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SAP and Their Problem With Collaboration

February 1, 2010 by sapplanningadmin



SAP has been trying to get companies to think collaboratively for some time. However, there are problems with the products offered by SAP that will prevent this from happening.

SAP’s Efforts in Collaboration

SAP has been making significant development effort in order to press into the collaboration market, and to generally get more companies to participate in collaboration. Their product within SCM that manages collaboration is called Supplier Network Collaboration (SNC), however, it is not a new product. SNC was once ICH (Inventory Collaboration Hub) and is one of the early modules within APO. Along with TP/VS, it was one of the two early modules in APO to never accumulate many implementations. However, unlike TP/VS, which is a bona fide solution for shippers (due to design issues, TP/VS is not considered suitable for carriers), however, ICH was never considered a complete product by those familiar with it. SAP decided to rebrand the solution and increase the breath which the product, now named SNC could collaboration. There are now at least six different ways that SNC can be used to collaborate using standard workflows, which range from everything from supplier collaboration to work order collaboration.
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TP/VS

In my book Discover SAP SCM by SAP Press I describe how TP/VS is one of the undiscovered modules in SCM. It, along with SPP, is the most straightforward module to configure. It merely suffers from the fact that transportation improvement is lower down on the corporate totem pole than inventory and forecasting.
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The Other Collaboration Solutions by SAP

Other approaches recommended by SAP are either publishing the plan to the web and to collaboration partners through the planning book. I am always amazed when I hear a consulting company propose this because the planning book is known as an inappropriate tool for doing this task. Collaboration requires workflow control and change control management, which can allow for a back and forth processes between the collaboration partners. The planning book can not do this, and really should not be opened up for outside parties to manipulate.

The second approach recommended is the SAP Portal. Sometimes the phrase “Netweaver” is added to this. However, Netweaver is not a product, but more a marketing concept, so it’s better left out of any technical discussion. This paper below is an SAP paper on how Netweaver can be used and is light on details and better unread because it will confuse the reader more than enlighten them. Sufficed to say, Netweaver does not exist, so “Netweaver” will not be doing anything at all.

http://www.sap.com/platform/netweaver/pdf/BWP_Collaboration_NetWeaver.pdf

Back to the discussion of using the Portal or Enterprise Portal (EP) for collaboration. Some people will refer to it as simply iViews. However, iViews is a “portlet” which is a small application that can “display information in various formats, such as text, figures, graphs, report, tables and charts.” iViews is just a functionality that resides within the EP.

However, the EP is not a baked collaboration solution, but is more of a toolkit, which can allow for more development. This is a constant problem in evaluating software. Software that often attempts to present itself as “completely flexible” is not actually completely written to match the company’s requirements. And incomplete software that needs to be custom developed should always be selected second to software, which is complete. The main logic for selecting custom software is if no off the shelf software can be found that meets the customer requirements.

Secondly, SAP has been promising a Collaboration Portal add on since 2007, and it has still not arrived.

The Problem(s)

There are numerous problems with SAP’s collaboration strategy and their collaboration products. Here is as sampling:

  • SAP is not telling customers the truth regarding solutions, that are not solutions with regards to the planning book and EP
  • SAP’s SNC product has a number of interface issues that make it unlikely a collaboration partner would actively begin using their product without some serious incentives
  • While SAP gets collaboration as a concept, SAP is lacking in its implementation in that it does not have a compelling product in the space even though it has been actively pushing collaboration for many years. One reason for this is that SAP lags the competition in both interface design and web interfaces. These are two important components to collaboration software.

The Industry-wide Problem

An analysis of competing solutions demonstrated that this was not just a problem of SAP, but also a problem in the industry generally. There are simply very few compelling collaboration software packages. On the face of it, it is difficult for me to understand why collaboration software is so difficult to develop, and it may have something to do with the few number of actual software enabled collaboration success stories (i.e. collaboration outside of EDI and sending spreadsheets). I certainly feel as if the market is ready if the right solution were to present itself.

