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SAP has reached a critical milestone in launching version 4 of its business intelligence (BI) and enterprise information management (EIM) product suite from its SAP BusinessObjects portfolio. These offerings, currently in final beta testing, will be released as a collection of software products by midyear.

Not much of what was announced came as a complete surprise since SAP had outlined its overall software strategy in December at its global industry analyst summit. At that time, it provided guidance on what it planned to bring to market in 2011. Still, version 4 of SAP BusinessObjects is a critical release for the company because it has lagged behind many of its competitors in bringing to market a common platform and set of services that support analytics across its broad portfolio of software products. This release should be important as well to customers, who badly need BI products they can rely on; our benchmark research finds that only 9 percent of organizations are very satisfied with their existing BI efforts.

In this analysis, I will take a larger, market-oriented perspective on SAP’s announcements and how they stack up against what I outlined as the five business technology innovations that Ventana Research believes are transforming the industry and the way business is conducted. These five innovations – analytics, collaboration, cloud computing, mobility and social media – are the foundation for our research agendas this year and the basis for my analysis here. My colleague, David Menninger, will offer separate, more specific reviews of version 4’s BI and EIM (enterprise information management) portfolio of offerings.

Analytics

SAP is betting its future on business analytics. In fact, the company has organized its product portfolio under a business analytics umbrella, one that covers a broad range of systems and tools, from BI and information management to enterprise performance management (EPM) and even governance, risk management and compliance (GRC) started many years ago. The technologies it acquired with its purchase of Business Objects has become a new cornerstone for the organization.

Starting last year, SAP has brought to market a series of analytics applications spanning many industries and lines of business (LOBs) . With the New York launch, SAP has started to provide a number of proof points, with customers talking about their early deployments and the value these applications have produced for them and their partners. Indeed, one healthcare customer, Johns Hopkins Hospital was highlighted. In addition to healthcare, SAP announced new business analytics applications for insurance and other industries and LOBs as well as the public sector. SAP will support these applications in 10 languages. While many of the early beta users are large organizations, SAP also intends to offer the same applications to medium-sized companies and LOBs using the SAP BusinessObjects EDGE BI technologies I will not delve too deeply here into technical details of version 4’s BI and EIM capabilities. I will, however, provide an overview of some important features because I believe they address critical customer needs. On the plus side, version 4 provides a common platform in which all the analytic tools operate against a single set of metadata and interact with data across multiple sources. SAP also has integrated its information management technologies, including data integration, data quality and data governance tools. These are tightly bound into SAP’s BI capabilities and provide high-quality data in a timely manner. In addition version 4 introduces complex event processing (CEP) with SAP BusinessObjects Event Insight. This brings real-time events and data together to provide what we have benchmarked and call Operational Intelligence. To boost performance, release 4 supports 64-bit computing and SAP’s in-memory High Performance Analytic Appliance, called HANA. SAP demonstrated the value of in-memory computing by running some BI operations on a quarter of a billion records both with HANA and without it; with it, the operation took seconds, without it minutes. Obviously we would all prefer to wait only seconds, so the real question for users is do they buy HANA for every deployment or only for the largest ones.

On the negative side, those of you looking for planning and forecasting in the EPM suite will be disappointed. It is not part of this version and will require some consulting to integrate your current analytics with your planning and performance management needs. This is a pressing issue: In our benchmark research 56 percent of organizations identified planning and forecasting as the number one ranked set of capabilities that they need to integrate with BI.

Overall, version 4 is a great step forward. Now SAP will have to wait and see if thousands of its existing customers will look to upgrade to the new version. SAP knows this transition will be critical to its success, and it confirmed to me that it is standing by, ready with consultants, partners and new tools to help its customers. The true measure of this success, however, will be where matters stand in a year or so.

Business analytics matters for SAP for the same reason our research firm has conducted the largest research ever done across business and IT, covering more than 2,800 organizations worldwide and across every industry: because analytics are essential for effective performance management. Our benchmark research on the portfolio of business analytics  has been coming out monthly, covering LOBs and (soon) vertical industry perspectives. It has found a significant movement to adopt new technologies that replace spreadsheets and other archaic legacy tools. To be successful, SAP will need to blend its BI and EIM portfolio with its EPM and GRC technologies to gain further customer acceptance of its new portfolio of industry specific analytic applications.

