Cloud Computing – SaaS Solutions by SAP ERP

SAP ERP Cloud Computing – SaaS Solutions

SAP is the world’s largest used enterprise resource planning solution that provides solutions for business process automation based on industry best practice standards. Given the IT service industry shift from Shared Services to Utility based ICT services, SAP has come up with two suite of SaaS solutions.

SAP Business By Design

SAP Business by design is focused on providing large organization’s subsidiaries and small & medium enterprises a full application suite that can help automate their idea to market, market to order and order to cash business processes while still paying based on usage instead of huge deployment costs. It gives them flexibility to configure functionality they need including Analytics and reporting that complete the full suite.

SAP Business One Cloud

SAP Business One Cloud is focused on providing small organization’s an application suite that can help automate their marketing, sales, delivery and service processes while still paying a low fees based on usage instead of huge ICT costs. The suite is preconfigured and ready to use for small size organisations. Being a cloud based solution it allows small businesses to become flexible and IT ready while giving them scalability to ramp up usage based on need.

CONCLUSION

Cloud Computing has started in past decade as a natural transition from ICT Shared Services to ICT Utility based services. The use, need and availability of Internet has made ICT traditional services transition to Cloud Computing service even more faster.

Cloud Computing Service benefits are now out weighing the issues faced and most the issues faced are by and large overcome by service providers. Cloud computing services are being adopted by most organisations and the adoption continues to increase every year.

Its clear that cloud computing services and specially SaaS solutions would continue to grow as this allows the organisations to become agile in adopting new solutions while reducing ICT investments and paying for use only.

The existing SAP ERP SaaS solutions are targeting and meant for use by SMEs and Smaller organisations.  SAP has to look into how it can create an offering for even the large size organisations traditional SAP ERP solution to SaaS SAP ERP solution. Delay in doing so could result in lost opportunity e.g. in saleforce.com is a fast growing SaaS offering for CRM solutions and many organisations are adopting it.

Lastly Cloud Computing Services open a vast opportunity for service providers to build and offer new internet based services and solutions that can help organisations achieve their goals.

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Software as a Service (SaaS) Service Model – Benefits and Issues

Benefits of SaaS Service Model

Cloud Computing SaaS Model offers the full stack of ICT service and full stack means it delivers an IT Solution for the organisation. The key benefits of SaaS service model can be listed as follows,

  1. One Standard Solution: SaaS solutions are made using industry standard best practice business processes for making them adaptable and fit for entire industry. The SaaS solution offering is standard and available across the whole organisation for use based on needs. This gives the organisation real time usage across the world and more importantly saving ICT costs of duplicate or different solution at different locations.
  2. Self Service Model: SaaS solution offering works on self-service model where by the business users can choose and pick the services options they need. The solution support issues are also self-service based making the business users to check and receive support from one central support.
  3. Pay for Use: SaaS solution offering allows organisations to pay for use, it means organisation do not incur or worry about ICT additional costs as they pay only for number of users using the specific service(s).
  4. Reduced Costs: SaaS solution offering allows organisations to reduce their ICT capital expenditure costs as the solution is ready to use and minimal to no upfront investment required to start using the SaaS solution. On the other hand as there is no ICT Infrastructure and other components ownership, the organisation only incurs the usage costs and has ease of ramp up and ramp down usage, thus allowing higher flexibility.
  5. Faster Time to Market: SaaS solution offering reduces the time for preparation and deployment to the lowest possible as the solution is available for use and requires minimum configuration, setup and user training time to start using the solution. As the whole organisation uses only one solution any changes or new functionality can be also introduced in one go to the whole organisation.
  6. Standard Interfacing: SaaS solution offerings are used by multiple organisations so these are made using industry standard best practices processes and ICT standard for cross system communications and message exchanges. This makes organisations to connect with their customers and consumers in a standard and easy to use way.