Arena Solutions

The best collaboration software I have ever seen is from a small company called Arena Solutions. They do not have a supplier collaboration product, but make a product for Bill of Material management, which is a highly collaborative object between design departments, manufacturing departments and outside suppliers. My evaluation of their product indicates that they are the closest to understanding how to provide collaboration software, and could, with less effort than customizing SAP EP, create a viable and elegant collaboration product. Their costs are far more reasonable than SAP, all they would need would be a large enough account to approach them to ask them to adjust their product in this way. The company that did this would find themselves at a significant advantage versus competitors because they would likely have the best collaboration solution going. See my article below on them, and also stop by their website if you get the chance.

http://spplan.org/2008/12/12/arena-solutions-and-where-used-view/

http://www.arenasolutions.com/

WalMart RetailLink

Interestingly, one of the most successful collaboration platforms of all time is the proprietary Wal-Mart RetailLink which is only for use between Wal-Mart and its suppliers. Wal-Mart has been at it for some time and began RetailLink back in 1996. I was recently turned on to this system by a co-worker and several the screens are available at this site.

http://www.retailright.ca/samplereport.htm

Those with a RetailLink account can access the site here.

https://rllogin.wal-mart.com/rl_security/rl_logon.aspx?ServerType=IIS1&CTAuthMode=BASIC&language=en&CT_ORIG_URL=%2F&ct_orig_uri=%2F

The fact that WalMart has a simple sign on that is publicly available is a step in the right direction.

Wal Mart does not go it alone but also leverages UCCnet for data cleansing and data standardization.

One interesting question is why Wal-Mart has not spun the support organization for this off into its own services and consulting company.

References

http://www.basisconsultant.com/blogs/116-netweaver/273-still-no-news-from-sap-about-collaboration-portal-add-on.html

http://www.cio.com/article/147005/45_Years_of_Wal_Mart_History_A_Technology_Time_Line


Posted in SNC | Comments Off

Getting More Value From Your SAP Consulting Partner

January 31, 2010 by sapplanningadmin



Dealing with large consulting firms can often seem like an uneven battle from the client’s perspective, but there are many techniques that can improve the odds.

Proven Methods

There are many ways to get more from SAP consulting partners, but strangely, the techniques recommended here are not employed with anywhere near enough frequency. In order to understand how to use these techniques, its important to break through an essential myth with regards to all of the large SAP consulting firms. Your consulting partner is not there to look out for your interests, but is there to bill hours. Self evident to many, this statement would be considered insulting to the major consulting firm leadership. However, if you look at the incentives laid out by major consulting firms then it becomes pretty evident where there approach comes from. First of all, getting to a partnership position in a large consulting firm is quite competitive. Partners in SAP practices must show the ability to “bring in” $2 million (roughly, per year) per year in consulting billing. Around 1/3 of this will go out in salary for the consultants, roughly $500,000 will go to the partner (depending upon how senior they are, more senior partners get more, and the other $800,000 will go to the firm for associated expenses such as offices and computers, and then to senior partners. Partners and directors that cannot maintain their quota will, after a couple of years (and depending upon the economic environment) bet let go. This model is very top heavy as a very large chunk of money is going to people who are not doing the work. While already very top heavy, the major firms in the US have moved to increase the distribution of income even more unequally through importing H1-B workers which are at a disadvantage in negotiation and are motivated to immigrate from lower paid countries that have many infrastructure and political problems. The major firms continue to pull H1-B workers from oversees using quotas setup during the tech bubble even as the US real unemployment rate is somewhere between 15 and 10%.

So the first thing to understand is that partners in consulting firms are under a great deal of pressure to keep their billing up. What most often happens is that this need to bill hours overtakes the desire to provide value to clients. Furthermore, consulting companies are not compensated based upon whether projects go live, but on the perception of the consulting being provided, and they are often shielded from responsibility by the fact that they have connections very high in the client. This is why consulting companies can in fact provide very little value, or negative value to clients still not be removed from an account. The reasons why essentially break down to the fact that consulting services are freely competitive. They could be made competitive, but that would require intervention from the government, which is probably not going to happen in the foreseeable future.

