2-tier ERP: A cure for the smaller markets in a global implementation

Many companies over-engineer, over-build, and spend too much for ERP as they begin to implement smaller markets where the needs are relatively simple when they try to shoehorn them into the larger global ERP system.  Even after implementation, the smaller “units” often find it difficult to get their requirements met as they account for such a small percentage (%) of revenue.  One of the biggest hassles in SAP is security and separation of duty (SOD) which often requires smaller offices with just a few workers to have special profiles, multiple login’s, or some special process to fit into the bigger office process.  There needs to be a better way to meet the requirements of highly optimized larger markets with large work forces and smaller, simpler, and more fickle markets with smaller work forces.  A 2-tier ERP solution might be the cure.

Up to now, companies have spent billions on  ERP implementations resulting in significant results.  Specifically for SAP, many of the fortune 100 companies I work with credit some portion of their ability to keep up, survive, and some cases surpass their competitors to their SAP systems.  The most successful implement SAP using standardized processes, strong governance, and fewer, and fewer instances.  Companies with lots of instances often ask me what is the right number of instances.  It is the fewest number of instances which can meet your business requirements.  Not 1, 2, or any specific number, but the fewest.  Each company has to look at its own situation, goals, and markets; however, I believe implementing a cloud based ERP (SaaS) such as Business ByDesign (https://www54.sap.com/pc/tech/cloud/software/business-management-bydesign/overview/index.html) can make implementing or getting to “fewer” much more possible and ultimately better meet the requirements of all parties unilaterally.

In the examples below, the imaginary company has about 80 divisions, units, or countries (depends on how the company organizes and implements) it wants to implement.  A rough cut of revenue shows that 65% resides in top 10 and additional 25% in next group of 10 (11 – 20).  The last group of 60 only account for about 10% of revenue.  While this is fictional, it is a composite many of my experiences in the real world.  We often spend as much, or more, getting the last 60 units into core instance.

All in one ERP model
All in one ERP model

If we recognize that the goal of the fewer or even a global single instance is not simply being on one system, but to have consistent, audit-able processes globally, a new option opens up using a 2-tier ERP model.  Bottom line is in many of these smaller units, often countries, the objective is really to make sure the financial results are valid and that ultimately the CFO can count on them when he reports out to Wall Street.  Getting everything into single SAP system was the best way, and in some scenarios still may be the best way, but it might pay to look at a SaaS based ERP solution as shown below.

Two Tier (2-tier) ERP model
Two Tier (2-tier) ERP model

Often I’m asked, why not just take one of our ERP systems and make it the “light” ERP system and we can even place it on the cloud (IaaS/PaaS).  It does work, but it misses many of the advantages of moving to SaaS.  It is a good option if those other units require lots of optimization.  In contrast the SaaS option will provide a more generic solution focused at smaller organizations with shorter implementation periods, mobile enabled GUI, and pricing by user which may match the more volatile small unit markets where staffing may quickly shift up or down.  Finally, if you are already on SAP ERP, there are significant integration between SAP ERP and Busines ByDesign pre-built with new ones being rolled out in future versions.

I will continue to encourage clients to move to the fewest number of instances which can meet their business requirements.  Adding a SaaS based ERP system such as Business ByDesign could make that journey even simpler and faster.

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Sharing the Righteousness of 4th of July

Happy 4th of July or American Independence Day to everyone.  Most of us reading this blog have a lot in comparison to the world or even in comparison to others in the USA.  Since I know more than a few of you personally, I know you are generous.  If you are going to share, be sure it counts.  Please take the time to understand where your generosity goes so that the righteousness you give goes to the people in need.  Unfortunately, some of the worst organizations profess to give to veterans who defend out shores, police who defend our streets, and firefighters who defend our homes, and even the defenseless like children.  

Please use site like Charity Navigator (http://www.charitynavigator.org/) to evaluate your choices.  At least ask what percent goes to overhead and fund raising.  The best organizations will easily give you a figure.  The worst are taking 99% of your money to pay themselves.  While I’m sure these people will rot in the afterlife, let’s deprive them in this life.

Give generously, but make it count.  Again, Happy 4th of July.

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Extreme Business Travel stories

Business Travel is the most fickle part of my job.  I travel enough that I’m in upper tiers on airlines, auto rentals, and hotels.  I’m also pretty good at it due to practice.  I do decent job of planning so that I can easily get 3 cities in a week if required.  I have had to change plans including re-routing at my layover airport to new destination, but the plans gave me ability to adapt including the fact I always carry a raincoat.  Sometimes, it just doesn’t seem to matter what I do. 

