the business and technology case for sap's analytic services

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  1. 1. Enterprise Applications Consulting The Business and Technology Case for SAPs Analytic Services By: Joshua Greenbaum, Principal, EAC Spring 2013
  2. 2. The Case for SAPs Analytics Services 1 Copyright 2013 EAC. Introduction: The Game Changes for Analytics in the Enterprise The need for advanced business analytics has never been greater, driven by the combination of growing business complexity and the extraordinary growth and complexity of enterprise data. Petabytes of data flowing from inside and outside the enterprise, coupled with new and highly dynamic business processes and the increasing need for broad stakeholder access to information, are fueling the need for analytical applications that can bridge the gap between data and business requirements. Bridging that gap is increasingly the domain of advanced consulting services, which ideally leverage existing and new applications and technology as they create new high-value analytics. The complexity of the problems consulting services are being asked to tackle going to the very heart of an enterprises core processes and data is also changing the dynamic of what it takes to be the trusted advisor that provides those much-needed consulting services. While there are many large consulting firms that can provide one-stop shopping for a broad range of customers, those customers are finding that one size doesnt fit all, particularly when considering the larger consulting and systems integrators that provide these services. Indeed, the need for more specialized services, specific technical and business expertise, and high-touch, high-value relationships means that the advanced analytical needs of a company are more often better served by a more focused consulting practice than the too big to fail top global SIs. This changing dynamic is particularly evident in the SAP market, where a combination of new technology offerings on the part of SAP and a growing awareness of the value of advanced business analytics is driving a significant wave of new opportunities for SAPs home team, its Analytic Services group. While SAP continues to depend on large global systems integrators as well as its own resources for the bulk of the implementation work in the SAP market, Analytic Services is increasingly called upon to take the latest in SAP technology and business knowledge and apply it to high-value and high-return customer opportunities. SAP asked Enterprise Applications Consulting (EAC) to take a close look at Analytic Services and its success in delivering high-value business analytics. EACs research reveals a growing track record for delivering market leading analytics in key battleground domains for SAPs customers, using a combination of advanced analytical tools like SAP Business Planning and Consolidation, SAP HANA, and the SAP Predictive Workbench, as well as by leveraging the rest of SAPs BI and analytics offerings and existing SAP methodologies like ASAP. The result is both a distinct value-add and competitive advantage for SAP customers in their respective markets as well as providing a competitive advantage for SAP and an important showcase for SAPs new products and services. This report is in three sections. The first is an overview of the changes in business process, data, technology, and applications that are driving this shift in the use of services groups like Analytic Services. The second discusses the specific service and technology offerings of Analytic Services and how they are designed to meet the new market requirements. The final section showcases examples from the SAP customer of how Analytic Services works with customers to solve their business analytics issues.
  3. 3. The Case for SAPs Analytics Services 2 Copyright 2013 EAC. Three Key Drivers of Change in Business Analytics Requirements: Dynamic Business Environment (such as new market opportunities or business models) Scarcities of Talent Related to New Analytical Requirements (such as Big Data) Managing Technology Complexity and Innovation Requirements (such as portfolio rationalization and new technology initiatives) The Market Shift Towards High-Value Analytics Services The need for high-value analytics services has always been present in the global business market, fueled by the never-ending requirements of business change, regulations, and competitive pressures. But three key market trends have conspired in recent years to make the need for high-value analytics services more acute than ever, while simultaneously making the acquisition and deployment of these services increasingly difficult for many companies. This first trend is an ever-quickening pace of change in business management, structure, and practices, driven by the global recession and the increased globalization of business across the board. As the result of an increasingly dynamic global business environment, companies are forced to consider making enormous changes to their structures, business processes, and lines of business. And with those changes comes an often more challenging requirement to alter the reporting and analysis functions of the enterprise to reflect its new structure, business model, or other opportunities and challenges. But dealing with new reporting and analysis functions created by changes in internal business models or structures is only the start. Companies must also try to keep up to date with shifting competitive, regulatory, labor, and other practices that define key risk, governance, compliance, and analytical needs. This already daunting task keeping business change and analytical needs in sync is made all the more daunting by a second key market trend: the growing quantity of data that must be analyzed as part of the shifting business climate of today. While much has been made of the astronomical growth in the quantities and complexities of big data, the silent problem stalking the enterprise is not how to deal with ever-increasing quantities of data, but where to find the talent needed to turn those petabytes of enterprise data into information and action. And while analyst firms like Gartner Group predict that the spend on big data overall will increase from $28 billion in 2012 to $43 billion in 2013, the problem of finding the people who can design, implement and manage big data projects will become an increasingly difficult challenge. Indeed, Gartner also predicts that up to one-third of the six million new jobs generated by big data between now and 2014 will go largely unfilled, due to a profound lack of skills in the market. A recent InformationWeek survey shows another impact of this trend the salaries of business intelligence and analytics professional are rising quickly, despite the recession, as supply continues to outstrip demand (see figure 1).
  4. 4. The Case for SAPs Analytics Services 3 Copyright 2013 EAC. Figure 1: BI Salary Trends Salaries in BI are climbing despite recessionary pressures, signaling a growing scarcity (Source:InformationWeek) These numbers obscure an important truth. This skills gap is even more a question of quality than it is of quantity. Tackling the big analytical problems of the 21st century particularly in light of the rate and complexity of business change and the growth in the quantity and complexity of data is made ever the more difficult by the skill sets required. Business analytics in the 21st century require deep industry knowledge, equally deep line of business knowledge, and a collection of analytical and IT skills that are hard to find in many organizations. Business analytics in the 21st century require deep industry knowledge, equally deep line of business knowledge, and a collection of analytical and IT skills that are hard to find in many organizations. And thats before considering the third market trend that is conspiring against the peaceful sleep of IT and line of business managers around the world: the growth in software complexity that has paralleled the two other trends in scope. The irony of enterprise softwares role in the new imperatives facing the global enterprise is that the path to the efficient and effective use of enterprise software as a way to manage global change has become itself a barrier to that management requirement. One of many examples of this can be seen in the aftermath of a merger, which forces companies to rapidly, and within the narrow confines of regulatory governance, consolidate the operations and reporting of acquired entities that often have completely different IT infrastructures, and therefore different data management and analytical tools, than are in place in the acquiring company. That complexity makes for an extremely difficult data and analytics problem to solve. $90 $119 $85 $110 $83 $109 Staff Management Median annual base salary 2010 2011 2012 Note: Median salaries in thousands of dollars Base: 261 staff and 208 manager BI/analytics IT professionals Data: InformationWeek 2012 U.S. IT Salary Survey of 600 BI/analytics and information-management IT professionals, January 2012
  5. 5. The Case for SAPs Analytics Services 4 Copyright 2013 EAC. But M&A is hardly the only driver. Many companies are simply finding themselves facing these new business imperatives competition, globalization, business change with antiquated technology tools that serve more as anchors than enablers in the battle to stay on top of business change. This third trend characterized by a disconnect between technology capabilities and business requirements is for many companies the final blow: Without some dramatic assistance, at both a strategic and tactical level, the need to match analytical and reporting capabilities with changing business requirements will go unmet. And with those unmet needs comes a host of problems relating to the effective enterprise management and governance. Because at the end of the day, in addition to the new complexities of global business, the ente