Collaboration

The importance business collaboration continues to increase, yet few organizations have implemented truly great person-to-person interaction tools for business activities and processes. Unfortunately, business collaboration has been caught up in the swirl of portals such as Microsoft SharePoint and separate instant messaging and web collaboration efforts. And, unfortunately, any discussion of how SAP’s collaboration tool, SAP Streamwork, was mostly absent from the launch and discussion of version four. SAP still positions Streamwork as part of its BI OnDemand and collaborative decision-making product offerings. I, for one, wish it would clarify how it fits into its overall BI strategy, but I am not sure the folks there know themselves. I can say that users feel business collaboration is not adequately addressed across the industry; in fact, 44 percent of organizations in our benchmark research on business intelligence and performance management say so. Another 26 percent ranked collaboration as very important, while 38 percent ranked it as important. I can only hope that SAP will get the message and further integrate collaboration technologies into its product offerings. It should also be aware that rivals IBM, Microsoft, Saba, Salesforce.com and others are integrating multichannel, real-time collaborations using text, audio, and video and in social media forums. Our research finds that multichannel collaboration is important to LOB areas but still not on the radar of most IT-focused BI departments. This means that IT departments must develop a better understanding of the people and process dynamics in the business side of their organizations to see how collaboration can help users not just make decisions but also take actions and drive process improvement. 

Cloud Computing

Cloud computing has already had quite a significant and positive impact on organizations that rent applications and services for their business processes and organizational needs. For most, though, the adoption of cloud-based BI has been slow because these offerings have largely been marketed to IT organizations that still prefer to buy, install, configure, customize and deploy applications in-house. This is not, however, the case for small- and medium-sized businesses and many LOBs that often have very little patience for long project cycles. Many of these groups would rather skip steps that in fact ought to be part of BI projects – data quality, for example, and metadata and measure development – to get these systems up and running faster. In the BI market, SAP has been experimenting with SAP Crystal Solutions and SAP BusinessObjects, both of which provide many key capabilities in a cloud environment. SAP, however, has not pushed the cloud-based approach as much as I think it should; it seems to prefer the traditional, on-premises approach, which requires organizations to purchase a license and to pay maintenance. Our benchmark research in BI has found that in the next 12 to 24 months, 28 percent of organizations would prefer to rent through software-as-a-service (SaaS) in the cloud; 25 percent would prefer hosted software that is managed offsite; and 33 percent prefer it the old-fashioned way, purchasing and installing it on-premises. It is the business side of organizations that are largely driving this shift, not IT. I would expect that SAP eventually will push harder to promote its cloud computing approach to BI, but for now the focus of its efforts will remain on IT.

Mobility

Mobility is an essential enabler for the next generation of business computing in any organization. Simplifying where and when you access applications, information and services is part of the reason why the adoption of smartphones and tablets is outpacing traditional desktop and notebook computers. SAP already is making some of its BI offerings available on mobile devices, including smartphones and tablets. SAP Web Intelligence, for example, is available on a range of devices, from the Apple iPhone and iPad to the Android-based Samsung Galaxy and the upcoming RIM Playbook tablet. SAP has gone so far as to develop native support for these platforms to maximize their value and the user experience. This is a smart move on SAP’s part. Our research on mobile support for business intelligence found that more than half of the organizations we spoke to are currently planning to support or are examining these new business mobility platforms. Our research also confirms that SAP and others will be required to support Apple, Android and RIM-based technologies. Interestingly, there is a declining interest in Microsoft in this area, as I have already written and which SAP confirmed. Thanks to these developments and the technology it acquired with its purchase of Sybase last year, I expect that SAP will use its annual user conference, Sapphire, to demonstrate the art of what is possible with SAP and mobile technologies.

Social Media

Although social media – Twitter, LinkedIn, Facebook and so on – have created new opportunities for consumers and businesses to connect in a simple manner, few on the business side seem to know how to use it to their best advantage. This is a serious issue because companies risk missing out on one of the most important advances in Internet technologies. Most organizations are simply not fully educating themselves on how to leverage this new and valuable source of data, let alone realizing how analytics can be applied to mine and to analyze the volumes of text consumers and their own workforces are generating.

