most assume the cloud is both well understood and a desirable goal. Mint Jutras research confirms that the market has reached a tipping point where cloud-based solutions are preferred over traditional on-premise deployments.

A question we have been asking for years now is this: “If you were to select a solution to run your business today, which deployment options would you consider?” In the early days of this question, those that would consider SaaS were definitely in the minority and almost everyone would, of course, consider on-premise solutions. That landscape has shifted dramatically. Figure 1 shows the most recent few years.

Figure 1: Deployment Options that would be Considered Today

Infor Fig 1Source: Mint Jutras Enterprise Solution Studies

* Option added in 2015

Note: The time span between the 2011 and 2013 studies was about 18 months as Mint Jutras shifted the timing of the study during the calendar year.

And yet, even with all this interest, Mint Jutras is absolutely convinced that many still don’t understand the terminology that is so easily tossed around today. Many use the terms “cloud” and “SaaS” interchangeably, but there are some important differences. So let’s distinguish between the two:

  • Cloud refers to access to computing, software and storage of data over a network (generally the Internet.) You may have purchased a license for the software and installed it on your own computers or those owned and managed by another company, but your access is through the Internet and therefore through the “cloud,” whether private or public.
  • SaaS is exactly what is implied by the acronym. Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or another’s) computer. It generally is paid for on a subscription basis and does not reside on your computers at all.

All SaaS is cloud computing, but not all cloud computing is SaaS. Traditional on-premise or hosted solutions might (or might not) be accessed via the cloud, although these are more likely to be delivered through a private cloud. Not all of our survey participants want the same thing in terms of the cloud (Figure 2). Yet despite this diversity in preferences, Mint Jutras believes it is important for any software that can be delivered through the cloud to be able to fully exploit the power and benefits of the Internet.

Figure 2: How do you prefer your cloud?

Infor Fig2Source: Mint Jutras 2015 Enterprise Solution Study

This is presumably the reason Infor has set out to take full advantage of the Internet, regardless of what cloud means to its various constituents. It has developed a very clear progression that it refers to as Cloud 1.0, Cloud 2.0 and Cloud 3.0. This journey continues today but Infor’s stated goal is “efficient, scalable, secure, highly available, cost effective applications running on world class infrastructure in the cloud.”

Infor’s requirements for “Cloud 2.0” include:

  • Multi-tenancy: This is the most efficient and cost effective way for solution providers to deliver a SaaS solution and aligns very well with Infor’s goal of “no customization.” Maintaining a single line of code precludes customizations that involve invasive code changes. Not all of Infor’s products offered as SaaS are multi-tenant today, but it is moving in this direction.
  • Scaleability and high availability: These should be prerequisites for any SaaS solution, but both require data centers that can easily grow as needed, with an adequate level of redundancy for backup, disaster recovery and business continuity. Rather than taking on this responsibility itself, Infor relies on the massive remote computing services offered through Amazon Web Services (AWS), leaving Infor to concentrate on developing business applications rather than building and supporting data centers.
  • Zero footprint and no local device dependency: By not requiring any software on the device used to access the software (desktop, laptop, tablet, smart phone, etc.), it delivers the access any time, anywhere promise of the cloud.
  • ION/web-based integrations: Features of Infor’s light-weight middleware, such as its event-driven architecture, message-based communications between applications and industry standard object models for data definition, provide alternatives to point to point integration involving a lot of programming and invasive source code changes. Individual ERP products making up its different suites will of course need to be able to take full advantage of this middleware. Solutions that are deemed “strategic” will take full advantage, while legacy solutions based on older technology can and do have limited capability and therefore might not be good candidates for movement to the cloud.
  • Successful security tests: Infor has three layers of security. Cloud-based products are required to follow acceptable protocols for software development and product release processes. It also has a team of ethical hackers, reporting to a chief security officer, that continually test and advise the development teams. And finally, it uses independent third parties for audits.
  • Health Check Monitors: These need to be built into the software for self-monitoring of performance (think scaleability and high availability).
  • No source code changes are allowed: But extensions, connected through ION, can be used to fill functional gaps.
  • Meets patching and upgrade requirements

Cloud 3.0 will likely produce more changes that are “under the covers,” including more use of open source technology, better support for single instance deployments (think private cloud) and minimizing the use of third party products that would require additional purchases from the customer.