Issues of SaaS Service Model

Cloud computing and SaaS service offering by service providers is still evolving. The key issues of SaaS service model can be listed as follows,

  1. Security: Security is the key concern for all organisations that think of SaaS Service adoption. This emerges from the fact that everyday unsecured internet sites and at times even the highly secured internet sites are hacked and data is stolen. SaaS service offerings are internet based and concerns organisations have is about securing their identity and organisation data.
  2. Standards: Cloud computing and SaaS offerings are still evolving and along with them the standards for such services are also still evolving. Type of clouds and mashing of multiple providers e.g. SalesForce.com offering Saas Channel CRM solution while using Amazon IaaS / PaaS service to host it.
  3. Big Data: Data Management is a growing concern for all organisations and its specially an issue for SaaS service solution as the organisation does not own any solution component and pays only of usage of the services. The concern is how the data captured can be stored in organisations data warehouse with ensuring that the data is encrypted while exchange and securely stored as well as usable for generate reports and insights required for decision making.
  4. Change: While adoption of SaaS service is fairly simple, the concern and issue is of switching from one SaaS solution to other and how the transition as well as underlying information exchange from one vendor to another vendor to be handled.
  5. Strategy and Governance: For Cloud Computing Service adoption organisations must have a clear strategy and governance structure and processes. Strategy will help identify in what areas what types of cloud services can be adopted while governance will help ensure clear understanding of roles and responsibilities, compliance and risks.
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Cloud Computing Service Evolution and Predictions

Cloud computing is opening doors for businesses and organisations to have IT services available as utility service with predictable cost and quality as per customer needs and pay for use models while still allowing flexibility of needs based selection of SaaS, PaaS, IaaS service and its components.

IT is becoming an essential part of companies DNA and Fabric as organisations realize that ICT services and solutions will give them a competitive edge to achieve their growth using real time information and insights as well as making products and services available using digital presence. Organisations are awakening and becoming to redefine their strategies to become a real time company, at the core of this is IT but now its not just another IT project but a business transformation enabled with word class IT solutions and services.

In most organisations ICT services are already served as Shared Service Model for past decade and organisations have become mature in having ICT services delivered using shared service model. The move from Shared Service Model towards Cloud Computing is a natural progression where organisations go from Shared Services to Utility Services model.

Internet and the need for doing things online and real time is now well embedded in most organisations as well as consumers. This is leading towards having ICT services being available through internet around the clock and in a secured manner. Could Computing Services and Service Model is fulfilling this need.

Forrester Research white paper of he Evolution Of Cloud Computing Markets” of july 2010 shows that organisations are spending around USD 2.4 Trillion for ICT services. Cloud computing is opening up a new space where the organisations will transition towards. A big part of the overall ICT spending would be moving towards cloud computing services. A macro shift of services already began from year 2009 and its expected to grow rapidly in coming year.

The report from delloite consulting of year 2009 suggests that cloud computing services would grow to the size of USD 1 Trillion in current decade and would continue to grow further. Cloud Services offerings from major players like Microsoft – Office 360, Azure and SAP – Business By Design and Business One Cloud and Amazon EC2 and S3 will lead the transition of Traditional ICT services and solutions to Cloud SaaS, PaaS and IaaS services.

Cloud Computing Services are on number 4 position of IDC’s Top 10 Predictions report of 2012. IDC report suggests that Spending on public and private cloud services, and the building of those services (the “cloud arms dealer” opportunity), will reach USD $60 billion. Amazon will join the $1 billion IT vendor club, and the strategic focus in the cloud will shift from infrastructure to application platforms and the race to build the largest portfolios and ecosystems around those platforms.

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Cloud Computing Basics

The term cloud computing came in existence is last decade while the concept and types of cloud computing services existed in one or the other form for past two decades. The name cloud computing is given to specify that organisations don’t have to worry about where there IT Infrastructure and Application Software are hosted, instead organisations can focus on the IT services they need to meet their fast changing customer requirements.

In past three decades business process automation has gone to the extent that IT has become a key part of all business transformation initiatives to help automate and enable the organisations to achieve their goals. IT services are more and more seen similar to utility services that are reliable, scalable and paid by usage. Cloud computing is also focusing on provide IT services as utility while keeping in mind that utility service needs vary from organisation to organisation. E.g. The power supply and water are the generic utility services and full fill basic need of electricity and water for the customer. But as the need for customer varies so the utility services vary and accordingly the service costs. The need of an industrial organisation is different to the need of an individual customer.

Cloud Computing focuses on providing IT services as utility services and has three types of service offerings which are briefly explained below,

SaaS – Software as a Service : SaaS offering covers the full stack of IT from the hardware all the way up to the software application service. The service is focused on pay for use and generally operates on the pay per use based on number of users and duration of use. E.g. Microsoft Office 360 costs $30 per user per month for online office application software usage.

