SAP upgrades- a response to Vinnie.

Vinnie Mirchandani’s deal architect blog is one of my regular reads.  Vinnie advises CIO’s how to beat up vendors on pricing, so it is in his business model to come down hard on vendors like SAP.  That’s fine with me.   I bat squarely in the SAP corner,  so it is likely that we will have the occasional disagreement. 

I believe his recent post (Instant Miso Soup) about upgrades  has some inaccuracies.   I’d like to try address them here. 

1. firstly he comments.

Last year SAP (and Gartner) threw a hissy fit over an Oracle ad which claimed only 4% of SAP customers had upgraded to its latest version. Oracle withdrew its ads. Now SAP issues a press release basically confirming what Oracle said was true – 1,000 customers, out of its 30,000+ customers And calls it “record speed customer adoption.” You want to see speed in migration go to the Serengeti.

Vinnie  mixes up the mySAP ERP 2004 and 2005 upgrade numbers.  mySAP ERP 2005 only went into general availability from ramp up in May 2006,  so to use these numbers to  lend credibility to Oracle’s dubious advertising campaign of last year would require a time machine.  1000 customers have gone live with ERP 2005 in less than 8 months since its general availability, by any measure that is pretty damn good.  BTW, according the report I received in December there are over 4000 live mySAP ERP  customers.  (slide below cut from Kagermann’s  recent analyst presentation, and please see the ASUG study mentioned below)

 (SAP naming conventions would be a worthwhile rant in itself– here Vinnie and I might actually agree)

2: Then he comments.

(upgrades) They are usually risky and they are usually low ROI. But instead of making migrations easy, most vendors are more jazzed about cool new developments, not upgrade tools and processes

The SAP’s investment in tools , methodologies  and services to manage upgrade risk and reduce upgrade times  and automate testing  has been significant.  Perhaps have a scan of the tools such as the new solution manager?  

Talk to folks that use them

Spend some time in the service marketplace?

Some customer examples that I dug out this lunchtime.

Upgrading in  45 Days
“Fischer Advanced Composites upgraded to mySAP ERP 2005
in 45 days.”

NOVA Chemicals: Moving Toward Continuous
Productivity and Innovation

“The upgrade [to mySAP ERP] is our first step in realizing the increased value of mySAP ERP to drive continuous business process productivity and innovation. The upgrade was accomplished easily, quickly, cost-effectively, and with minimal disruption to our business,” says John Wheeler, CIO, NOVA Chemicals.

Erdgas Zürich AG.

“The upgrade to mySAP ERP 2005 provides us with the flexibility we need to master future challenges in the gas industry,” says Bernhard Hegmann, project lead, IT and Organization, Erdgas Zürich AG. “The ramp-up program was completed on time and budget and runs reliably. The direct communication line to SAP via the ramp-up coach was a key success factor.”

Provincie Noord-Holland

The move to mySAP ERP 2005 provides us with the newest functionality,
which is closer to our business processes and [to the] primary process of grantor management,” says Derk Riesthuis, program manager at the Provincie Noord-Holland. “We completed our ERP upgrade on time and within budget, and are now up and running with a robust application and technology that helps
improve our business processes and enhance visibility for our managers. The new architecture of mySAP ERP allows us to collaborate more effectively and operate more flexibly at a lower overall cost.”

Bitburger

“With the upgrade from SAP R/3 [software] to mySAP ERP 2005, we built a robust technical platform to support our core business processes and enable us to cope with the challenges of our industry. After a very smooth upgrade, we are
now up and running with stable applications and technology.”  Uwe Siller, CIO
Bitburger 

I’d also suggest checking out the upgrade symposium running soon in Colorado. Talk to companies that have done the upgrade Maybe Air France?  Gillette? Nasa, Canadian Broadcasting Company, Tyson Foods, Inc. These guys see a significant ROI, and so do lots of others.

Have a glance at the latest edition of SAP info and see how we are working with user groups around the world. And picking up on the user groups, herewith some  User group commentary on upgrades.

This is what the German user group (DSAG)  had to say recently.

