A new wave of Green Field ERP implementations is coming, but it will be different
If one development in the last year stands out among companies that run SAP it is that many of them are considering or already embarking on large scale initiatives to create the IT application landscape for the next ten years. Where in the past decade the dominant model was to leave the basic application landscape untouched and to “sweat the assets” now seems to be the time that a new wave of Green Field implementations is being prepared or embarked on.
Of course the rationale for this is quite easy to see: business and business models are changing at an ever faster rate, with digitalization taking over or replacing more and more chunks of traditional business processes, and Big Data becoming a real force in day to day operations. Also from the IT side the maturity of solutions in these areas is rapidly increasing and old limitations are falling by the wayside. To leverage all these new technologies and to create the new business models it is impossible to stay within the boundaries of the old applications and a Green Field approach becomes the only viable route for the future.
This article explores some of the characteristics and consequences of this coming new wave of green field SAP implementations and gives some pointers as to where the focus should be.
(Extended) ERP is still a Process Based Concept, but the management of processes will be completely different
The traditional way of implementing SAP Business Suite revolves around the concept of Business Maps and Business Scenarios, with main scenarios (baselines) being developed first and then an extensive list of scenario and process variants being configured by setting of a large number of tables buried in the Business Suite system(s).
Further customizations were possible by creating custom tables, writing custom ABAP programs and using user exits. In that way company specific processes and functionalities could be created. Analytics about the processes were created by ETL of the business data to an external Business Warehouse where multi dimensional cubes would correlate the data into meaningful analytics (OLAP versus OLTP).
Over the last ten years or so a lot of processes not well served by the Business Suite out of the box were added through extensions to the standard applications (either based on SAP-developed “composite applications” or external “Application Composition Platforms”).
The limitations of this solution model are easy to spot:
- The configuration of scenarios in SAP resulted in hard to change “electronic concrete”
- More and more user exits and custom ABAP software made the working of the scenarios ever more complex and difficult to grasp and manage
- Adding new layers on top of the standard Business Suite increased full stack complexity and required a continuous architectural trade off between best of breed and SAP owned toolsets
- Every new incremental technology added to the stack fragmented the solution architecture more and required very different expertise, skillsets and niche consultancy partners.
Add to this mix the incredible innovations currently happening in the global economy and the IT capabilities and this explains why something had to give. The recovery of the global economy now underway provides the investment impetus to actually do something with these circumstances and start afresh, just like this was done in the early-to mid nineties with the first big ERP implementation wave.
Characteristics of the new wave of Green Field implementations
The new wave of green field implementations will have to be based on a number of key capabilities to:
- support and enable the new digitized reality based on Big Data and Real Time process management
- leverage all the new technologies available and continue to do so over time because the only certainty is continuous change
- enable fast development and have inbuilt agility and flexibility
- fully support the Consumerization of IT where the user is 100% supported in every use case
- put the business in charge of the IT solutions
The Real Time Process and Data Platform
The SAP HANA revolution is already underway of course with more and more companies starting to leverage this innovative platform, which really is a game changer all round.
Initially SAP marketed this only as the Real Time Data Platform but now more and more this is also changing to a Real Time Process Platform, as that is where the real value is: applying business rules and goal orientation to the business processes in real time based on the actual real time business data and business process status.
Vanilla Processes and Exception Management
A real time process platform changes a lot of the ground rules on process management and scenario configuration in the business suite.
If we look at the configuration of main transactional business scenarios the 80/20 Pareto rule will apply, with 80% of the flows being easily designed using just a limited set of configuration settings in the Business Suite system.
The exception flows will no longer be designed using lots of different document types and sub scenarios (remember the “Business Process Master List”?) but will be handled using business rules and goal oriented logic in the Real Time Process Platform.
Smart Process Apps: Goal Orientation and Business Rules
There is already a lot of talk about a concept called “Smart Process Apps” (a.o. analyst firm Forrester has published extensively on this new concept). These applications cover end to end business scenarios not with detailed sequential process flows with all the exceptions modeled in, but are based on flexible sets of allowed activities that support the realization of a specific business goal (“goal orientation”). In these Smart Process Apps the business goal is defined, as well as the activities that can together achieve the business goal. The strict sequence of these steps however is not statically defined upfront. Depending on the current status it is dynamically determined which activities move the process to the specific business goal and these activities can then be executed. Such a model is heavily based on a clear set of business rules and a formal “knowledge model” which models out all the conditions required to reach the business outcome, but stays clear of the actual sequence of all activities. Of course the process dependencies are modeled upfront using business rules (for example you can only deliver a product if it is available).
In the Green Field implementations of the Business Suite coming up this concept can and will be used to cover specific business scenarios that are not “vanilla” end to end but require special attention.
Harvesting Big Data
In the old days what was known about any business process was mainly captured in the formal databases within the business suite. The “document principle” made sure all the relevant data about a business process and scenario was captured and stored in the system of record which was ERP.
In the new world which is the basis for the upcoming green field implementations there is another source of relevant business data. All sorts of equipments used in the business process will produce endless streams of data about their own status, possible errors, business events etc. At the same time contextual information is generated continuously by sources external to the company itself, such as for example social media sentiment about products. This “Big Data” phenomenon will have to be incorporated in any green field implementation as most business scenarios will benefit from this type of data becoming available for analysis and action in real time.
