Robert Kugel's Analyst Perspectives

SAP has inaugurated a new series of business applications it calls Enterprise Performance Management (EPM) OnDemand as a cloud-based subscription service. The applications are part of SAP’s EPM version 10 suite, which it introduced last year. It’s a first step in what is likely to be a portfolio of general-purpose, lightweight and relatively low-cost apps designed to be used on mobile devices. Using HANA on the back end, the applications can deliver high performance in accessing masses of business data and deliver actionable information to executives and managers. The three on-demand apps in EPM are for expense management, profit-and-loss (P&L) analysis and capital project management. They also just released its SAP Business Planning and Consolidation that has a mobile version on the Apple iPad that is part of its recently announced EPM UnWired. The move is another indication of SAP’s emphasis on cloud computing, which my colleague Mark Smith covered earlier this year.

OnDemand’s analytics are hardly advanced and the scope of the information they use doesn’t break any new ground, but that’s not the point. Increasingly people have been integrating mobile devices into their day-to-day work. Executives carry around tablets while doing “management by walking around.” Being able to call up specific numbers relevant to their parts of the business, visualize them graphically and drill down to detail enables managers or executives to have structured dialogs with direct reports about what just happened and what to do next. (Business dialogs become structured when numbers are applied to generalizations.) Running the applications on HANA means that even complex models will return answers quickly – a key requirement because to be useful for business dialogs, response times must be fast. Since the applications are already running in the cloud, it really doesn’t matter where or when users access them.

EPM OnDemand and its latest UnWired applications also serves as a proof-of-concept demonstration of what IT departments could do to quickly develop (and change) their own business-focused mobile analytics running on EPM and HANA. These would be lightweight analytics applications built around the exact needs of specific types of businesses – for example, measures and metrics particular to steel service centers, high-volume repetitive manufacturing, or engineering and construction.

To make its on-demand apps more accessible and useful, SAP has integrated Microsoft Office with them, so users can perform ad-hoc analyses of data sets using Excel and publish the results as part of a collaborative business process. Or, they could modify the output of a complex predictive model to reflect their own front-line insights and write a report back to a server where it would be immediately incorporated into the next iteration of an evolving operating plan. Or, sales managers could have a better insight into pricing products that are commodity cost-driven if, say, these incorporate real-time commodity futures feeds and up-to-date pay and benefits expenses into production cost models.

To make these applications a success, SAP will have to expand the range of OnDemand applications, price them right and enhance their usability. As to this last point, the baby boom generation – the first to have business computing as a given in corporate life – is beginning to retire. Coming up quickly are people who have woven computing devices into every recess of their lives. Mobile computing platforms and the evolution (albeit slow) of HTML will enable (and force) software designers to rethink how work gets done as the conceptual line between the design of business and personal applications increasingly blurs.

Regards,

Robert Kugel – SVP Research