SAP is moving forward on two fronts. First, it offers the SAP BusinessObjects Text Analysis product that it acquired many years back and, second, it has integrated its SAP BusinessObjects Event Insight with various social media. With this integration, updates on social media create events that can be processed, analyzed and correlated with other ones. This type of data is now important to more than a third of organizations. In our more recent benchmark research on marketing analytics, analytics that can quantify the value of social media was found to be important in 31 percent of organizations while the information itself was an important source in 35 percent of organizations. Our research also showed it to be slightly more important for multichannel contact centers.

In addition to blending business and social media data together, SAP is providing sentiment analysis to assess the impact and value of, for example, tweets on a specific hashtag or keyword activity. SAP’s free Internet demonstrations show how its systems process text from social media channels. This might be useful for the industry IT analyst firms that are still ignorant of social media. As part of its EIM portfolio, these capabilities can be brought together with the BI and analytic capabilities of version 4 of SAP BusinessObjects.

 The good news is that our benchmark research confirms that many of the new technologies SAP is bringing to market are just what users are asking for; it also shows that SAP has more opportunity to address other pressing concerns. Analyzing vendor announcements and new technology advances properly require a close eye on what the industry really needs as opposed to what vendors might say it needs. This is why our firm invests significantly in the science of research, as I have recently written about. Look to hear more from us shortly on SAP’s announcements as the products becomes generally availability across the world.

 Regards,

Mark Smith – CEO & EVP Research

The talent management software market has and continues to consolidate dramatically through acquisitions. The trend is to bring together processes and applications for hiring, onboarding, performance assessment, compensation, succession planning and analytics. As the race continues to attract customers and users by presenting the most integrated suite of applications, a new market segment has evolved in the shadows and is now taking the stage in talent management. Talent Technology, a vendor in this space, calls it talent generation; its function is to help companies identify the talent they require across all sources, broadcast job openings and promote the organization as an attractive workplace for the best talent. It relies on social media and Internet sites where jobs are posted. Doing this manually for one open position is easy, but Talent Technology’s just announced Talemetry Suite offers a unified and consistent method for recruiters and hiring managers to seek talent for any opening.

The Talemetry suite contains applications to broadcast openings and match, profile, apply and connect talent to an organization’s hiring and applicant tracking process. The broadcast application provides a single method to post a position to Internet and corporate job boards and internal employee portals. The matching application provides the ability to search and rank candidates among millions of resumes across various networks, along with ability to save records of these efforts for auditing and compliance purposes. The connect application promotes the organization’s brand and open positions to social media and Internet-based portals. The apply application imports candidates’ information, including from social media, into applicant tracking and hiring applications. The profile application compiles all the available information and summarizes it for recruiting and hiring managers. Each of these modules brings a simple approach similar to those of Facebook or LinkedIn. This is more effective than doing talent sourcing and broadcasting separately.

Talent Technology is a decade-old software supplier that has integrated its technology with the applicant tracking system (ATS) and human resource management system (HRMS) products of Lawson, Oracle, SAP, Taleo and others. It also has worked with job boards and aggregators and has used that knowledge to create Talemetry. Talent Technology is bringing its products directly to market in a way that is complementary to the offerings of its partners. Instead of trying to build a better ATS or hiring application, the company focuses on extending talent management to the Internet.

Organizations today need to reduce the time it takes to hire; our workforce analytics benchmark research identified this as the second-most important metric in two-thirds of organizations. Talent Technology addresses this issue. Companies waste time in the hiring process when they have to collect information from silos of applications and services; Talemetry helps unify these sources into a common view to reduce manual processes and inaccuracies that result from them. Talent Technology also supplies recruitment analytics to identify disconnects in activities and applications that support hiring processes. Also organizations want to be sure that they access the complete pool of talent for their needs. We estimate that today most are able to put their positions in front of less than one-fourth of the potential talent. Talemetry can be integrated with talent management applications from other vendors. Our performance management for talent management benchmark research found that only 26 percent of organizations currently integrate those systems but more than 45 percent want to do so.

If your talent generation and sourcing efforts are less than optimal, and if you seek to streamline and integrate them across social media and Internet channels, I encourage you to look at Talent Technology. Simple yet sophisticated, its applications take a new approach to ensuring that the identification of candidates and broadcasting of job positions are done in a consistent method and that information about candidates is used effectively to reduce the time to review applications, determine whether to interview and eventually hire people. As we all know, talent is one of the core assets of every organization. If you are not doing everything you can to optimize your talent processes, you make it harder to compete in an economy where every employee counts.

Regards,

Mark Smith – CEO & EVP Research

Mark Smith – Twitter

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