The CWG Plays "Question and Answer" with SAP

The CWG Plays Question and Answer with SAP

The next CWG conference - in Salzburg - is coming up over the horizon. If you ever wanted to ask SAP management directly - what's the plan? What's coming up for us? When will you address my particular issues? - there's no better place. When last we all gathered on Marco Island, those of us fortunate enough to be there got to ask our questions. Now you can listen in ... almost as if you had had a seat in the room that day.

 

Strategic Level

Steve Schneider:
What is your (SAP's) vision for product configuration technology relating to the IPC and LO-VC in the next 5 years?

Marcus Behrens:
ERP as the central repository for product models is a stake in the ground for us at SAP. This means that all scenarios within the Business Suite are driven by one product model repository. The best methods of dealing with change management are what already exists in R/3, therefore there will not be any external database as a repository for product models (such as the older versions of IPC standalone databases).

I suggest to look at CTO and MTO order management processes differently from ETO. SAP has an end-to-end solution for CTO and MTO covering all scenarios covering multi-channel marketing and sales, order management, fulfillment, billing and service. These end-to-end scenarios leverage the IPC as a core component. The VC in R/3 covers only a subset of these scenarios. The key question here is to enable the use of one configurator across all sales channels and at every step of the order mgmt. process.

The VC also supports ETO order management end-to-end; the IPC does not. The Project System (PS) for example only works with the VC, not with the IPC. ETO requires a much tighter integration of PLM processes with CRM processes - the IPC takes a snapshot of master data to be leveraged across many sales channels and is not designed to satisfy the requirements of changing the rules (or the outcome) of the configurator "on the fly". The key requirement I see here is for all participants to have direct access to one system of record at all times.

The IPC engines are really no more than a technology component within the solution offering. The IPC becomes a server-based application solely, and lives in the NetWeaver stack. Our goal is to make the IPC architecture & technology become "invisible" as opposed to being a bolt on application.

Steve Schneider:
As part of this vision, does SAP see the IPC becoming the "primary" configurator technology?

Marcus Behrens:
We are investing in continous improvement for customers who have implemented the variant configurator in CTO and ETO processes (e.g. Product Modeling Environment in ERP). ETO customers in particular will benefit from new scenarios in which they can combine CRM opportunitiy management with ERP based quoting and ordering. However the IPC engines are part of the future investment in a business process platform moving forward. SAP will provide even more solutions with more of their partners utilizing the platform technology.

Steve Schneider:
As part of this vision, do you see a release of ERP2XXX or ECCXX with the IPC as the only supported configurator?

SAP Response:
No, but there will be certain scenarios/industries/customers that can migrate to exclusive use of the IPC for sales configuration across the Business Suite.

Steve Schneider:
Does SAP see any value in developing a tie to graphical CAD tools to allow true rules based, graphical, parametric, configuration technology?

Marcus Behrens:
This is where SAP will open the door for partners to make it much easier to work with SAP to access their technology, using different manners of interacting with partners that allow access to the technology.

Steve Schneider:
Does SAP see a "new" or "different" configurator other than the existing LO-VC or IPC being developed?

SAP Response:
No, not at SAP.

Steve Schneider:
What does SAP see the distinct roles for High and Low level configuration being?

SAP Response:
High-level configuration needs to provide guidance in the sales process, enable pricing and ensure correctness and completness of the offer independent of fulfillment organisation. Low-level configuration needs to provide manufacturing BOM and routing explosions.

Steve Schneider:
Where does SAP see high and low level configuration being performed? For example, do you see the IPC being utilized in APO and allow "low level instances" to be created within APO?

Marcus Behrens:
High-Level configuration should best be performed where the buying process happens and the trade-off decisions between options, prices and other factors are beeing made.

In APO the functions for low-level BOM-explosion are a compatible extension of the BOM and routing explosion functions of R/3.

Steve Schneider:
If the IPC is part of the vision, will the advanced mode of the IPC be the only method to support inter-product rules (i.e. rules that look across sales order line items) . If not, how does SAP expect to address this business need?

Marcus Behrens:
SAP will look at how to best address this need. The advanced mode is simply one possibility to solve the business issues. Some of the other possibilities are:

  • CRM Interlinkages
  • Reference characteristics
  • CRM Business Rules Framework
  • IS Mills Order Templates
  • One Key question here is how much the inter-product rules are created and maintained centrally or are defined closer to the customer/market. For the Telecommunications Industry we are looking to answer this and other qualifiying questions right now.