DSAG can confirm the trend of the DSAG investment survey –  conducted in  March 2006 – that customers are performing  upgrades more intensively from SAP R/3 to mySAP ERP 2005 this year and also in the forthcoming months. With this step, businesses are able to lay the foundation to leverage the next generation of ERP-software and an enterprise serviceoriented architecture (enterprise SOA). Early finalized mySAP ERP upgrade projects from enterprises organized in the DSAG CCC/Service & Support work council confirm that technical release upgrades are easy to handle and were completed smoothly.
In this regard, SAP upgrade offerings contributed significantly. “In the last few months, SAP has invested a great deal“, Andreas Oczko, DSAG board member and spokesman for the DSAG CCC/Service & Support work council was happy to report. Based on their current situation and needs, SAP customers are able to receive competent assistance from SAP with tailored knowledge transfer, tools, and service offerings. Focused specifically on the information needs of IT  managers, the SAP Upgrade Information Center  provides the best overview on upgrade information in preparation of an upgrade project. It also allows you to directly access the Solution Browser for mySAP ERP. Andreas Oczko, also representing arvato systems Technologies in the work council, speaks from experience when he states, “This is an ideal tool for SAP business users– it is really simple and intuitive to analyze and assess in detail new processes and functions provided with latest releases.”

According to a recent ASUG (America SAP user group) benchmarking study (May 2006), only 5% of upgrades were reported as significantly overbudget.  87% met or exceeded ROI expectations.   90% of respondents plan to upgrade (or are currently upgrading)  in the next 24 months. The study goes on to document best practice for upgrades. (available to ASUG members at the ASUG website)

SAP isn’t by any means perfect on upgrades, but there is a large team of people dedicated to improving the  process, and every release, we get better at it.  We are working very closely with customers and user groups  to continuously improve the upgrade process.  We also actively support partner tools that further aid the process.

I’m not sure Oracle and the others are up to, but  Vinnie, to comment that  “But instead of making migrations easy, most vendors are more jazzed about cool new developments, not upgrade tools and processes.” smacks of vinniedictiveness.  It flies directly in the face of the facts here at SAP, and at the 1000’s customers that have successfully upgraded.

 

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9 thoughts on “SAP upgrades- a response to Vinnie.

  1. thanks for clarification. 4,000 is better than 1,000 – for ERP 2004 and 2005 is still pretty small compared to your 30,000+ customers.

    I would also like to see data on time/budget your mainstream customers spent on the migration before I accept your statement that your tools are making upgrades easier than 3- 5-8 years ago. Most of the upgrade effort is in testing, re-visit integrations, end user retraining – like to see where you have automated much of that. Just showcasing a couple fo 45 day case studies does not make it mainstream.

    Thomas, most of our clients do not pay us for upgrade planning – so this is not about business for my firm. But I can see their heavy sighs when they think about when they think of a Vista, MySAP or Oracle 12 upgrade…and soon to be followed by some other major Service Pack or ESA or Fusion disuption. The ROI from enterprise upgrades is very low from what I see in IT budgets and it sucks up valuable IT time and money which could be spent on innovation. That is my motivation for writing. It is an extreme form of empty calories in IT.

  2. Vinnie,
    Thanks for commenting back.

    As I noted above, ASUG provides a detailed benchmark study. Well worth a read. It will provide alot of the info you need, as will a visit to the SAP service marketplace in the upgrade section.

    There are new testing tools and migration tools, lots of elearning tutorials for enduser training, best practice processes, fixed price services, delta cases, and ROI frameworks. Things have significantly moved on.

    The upgrade event in colorado looks interesting too.

    If your customers are unhappy with the SAP upgrade process I’d be happy to put them in touch with the upgrade folks here at SAP. This is an area we have worked hard on, hence my response.

  3. Very interesting… also that someone that works for SAP defends it – shows good spirit… but at least someone working for SAP should get the dates right… mySAP ERP 2005 went into ramp-up in October 2005… over 200 companies in the ramp-up program – that went ‘extraordinarily well’… so it’s a little more than the 8 months mentioned above…

    Why all the fog? Well mySAP ERP is the worst adopted SAP main line product EVER!!!

    SAP wants everybody to forget it shipped first in March 2003 (yes three – soon 4 – yes FOUR – years). And now party on 1000 customers and contradict yourself… (is 1000 or 4000 like Henning said?)

    Think of this: March 2004 – one year later – 0 / zero / nada / null / zilch references for the first version of mySAP ERP… then the first one – Avanex – disappears right away again…

    Even last summer (2006) on the mySAP ERP roadshow in Germany (!) SAP promised to have live references on stage… and I heard from multiple people who attended the 4 events – nobody was there on stage… in Germany!

