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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

SAP Lifecycle: slicing for value

Categories : StrategyTechnology

This is a metaphor. Imagine you wake up one morning and find an elephant in your backyard. It has settled itself comfortably in the garden shack and does not seem to be planning on moving anytime soon. It is easy to feel the potential and immense power this creature can bring. But you may quickly find yourself occupied by managing collateral damage and making sure the elephant doesn’t swallow your entire budget already for breakfast. In the meantime, in the house people start to ask questions what that animal is doing in the backyard in the first place. Again: this is a metaphor. I am not implying that the average IT landscape – more specifically a typical SAP-oriented one – is just as intimidating and immovable as an elephant. But the sheer size and complexity of an installation can absorb all management attention. It leaves little room for unleashing the true potential of the solutions, let alone that it can be discussed with the business side of the organisation. This becomes all the more difficult when you consider upgrading to a major new version of the platform: it may require significant upfront investment and – at first sight – provide little direct value to the business. So how do you manage something big and imposing like that? Well, think about slicing it. And getting a bit outside the box (or shack, if you like). Very few will doubt that by now the cloud has become a serious mechanism to deliver solutions to the business community. And although not all of it may be considered enterprise-ready yet, the phenomenon is quickly setting a new benchmark for what to get from the IT department. Business users start to expect focused, fine-grained solutions that they can activate any time they like. They expect to pay for it per use or on a subscription basis. They don’t want to be exposed to the infrastructural requirements of the solutions. And they certainly don’t want to be bothered by upgrades and other considerations for improvement. All of this is in the rationale behind one of the more crucial propositions to the market I have seen in quite a few years. It is SAP Lifecycle, one of the flagships of Capgemini’s increased focus on managing the entire lifecycle of complete application landscapes. It reduces the complexity and capital expenditure of implementing or upgrading to Business Suite 7, securing applications management, applying platform innovations and – if needed – running the underlying infrastructure to one simple thing: a pick & choose menu card of elegant, clearly defined business services that are paid for on a subscription basis. To me, it is the future of packaged based solutions: a set of business services you can subscribe to with all the underlying complexity - including the very fact that there are package components inside - shielded off. It gets rid of massive capital expenditure and replaces it by much more flexible, operational expenditure. It also secures innovation, as new business services are made available – like a menu card that evolves with the seasons – and the provider handles all the technology innovations inside the platform. Best of all, by defining and pricing at the level of fine-grained business services, you find that they – finally - become a topic again to discuss with the business side. Not only in terms of what individual, core business services should cost, but also what the immediate value would be of new services that can be activated. This is the reason why frequent value workshops – to understand these dynamics – are an integral part of the proposal. After all, in the end you want to be involved with your business users in these type of value workshops, not in risk review boards or at the receiving end of spreadsheet costing. You will appreciate that there is some spectacular complexity behind the deceivingly simple façade of the menu card. Both in terms of technology – upgrades, migration, applications management, hosting – as in terms of financial engineering. I have witnessed some of the brightest minds in our company deal with the challenging economics of transforming big monolithic investments into flexible subscriptions. And all that without scaring our corporate legal and risk management people too much. True heroism indeed. But then again, it takes nothing less than a bold approach to get an elephant to move. Or to get it sliced, if you like. (Oh, did I already mention that elephant was just a metaphor? )

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Ron Tolido

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