In the last month, I’ve planned and executed well and had terrible results, and of course the inverse where I planned and executed poorly yet had a wonderful result.  Interestingly, both were the same airline, Delta, and out of New York Airports – LaGuadia Airport (LGA) and JFK (JFK).

First, the not so good.  I planned to take a flight from LGA to Fort Myers (RSW).  I started in New Jersey, so got there extra early to avoid the traffic since the flight was at 7 p.m.  I was extra early since it was raining and there were major storms in the area.  I knew I was in trouble when the times started pushing back by hours.  Eventually it cancelled.  The alternative was to depart at 10 p.m. to Tampa (TPA), rent a car and drive about 2.5 hours to home.  I had 8, 9, and 10 a.m. calls I needed to be on in the morning with the 9 a.m. requiring me to review a document. Unfortunately, the TPA flight was delayed and didn’t take off until 2 a.m.  The result was I got into TPA around 4 a.m.  I took a hotel, took my calls from the hotel, and got home around 1 p.m.  I had done everything right, but I lost.

I had the inverse, too.  I had JFK to San Francisco flight 7 a.m.  The airline adjusted the take off to 6:58 a.m. which I somehow read as the flight was at 8 a.m. or at least that is what I had in my head.  I had a really nice mid-town NY hotel, but that night I didn’t sleep well and found myself watching clock.  At 6 a.m., airline app gave me an alarm telling me I had 20 minutes to boarding and I’m in my hotel room in my undershorts brushing my teeth.  GASP!

 

  • 6:00 Panic! 
  • 6:01 Don’t Panic per the Hitchhikers Guide to Galaxy (valuable even if fiction)
  • 6:01 Dress, stuff suitcase, etc.
  • 6:10 Ask for car via UBER (love that app).  The account is tied to your credit card, so no long goodbyes or failed credit card transactions at curb as with taxis
  • 6:12 UBER driver meets me on the curb with trunk open in front of hotel
  • 6:15 Looking up alternative flights for 2:00 pm PST meeting (none on my airline, so big $s if I miss the flight)
  • 6:30 Traffic is light and the driver is moving quick, but not insane. 
  • 6:46 Dropped off at the curb at JFK
  • 6:48 Go through TSA line asking for Pre-check and telling them “I screwed up, mis-timed my flight, and it was my fault”
  • 6:49 TSA agent closes her stand, walks me to front of the line, puts my bags in the front and puts me first in for the scanner
  • 6:52 Walk to JFK Gate 62 which is about 20 meters from security with my belt and shoes in hand
  • 6:54 Gate agent hands me an upgraded seat for the 5+ hour flight
  • 6:56 Butt in seat 44 minutes from mid-town on a weekday morning
  • 6:58 Sent a nice tweet to the TSA for their angel of an agent
  • 6:59 While shutting down I check the PDF bill for UBER (got to love it)

If you judged travel by these 2 sensational accounts, you’d argue planning doesn’t matter it is all luck.  What is missing is the boring part – the other 50 weeks where I made my flights with no real ups or downs, but got there on time according to plan.  Too often we define a topic based on the extremes and the sensational.

So besides being a good story, there is lesson.  Build your plans to give you enough structure to support your requirements, but enough flexibility to adapt to inevitable changes in your business.  Most of the time it will work to your advantage and sometimes no matter what, it fails due circumstances beyond your control.  All you can do is roll with it. Finally, sometimes you get help from an unlikely source – just be sure to send a thank you note / tweet / e-mail.  Even angels need encouragement.

Mary Meeker Report

Mary Meeker Report

What is going to happen in the future?  Honestly, no one knows which is what makes it exciting, but a lot of us try to look at current trends and project the future.  It is not a crystal ball.  One of the best for politics is Nate Silver (http://fivethirtyeight.blogs.nytimes.com/author/nate-silver/) from the NY Times (http://www.nytimes.com).  His recent predications on the elections have been spot on.  In his book, Signal to Noise (http://www.amazon.com/dp/159420411X), he looks at how people ignore the data based on their own bias.

The Mary Meeker report really doesn’t draw any conclusions.  It offers more of pure data view, but you get the picture of where it is pointing.  You certainly can see the new expanding power base in China and India.  It warns us to learn from our past, which is why we all need to study some history.  I encourage you to spend some time with it and put aside your biases so you see the “signal” and can shut out the “noise”.  It is a fun filled 110+ page ride.  

Let me know what you see in the data.