Protecting the Company

Thus in addition to trading information with other companies that also have consulting companies currently running projects, taking individual action is probably the most important determinant in getting value from a large consulting firm. Here are some techniques: Never have a large consulting firm perform a software evaluation for you. Because of financial pressures, you will either be pitched the software that the consulting company has the most experience in, or consulting company will “build a relationship” with a smaller firm, but demand either money or the right to staff their own consultants on the projects, and for the software company to train their consultants free of charge. This will mean hiring usually a small firm that will not be bidding on the consulting work, or hiring an independent contractor. Many good independent contractors can be found on DICE or LinkedIn that have the expertise to perform a software evaluation for you. Do not accept generalized references. That is don’t accept the statements by consultants that work for the consulting company that are solely based upon their personal project experience. These are massive firms with sometimes over 100,000 employees working in all different capacities. There needs to be access to the consulting company’s database in terms of what they have done in clients globally with specific functionality. I am continually amazed how often-consulting companies get away with bringing nothing more than the collective knowledge of the people on the account.Don’t value a consulting company’s methodology. Methodology has to be the most oversold feature of consulting. Projects are managed using tried and true techniques of project management, and no consulting firm has found a secret formula for getting projects in faster or better. More important than methodology is the institutional structure. If a consulting company wants to keep billing hours rather than taking a client live and leaving, a methodology is not going to change that. ConclusionThese are just a few techniques, and depending upon the popularity of this article I may return to update and write a new article on this topic because this area is a wellspring for improving project performance. When it comes to SAP consulting partners, do not trust, but do verify. While I do not have numbers to back this claim up, in my personal experience, companies that verify do better than those that trust.

There are many ways to get more from SAP consulting partners, but strangely, the techniques recommended here are not employed with anywhere near enough frequency. In order to understand how to use these techniques, its important to break through an essential myth with regards to all of the large SAP consulting firms.

Your consulting partner is not there to look out for your interests, but is there to bill hours.

Self evident to many, this statement would be considered insulting to the major consulting firm leadership. However, if you look at the incentives laid out by major consulting firms then it becomes pretty evident where there approach comes from.

Becoming and Staying a Partner

First of all, getting to a partnership position in a large consulting firm is quite competitive. Partners in SAP practices must show the ability to “bring in” $2 million (roughly, per year) per year in consulting billing. Around 1/3 of this will go out in salary for the consultants, roughly $500,000 will go to the partner (depending upon how senior they are, more senior partners get more, and the other $800,000 will go to the firm for associated expenses such as offices and computers, and then to senior partners. Partners and directors that cannot maintain their quota will, after a couple of years (and depending upon the economic environment) bet let go. This model is very top heavy as a very large chunk of money is going to people who are not doing the work. While already very top heavy, the major firms in the US have moved to increase the distribution of income even more unequally through importing H1-B workers which are at a disadvantage in negotiation and are motivated to immigrate from lower paid countries that have many infrastructure and political problems. The major firms continue to pull H1-B workers from oversees using quotas setup during the tech bubble even as the US real unemployment rate is somewhere between 15 and 10%.

So the first thing to understand is that partners in consulting firms are under a great deal of pressure to keep their billing up. What most often happens is that this need to bill hours overtakes the desire to provide value to clients. Furthermore, consulting companies are not compensated based upon whether projects go live, but on the perception of the consulting being provided, and they are often shielded from responsibility by the fact that they have connections very high in the client. This is why consulting companies can in fact provide very little value, or negative value to clients still not be removed from an account. The reasons why essentially break down to the fact that consulting services are freely competitive. They could be made competitive, but that would require intervention from the government, which is probably not going to happen in the foreseeable future.

Protecting the Company

Thus in addition to trading information with other companies that also have consulting companies currently running projects, taking individual action is probably the most important determinant in getting value from a large consulting firm. Here are some techniques:

  • Never have a large consulting firm perform a software evaluation for you. Because of financial pressures, you will either be pitched the software that the consulting company has the most experience in, or consulting company will “build a relationship” with a smaller firm, but demand either money or the right to staff their own consultants on the projects, and for the software company to train their consultants free of charge. This will mean hiring usually a small firm that will not be bidding on the consulting work, or hiring an independent contractor. Many good independent contractors can be found on DICE or LinkedIn that have the expertise to perform a software evaluation for you.
  • Do not accept generalized references. That is don’t accept the statements by consultants that work for the consulting company that are solely based upon their personal project experience. These are massive firms with sometimes over 100,000 employees working in all different capacities. There needs to be access to the consulting company’s database in terms of what they have done in clients globally with specific functionality. I am continually amazed how often-consulting companies get away with bringing nothing more than the collective knowledge of the people on the account. When commitments are made by consultants in meetings that outside information can be provided, follow up. Many times, the consultant will make a promise assuage the client’s concern, but then not provide the information. The less you allow that to happen, the less it will happen.
  • Don’t value a consulting company’s methodology. Methodology has to be the most oversold feature of consulting. Projects are managed using tried and true techniques of project management, and no consulting firm has found a secret formula for getting projects in faster or better. More important than methodology is the institutional structure. If a consulting company wants to keep billing hours rather than taking a client live and leaving, a methodology is not going to change that.

