March 6, 2013 Muscat, Oman

Transcription

1 March 6, 2013 Muscat, Oman

2 Business Agility with Cloud Solutions Deniz Kilyar Director, SAP Line of Business & Mobility Solutions

3 11 Lines of Business The SAP product strategy embraces the Cloud Cloud Mobile Analytics Applications Database and Technology Powered by SAP HANA 24 Industries Go to Market 2012 SAP MENA. All rights reserved. 3

4 Cloud computing definition Forrester definition: A standardized IT capability (services, software, or infrastructure) delivered via Internet technologies in a pay-peruse, self-service way.* * September 9, 2009, Best Practices: Infrastructure-As-A-Service (IaaS) Forrester report 2012 SAP MENA. All rights reserved. 4

5 Cloud Computing is disruption

6 Closeness Innovation to Customer / User End-User Expectations Mainframe Client Server Internet On Demand Cloud Computing Single system processing Resource colocation Distributed users Two tier application End-to-end processes Integrated platform Breadth / Depth of Service Delivered and managed remotely User and system flexibility

9 SAP is uniquely positioned to unlock the value of the Cloud by combining SAP s traditional strengths with SuccessFactor s DNA + Enterprise depth End to end business process expertise Technology expertise Developer bench strength Complete focus on customer success Experience building solutions that touch everyone in the Cloud Solutions that work the way people do Fast pace of innovation 2012 SAP MENA. All rights reserved. 9

10 Business Agility with Cloud Solutions Ariba March 6, 2013

12 OnDemand (OD) Defined OD applications are multi-tenant Allows multiple customers to share the same instance of the application. This decreases both the IT infrastructure costs and IT maintenance costs by sharing the instance while all data remains separate. When the application is upgraded, all customers are upgraded simultaneously. Customers are notified well in advance of upgrades and major upgrades provide an early access program The multi-tenancy capability provides the vendor much lower costs - which can be passed on to the customer SAP MENA. All rights reserved. 12

13 Behind the Firewall (BTF) Defined BTF implementations are single-tenant applications Nothing is shared. Single-tenant applications tend to be very difficult and costly to upgrade because of the customizations and complex integration required by these solutions. This dynamic results in costly and time-consuming upgrades, and infrequent code revisions 2012 SAP MENA. All rights reserved. 13

14 Points to be considered while decision making Does it give competitive advantage Is it core or non-core business requirement (Procurement, HR, Payroll,) Time required to Go Live Return on Investment (pay back time) Best practices Downtime Concerns Is Cloud the only option? 2012 SAP MENA. All rights reserved. 14

17 TCO Cost Components BTF OD Ongoing Costs Apply Fixes, Patches, Upgrade Ongoing burden on IT Downtime Maintain/upgrade Performance tuning hardware Rewrite customizations Maintain/upgrade network Rewrite integrations Maintain/upgrade security Upgrade dependent applications Maintain/upgrade database Ongoing Costs Subscription fee Additional services Additional applications 2012 SAP MENA. All rights reserved. 17

19 Companies using Cloud Apps In the Cloud Over 2000 buyer clients of all industries, sizes, geographies Including more than half of the Fortune 100, including 18 of the F SAP MENA. All rights reserved. 19

20 20 Some of companies in Middle-East using Ariba Cloud solutions

21 So what does Ariba Solutions Do? Supplier Discovery Supplier Network Visibility Sourcing Contracts Procurement Electronic Invoicing Monitor Performance Transparency into the Clause Library Enable Catalog and non Reduce invoicing & Compliance negotiation process Electronic Work flow catalog based buying errors Transparency into buyer Focus on laying out for approvals Ensure purchasing of Reduce cycle time performance comparative criteria clearly Electronic Repository Punchout, Dynamic, rate for invoice Visibility by Commodity before bidding / negotiations Seamless transfer and card and contract catalogs processing Strategic decision making / responses are received communication with Ensure contract compliance Compliance against information by Purchasing Further savings outside parties Reduce Maverick buying contracts for non- Behavior achievement after offline Achieve global Leakages plugged on PO spend Identify opportunities tendering contract visibility volume discounts Ensure and prioritize spend All Types of contracts Drive policy compliance and Transparent management actions consumption control approval and 2012 SAP MENA. All rights reserved. payment process 21

22 Licensing & Maintenance Costs Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) Licensing - License - Supplier Portal - 3 rd party licenses Maintenance and Support Fees - TSS - Help Desk 1. Annual Subscription typically based on a 3 year term (Pay As You Go) COST: $Annual 1. Does NOT require licensing of dependent software (DB, WEB and APP servers, etc) 2. Supplier portal access required for document transmission between buyers and suppliers (purchase orders, change orders, shipment notices, invoices, timesheets, etc) COST: Included in the Subscription price 1. ALL Maintenance (patches and upgrades), help desk and technical support are included in the annual subscription fee. 2. Help Desk 3. Application of upgrades and patches 4. Technical Support 5. Speedy issue resolution. 1. One-time perpetual license of the software or agreed upon term 2. Requires Licensing of dependent software (DB, WEB and APP servers, etc) 3. Supplier portal fees for document transmission (purchase orders, change orders, shipment notices, invoices, timesheets, etc) COST: $One Time Up Front 1. Customers have to pay 18-22% (of the perpetual license) per year for technical support and access to patches and upgrades not including help desk 2. Access to upgrades and service packs NOT the subject application 3. Technical Support initiated and worked jointly with the customer and support COST: Included in the Subscription price COST: $Additional Recurring 2012 SAP MENA. All rights reserved. 22