    Or: Checkout China Telecom – even with a video on how great mySAP ERP is (it’s customer on the reference site of http://www.sap.com for mySAP ERP)… but what are the live on R/3! (http://www.sap.com/usa/solutions/business-suite/erp/customersuccess/videos/index.epx) – and worse – they stopped the rollout and using local Chinese vendors?!

    Why all that? Well nobody wants to be first – and the business value of a mySAP ERP upgrade is doubtful…

    And beyond: The real issue is if you have really used R/3 well — with Sales and Manufacturing and Purchasing… and of course done some modifications… well that’s what many, many SAP customers have done… well now you have to decide what to do with that customization. Best is of course to get rid of it… but if you still need it – it’s a bit if trouble… you need to disect it between the pieces that are still running in mySAP ERP – and then take the pieces out that need to run in mySAP SCM / mySAP SRM and mySAP CRM… no fun – but costs money and time.

    What worries even the most loyal SAP supporters on this is that the biggest showcase to deliver something like this – was a desaster in terms of in time and on budget… delivered by SAP AG development (and who has people like these at disposition for an upgrade…?).

    What is this based on? Well don’t forget mySAP ERP shipped in March 2003… when asked for the vertical code that R/3 supported SAP said it will be

    – end of 2003 – but nothing happened
    – then summer 2004 – but nothing happened
    – then end of 2004 – and nothing happened
    – then summer of 2005 – 50% or so shipped
    – the rest was summer of 2006

    WOW! The vendor had underestimated this complexity and slipped on this many times — of course largely unnoticed by the public… but not the SAP customers — who held out until availability of mySAP ERP…

    So what will a SAP customer do and think? Well better wait…

    And things got better – as Shai Agassi announced – mySAP ERP 2005 will remain stable and the core till 2010… on top of that there will be enhancements… now that was really GOOD news and convinced many customers to start upgrading…

    But wait: There is this nagging feeling… this deja vu… what and when was that? Oh yes – in 2002 R/3 Enterprise was the ‘last R/3’ release and would be kept stable for the future to come… great news… also component upgrades… great news… but then came the ‘nasty’ mySAP ERP surprise in March (with a heft re-license fee and the implementation issues that have led to the upgrade issue we are emailing about…).

    So will SAP pull of the same again? I think they have to – if they want to make their perforance number for 2010… was A1N only a slip – or a new product? Already BPP (when will it ship) is a new product – and a ‘new revenue opportunity’ as SAP confirmed when announcing it. But seriously – can the so far new products – including the announced ones make all that revenue growth? A1S will get SAP customers, but less revenue, Analytics – well a bit – but hardly to maintain growth, Duet – drop in the bucket, NetWeaver – not much as customer are busy doing mySAP ERP upgrades (and for mySAP xxx internal use it’s free)… so where will it come from? To me it’s clear there MUST be a new product… of course there will be a credit like with mySAP ERP… but will SAP be able to pull this off once more (deja vu is called mySAP.com…)? Customers are wary, analysts are not alerted yet, maybe the bloggers are / will be… the competitors for sure should!!!

    All about perspective — and de-masking a very, very good marketing machine called SAP…

  4. Thomas: I make my living off SAP. There is tremendous obfuscation on the part of SAP marketing in addressing whether ERP 2005 is productive in 1000 customers or in 410 productive instances( those of us who know better know the differences )or 200 actual customers. I am sorry to see that in 1 week you had more thna a tripling of customers go live . first use customers or instances interchangably.( do not mix the two)I think you have a very small sample size to actually show ERP 2005 live ( meaning R3 equivalent product live). I think there are only 1000 cusotmers globally who have signed up for ERP 2005. Most of my customers are eschewing upgrades and waiting for NW 2004s to become stable first and do not want to be caught in a platform like 4.7 or Enterprise or ERP2004 which has no way to get service orientation working any time soon. SAP would be great if it followed what it used to do in the late 80s and early 90s . When the German presales Engineers would be honest and tell us cusotmers what worked and what did not. I wish those days were back!

  5. Thanks for your article by the way If you want to consider ERP system. Free Learning SAP R/3 in a step-by-step online and we provide SAP document and ABAP/4 training online everything we provide free for you. visit saptraineronline.com

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