Closed Loop Process Management
Many companies have struggled in the past to ensure that the business processes and scenarios they have modeled conceptually are also delivered in practice. Top Down process engineering and modeling has often resulted in extensive process hierarchies with detailed process performance indicators. Process owners have been assigned and are responsible for the effectiveness and efficiency of these processes end to end. In the IT systems these processes often do not comply with the designed process models. The ERP systems are not flexible and often cannot meet the standards of the designed processes. Changes in business models are extremely hard to implement in the established back end systems.
The emergence of the real time process platform changes this dynamic and creates the capability for real closed loop process management.
The new SAP product Operational Process Intelligence (OpInt) for instance makes it possible to match the top down designed process models with the process execution in the back ends by creating a middle ground where the two worlds meet in real time. This way the process performance of any business process can be measured on the right performance indicators in real time without having to run all sorts of batch based process performance reports in the individual back ends. The Modeled process world meets the Execution process world in real time in the established “middle ground” of Operational Process Intelligence as the universal “process esperanto”.
Quo Vadis BPMS
In terms of the SAP roadmap the intention is to integrate the existing NetWeaver BPMS toolset into the HANA Real Time Platform. There will still be use cases where the BPMN based BPMS system brings clear benefits so it will continue to find uses in the new architecture and solution set.
But a consequence of the move towards a real time data platform is a sharply diminishing value of a separate Process Orchestration layer in a BPMS. If processes and scenarios can be managed and correlated using the OpInt platform with a goal orientation focus it does not make particular sense to keep on managing separate process instances defined in BPMN and it increasingly makes sense to model in a goal oriented way by Business Rules and Process Correlation. It removes one layer of complexity and this is a good thing.
A Possible Architecture
The picture below outlines a number of components of the new architecture that will support the Green Field implementations of the business suite going forward.
Both in Design Time and in Run Time there are different and new components that will enable a much more flexible and agile resulting system that also aligns well with the new business models continuously evolving in the real world.
Picture 1 Possible Architecture
New Skill Sets and Consultancy Providers
Of course if you look at the skill sets available in the marketplace and with internal IT departments at companies there is still a large gap to fill. Most traditional SAP consultants are specialized in only one discipline, for instance the configuration of processes in a business area like FICO, Materials Management or Sales.
The following picture shows how these skillsets should be developed into areas where they can be productive in the new Green Field implementations.
Picture 2 Skill sets required for Green Field Implementations
When you look at this skills mapping it is immediately apparent that the traditional ERP skillsets are still required, but are not enough to cover all components. If a new implementation is done using only the well established skillsets, then the result will be traditional: complex scenario configuration in the back ends, lack of flexibility in the functionality as well as clunky process and UX results which will not get the most out of the Real Time Process Platform.
To really leverage the qualities inherent in this new Business Suite platform a different mix of people is required and the system integrators and IT departments of SAP-centric companies need to take action sooner rather than later.
Program and Project Management Consequences
In terms of Program and Project management the whole ASAP methodology needs a rethink. Of course the Agile ASAP variant currently used is a vast improvement over the old waterfall based approach. But as far as subject matter is concerned there need to be additional work streams added and the Integration Architecture needs a heavier footprint. User-centered design practices and Design Thinking need to be fully incorporated in the implementation methodology used.
The different technologies involved in creating the Green Field solutions will require a different type of Design Documents and how this can be done in the most efficient and effective ways still has to be developed. Focusing on both end to end scenarios and user centered design will be helpful if we manage to integrate these different concerns in a cohesive way.
In terms of delivery phasing the concept of the real time process platform will enable a more fine grained implementation sequence, either by scenario, scenario variant or user group or geography. This is because the intrinsic flexibility is higher and development cycles can (and will have to be) shorter.
It is inevitable that a learning curve will have to happen to prevent large budget overruns and mistakes in implementation sequence and structure. No SAP program manager or project manager at the moment has the required experience or knowledge about what this platform will deliver. A significant risk is that the new platform being implemented will at least partly still be based on yesterday’s thinking which would be a shame.
A lot of large companies are currently embarking on a Green Field implementation of the SAP Business Suite based on HANA or are at least considering such an endeavor.
Because the new Business Suite on HANA is based on a Real Time Process Platform including a flexible goal oriented business process management concept the configuration of the business suite will change quite dramatically.
New components will take over a lot of the exception handling and sub scenarios, and the mainstream scenarios will be able to be configured in a vanilla way.
To make optimal use of the new capabilities in the Business Suite based on HANA these Green Field implementations must be based on the full stack delivered by the Real Time Process Platform and its components.
This will require a different skills mix of implementation consultants, architects and project managers.
The potential for significant business benefits delivered by the Business Suite on HANA is so big that a serious look at the main architecture for these Green Field implementations is imperative for every company going this route.
Taking a traditional approach will inevitably create an outdated solution. The new Business Suite on HANA requires a fresh outlook on how to deliver business process excellence.
Let’s go for it.