Providing last-mile functionality across a broad set of micro-vertical industries, supported by the architecture of the Internet is a lofty and practical goal. But Infor faces a unique challenge in leveraging this strategies in growing its business. Like any other solution provider today, Infor must attract new business. But it also must work hard to satisfy and retain its existing customer base of over 73,000 companies.

Many of these customers are stuck on older products, built on outdated technology. While promising to never force them to move off these old products is laudable, in a way it does the customers a disservice. In staying put, they will remain at a competitive disadvantage. Infor needs instead to lure them into making a significant change. That is where the third strategy pillar comes in.

Creating Experiences People Love

All too often companies and the people responsible for choosing to replace or upgrade solutions (or not) become complacent. The solution in place might not have all the functionality they need; it might be hard to use; it might not have produced the results anticipated. But change is hard. Many fool themselves into thinking old solutions, based on outdated technology aren’t “that bad.” They lose sight of how much solutions have evolved, both from a technology standpoint, and also in terms of features and functions. They cling to old customizations, not realizing a newer solution could probably be configured and personalized to satisfy their needs without invasive customization.

Many Infor customers fall into this category. What they don’t realize is that they could trade in their old solutions without changing solution providers. If they choose to go to a cloud-based solution, they also benefit by relinquishing the care and feeding of that solution to Infor, allowing the existing information technology (IT) staff to play a more strategic role in the company, adding more value than just keeping the lights on. And those running old versions of the products that are “strategic” for Infor might not even have to switch solutions.

Infor’s UpgradeX program is designed to get these folks on the latest release of these strategic products and then move them into the cloud. If their current ERP is part of one of Infor’s CloudSuites, the biggest effort will be in upgrading. If not, that probably means it will never bring them the kind of competitive advantage a more modern solution can provide. So these customers will need to migrate to a different solution, which means a reimplementation. But that is not necessarily a bad thing. Reimplementation allows the customer to rethink decisions that may have been influenced by prior limitations of the technology or the application. It’s an opportunity, but to get them to move, the target solution better be something that truly beckons.

While Infor has been talking about building “beautiful software” for several years now, it is the concept of delivering an experience that people love that resonates and should have a bigger impact on that portion of its installed base that has been clinging to older software. After all, beauty is in the eye of the beholder and Mint Jutras research has confirmed in the past that efficiency far outweighs the visual appeal of the software. In fact our 2015 Enterprise Solution Study confirmed it once more.

We asked survey participants to select the top three most important factors in determining “ease of use.” As in the past, minimizing the time to complete tasks took first place and intuitive navigation was a close second (Figure 3). The two are closely related, more for knowledge workers than those doing heads-down data entry. A decision-maker in search of answers that must hunt and peck for the right inquiry or function is certainly not minimizing the time to complete a task.

Figure 3: “Top 3” Factors Influencing Ease of Use

Infor Fig 3Source: Mint Jutras 2015 Enterprise Solution Study

However, with all the talk of the impact of the millennial generation recently, we decided to look at this from a generational perspective this year (Figure 4).

Figure 4: “Top 3” Factors Influencing Ease of Use by Generation

Infor Fig4Source: Mint Jutras 2015 Enterprise Solution Study

This gave us a new perspective. While minimizing time to complete tasks still takes the lead for all three generations, it does so with a much smaller margin in the Millennial generation – actually by no margin at all. Beautiful software (a visually appealing user interface) was tied for first in the youngest of the three generations.

While it is more likely that a Baby Boomer or a Gen Xer will have final approval over the purchase of new software, Millennials will often be involved in the selection committee and will definitely be amongst the regular users of the system. So the perspectives of all three generations are critically important.

Yet for decades, user interfaces have been designed by software developers who have never walked a mile in the shoes of the customer, regardless of generation. Which is why Infor is providing more user experience options and is also now taking a radically different approach.

Several years ago Infor created Hook & Loop, its internal creative design agency. Typically software companies turn to creative designers for advertising and imaging, not for software design. But that is exactly what the Hook & Loop team does at Infor. The team has grown from six people to a staff of over 100. This team is not a team of software developers and as a result brings no preconceived notion of how software looks and feels. Instead it goes to those who do the work and asks questions like:

  • What is your role in your organization? What are the different “hats” (roles) you wear?
  • What is a typical day like?
  • How do you interact with your co-workers and share information?
  • What frustrations do you experience on a regular basis?
  • What workarounds have you come up with to make your life easier?
  • What are the (small) things that make you happy?