We are all Mad Men for our own brand

Every communication you send is an advertisement for you and your own brand.  You are your own Madison Avenue Advertising Agency on the Internet, and maybe without all the smoking, copious alcohol, and other excesses (or not).  You are your own Mad Man.  Your communications accumulates over a life time, and you need be vigilant.  I can still find communications I wrote on listserves (pre-blogs, pre-forums) back in the late 1980’s.  Every recorded communication is a potential public communication since it only takes about 3 clicks to move it from one media site to another (e-mail to FaceBook, twitter to LinkedIn, SMS to WordPress, etc.).  In fact, every twitter is being placed into the Library of Congress (http://read.bi/VX68Iv), so it is in essence etched in stone.

It brings us to 3 simple rules.

  • Rule #1: Never write something you wouldn’t show your mother.
  • Rule #2: Write not to be understood, but to be not misunderstood.
  • Rule #3: Less is more or “be terse and pithy”

Rule #1 does assume your mother is a reasonable well mannered person, but basically it is important to be aware your communications can end up being read by anyone from a 7 year old on the Internet to a pious leader of nations.  You really don’t know the eventual destination, even if you just sent it to one person.  I’m not saying don’t ever be provocative, swear, or even be adult in your communication, but at least make sure it fits.  Using language appropriate to a rowdy bar in a business communication just shows a lack of imagination   Making characters in a rowdy bar sound like Sunday school teachers is stupid.

Simply, make the communication fit the situation and hope you get quoted well enough that someone can understand your choice of language.   I’m also working on being more positive in communication.  Criticism often can get amplified by the reader especially if they don’t know you or don’t know the whole situation.  It is a personal goal of mine this year. I generally use the rule of “if I’m questioning the language, tone, or word, I probably shouldn’t be using it.”

Rule #2 came from my high school English teacher, Mrs. Leslie Bush, and requires discipline and practice to make sure you are not misunderstood.  We all try to write clearly.  We all try get our point across, but sometimes it just gets lost or it can easily be misunderstood.  Understanding how to properly use grammar helps.  Understanding when to use “emotional” words (see rule #1) and the connotation of words is important.

It is very different to say “it was a terrible mess” and to say “it was an abortion”.  Regardless of your political bias, “abortion” is loaded word with lots of connotations that vary based on your own bias.  That is the problem with emotions – no one experiences them the same way.  If you call upon emotions and loaded words, make damn sure it is the impact you want and doesn’t overshadow your message.

Rule #3 of being Terse and Pithy also came from Mrs. Bush.  Thank you Mrs. Bush.  Be direct.  Be succinct.  Finding the right word can be everything.  Use only the words you need, and not one more.  Don’t introduce complexity for complexities sake.  No one will think your smarter because you totally lost them in your complex sentence structure and $40K words.  Hemingway taught us you can write with simple words and in short sentences and it can still become a masterpiece (sorry, I still don’t like or get Old Man and the Sea and I even like fishing).

Rule #3 really is the writing equivalent of Occam’s Razor (http://en.wikipedia.org/wiki/Occam’s_razor) which simply states the simplest answer to the problem is generally (always) the best.  It is something I see most CIO’s and CTO’s trying to apply to all of their worlds.  Much of the SaaS movement is about finding a simple outcome based solution for business problem.  In this case, you should be driving the reader towards the right conclusion by the shortest path possible.

If you follow these 3 rules, at least for more business and technical writing you may find you will: 1) avoid some sticky situations; 2) be able to better communicate in a written format; and, 3) be able to motivate others to see the world from your view.  After, most of the time when we put words on paper, or into the Internet, we are creating an Advertisement to compel others and over time, we are accumulating our own brand.  We are the Mad Men of our own lives.

Next week, I’ll start discussing a more technical topic of “SAP Enterprise Application Strategy in the Era of SAP HANA, Infrastructure, Platforms, Software and Everything as a Service” which I’ll be presenting at SAP Sapphire in Orlando, FL on Wednesday May 15 from 4:15 PM – 5:15 PM.

I hate it when corporate security is correct!

My laptop runs slow due to encryption.  I can’t use public file sharing sites like dropbox, google drive, etc.  Only some of the mobile functionality is enabled on my smartphone and it is not evenly distributed by operating system such Blackberry, iOS, and Android (due to security).  I don’t even know what we do with Windows Mobile OS?  All of this overhead, oversight, and security is cramping my style and agility and they are correct!

“When everyone is out to get you, paranoia is only good thinking. – Dr. Johnny Fever – WKRP in Cincinnati.

Corporate Security was correct in their thinking.  It looks like there are not just individual criminals and some less than ethical corporations out to get our corporate secrets, but the Chinese Government is actively working to steal them.  I found the NY Times article below unnerving.