Conclusion

These are just a few techniques, and depending upon the popularity of this article I may return to update and write a new article on this topic because this area is a wellspring for improving project performance. When it comes to SAP consulting partners, do not trust, but do verify. While I do not have numbers to back this claim up, in my personal experience, companies that verify do better than those that trust.


Posted in Implementation Issues | Comments Off

Forecasting Methodologies in SAP SCM DP

January 26, 2010 by sapplanningadmin

What is Available in DP?

We have pointed in a number of posts that the forecasting methodologies in SAP SCM DP are not particularly a differentiator in the marketplace, and that the majority of complexity is in the data modeling tool called the Business Warehouse Workbench (which appears to be in transition to be replaced by Business Objects at some point).

The Forecast Profile

The forecast profiles the combination of settings that can be saved and applied to the demand history. The profiles configuration is segmented into two the forecasting categories.

  • Univariate Forecasting
  • Multiple Linear Regression Forecasting

The forecasting profile configuration also allows has a third tab for composite forecasting which is a combination of the two forecasting categories.

Master Profile

The profile begins with the Master Profile tab. This tab holds the forecasting method independent fields which selects things like the forecast horizon.


Univariate Tab

This tab is used to create profiles for univariate forecasts. The Alpha, Beta and other factors can be controlled here. By saving different profiles with different values different univariate profiles are created, and can the be applied flexibly to products. Additionally, there are a number of standard univariate profiles that ship with SAP.

These can connected to different forecast strategies. Many of these should be familiar to experienced forecasters.

The MLR Tab

This profile allows any regression model to be created and then applied. Independent variables are added below.

The Composite Tab

This is simply a tab that combines two profiles (one univariate and one MLR) and applies a weighing factor to each profile to blend the forecast.

Conclusion

Forecast profiles in DP are quite flexible and allow many custom methods to be created.


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Should SAP Be Paid As A Reseller of Software?

January 17, 2010 by sapplanningadmin



This program makes a lot of money for SAP, but is it right?

SAP has essentially added a line of business over the past few years. That is of software reseller. Through various programs such as xApps, approved solutions among others, SAP is now introducing software to its clients, and taking a percentage (anywhere from 40 to 70% of the software license. There happen to be several of these agreements that SAP has in the SCM space. The question arises as to why software companies would give such a hefty amount of money over to a competitor. The answer is that SAP gives these companies exposure that they would not ordinarily get.

The Problem

Something is very un-kosher about the largest software vendor reselling other software and taking such a large chunk of money. Is SAP simply using its monopoly position with customers to in effect sell access? This appears to be the case. Some analysts point out that these programs are good because they help fill out the product line of SAP. The person who points this out needs to state who they are saying it is good for. It does not seem to be good for the third party vendor or for the customer. Secondly, companies can do their own research and find third party solutions themselves. This is supposed to be the role of large consulting companies to help with this research, but the major firms are so SAP biased, that they often do not do this role properly. The issue is when high status partners see third party solutions as a threat to their revenues. Large consulting companies have SAP resourced to sell, so small solutions get less focus. Also, how unbiased is this program? If say one third party software company is on the price list, and another third party company is not, even though the solution is better for the customer, wouldn’t only the company that is allowing SAP to take 1/2 of its license revenue always be recommended? Is the fact that SAP is making so much money from these deals being declared to the client? I do not think it is, because if this were known, I don’t think clients would agree to it.

Conclusion

SAP needs to make its money by developing software, not reselling other company’s software. This program does not smell right, and should be terminated.


Posted in Implementation Issues | Comments Off

Do Strategy Consultants Add Value on SAP Projects?

