Written by Axel Buelow, Interim CIO – SAP AG

273909_l_srgb_s_glBy setting up the SAP HANA Enterprise Cloud, SAP is offering customers a Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). However, Software as a Service (SaaS) is also a growing and compelling trend. I’d like to talk about the many ways SAP also provides SaaS internally, particularly in the areas of HCM, finance, procurement, sales and social collaboration.

In order to offer business processes successfully in the cloud at SAP, we first aimed at processes that either were decoupled from other processes, loosely coupled via single interfaces or those where integration was already in place. With these criteria in mind, we were able to find a number of opportunities where we could offer Software as a Service for SAP employees.

In terms of HCM, we now have several processes that we run in the cloud with SuccessFactors, from Talent and Compensation Management to People Development and Succession Planning. We plan to add Recruitment and Learning to our HCM cloud portfolio shortly, and will continue to move further processes into the cloud.

In the area of Finance, we are live on SAP Cloud for Travel, where employees can enter their travel costs and receipts for reimbursement – either via their laptops, their mobile devices or simply at their desktops.

We already have some key Ariba procurement scenarios live in the cloud – Ariba Supplier Information and Performance Management, Ariba Procurement Content, Ariba Sourcing and Ariba Collaborative Commerce (Connectivity to
the Network for Purchase Order and Invoice Automation) highly integrated with our OnPremise world – and are currently evaluating the next scenarios to implement.

In terms of SAP Cloud for Customer, we follow the hybrid strategy, with CRM on HANA as the backend. To support better user adoption, we have now made it available via mobile, so that account executives can use it to manage their sales opportunities while on the road.

At SAP, we offer an internal social collaboration platform with SAP Jam. This helps us to respond to internal demand and communications requirements as the organization becomes more and more social. We have implemented SAP Jam across SAP and will develop its capabilities further with additional apps and functionality, as well as integration to other applications.

One motivation to pursue SaaS is the positive impact on operations. For example, in Q1 2013, traditionally a peak period for performance reviews, we saw a 35% reduction in tickets for those processes running on demand.

SaaS offers us the opportunity to standardize processes, as with a cloud solution there is no need for customization to match regional flavors. This means we no longer require a long roll-out cycle, with specific country requirements and instead we are able to deploy software instantly to a global user group. We see that this offers an instant cost benefit, especially as software developers are no longer required to do costly customization.

By focusing on supporting processes in the process landscape, instead of those at the core of the value chain, we can gather experience with SaaS and then use our experience to address our core processes.

From my perspective, the benefits of SaaS will outweigh related concerns going forward (see the link below to a post on cloud security). This is a trend that is not only compelling, but is inescapable. We can’t ignore the fact that the majority of today’s software is being built to match the SaaS model, and our role is to prepare our organizations for the transition. The role of IT will continue to change, as the IT team starts to focus on processes and offers internal consulting rather than internal programming. I have talked before about the need for IT and the business to collaborate and this will be essential when switching to SaaS.

Security will also be the watchword, as it is clear that when implementing standard software across geographies; there will be different requirements for different countries. For example, EU countries cannot allow data to reside in APJ. This is a vital aspect of the SaaS transition, and IT will have to assist the business in negotiating the data specifics of different countries.

The transition to SaaS means a major transition for IT too – instead of doing it all from implementing to programming, IT will now manage different partnerships with third parties, working together on security, business processes and infrastructure to ensure the successful deployment of on demand software in the corporation.