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Having talked about the transition in SAP’s perspective on NetWeaver platform from an Application and Integration Platform to a Composition Platform in my The case for core vs. the context, I was wondering…Whats next from SAP that differentiates it from competition?

Remember the definition of CORE? Any process that contributes directly to sustainable differentiation that drives purchase preference.

CHANGE = PAIN + DESIRE, a statement I came across some time ago. It could be interpreted as, “to undergo the PAINful process of CHANGE, one needs a strong DESIRE”. Unfortunately, or fortunately, depends on how one looks at it, one of biggest challenges that organizations have to address these days is CHANGE. Some see a problem…others an opportunity! Accenture. Seemingly, SAP saw the opportunity side of the coin. That is why Shai Agassi talked about NetWeaver as the Enabler of Change.

According to the latest study by Economist Intelligence Unit, titled “Business 2010 in Asia Pacific – Embracing the Challenge of Change”, “Executives in Asia-Pacific agree with their couterparts around the world that Adaptive Business Models will provide the best opportunities to enhance competitiveness…”, or in other words – business models will be the CORE differentiator. Other key attibutes identified by the study include: innovation, specialization, and command of information as key differentiators. So it is not the Service Offering, rather its the Service Delivery that will help organizations sustain leadership. Yes, innovation in service offerings is a key differentiator but usually commodotization does not let it last long. It is then up to the organization to come up with ways of adapting itself to the changing market demands, optimizing its service delivery processes and creating value out of existing investments. An example could be SAP UK’s Solution Upgrade Package, based on fixed deliverables and price. So a new way to offer the same Upgrade Services that SAP offered previously.

According to the same EIU study, “80% of the responents believe that the production of goods and services will be demand-driven rather than supply driven”. As customer demands intesify for quality, price, and an excellent CRM experience, business models have to change. Hence, ability to adapt business models seems to be the key pain-point/opportunity for executives around the world.

To address this demand for flexible IT systems that adapt as business models do, SAP came up with the idea of a Business Process Platform based on NetWeaver.

imageSource: SAP Annual Report 2004

Just to show an example, this is how a Composition Platform like NetWeaver could allow organizations to utilize service-enabled components in adapting their business models without much hassle and with the least amount of PAIN: image
This image was displayed in one of the previous installments of SAP INFO, with focus on Business Process Management (BPM).

Hence any BPM tool like ARIS sitting on top of NetWeaver will deliver a complete Business Process Platform. This will enable the enterprise attain flexibility in design and execution of CORE and Non-CORE business processes at an abstract level, letting NetWeaver take care of the underlying configuration and execution level details. Such a system will benefit from the opennes of NetWeaver to allow seamless integration across SAP and non-SAP systems, giving the organization a command over its processes and delivering the insight it requires to attain and sustain leadership.

By the time SAP delivers its complete product-line as service-enabled, organizations having embraced the ESA vision will benefit the most from the Business Process Platform, since they will have the ability to adapt their business models, integrate and dis-integrate their business processes as and when required, and ensure optimal service delivery based on market demands. Those who fail to do so will find it difficult to sustain the competition due to lack of flexibility and slow speed. So if you are decision-maker, take a look at the ESA Adoption Program to orchestrate the Services-Oriented Enterprise vision for your organization. After all, thought leadership is about recognizing trends and leading your orgaization towards sustainable growth through innovation. If you are not a decision-maker, spread the word!

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