• Ratios of new license to maintenance revenues shift from 1:2 to 1:4 and in some cases 1:5.  Enterprise software vendors now in a better position to convert perpetual business models to subscription business models.  Do they have the guts and board approval?
• Indian System Integrators competiting for market share in Europe, Middle East, and Africa as they shift away from the North American market.
• Japanese CIO’s finally realizing that they need to break free from their existing ERP software vendor relationships.  SaaS options now in consideration.  Recent advancements by NTT to host Zoho, Siemens’ 420K employee move to Success Factors, and Flextronics 240k employee deal with Workday have shifted perception that SaaS can’t solve large enterprise requirements.
• Cloud computing - Broad acceptance that enterprises are interested - There's absolutely no question that cloud computing has moved into the mainstream of enterprise technology. Everyone from Microsoft to Accenture to HP to IBM to SAP admitted as much. With the worsening economic conditions and the maturation of cloud computing services, enterprises are actively investigating cloud computing. The main differences of opinion between the legacy vendors and companies like Salesforce and Amazon lie in how quickly and broadly companies will adopt cloud computing.
• Too much discussion of clouds at the infrastructure rather than platform layers - The entire cloud conversation at Structure was very focused on infrastructure. As Daryl Plummer of Gartner has noted, Cloud computing is not about infrastructure. It's about a new delivery and consumption model for IT services that are elastic, metered and abstract away the SW stack. The conference was mostly focused on the lowest layer of the stack and didn't really talk about how the cloud enables transformation at the business process level.

Source: 1, 2

Tags: cloud - saas - maintenance - cio - maintenance+revenue

Prashanth Rai

(Cross posted from cio-reinveted)

1. Regardless of the specific BI technology, in the short term, the executive mandate for most organizations will be to do "more with less." Although we continue to see healthy demand for BI functionality from business end users, IT departments and business end users alike are being asked to curtail costs.
2. As a result, incremental, small purchases, and deployment of BI technology will dominate the market in the short term. This trend is also likely to push more organizations toward SaaS and outsourced BI and analytics solutions that have a pricing model, which enables better allocation of direct costs to current profitability.
3. IDC is beginning to see evidence of greater interest in outsourcing of advanced analytics processes.
4. Standardization and the expected eventual commoditization of core reporting, dashboard, and OLAP functionality. This core QRA (Query Reporting Analysis) technology, which still forms the bulk of the revenue for BI technology vendors, has been available for decades. Although substantial feature and functionality improvements have been
   made to this software over the years, the lack of differentiating features will continue to drive down the cost of this software.
5. The logical conclusion will be the broad availability of open source or very low-cost commercial reporting,
   dashboard, and OLAP technology with a shift in spending from licenses to support services.
6. QRA tools, there will be an intermediate-term opportunity for some vendors to differentiate their ad hoc query and multidimensional analysis tools based on features and functionality that put a premium on simplicity and performance. This may include use of in-memory deployment techniques, interactive visualization, or associative data management structures
7. The next wave of innovation in the BI market will come from the expansion of the overall business analytics solution to include functionality for supporting:
8. • Unified access to and analysis of structured data and unstructured content
   • Collaboration during the process of decision making
   • Capture of knowledge learned in the context of decision making
   • Intelligent process automation, which combines BI functionality with that of business process management
9. In 2008, Oracle reaped the benefits of its investment in Oracle Business Intelligence Enterprise Edition (OBIEE) — the company's BI platform and its different modules for query, reporting, and analysis.
10. OBIEE has emerged as a growth driver in the overall Oracle portfolio.
11. Oracle's 2007 acquisition of Hyperion has only marginally contributed to the company's BI tools revenue.
12. Oracle is well positioned to continue to benefit from OBIEE by selling it to its existing vast applications and database customer base.
13. SAP derives all of its BI tools revenue from the QRA market segment.
14. In 2008, the company's SAP BusinessObjects portfolio benefited from the vastly enlarged sales force and was able to sell BI tools to SAP's applications customers.
15. The company (SAP) ran into some resistance from customers to its pricing structure but was able to overcome this challenge partly through improved communication about its BI tools portfolio road map.
16. Although SAP's rationalization of acquired BI tools has not been completed, the company is well positioned to fulfill the future needs of BI technology purchasers.
17. SAP is also on the forefront of redefining the functionality of a BI solution by integrating traditional QRA tools with those for content access and analysis, collaboration, and event monitoring.