Remember this team isn’t developing the software. It is just designing what it will look like and how the users will interact with it. As a result, it is unfettered by all the distractions of the programming that very often leads developers down rat holes, creating added complexity and even scope creep.

Yet through its experiences to date, it has grown beyond designing each user experience from scratch, which is very important in terms of delivering innovation at an acceptable and accelerated pace. The team has developed a variety of page-level navigation methods for specific use cases, including approaches such as:

  • Drill down / drill up
  • Breadcrumbs
  • Sections: Tabs
  • Sections: Dropdown
  • Accordion (expand and contract information)
  • Wizards
  • Cardstack/List

If you talk to Infor you will hear them talk about the SoHo user interface, which is transitioning to SoHo Xi. Infor is quite fond of code names. What is more important to the users of the software is that it is designed to be efficient and visually appealing, both at the same time, whether the user is using a desktop, laptop, tablet, smart phone or any other type of device that may come on the scene.

Conclusion

The investment that Infor has been making over the past few years is now coming together and producing some pretty dramatic results. Its verticalized CloudSuites have been emerging on the scene. This of course is an on-going process, but expect more (functionality), and expect more vertical focus. New ways of engaging with ERP are being introduced. They are both efficient and visually appealing. These suites look nothing like the old software of yesterday. This is a new Infor.

Infor will not force its customers or its prospects to move to the cloud, but if they so choose, Infor will be ready and fully Cloud 3.0 enabled. Even if customers choose to stay on premise, they will still be able to benefit from the architecture of the Internet. But of course those stuck on older technology will have to take some action.

Mint Jutras has observed that some Infor customers seem to want to die with their cold, dead hands on old software. While that may be a tribute to the software, if you want your business to grow and thrive, we recommend getting on board with the Infor program. Of course you will have to get used to a new user experience, but we think it will be a welcome change. You could even fall in love with your ERP all over again.

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SAP S/4HANA: Simple, Fast, Different

What Does it Mean to the Business?

On February 3, 2015, SAP announced what it called its biggest product launch in the history of the company: SAP Business Suite 4 SAP HANA, or (thankfully) SAP S/4HANA for short, was touted as “the next-generation business suite to help customers run simple.” Indeed, “S” stands for simple; “4” is for 4th generation and in Information Technology (IT) circles, HANA speaks for itself. To interpret for those outside the world of IT, HANA is an advanced in-memory platform that is able to crunch through enormous volumes of data incredibly fast.

In combination these three factors hold enormous potential to change the way businesses are run. While the potential impact might seem intuitive to technologists, it is far less obvious to the typical business executive. And yet, in a world where the terms innovative, disruptive and transformative are all too often over-used and mis-used, SAP S/4HANA is disruptive innovation that can be used to simplify and transform your business. If you are interested in learning how, read on…

What is it?

SAP S/4HANA is a new product, which, like its predecessor (the SAP Business Suite) will include enterprise resource planning (ERP) and other complementary functions including:

  • Customer relationship management (CRM)
  • Supplier relationship management (SRM)
  • Supply chain management (SCM)
  • Product lifecycle management (PLM)
  • cloud functions such as SAP SuccessFactors (HCM) and its Ariba Network

Like the SAP Business Suite, it is designed for the large enterprise, and eventually will satisfy the requirements of the same 26 industries SAP has spent decades building out. This is a big and bold move for SAP. Given these similarities, some immediate questions come to mind. First of all, why develop a new product? After all, the SAP Business Suite could already run on SAP HANA. Secondly, is it really possible to replace over 400 million lines of code quickly enough or will a complete solution be decades in the making? To answer these questions we need to look at both the differences and the similarities.

At first glance, the differences that appear most obvious to the typical business user lay in the user experience and deployment models offered. Beyond the obvious is the new code line with a new and simplified data model, but more on that (and what it means to the user) later.

Choice of Deployment Models

The existing product was essentially an on-premise solution, although SAP has recently offered a cloud-based managed services option. The SAP HANA Enterprise Cloud (HEC) is a service that allows organizations to move existing (or new) implementations of the SAP Business Suite off their own servers and into SAP’s massive data centers where SAP would manage it as a single tenant solution in a private cloud. But this doesn’t carry the same benefits of lower cost and faster innovation possible with a multi-tenant software as a service (SaaS) solution.

With SAP S/4HANA comes a choice of deployment options. The On Premise Edition is available today while the Public Cloud Edition (multi-tenant SaaS) will be available soon (the first quarter of 2015), followed by the Managed Cloud Edition in Q2.