PaaS – Platform as a Service: PaaS offering covers the IT stack up to providing a platform that business can use to build / manager their own applications. This service is also focused on pay for use and operates based on type of platform and number of applications to be run on the platform as well as any value added service additions. E.g. A company offering PHP and My SQL platform that can be used by organisations to build and host their own applications.

IaaS – Infrastructure as a Service: IaaS offering covers the IT stack upto the Infrastructure layer, in simple words up to Operating System level. The service is also focused on pay for use and operates based Infrastructure usage like hardware and storage. E.g. Hosting providers like Rackspace, Amazon and T-systems offering standardized, virtualized and secured infrastructure hosting that individuals as well as organisations can use for hosting their application platform and application software solution.

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Business Process Management, Process Maturity Model and Implementation

Introduction

The businesses are required to continuously change and improve to meet their customer needs and to achieve their goals. For any organisation to be able to achieve growth one of the important criteria is to have a solid operational excellence for effective and efficient operations management. For operational excellence and growth, organisations have to have clearly defined ways of working and full visibility of end to end business process value chains. The term end to end means clear visibility of Idea to Market, Market to Order and Order to Cash processes and supporting internal processes for HR, Legal, Finance and IT departments.

On one hand the organisations are under pressure to remain agile and flexible for adapting change while on the other hand for operational excellence it’s important to have a structured way of working and execution to be able to achieve the results with required level of quality. Organisations have to identify business areas that are their unique competitive advantage Vs business areas that are industry best practice standard and can be kept compliant with industry best practice standards.

For achieving the standard and structured business processes and their compliance, a framework and process maturity model is essential. The framework and process maturity model will help in identifying, implementing and continuously improve the organisations business processes.

Overview of Business Process Management

Business process management as the name suggests focuses on end to end activities involved in managing business processes. This starts from business process requirement definition, design, deployment and post deployment monitoring and control followed by continuous improvement.

Although most organisation have business process management done using one or the other method, the challenge is to ensure that its tailored to meet the real needs of the organisation. Starting and implementing business process management initiative requires time, efforts and commitment from all levels of the organisation especially from the management team. These initiatives involves multiple departments and so are executed as business transformation program instead of just one department making steps for business process management. It is also essential that such initiatives are done first time right as failure could lead to high business impact especially in the area of operational excellence.

Business Process Maturity Model

For effective business process management implementation as well as continued monitoring and control post implementation, it’s essential for organisations to use either market standard or own business process maturity model. A business process maturity model allows organisation to check their current maturity level / state of respective business process. This not just help in identifying but also defining improvement actions that would help strengthen the process maturity level. It also helps the organisation in identifying and ear marking the business processes where they need high level of maturity Vs. those where they can live with a slightly lower level of maturity.

Over past decade as more organisations realize the need for effective business process management; many maturity models have come to existence. However, only few are successful and used widely, namely Capability Maturity Model Integration (CMMI) and Business Process Management Maturity Model (BPMM).

One of the most widely used models is Capability Maturity Model also known as CMM developed by software engineering institute at Carnegie Mellon University. It came in existence in year 1989 and was shaped as a maturity assessment model in year 1993. During past 15 years it further evolved and become broader and being used in different areas of an organisation from IT to People to Product and Services. This maturity model helps organisation evaluate the business process maturity on 5 levels named as Initial, Managed, Standardized, Predictable and Innovating. The organisation can measure their process maturity against each process area at various levels and decide to take up best practices specified.

The other widely used model is Business Process Management Maturity Model (BPMM) developed by Object Management Group (OMG). It came in existence in year 2007 and is based on Humphrey’s Process Maturity Framework and CMM. This maturity model helps organisation evaluate the business process maturity on 5 levels named as Initial, Repeatable, Defined, Managed and Optimized. The organisation can measure their process maturity by answering the standard questions with evidences for each level of maturity.

