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Author's profile photo Filip Misovski
Filip Misovski
December 19, 2016 4 minute read

A Guide to Building and Buying LOB Innovations

SAP partners and customers are constantly provided choices of innovative technology and applications to drive business outcomes.  Sometimes these choices are confusing from the sheer naming down to perceived overlaps in functionality.  As we ramped up the SAP HANA Cloud Platform with 550+ partners and 100s of Line of Business (LOB) scenarios and transactions, we started observing patterns on how end-to-end Extensibility occurs in the LOBs like HR, Sales, Procurement and Finance.  This article is meant to give an overview of those critical choices, learn about the implications and the need to standardize on HCP as the LOB extension and innovation platform.

We suggest a graphical 2×2 framework to mentally arrange the options for customers and partners.  On the x axis, we cover the category of Extensions we see ranging from standalone “products” to “spot apps” built as part of an implementation project and spot consulting to close short-term gaps.  On the y axis, we cover the environment where these innovations are deployed, running and supported from – may it be HCP or other.

Let’s start with the view on how to build and deliver LOB innovations that partners frequently ask us about.  For example in the HR space, we still get folks confused about MDF vs HCP.  The reason is simple because in the category of “spot apps”, one can actually choose both HCP and MDF where Consultants and Admin Users can craft a spot solution.  These solutions are typically form-based with rules and UIs, but very little new database objects, app logic, analytics, configurations and integrations as seen typically with robust products.  MDF-based extensions are configured and running inside the SAP SuccessFactors stack and available for HR IT Admin and HR Consultant.  On the other side, HCP is enabling spot solutions through multiple UI-centric services from BUILD for prototyping/user research through Web IDE for development and HCPms for mobile services.

Partners and customers can also build their extensions using both HCP and LOB-specific framework such as MDF. For exmaple: HCP for the custom, rich UIs, complex business logic and MDF for naturally extending the SuccessFactors data model.  What we don’t see MDF is being used to build and ship products for the LOB.  This is where one needs core programming models such as HANA XS, Java, and/or Cloud Foundry buildpacks that are targeting professional developers and ISV organizations.  And certainly we are not alone in this market, where we see LOB products built and running on non-SAP platform technology.
Independent of how an Extensions is built, the LOB customers would want to consume this innovation first and foremost.  One of the first questions they have is on the business model and cost associated.  In the spot apps category, we typically see consulting fees charged to cover the time and material spent.  If it’s part of a new implementation for LOB SaaS solution, the costs and planning may even be included in the overall project.  On the HCP front, the partner can embed the SAP platform fees and license, or the customer can purchase the license directly from SAP for multiple projects and across LOBs as a shared platform.  If customer is buying a new extension product then the expectations are like with any SaaS solution or SAP module to provide subscription fees and implementation fees.  The subscription fees cover support, maintenance and regular updates of the product and platform.  Additionally, HCP-based products can provide the flexibility to do additional custom development layered on top of the standard product for any customer specific features.
All categories are represented with ecosystem of partners that specialize on the skills and techniques to deliver LOB innovations.  Below is an illustrative view on LOB partners covering these spaces.  All four categories of Extensions are important for the customers lifecycle with LOB solutions.  Some customers start with spot apps, and some need products to renovate and improve the broader functional and business needs.  For example, internally at SAP we are using products such as the Accenture HCM Software and Semos Engagement Suite.  At the same time, our SAP HR team has used HCP to build a “spot app” to fulfil local, worker council requirements missing during the recruiting process in SuccessFactors.   As we are rolling out Employee Central, the need for MDF-based spot apps and also products for benefits and time management are considered.
We like to close this guide with four major trends and conclusions:

  • Integration is and will be key for Extensibility and new LOB Innovations.  It starts with discovering APIs from SAP and even non-SAP sources, and it’s where HCP’s API Business Hub comes to play.  Integration of LOB processes and data is a mission critical topic for customers and where HCP integration services and Smart Data Integration come to play.  Integration is also expected on security level (SSO, API clients), usability level (UIs / Home Pages / Tiles) and workflows.  And going forward, integration with Things (IoT) and Artificial Intelligence (AI/ML) via HCP is strongly desired to make products more intelligent, connected and next-gen ready.
  • Consuming innovations has to become easier for LOB customers.  It starts from discovering apps, to driving pilots or global deployments, and contracting with our ecosystem at a digital speed.  Technically, we need to make sure provisioning and lifecycle management of the extensions and platform do scale as well at this digital speed.  Last but not least, HCP will provide not just a developer experience but also a business experience for managing the consumption of platform services on pay-per-user basis.
  • Building and delivering products takes time.  And takes focus to perfect the end-to-end service and delivery.  That also requires a dedicated organization(s) with product mindset, deep developer skills, designer skills, professional support organization and cloud operational excellence.  That’s why product-driven partners focus less on the quantity of extension products and more on the depth, breadth and quality of a single LOB product.  Whereas spot app driven partners are typically going for the quantity of extension apps (10, 50, 100) to meet the various needs to optimize the SAP projects.  In some cases, we see a trend for spot apps maturing over time and becoming a standalone product.
  • HCP is a proven platform for partners to evolve their IP and solutions without disruption.  For customers, HCP becomes a one-stop-shop for consuming, integrating and building LOB innovations.  And market analysts like Jon Reed cannot agree more with us on this point.

    • Great apreciation goes to our partners and customers for believing in us to deliver value to their businesses.  Special thanks also to the cross-organizational teams and members at SAP for building and supporting the extensibility offering and LOB innovations!

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