New and Improved User Experience

The user interface of the SAP Business Suite has long been a weak point, and also one of the hardest to “fix.” SAP is not alone in this dilemma. Many enterprise application solution providers struggle with this as expectations change over time, especially with the influence of consumer mobile devices. Users become dissatisfied with existing user interfaces but often getting them to change is like pulling teeth, for fear of the need to retrain users and because people (those actually using the software) get used to it and resist change.

SAP has actually been working on fixing this problem for more than two years. In the spring of 2013 it introduced SAP Fiori, a collection of 25 apps (initially) that surrounded the Business Suite, providing a new user experience for the most commonly used business functions of ERP. While useful in pleasing existing users and perhaps even attracting new users within the enterprise, SAP Fiori had limited impact for two related reasons. First, the initial set of apps just changed the user interface (UI) and did not add any significant new functionality. And yet, they weren’t free. Customers balked at paying a fee for innovation they expected SAP to deliver as part of maintenance.

The second round of Fiori apps however began to add in new capabilities, but in spite of that, SAP responded to customer complaints and made them free (with maintenance). And today there are over 500 of them available.

The intended new user experience delivered with SAP S/4HANA is based entirely on SAP Fiori and SAP expects that over time more and more transactions will come from mobile devices, a very viable option with Fiori. New customers will engage with SAP S/4HANA through these apps right from the beginning. Those SAP Business Suite customers that migrate to SAP S/4HANA will have the option of continuing to use the traditional user interface, but of course Fiori apps won’t shore up this weakness unless they are really used. Hopefully, with the mindset of running a new product, customers will expect to engage differently and therefore take better advantage of the new experience and the new functions delivered through Fiori.

Beyond the Obvious

While either or both of these differences might be compelling, even together they don’t justify the time and effort involved in replacing 400 million lines of code to produce a new product. The real game changer here is the underlying technology that allowed SAP to reduce the data footprint by a factor of 10, increase throughput by a factor of 7 and make analytics and reporting orders of magnitude faster (SAP claims 1800 times faster). SAP’s goal was to achieve a zero response time.

However, many business executives running SAP solutions, as well as those of other vendors, might not perceive themselves as having a problem with response time and the size of their data footprint is hardly something that keeps them up at night. If you consider yourself in this category, what’s in it for you? The short answer is

  • Speed in getting at data and answering questions
  • The power of iterative questions, including immediate answers to new ones you didn’t even know you had until you started looking
  • The ability to base all decisions (strategic and operational) on as much detail, in as fine a level of granularity as you can imagine

Perhaps you don’t think you have a problem because you have adapted to the limitations of existing systems. Or you don’t know response time is slow because you never put your hands directly on the system. You might be accustomed to making decisions from data that is frozen in time (a snapshot) because it is not updated and available in real time. You may have waited so long for new queries and reporting that perhaps you stopped asking for them. You probably forecast sales at a summary level by region, assuming you can’t possibly analyze and predict sales at an individual customer level, by product and region, by sales rep. What if SAP S/4HANA could change all this?

Speed is obviously a key factor, but why should you care about reducing the data footprint? The answer lies in understanding why that footprint got so bloated in the first place. As your solution footprint has grown through the years, there is a very good chance you have introduced redundant data. If you started with ERP, then added CRM, both need customer data and product data. This redundant data needs to be synchronized. SAP estimates that 40% of the data load is the exchange of data between solutions.

In addition all enterprise solutions have traditionally accumulated all sorts of totals. Some are for periodic reporting (monthly, quarterly, annually, etc.), while other aggregates are used to gain insight into different parts of the organizational structure. This aggregation enables reporting without having to sort and calculate totals across a potentially large volume of transactions. While the process is simple and effective (because you can gain access to these totals through a simple query), there were some drawbacks.

Not only is there more embedded code to maintain these totals, there is more contention within the data files. Let’s say a large enterprise has people all over the world entering sales orders. If totals are updated in real time, even though it might appear that all transactions are accessing and updating records in the files simultaneously, in reality, these updates happen one at a time. Before a transaction can update a record, it has to check to make sure no other transaction is trying to do the same. If the record is being accessed or updated by another transaction, it must wait for the record to be freed up. Of course it might take only seconds, but those seconds add up and response time slows.

This is also why sometimes these totals are not updated in real-time, and instead are calculated with batch runs. That means you are looking at a snapshot in time and not the “real” number.

