What if you could deliver your BI projects in 50% or less time than you do with your traditional systems today? At the HANA Global Center of Excellence, we are lucky enough to be able to work with lots of customers who are seeing these benefits today, including:
Honeywell - http://scn.sap.com/docs/DOC-38529
Lexmark - http://scn.sap.com/community/business-trends/blog/2013/05/15/lexmark-cio-sap-hana-gave-us-the-abilit...
Kennametal - http://www.saphana.com/docs/DOC-3648
In-memory technologies like SAP HANA have attracted huge attention in the BI community because of their ability to deliver response times that are hundreds, thousands and even hundreds of thousands of times faster than when using traditional databases. This is exciting and is changing the way we view BI, but I would argue that this speed is not the most important benefit that SAP HANA delivers…it is productivity.
How important is productivity when compared to your total BI spend?
This will vary significantly from customer to customer (and I’d like to see your breakdown if you are willing to share), but here is a breakdown of costs that we have recently seen across a number of large customers where we have benchmarked total cost. It is clear that any improvement in productivity is the single biggest lever in managing your total BI TCO.
How are we achieving this increased productivity?
We’ll address this in more detail looking at each step in the BI process (requirements capture, design, development, testing, implementation and change management, but here are some of the key drivers:
- Reduction in layers. The speed of SAP HANA allows you to get rid of the layers in the BI architecture that were introduced to enhance performance, including aggregates and summaries. Each layer adds complexity, slowing down development, testing and change management.
- Logical vs physical modelling. Building logical models instead of physical models allows you to both build and change models more easily, without having to unload data, make changes, re-load, re-index etc.
- Iterative real-time BI development on entire data scope: Typically, BI development is done with small data subsets because of performance issues – this keeps your load and development times down. Organisations usually then conduct user acceptance testing with small subsets, then go back, reload larger volumes of data, and refine development and conduct a second round of user acceptance testing. This is eliminated with SAP HANA where you can develop with full sets of data. The high performance loading and reporting also means more iteration cycles can be run within a day, in some cases even dynamically when interacting with the business users.
Before we get into more detail of how we are achieving the productivity increases, let’s think first about what this increased productivity would give you:
- Lower FTE (full time employee) cost, which leads to ability to deliver more projects,
- Less time elapsed,which means cash-flow business benefits pulled forward
- Strategic (less tangible) benefits: Lower risk of obsolescence, first mover advantage, higher customer satisfaction
- And for delivery organisations… higher day rates, more margin on fixed rate contracts
The most obvious benefit of this increased productivity is that delivering the project costs less.
If you can cut 3 months out of a 6 month project with the same number of resources, whether internal or external, you will cut 50% of the project costs. If you have 10 people working on a project full-time for 6 months at a fully loaded cost of €100,000 a year, the project will cost 10 FTE x €100,000 / year x 0.5 years = €500,000. Cutting this by 50% for one project will deliver a saving of €250,000. If you can do this for 4 projects a year, that’s €1,000,000. Now, some people will argue that you will only get this savings if you cut the BI workforce by 50%. What we find with most of our customers is that the BI teams get to tackle more projects. Most CIOs and BI teams today have a long list of to-do’s. Most teams are stuck on the top 3, the tasks that are the most urgent but not necessarily the most important. Since the top 3 consume all their resources, they keep pushing the other tasks, which are often more important long term, more strategic, and probably more fun and rewarding (e.g. leveraging Big Data to improve customer churn, or delivering predictive models so that business users can do more scenario planning).
The second obvious benefit of the increased productivity is the shorter elapsed time to deliver the BI project.
This often has even bigger implications than the FTE cost reduction. This can range from first mover advantage, faster time to compliance, less time for scope changes during the course of the project, less risk of the project being obsolete before it even sees the light of day. The big question is how to quantify the benefits of this shorter project elapsed time, and here is one approach that our customers have found helpful. Most big BI projects today have an explicit business case. Let’s assume that the BI project will deliver better customer segmentation, which will in turn improve up-sell conversion rates by €100k a month. If the project is delivered in April instead of July, the first year benefit will increase by €300k. Not only will you see the benefit sooner (quicker time to value), but the 3 months of additional benefit would have been lost forever in the slower traditional approach.
| Benefits €k | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug |
| 3 month project development | Time spent developing | 100 | 100 | 100 | 100 | 100 | ||
| 6 month project development | Time spent developing | 100 | 100 | |||||
Finally, the soft benefits…
The most often quoted additional benefit that our customers see is that the business stakeholder customer satisfaction increases dramatically. IT is perceived as more responsive, delivers more (and more strategic) projects. If the project is customer-facing, enabling self-service analysis of spend, the external customer satisfaction and net promoter score (NPS – the % of people who would recommend a product or service to friends and family) will increase. Some implementation partners are worried about the consequences of this faster delivery time. Most however, see the opportunities that this delivers. For the same budget, they can deliver more projects and get more strategic in the account. From a competitive perspective, if they can deliver the same project in 50% of the time that their competitors need, there is a lot less negotiation with the customer about the day rates. Finally, if the time spent can be shifted to more value-added activities, partners are able to attract and keep better individuals.
In the next blog in the Series, we’ll start to take a look at the different phases of BI projects, and how SAP HANA enables customers to significantly cut the time and cost to deliver…
If you are a SAP HANA customer, and are seeing BI productivity benefits, I’d love to hear your story. Include contact details in your comments, and I’ll call you or alternatively you can reach me atAndrew.de.rozairo@sap.com or +44 7977 257299
(Many thanks to Henry Cook, Wilson Kurian and Bernard Kenny for their contributions to this blog, originally posted in saphana.com)
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