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There has been many blogs and presentations about the potential of HANA.  I have heard comments like “ the report which used to take all of lunch time can now  been done in seconds”.  But is this the true value of HANA?  Companies cannot apply HANA technology to everything.  So where “is the most bang for the buck”?  In one of SAP’s previous “game changer” (apologies to @applebyj) technologies, Enterprise Service Oriented Architecture (ESOA), SAP continually referred to Geoffrey Moore’s ‘concept of Core vs Context to position the ESOA potential.  The proposition went something like this.

Geoffrey Moore in his books “Dealing With Darwin etc” discussed the concept of gaining competitive advantage and maximising value by focussing on Core activities. He defined Core as processes that provided a unique competitive differentiation through increased revenue and profits.  Alternatively Context are all the other processes in a company.  There is no increased revenue and profits for doing these well but there are penalties for doing them poorly.  In the majority of cases email would be categorised as Context.  Companies depend on email for their day to day operations. But in most cases having a great email system is not going to be a competitive differentiator.  Moore goes onto say that resources should be transferred from Context activities to Core activities.  This can be achieved by getting partners/outsourcers to provide the Context activities.  For example email providers, logistic companies etc.  Accordingly the resultant growth in Business Process Outsourcing.  One company’s Context can be another company’s Core.

SAP proposed that for companies to get the greatest benefit from ESOA that they should apply this technology to their Core processes.  This provides the opportunity for innovation. 

It seems that this approach can be equally applied to the positioning of HANA.  This will enable companies to maximise the value of HANA.  HANA will certainly speed up Context activities and provide greater efficiencies and possibly increased revenue but this is not where the true potential exists.  The true potential is the development of new business models which provide competitive differentiation.

However Geoffrey Moore argues that the competitive differentiation gained through focussing on Core activities does not last forever.  Core eventually becomes Context.  As competitors copy the new business model the competitive differentiation lessens.  Companies who are first movers with HANA will have significant improvements in their processes.  But as HANA becomes essential infrastructure these process improvements will be standard across al companies.  

In relation to Core, the potential of HANA is to discover knowledge from large data sets to provide an opportunity for innovation.  So rather than reporting on what has happened, try and understand why it has happened and what could happen in the future.  SAP BI tools include functionality to support data mining (Knowledge Discovery) which can integrate with HANA technology.

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