And finally, keeping these totals up to date, whether in real-time or through batch runs, means you have to anticipate how and what you want to include in the totals. What happens when you want to change the organizational structure and report in a new way? Those pre-calculated totals are now meaningless. If you can instantly slice and dice and calculate on the fly using any criteria, you don’t have to do any of this aggregation and you get complete flexibility.

Removing these totals means no updates and no more contention. Dozens or even hundreds or thousands of transactions can be entered and stored, at the same time (literally, not just seemingly). This is what the technologists mean when they refer to “massively parallel processing (MPP).”

So SAP got rid of these totals and also the database indices. Database indices allow you to do key lookups. You can easily look up a customer or a product by customer number or part number because those numbers are keys, allowing the software to go (more) directly to a record without having to search through the entire file. But these indices are no longer required if you can search through even massive files and still get sub-second response.

In the end, SAP S/4HANA reduced the number of data tables from 110 to less than 10. And it also segregated out historical data from current data. By its very definition, historical data can’t be changed any more. That makes it easier to handle. So SAP segregated it and made it read-only, making it even easier to deal with the current data.

This flexibility and speed is the real value HANA brings to the business, along with improved, faster decision-making. However, to take full advantage of HANA, SAP S/4HANA must only run on HANA. Of course, this means customers will not have a choice of databases. Some industry observers are criticizing SAP for removing this as a choice. However, preserving that choice of database means SAP S/4HANA would be restricted to the least common denominator of functionality.

If SAP does not take full advantage of the benefits HANA brings, why create a new product? The SAP Business Suite already provides this freedom of choice, including the Business Suite on HANA. And SAP has promised to continue to develop and support the SAP Business Suite through 2025.

Some customers will be reluctant to spend the money on a new platform. Some will cite the skill levels of their current staffs. If customers want to remain on traditional databases, they should just stay on the SAP Business Suite, at least for now. If IT staffs have not upgraded their skill levels by 2025, they will have more problems to contend with than just limitations in response times. So maybe it is time for some “disruption.”

Disruptive Innovation

While technology industry observers love to talk about “disruptive technology,” many business executives think of disruption as a bad thing. Yet while certain types of disruption can indeed be bad, other types can also be good. Disruption that prevents you from delivering a product or service is obviously bad. Disruption that forces you to do things in a different, but better way can be very good.

Wikipedia defines disruptive innovation as “an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect…”

SAP S/4HANA is indeed disruptive innovation, but in the good sense. It is a bold move for SAP. Obviously its customers cannot transform themselves overnight, but they don’t need to. SAP S/4HANA was designed to allow existing SAP Business Suite customers to migrate without the bad kind of disruption. And of course SAP can’t transform millions of lines of code overnight either.

While the SAP Business Suite was just that – a suite of products, eventually all this functionality will be embedded and delivered as a single product. SAP started with ERP, but will eventually add in functionality from CRM, SRM, SCM and PLM. It will start with those industries most likely to see the cloud as the next stop in their extended ERP journey, and then continue to broaden its industry reach. Of course for any company taking this big next step, as always, the devil is in the details. How will companies (both new customers and existing SAP customers) make the transition while SAP itself is still in transition? Will they be able to embrace the good kind of disruption while keeping the bad kind at bay?

Conclusion

The short answer is yes, but that too will be a journey. It will not happen overnight. The key to success is in allowing all the current and new solutions to coexist. While SAP S/4HANA only has 10 or so tables, those applications like CRM, SRM and SCM are expecting to find their share of the full-blown 110 tables. That’s okay.

SAP has also defined a virtual data model that can do a translation of sorts, mapping the old tables to the new data model. This is a key factor in facilitating the migration from SAP Business Suite to SAP S/4HANA without disruption. It not only allows these (currently additional) applications to interoperate with SAP S/4HANA, but also allows customers to continue running current reports that might rely on those old totals. So current and new customers both can ease into taking full advantage of the new capabilities. This is good since it will take companies awhile to realize they can now solve problems that are currently viewed as unsolvable.