I fully understand why governments feel they have the right to protect themselves from other governments.  And I’m willing to acknowledge that technology is part of warfare, but it appears China has bonded its defense strategy to its corporate strategy.  To me, a line has been crossed.  If you want to read the full Mandiant Security report, it is available, but I don’ think you sleep any better at night.  (http://intelreport.mandiant.com/).

Chinese Army Unit Is Seen as Tied to Hacking Against U.S.

On the outskirts of Shanghai, in a run-down neighborhood dominated by a 12-story white office tower, sits a People’s Liberation Army base for China’s growing corps of cyberwarriors.

:

Mandiant’s report does not name the victims, who usually insist on anonymity. A 2009 attack on Coca-Cola coincided with the beverage giant’s failed attempt to acquire the China Huiyuan Juice Group for $2.4 billion, according to people with knowledge of the results of the company’s investigation.

As Coca-Cola executives were negotiating what would have been the largest foreign purchase of a Chinese company, Comment Crew [Chinese Army Hacker Unit] was busy rummaging through their computers in an apparent effort to learn more about Coca-Cola’s negotiation strategy.

http://www.nytimes.com/2013/02/19/technology/chinas-army-is-seen-as-tied-to-hacking-against-us.html?pagewanted=all&_r=0

It appears to me, that if you are going to approach cloud for your corporate assets, you better be very sure that your cloud provider is as focused or even more focused on security measures as your own company.

Losses due to hacking have big dollars associated with them. According to HotForSecurity site, recent reports showed hackers earned $12.5 billion in 2011.  The top 5 incidents that were known are below.  I’m sure many others went unreported.

  1. $171 million – Sony
  2. $2.7 million – Citigroup ($4B in total losses)
  3. $2 million – Stratfor
  4. $2 million – AT&T
  5. $1 million – Fidelity Investments, Scottrade, E*Trade, Charles Schwab

http://www.hotforsecurity.com/blog/top-5-corporate-losses-due-to-hacking-1820.html

I can’t say what other cloud providers do or don’t do.  I can say that IBM, we always take security very seriously and push it down to the seemingly innocuous layers not just in the cloud data centers, but throughout the company.  And yes, that even means my laptop, iPhone, iPad, etc.  Keep in mind, it only takes one nasty e-mail or one invaded file from shared site to start the rift in your corporate security.

Yes, I still believe the future is cloud – IaaS, PaaS, and SaaS.  We just need to make sure we do it responsibly.  Later, I’ll discuss what we are doing at high level with our two public cloud solutions – SmartCloud Enterprise and SmartCloud Enterprise+ – to make them secure for enterprise computing including SAP.

SAP HANA MCOD – What I really want for my data center

The real SAP game changer will be when I have one (1) HANA DB for all my production applications.  I want single, giant in-memory DB where my ECC, BW, CRM, PLM, SCM, BOBJ, etc. all consume the same data.  I want a row  view for the OLTP ECC-like applications and column view for OLAP BW-like applications.  It would look like the picture below.

sap hana mcod system
What we really need from SAP! The SAP HANA MCOD system.

Right now, I can’t really recommend using HANA on anything but OLAP based applications.  In the future, when we can do the analytic transformations in memory without silly exports, extractors, DSO’s and the like, we will really have a very* different scenario.  For now, the cost of the HANA license and risk of losing transactions only committed to memory is not justifiable.

In this new vision with MCOD, there will be two (2) key issues.  First, how do we support MCOD.  I’ve seen MCOD come and go since 1993 several times. Each time, it was easy to build and impossible to support.  The overlapping requirements became overwhelming. Second, HANA will need a data aging architecture which can age data out of main memory to some slightly slower memory or device.

IBM is working on some important technology, Phase Change Memory, that will be of great value (http://www.zurich.ibm.com/sto/memory/).   It may provide the near DRAM speeds while being cost effective and non-volatile.  Maybe IBM will build out series of servers specifically designed to run in-memory databases such as HANA with massive DRAM and massive PCM capacities.  PCM could then provide the roll-back logs and more at near DRAM speeds. PCM won’t solve the MCOD and data aging problems, but at least the risk of running rapidly transacting OLTP systems would go to near zero and certainly lower than that of even today’s highly cached disk writing databases.

It is going to be a fun watching HANA make it from infancy to toddler-hood.  I wonder how fast she’ll mature.

* Mark Twain said every time a writer was tempted to use “very” in a sentence, they should use the word “damn” and then the editor would strike the word and the sentence would read as it should.