    Steve Schneider:
    Does SAP plan on providing any financial incentives/disincentives to move from the current technology to whatever the vision may be? My company won't upgrade [to ERP 2xxx] until 7-10 years from now. I have to be able to put a CRM application at the dealer that allows us to take orders there over the net. I need a way to get my company moving on this soon, because this change has a long lead time.

    Marcus Behrens:
    CRM can be used with R/3 as it's backend. mySAP CRM Channel Management empowers organizations to manage partners and enables partners to effectively serve their customers, resulting in a more profitable and loyal indirect channel. There is also a solution available for the Automotive Industry from SAP to enable the dealer with an on-premise solution.

    Steve Schneider:
    Does SAP plan on providing a migration path from the current technology to whatever the future technology may be?

    Marcus Behrens:
    Migration paths to ERP and CRM 2005 are well-defined from the technology point of view. The key question is how easy can which new functionality provided be combined with what was already working in R/3. We are looking to make this simpler and more straightforward.

    Steve Schneider:
    Is SAP taking a stand with international standards bodies (other than STEP) to develop product data interchange standards in the E-commerce arena? Such as support for the newly released ISO standard AP236

    SAP Response:
    none so far

    Steve Schneider:
    Will part of the ESA implementation be to separate the traditional SD functions from the R/3 application?

    Marcus Behrens:
    This will be looked at on a case-by-case basis and will strongly depend on the Netweaver release level.

    Steve Schneider:
    What is SAP's role in helping the CWG develop Best Modeling Practices relative to the SAP strategic direction? For example: if the CWG were to specify a best practice for LO-VC that allows multiple class assignments to a material, but the strategic direction SAP configurator (IPC?, VC?) only supported 1 assignment, what guidance, response, or interaction could the CWG expect from SAP?

    Marcus Behrens:
    I believe that defining a best practice for product modeling without looking at which master data change processes and which order management and fulfillment processes you have is very hard. That's why it is difficult for SAP to provide best practices.

     

    Business and Enhancements

    Steve Schneider:
    Is the method for obtaining enhancements described to the VC/ECM Focus group the only approved method for enhancing the SAP software?

    If so, how is this balanced with the continuing CWG enhancements being worked on in the area of IPC user interface and PME?

    If not, can the existing VC/ECM Focus Group enhancement list be utilized as a method for defining enhancements to the PME and the Integrated IPC with the understanding that they would NOT be "backward compatible" into the existing LO-VC?

    SAP Response:
    The work of the CWG focus groups is instrumental in helping SAP understand where the solution works and where it fails. It is also critical for customers and partners to determine the best way to leverage what works and how to fill the gaps if SAP cannot provide a solution short-term.

    Robert Eramo:
    During the conference Bernhard [Neumann]stated that a list with names of companies is needed to enhance VC.

    Michael Zarges:
    VC enhancements are possible in principle, but we need a strong justification to not only obtain a development budget, but also agree on taking the risk to do changes to the VC. Therefore each proposal should be underlined by a statement from executive level managers. The number of names matters, but also relevant are: o The size of the customer o The level of the company executive that is complaining. SAP will only respond to pressure from these high levels at the customer. A plain spreadsheet of VC change requests is not sufficient for our upper management.

    Judy Cubiss:
    One clarification: other names matter, too, but the Executive Council is the target.

    Michael Zarges:
    If companies want SAP to believe a request is important enough to justify expense of enhancements, then it can't simply be a "nice to have." A manager (at the executive level) needs to clearly state: "this is a problem which is costing us money".

    There are 10 seals on the ERP core. The VC is part of the core, so getting SAP to change it will make people nervous. Far more important than the development effort is the risk mitigation. Don't forget: SAP cannot airily jeopardize more than 1000 productive VC installations by modifications to the core. There needs to be a very good reason for any change to the core, and that reason must be provided by customers.

    Peter Illing:
    Were previous proposals explicitly rejected by SAP management (for the reasons above)?

    Michael Zarges:
    I guess last time we were not able to convince upper management of the criticality of VC enhancements to justify the risk and investment. Continuous improvement in R/3 is not as interesting as new license-winning features. Across the R/3 space there are almost infinite requests for improvement, and VC is only one small part of this huge ERP realm.

    Judy Cubiss:
    Realistically areas such as HR and FI have a larger stick simply because they have compliance issues that have to be dealt with.

    Conclusion:

    Many thanks to our SAP panel. We did our best to put them on the spot, so if you don't feel them squirming, then credit the relationship-building which has gone on over the years.

    Please send comments to Peter Illing, at peter.illing@integrity-gmbh.de.