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SAP Business Suite on HANA: Changing the Conversation

It’s Not About the Technology, It’s About the Business

I recently got an update on SAP Business Suite on HANA from Jeff Woods, former industry analyst, currently Suite on HANA aficionado at SAP. Jeff had lots of good stuff to share, including some progress to date:

  • 800+ Suite on HANA contracts have been signed
  • 7,600+ partners have been trained
  • There are 200+ Suite on HANA projects underway
  • 55 of these projects have gone live (and the number is growing)
  • The largest ERP on HANA system supports 100,000 users

So the Suite on HANA is quite real. But the single message that resonated the most strongly with me: the conversation has (finally) changed. While we’ve been hearing about HANA as this wonderful new technology for several years now, for the most part, the talk was about technology and even when the technologists spoke about purported business value, they spoke in very technical terms. But the audience I write for, business leaders in various industries, don’t care about technology for technology sake. Many don’t (care to) understand tech-speak. But they do care about what technology can do for them.

A Year Later…

It was just about a year ago that SAP announced the availability of SAP Business Suite powered by HANA, complete with live and live-streamed press conferences in both New York City and Waldorf, Germany. I don’t think I have ever seen such genuine excitement from SAP folks as was displayed in this announcement, and yet the “influencers” in the audience were a bit more subdued. A year ago I attributed this to the fact that these same influencers tend to be a quite jaded bunch, hard to impress. We had also been hearing about HANA for a few years already. There wasn’t a “newness” or game-changing feel about the announcement. But impressing the influencers is only one step towards the real goal of engaging with prospects and customers.

A year ago I also wrote, “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.” But uncovering those previously unsolvable problems required some visionary thinking.  Tech-speak is not going to get the attention of the guy (or gal) that signs the check or spur that kind of thinking. And a year ago the conversation hadn’t changed. Just look at how the vision of HANA was portrayed:

  • All active data must be in memory, ridding the world 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

Look carefully at those words. They mean nothing to the non-technical business executive. Sure, those words got the attention of some forward thinking CIO’s, and that was enough to kick start the early projects, projects that produced amazing results. But that’s as far as the message got. And even when the message was not articulated in technical terms, it was presented at too high a level of abstraction. Business executives faced with important decisions don’t think in terms of “becoming a real-time business.” Operational managers don’t seek out “transformative innovation without disruption.” They want to get through the day most effectively and efficiently and make the right decisions.

Asking the Right Questions Today

So how do you change the conversation? By asking a different kind of question. Because “faster” is universally accepted as a good thing, in the beginning the HANA conversation might have been kicked off with the question to the CIO: What processes are running too slowly today? But in talking to the business user, you need a different approach. SAP’s “cue card” below is a good start. You are now seeing conversation starters that make more sense to the business leader. Take the time now to read them carefully. If you are a business leader, they will resonate much more than discussions of MPP and column-oriented databases or even speed of processes. I especially like the business practice questions in the rightmost column.

Cue card

Source: SAP

But if I were sitting across the table from a business leader, I might ask questions that are even more direct and down-to-earth. For example:

  • Describe a situation where you have to hang up the phone, dig deeper and get back to your customer or prospect later. (By the way Jeff’s thought was that by hanging up you only encourage them to pick up the phone and call your competitor.)
  • What summary data do you get today that consistently requires more detail before you make a decision? Can you get at that data immediately (no delays) and easily (no hunting around)?
  • What level of granularity are you forecasting revenue? Is it sufficiently detailed? Are you forecasting by region or maybe by product line when you would love to be able to forecast by territory, individual customer and individual product combined?
  • Are there decisions that require you to consult with others? How much time does this add to the decision-making process? How easy or hard is it to keep track of who to contact? How quickly can you make contact? Quickly enough?

The goal really is to improve the business not only in small linear steps, but also to increase speed of decision and therefore efficiency exponentially. The first step is to provide new ways of engaging with the system, which means changing the user experience. But to change the game, you need to make improvements to the process itself. SAP’s new Fiori applications are a good example of this progression.

 Fiori: More Than Just a Pretty Face

Last spring, SAP announced SAP Fiori, a collection of 25 apps that would surround the Business Suite, providing a new user experience for the most commonly used business functions of ERP. While useful in pleasing existing users and perhaps even attracting new users within the enterprise, this first set of apps just changed the user interface and did not add any significant new functionality.

The latest installment has 190+ apps supporting a variety of roles in lines of business including human resources (HR), finance, manufacturing, procurement and sales, providing enhanced user productivity and personalization capabilities. The apps offer users the ability to conduct transactions, get insight and take action, and view “factsheets” and contextual information. The next round of Fiori apps are expected to add even more new capabilities, thereby taking them to the next level in changing the game.