Source: IDC

Tags: bi - sap - obiee - business+intelligence - QRA - oracle

Prashanth Rai

(Cross posted @ cio-reinvented)

The title of this post is directly from the keynote of the Co-founder and Chairman of the SAP board Hasso Plattner at Sapphire US 2009. Hasso's keynote was for most part technical, talking about in-memory databases and how its going to transform the "Transaction processing system" space. It was geeky and pretty interesting, but during the later part of the keynote - looked like Hasso went off script and focused the keynote / presentation to his management team rather than the customers/partners/others out there. And one of the clear things that he did mention that it was time to bring the bear(Business By Design) out of hibernation.

Lets look at BBD from a customer point of view. A highlight session for me at Sapphire 2009 was the session with the Business By Design customers. This session had two customers one recent , one who had implemented it for a year make presentations and had other customers spread around different tables discussing with various bloggers, media, analyst resources.

Customers who were at the event:

• Bendpak, US
• Research Point, US
• IntelePeer, US
• Envelopments, US
• Nag, England
• Prognosys, India
• Sundolier, US
• Suh'dutsing Technologies
• Skull Candy
• TAM Ceramics
• One Vision Solutions

So as a part of this session I was able to collect data/experience points of 4 of the above highlighted customers.

Common Characteristics of these companies:

• No CIO or dedicated IT Team, It was run primarily by the CFO
• Turnover of around / less than 75 Million$ Companies
• Between 25-50 system Users

Each of these customers have had very positive things to say about their experience buying, implementing and using the product. Will summarize some of the points I heard during the discussion and other research about each of these customers.

1. Outgrew earlier / rudimentary systems like excel, quick books etc
   1. Brent Walters CFO One Vision - "We outgrew our systems"
   2. Beth Siron, the ERP implementation coordinator at Skullcandy - “We were running on QuickBooks and Excel spreadsheets, which is standard for a small company,” she said. “With our rapid growth, we’re not going to be able to continue with our current systems very much longer,” she said. The QuickBooks accounting system wasn’t designed to scale up and is hitting its limits. Additionally, the company needs to do product demand forecasting and manage multiple warehouses. Outdated manual processes worked well in the first couple of years, but that has changed. For instance, currently, e-mail is the method of coordinating the workflow's between manufacturing personnel and the offsite warehouse. Need for future stability. The company realized it needed a standard, stable ERP system that could scale out and would receive incremental future enhancements with new technologies. Siron said, “We want to keep growing rapidly and don’t want to be faced with another implementation in a few years. We needed to find a solution that wouldn’t just fit our needs now, but also four or five years into the future.
2. Need to minimize manual processes and the need for hardcopy files to be passed around & ultimately have a 360 degree view of the start to finish process
3. No need for IT Team / Landscape , Implementation executed by Business Owners.
4. Time from Initiating discussion with SAP to having BBD up and running ranged between two to five months
5. Embedded analytics a big advantage
6. Ability to do some customer specific configurations
7. Quick ROI due to rapid solution deployment
8. SAP - A Brand you can trust
9. One integrated functionality suite

High level cost comparison between ERP in a box and ERP via the Internet options done by OneVision

This also got me thinking in terms of how BBD is a good financial fit for these companies. So I just did a quick back of the envelope calculation - A typical IT budget for an organization is around 1%, so if the typical turnover of the organization leveraging BBD is around 75 million, their IT budget should be around 700K. And If you see the cost of SAP as an integrated suite with no cost on servers etc is 149$ * 30/50 = 50K / 80K, Which is between 7-15% of the overall IT budget. This does seem to make a lot of sense. Thoughts??

Looks like SAP needs to quickly figure out the financial model on how they will make money in this scenario assuming they have addressed the teething technical issues that they had. One question that I did have about BBD is how do they plan to address the customer concern of data lock into this platform.