January 16, 2010 by sapplanningadmin


Strategy consultants look at the world a bit differently than software implementers. Occasionally strategy consultants are included on SAP implementations. One of the questions I am sometimes asked is if strategy consultants actually add value on these types of projects.

The Concept of Strategy Consultants on SAP Projects

Hypothetically it would seem that strategy consultants could add some value on SAP implementations. Often times the business at the client needs assistance in developing requirements and oftentimes this requires quantification of many things that the business often times does not have either the time to analyze or the ability to analyze.

The Reality

However, in my experience the reality is quite different than the hypothesis. One of the problems is that most strategy consultants are not particularly practical. They primarily make their money by brining “trends” to companies to implement. One year the trend might be “lean,” the next year it might be something else. Because they are trained to think at such an abstract or unrealistic level, they are not very useful in helping the business drive to any realistic requirements. Furthermore, strategy consultants generally don’t have a very good idea how to implement their ideas, and are very infrequently called on to do this. Because they are not tasked with this, their solutions will often lose any semblance of practicality in favor of what could be called “sex appeal.”

A second issue is cultural. Culturally strategy consultants are taught to have a very high level of entitlement, and part of the training that the large firms give strategy consultants is to basically exude arrogance, as this can be mistaken for confidence on the part of the client. Most strategy consultants see IT consultants as “mechanics” and do not generally work with them very well, which makes it difficult for them to work successfully on SAP implementations.

Thirdly, most strategy consultants are not particularly quantitative. Most their work is based upon interviews, not on data analysis, and because they lack these interests and skills, they are not very comfortable asking for extracts from the IT department. I worked with several strategy consultants on an evaluation project and it turns out that by the time I had arrived on site, the strategy consultants who were there had completely alienated the IT department of the client, which would not provide them with any data. I spent time mending fences simply by showing people in the IT department normal everyday consideration, and soon was able to make progress in obtaining data. However, after I performed the analysis and presented it and in passing told the strategy consultants that they needed to work better with the client IT department, the strategy consultants told me that they did not have to because they would simply “roll them over” if they pushed back. Strategy consultants only really think of engaging at the higher levels, and little interest in working at the level below this.

Conclusion

I would say that bringing strategy consultants onto SAP projects is not normally a worthwhile gamble in 90% of the cases. There are always exceptions, and things to look for are things like a more manageable ego, a quantitative orientation, and the ability to build consensus. While people that can really communicate with the business are critical, and often not found among SAP consultants, strategy consultants are generally not the right people to bring in to fill this gap. I would instead recommend that companies look to people with different backgrounds to fill these roles.


Posted in Implementation Issues, Management | Comments Off

How Does SPP and SNP Handle Soon to Expire Products for Redeployment

January 9, 2010 by sapplanningadmin

Background

I have recently been analyzing using Inventory Balancing functionality in SPP, and the Deployment Optimizer in SNP in order to redeploy inventory. SPP Inventory Balancing is explicitly designed for this, while the SNP Deployment Optimizer is not (rather it is designed to move material out from parent locations to child locations in conditions where there is an overage or underage of material). However, I have been attempting to see if the Deployment Optimizer can be adjusted for this task. What I have found is the redeployment capability is significantly below third party application. And one area that we have analyzed is the ability to redeploy different types of stock differently. In fact, I have not found any evidence that the Deployment Optimizer has been used at any client for redeployment. Some consultants who are not familiar with redeployment like to pretend that deployment and redeployment are the same thing. This is convenient for them if they are SNP consultants as deployment is really all that SAP SNP has to offer.

Here is roughly how deployment is different from redeployment.
Click the image to enlarge.

Soon to Expire Stock

For the category of stock that is coded as “soon to expire” the solution selected must be able to reduce the threshold for redeployment so that the material can be repositioned to a location where it can be consumed rather than written off.

The Burnout Threshold

Other software calls this the Burnout threshold and is easily adjustable. We are not surprised that the SNP Deployment Optimizer does not have this, because it is not designed for redeployment. However, we were surprised to find no such functionality in SPP. The closest that we could find were fields related to the warranty end date, recall start date and the goodwill start date. These fields are related to providing a signal to the system to treat the inventory differently during redeployment. They are not the same as burnout threshold which is a very useful concept that exists in third party applications.


Posted in SNP, SPP | Tagged , | Comments Off

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