The MRP cockpit is an example of this next generation Fiori app and a perfect illustration of how these new apps can recreate processes, even ones that are 30 years old. If you “know” manufacturing, you probably also know that the introduction of Material Requirements Planning (MRP) software back in the late 70’s was transformational, although nobody really called it that back then. “Transformative” innovation is very much a 21st century term. But it truly was game-changing back in the day.

Last year, even before the conversation had shifted, I saw the parallels between the potential for HANA and the automation of the planning process that MRP brought about. Today the MRP cockpit delivers on that potential.

For those outside the world of manufacturing, in a nutshell, MRP 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. Forecasts are educated guesses and actual demand can fluctuate from day to day. 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. Particularly since MRP runs were notoriously slow.

It was not unusual for early MRP runs to take a full weekend to process, and during that time nobody could be touching the data. This didn’t work so well in 24X7 operations or where operations spanned multiple time zones. Of course over time, this was enhanced so that most MRPs today run faster and can operate on replicated data, so that operations can continue. But that only means it might be out of date even before it completes. And MRP never creates a perfect plan. It assumes infinite capacity and “trusts” production run times and supplier lead times implicitly. So while most planners were relieved of the burden of crunching the numbers, they were also burdened with lots of exceptions and expedited orders.

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 have experienced an average of 10% to 20% reduction in inventory and similar improvements in complete and on-time delivery as a result of implementing MRP.

But through the past three decades, MRP hasn’t changed all that much. Yes it has improved and gotten faster, but it hasn’t changed the game because it still involves batch runs, replicated data and manual intervention to resolve those exceptions and expedite orders. Now with HANA we’re not talking about speeding up the processes by 10% to 20% but by several orders of magnitude, allowing them to run in real time, as often as necessary. But if it was just about speed, we might have seen this problem solved years ago.

You probably don’t remember Carp Systems International or Monenco, both Canadian firms that offered “fast MRP”. Carp was founded in 1984, and released a product in 1990 bringing MRP processing times from tens of hours down to 10 minutes. It ran on IBM’s RS6000 (a family of RISC-based UNIX servers, workstations and supercomputers). But it was both complex and expensive for its time ranging in price from $150,000 to $1 million). Not only was it expensive and required special servers, in order it to work it needed to replicate the data and then apply sophisticated algorithms.

About the same time Monenco introduced FastMRP, also a simulation tool, but one that ran on a personal computer. While it cost much less than Carp’s product, it was also less powerful and had significantly fewer features.

You won’t find either of these products on the market today. If speed was all that was required they would have survived and thrived. In order to change the game, you also need to change the process, which is exactly what SAP intends with its new Fiori app for MRP.

The new MRP cockpit includes new capabilities, like the ability to:

  • View inventory position looking across multiple plants
  • Analyze component requirements with real-time analytics
  • Perform long term MRP simulations
  • Analyze capacity requirements and suggest alternatives

But this too 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? Not only will decision-makers need to adjust to thinking in real-time, but will also have to trust the software to automate much of the thinking for them. Will they be able to sit back and let the software iterate through multiple simulations in order to find the best answer to an exception even before it is reported as an exception? I suspect they will if it is fast enough. And HANA is now delivering at speeds that just a few years ago would have been impossible. But with these speeds accelerating by orders of magnitude, the ability to communicate and collaborate effectively must also accelerate.

Making the Human Connection

It is not enough to change the way users engage with the software, it is also necessary to change the way they engage with other people. How often do you or your employees today express sentiments like:

  • If I just knew who to contact for approval/help….
  • I don’t know what to ask
  • I wish I could check with (several) people on this quickly

What if the software could help? As work flows are streamlined, automated and accelerated, so must the lines of communication and potential collaboration. Whether employees are looking to move a process forward, resolve an issue or mature an idea faster, lack of communication and clumsy modes of collaboration can inhibit the game-changing effect of the technology. Which is why SAP has upped its game in the area of Human Capital Management and social collaboration tools. It took a significant step forward with the acquisition of SuccessFactors and JAM and has been blending these capabilities with the HANA platform.

Key Takeaways

Nobody today would disagree that the SAP Business Suite, powered by HANA combines deep and rich functionality with powerful technology. But can it be game changing in terms of how businesses operate? The potential certainly exists, but it’s not just about speed. Changing the game means changing the way we’ve been doing things for decades. Before we can change the process, we need to change the conversation. Are you looking to optimize business processes? Are you ready to talk?

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