More on BBD to follow.

Tags: business+by+design - bbd - sapphire09 - sap - ondemand - saas

Source: 1

Prashanth Rai

(Cross posted from CIO-Reinvented)

Results Summary:

1. Almost half of the respondents claimed there would be no impact But over half of the executives stated that they are, indeed, adjusting their approach to market conditions.
2. Twenty-four percent are reacting to the recession by moving more aggressively in the cloud/SaaS direction: either doing more evaluation, beginning to adopt, or increasing their adoption of IT cloud services.
3. Fourteen percent are reducing their pace of cloud/SaaS adoption
4. The largest portion of customers leaning more aggressively toward the cloud model are in the “more evaluation” stage. This makes 2009 and 2010 a very important time for suppliers to be actively educating the marketplace about the cloud model and their cloud offerings

Source: IDC Blog

Prashanth Rai

Technorati Tags: saas - idc - cloud+computing

The current design of Oracle EBS (Release 11i) ties user responsibilities to an Operating Unit (OU). This design was cumbersome for users who worked across operating units to perform their basic functions, since they had to change responsibilities based on the OU for which they were recording transactions. With MOAC, Users can

“Perform multiple tasks across Operating Units without changing responsibilities”

A single application responsibility can now access, process and report on multiple operating units. The new responsibility definition can cut across multiple operating units and multiple legal entities.

For the full article - click here

Prashanth Rai

I was thinking of something appropriate to write for my first blog back, so I thought I will start with something that has been top of mind for some time now. "how will enterprises adopt cloud computing? " . And I am sure there is no simple or there isn't one correct answer to it.But I figured there are a set of factors that impact the choices / path that an enterprise ends up taking. So what are these factors? Below is an initial list of things that I could think of, I am sure there are many more, please add.

1. Maturity of IT department in the enterprise - Architecture,Structure,Process etc
2. The management's view of the IT department / CIO's place in the Management team / Political will/clout of the IT Department
3. Current state of investment in inhouse IT Resources/ infrastructure & investment payback period
4. IT Resources,Utilization levels / monitoring
5. Understanding of core / context IT systems - Standardization of systems / processes
6. IT Internal Staff Numbers/ Volume / Types of activities / roles they play
7. Existing Outsourcing / Offshoring operations/Contracts
8. Pressure to reduce cost / need to avoid capital expenditures
9. Willingness of the Management team to be innovators

These factors in varying degree's impact the decisions organizations take in adopting the "Cloud" or not. So I was wondering what could be a typical road map that organizations will adopt as they move towards the cloud, so below is a graphic with the first stab at it. In this approach I haven't factored in the private cloud option, that I will cover later.

This is only indicative, different organizations are probably going to adopt it very differently or some leading vendors will help them leapfrog further up the value chain. Please share your thoughts on this.

Tags: cloud - cloud+computing - enterprise - aws+amazon

Prashanth Rai

(Cross posted from cio-reinvented.typepad.com )

Ram Charan

InformationWeek: How can CIOs and other technology leaders best help companies navigate this economic uncertainty?

Charan: I would like to address the CIO specifically. I find these people to be very bright and hard working, but they need to change their orientation, really learn about this financial crisis, what are its causes, where is it going, so they can engage in the right conversations at the CEO table. Item No. 2: They need to understand the cash-flow issues of the company. If the cash flow is down, where are the areas where they can help--outside their IT budgets--in the short term to free up the trapped cash, collect the cash better? Third, they need to think of the lines-of-business people as their customers. Go and sit with them, interview them. And then come back to them with ideas. Fourth: What can they do in terms of the IT budget? Here, the exceptional CIO is going to shine. Having done the first three items, the CIO needs to take his team off-site for a day to reprioritize existing projects. Say you have 50 projects. You must reprioritize them according to what will free up cash flow in the short term. Then play this scenario out with your team: If for some reason top management cuts our budget in half or by a quarter, what will be the new priorities?

InformationWeek: So does the longer-term, transformational kind of work then take a backseat?

