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onDemand, The Million dollar question

This is a summary of a lunch discussion with my colleagues, i decided to share since it touches some key aspects of the onDemand story in the Industry.

What is onDemand ERP?

 “It’s the practice of hosting an ERP software implementation off-site, usually through a third party. This allows you to gain most, if not all, of the benefits of ERP systems with a lower pricetag. ”  – wikipedia

 “On-demand software is typically delivered by an application service provider. This type of service offering is also frequently referred to as Software as a Service.” wikipedia

Where we are with onDemand in Enterprise Software?

With the rather sobering story around onDemand in Enterprise Software, It begs to ask the question, what is the best path to tread OnDemand?
Enterprise software vendors have tried or are trying the big bang theory, where all the functionality is delivered all in once but has achieved little success. Some of the known issues, performance, quality, multi-tenancy, etc.

Challenges to solve   

Is the infrastructure ready?  

If we go into the infrastructure readiness, the question of the How heavy the application server stack is comes into play?
If the stack eats up a major share of the resources, then it’s a serious problem to begin with.

Can we simplify Business rules?

To go one step further, there are complex Business rules embedded into the system today. Let’s take an example of small Forging company, which wants to have an efficient plant. To do so real-time data needs to flow in and out. They might not want to have such strict checks for each transaction or might just want to avoid them. And as complex the transaction becomes the cycle times deteriorate from the hosted system. Can a small business sustain this disruption? This one example of the set of problems ahead
A small business wants to get more out of their investment. Thus the question, What can be onDemand and what cannot?  Is it a Big Bang approach that works or only develop those processes which the customer can leverage. Keep the process onDemand.

What transactions can be onDemand?

Salesforce does a decent job with CRM, but does transforming all business transaction to onDemand improves Business Result and effectivity? Each process owner needs to see what can be onDemand and what cannot.  Of Course all this has to be done in a profitable way.  So we finally concluded, for a SMB to consume an onDemand service and improve Business effectiveness, the stack footprint, flexibility of business rules, and
the right transactions to enable might be a key to success.

Key Success factors :

If there is a lightweight application sitting on top of a lightweight stack with flexible business rules, that would be a hit out of the park. But its easier said than done.
Of course onDemand is the way to go, it reduces cost for the customers from the onPremise solutions, saves upgrade cycles and invaluable dollars to begin with nevertheless there many more aspects to this discussion

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  • Hi Asif,

    SAP has always, untill recently, stood for Big Solution, complex business processes taking care of the large Organisations. Now to reinvent those very applications for SMB's, it would have to be a paradigm shift from what SAP is all about.

    If leaner or light weight applications has to be built, it cannot be built on the same platform where the big ones are existing. And as you said, it's easier said then done, it will take huge effort in understanding how to go about and break the notion that SAP is only for Big and Large enterprises.

    OnDemand business has huge potential otherwise SFDC, netsuite would not have succeded. How this can be made possible in SAP's landscape is something to be seriously thought about.


    • Good thought Harshit...

      The question is more towards what Business model is the Best for an onDemand infrastructure.

      When we speak of lightweight applications and lightweight stacks... thats where big vendors need to think , maybe relook at these stacks and make them leaner or provide a scaled down version.

      For one, i belive web 2.0 can be a great selling point if embedded.