After words

Business process management is essential and important for all organisations. In this era of change its important that business processes are standardized and optimized for use. Its even more important to differentiate the amount of efforts and time that need to be spent in specific business areas in standardizing. This allows one end for organisation to use best practice standards and on the other end help them measure and continuously improve the business process management within the organisation. From the review of this paper following are the key points to note,

- Depending on the size of the organisation the approach used for BPM Implementation can vary

- For Large multi-national organisation, business process management initiative must be run as business transformation program

- The program must have support for organisation management team and must be ready for required governance and culture change

- The execution must be planned based prioritized end to end business process value chains with highest priority for processes adding direct value to business growth

- Post implementation for ongoing improvement, a robust process maturity model must be adapted and put to use through the organisations business process management organisation

- Industry standard business processes in the area of support departments must be adapted using industry standards and tools

- BPM implementation and process standardization lead to application rationalizations and lower IT costs for the organisation

Looking forward the business processes management will continue to get stronger and standard. For all organisations to be able to do business in effective and efficient manner, it is necessary to have a strong BPM implementation. BPM is further evolving where organisations are faced with Agile and Lean concepts which required organization’s business processes to be equally agile and lean. Agility is important for faster change while Lean supports the organisation in faster adaption of change.

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ERP Systems and Social Media – Mobile Communications

For most organisations, IT architecture and backbone is an important aspect for enabling the business. One of the important part of the backbone are ERP systems of the organisation that automate and connect organisation business processes end to end to deliver seamless service towards its consumers and customers. ERP systems are starting to move towards integrating and making their offering social media and mobile communication enabled. There is still lots of space for them improve and become truly social media and mobile communication enabled.

SAP ERP Systems are already offering numerous mobile applications that help the organisation workforce to become more productive using the power of integrated social network for real time data exchange. The area of CRM – customer relationship management is having most of the touch points towards the consumer and customers, SAP ERP Systems have still room to improve their integration with Facebook, Twitter type of social media platforms. In this same space SalesForce.com is offering real time online integration where marketing, sales and service modules have tight social media integration to engage consumers and customers. There is still room for improvement on integrating the campaigns, promotions and contests linkage of ERP Systems and Social Media sites hosting these events. Currently most of the ERP systems offer mobile communication and social media integration for the organisation users through their mobile application solutions. There is a still lot to be done for tighter engagement of consumer and customers through social media and mobile communication platform using ERP Systems as the backbone. Important still is to note that ERP Systems solution providers are working on this and in doing so the first step most of them have taken is to make their solutions real time available using internet and cloud hosting platforms. In coming years more improved solutions would come forward.

This decade and era is a real time business era that is pushing organisations to become real time as well as opening new doors of business using social media platforms. Many organisations have embarked on this. For achieving real success and business growth through social media, it’s important that organisations take phased approach to slowly ramp up their social media presence. This needs to be carefully handled through organisation execution strategy to address how social media and mobile communications platform can help them internally as an organisation as well as externally towards its stakeholder, customers and consumers.

Social Media and Mobile Communications help an organisation to grow internally as well as externally, it can be integrated with the organization’s end to end value chain from idea to market to market to order and order to cash functions. Most impact for engaging consumers and customers can be seen in market to order functions especially in customer relationship management area that comprises of marketing, sales and service.

Social Media and Mobile Communication Solutions and Platforms have evolved and improved a lot in past one decade. The evolution of social media and mobile communication platform integration with ERP systems is still evolving and some progress can be already seen with move towards cloud hosting and mobile applications coming to life with inbuilt integration with social media platforms. The evolution continues and would become even more real time and tightly integrated in coming years.

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Use of Mobile Communications and Social media – Organisation Change

Organisation Change

For successful presence and use of Social Media and Mobile Communications platform the organisation must start with their vision and execution strategy. It’s important that the use of social media for organisation growth is clearly underpinned as per part the execution strategy. It starts with having clear social media policy for internal as well as external stakeholders including clarity on what’s allowed and not allowed. The next step after policy is to have social media usage guides available for internal as well as external networks. As social media operates 24×7 using virtual network it’s essential to monitor and control the publications and remarks. Many of these would require senior leadership comments and so it’s highly important the organization’s management team is having clear understanding, owning and support for the initiative. The publications must be clearly reviewed and simple, honest and true communications should be made. Launching, handling and archiving of campaigns, contests and promotions must be handled properly. The initiatives must have clear performance indicators that would give insights on what needs be to achieved, why and how far is the organisation in achieving this. Lastly this would need investment in right resources with skills and capabilities for managing organization’s social media presence. Resources required would in IT, Marketing, Sales and Service teams. This needs to be supported by management and Human Resources team.

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