Charan: You have to look at your budgets in three buckets: First, the utility, keep the lights on, keep the computers working. Two is compliance. There will be more regulation. Do the benchmarking, be more efficient, try to standardize. Third is the discretionary projects. The thing I want to caution every CIO about: What criteria you were using in the fall of 2008 to call something transformational may have become irrelevant.

InformationWeek: Any parting advice for CIOs?

Charan: Remember you are a leader. With leadership in tough times, you need to be sensitive about the psychology of the organization. Take your IT team aside. Be honest. Tell it like it is. No sugar coating. Not too optimistic. Not too pessimistic. Your leadership is going to be tested.

Given the uncertain times, budgets are getting frozen / cut this is a given. But given this scenario it is important for all the stakeholders the IT side of the enterprise - CIO, IT Department, LOB Managers, Vendors, Partners etc - Come together and think through the priorities and approach to the needs of the institution. It is important that vendors to also participate with the IT departments and come up with new ways to help the achieve the objectives and also work with the enterprise to provide the best economic model for their services in the short term.

Tags: cio - ram+charan - information+week - recession

Prashanth Rai

Is this observation surprising? Not really!!!

In this age of webinars and online trainings, why do we expect ERP users to learn how to use the software through class room training? It is obvious that we need to approach ERP training and enterprise application knowledge management differently. Oracle has taken a good step in this direction called the “User Productivity Kit” (UPK) which addresses this fundamental problem from multiple angles.

What is UPK?

“It is a collaborating content development platform for Oracle Suite of enterprise application products that can quickly create customized training and support material.”

In layman’s language it is a tool which helps you build your online user help and training content with multi-language translation capability. From an end user standpoint it provides for environment specific (client) online help and training content which can be used to better understand and use the enterprise application resulting in increased productivity.

Benefits:

The obvious benefits include better usage of the application resulting in increased productivity, better ROI, online training and single source for user training management etc. It is important for us to understand what could be the indirect benefit or the need for such a tool.

• User training on demand with no additional cost. For role changes, employee turnover (especially relevant in a shared services environment) where the training cost and the lack of the same is prohibitive this provides a mechanism to record, evaluate and then help the user in performing his tasks. The 4 modes which this tool supports “See It”, “Try It”, “Know It” and “Do It” helps in achieving the same.
• Reduction in support cost. Almost 50% of the support issues could be attributed to improper understanding of the application and this tool has a direct impact on the same.
• From a compliance perspective too, we are sure that only those users who are trained, tested and approved on the application have appropriate access to the menu options

We could obviously add more…

From an implementation stand point too, it is a tool which is easy to customize and implement and takes weeks and not months to implement.What more it is not a Third party tool and comes with the blessing of Oracle themselves and is supported by them.It is obvious that UPK is a tool which answers a lot of your questions relating to end user training management and helps realize the real ROI for oracle enterprise applications?

Krishnakumar (KK)

"Actually, market & industry structures are quite brittle. One small scratch and they disintegrate, often fast. When this happens, every member of the industry has to act. To continue to do business as before is almost a guarantee for disaster and might well condemn a company to extinction. At the very least the company will lose its leadership position; and once lost, such leadership is almost never regained. But a change in market or industry is also a major opportunity for innovation"

This passage is very applicable to both sides of the house in the Enterprise IT industry, the internal IT departments & the service providers or vendors. Today there aren’t scratches but thunderbolts that seem to be attacking us from all sides. We have the economic winter which is forcing cuts in budgets etc , on the other side there are new tools, technologies emerging which show phenomenal promise like enterprise2.0, SaaS, PaaS, SOA etc etc & last but not the least the growing pressure on IT to deliver results and provide greater business alignment / efficiency / innovation - IT is fundamentally changing the way industry operate / do business - Explained very well in this post by Fred.

Let’s start with a quick understanding of the title of this blog - "Business Technology Innovation". The blog will focus on the innovations that can be leveraged at the intersection of business process and technology solutions. We believe that the line between business and technology is disappearing leading to the emergence of a new breed of knowledge worker - The Business Technology Innovator. Who has a good understanding of the business process and its objectives and is able to use the technology tools and solutions to drive innovation and achieve the required business results.

Prashanth Rai