23 Implementation Costs Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) Functional -Implementa tion -Testing Technical -Implementa tion -Integration -Testing 1. Designed implementation that takes days to weeks to implement 2. Best business practices, data, rules and templates already built into the application 3. Implemented by remote resources in a shared services environment with only the Project manager and technical/functional lead at the customer site as required 4. The implementation costs can be rolled into the subscription price of solution over the term (i.e. over 3 years) 5. Application testing COST: Included in the Subscription price 1. No assembly required 2. The underlying technology infrastructure for On- Demand applications is already in place when a customer decides to begin the use of one of these applications. 3. Integration Testing 4. Hardware Testing COST: Included in the Subscription price 1. Implementation takes months to years 2. Implemented with consultants at the customer site 3. Detailed Implementation methodology usually starting with a 6-8 week design workshop (each customer will have it s own custom design versus implement to a pre-configured design) 4. The implementation costs are usually absorbed in the first year of deployment 5. Application testing COST: $Additional One Time 1. In the case of BTF implementations, the Internal IT team must become technical experts in the software: installation, infrastructure, integration, issue diagnosis, and upgrades in order to work with the solution effectively. 2. This involves significant training, ramp up time, and paying for a large IT staff indefinitely. 3. Integration Testing 4. Hardware Testing COST: $Additional One Time 2012 SAP MENA. All rights reserved. 23

24 Implementation Costs cont. Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) Post deployment IT Skills 1. Post deployment configuration/changes handled by Ariba TSS COST: Included in the Subscription price 1. Detailed working knowledge of the application development language is NOT required 2. Implementation is performed by Ariba including customer specific customizations 3. Any customer specific changes or configurations are executed within the administration user interface and can be performed by a business analyst COST: Included in the Subscription price 1. Post deployment configuration/changes handled by Customers internal IT team COST: $Additional Recurring 1. Internal IT team must have a detailed working knowledge of the application development language that was used to develop the application (Java J2EE vs..net for instance) in order to extend and customize the application. Otherwise, IT consultants must be hired to perform the work. COST: $Additional Recurring 2012 SAP MENA. All rights reserved. 24

25 IT Infrastructure Costs Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) IT Infrastructure 1. No significant technology investments all the organization needs is a PC/laptop already on the users' desks 2. Everything required to run the solution as detailed with the BTF is Included with OD 3. Anywhere access. Because on-demand is internet-based, you can typically access the full-functionality anywhere you have an internet connection 1. Significant technology investment is required: Database software, Operating system software, Backup software, Web server, application server and Monitoring software. 2. Requires high-availability IT architecture. This includes having redundant components (Server Hardware, Web Servers, Internet connection, etc.) and Service Level Agreements for over 99% uptime. 3. The architecture needs to also include proper backup equipment, software, and procedures COST: Included in the Subscription price 4. Traditional BTF enterprise applications requires a VPN connection and/or specialized client software. COST: $Additional Recurring 2012 SAP MENA. All rights reserved. 25

26 Operations Support Costs Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) Operations Support 1. On-Demand solutions include operations support. This includes the support resources needed on a daily basis to meet the Service Level Agreement with regards to up-time, backup procedures, disaster recovery, performance and security. 2. Help desk is included for both end users and Suppliers 1. The internal cost of the on-going operations support of BTF solutions are made up of the following factors: 1. Log monitoring procedures for performance thresholds including warning messages 2. Ongoing Performance tuning 3. End user help desk 4. Web Trust, SAS70 and PCI certification have to be renewed on a periodic basis so that operations meet current web standards. (Note: Many internal IT departments do not regularly go through such rigorous audits?) COST: Included in the Subscription price 5. Since many Spend Management applications include both internal and external (supplier) users, the internal IT organization must have procedures in place to deal with suppliers accessing the system and they must continue to manage the security requirements COST: $Additional Recurring 2012 SAP MENA. All rights reserved. 26

27 Upgrades and Patches Costs Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) Application Upgrades and Patches - Patches - Upgrades - Innovation cost 1. The OD model removes all of the interdependencies on all the hardware and software needed to run the applications as it is controlled in a single environment not mixed with other solutions 2. The application of Patches and Upgrades to the customers solution is included and automatically performed on a regular schedule 3. Built for Change. Upgrades are performed automatically every 4-6 months (innovation). 4. Minimal to no downtime to the solution during maintenance. 5. JPM Securities writes.traditional applications tend to lose their customizations and integrations when underlying code is upgraded. This dynamic results in costly and time-consuming upgrades, and infrequent code revisions. In contrast, multi-tenant on demand applications typically have frequent new versions, simultaneous upgrades, and meta-data tenancy buys the vendor much lower costs which can be passed on to the customer. COST: Included in the Subscription price 1. One issue that all IT organizations have in running a data center with different BTF applications is the version support of the underlying software like Operating Systems, Database Systems, Web Servers, J2EE environment, etc. 2. Or the IT organization has to not only upgrade the application but all of the underlying components as well. In addition, the IT organization has to support those various versions of software. 3. Outside these inter-dependencies, there are Significant IT costs to Apply Patches and Upgrades to BTF solutions including testing. 4. Innovation is very limited as new features/functions only occur with new releases (vendor provides new releases every 2-3 years) and to take advantage of the new features/functions you need to perform an upgrade which is usually deferred (3-5 years out) 5. There is Downtime (hours - days) to the solution when any maintenance is performed COST: $Additional Recurring 2012 SAP MENA. All rights reserved. 27

28 Embedded Service Costs Cost Element Ariba OnDemand (OD) Behind-the-Firewall (BTF) Embedded Services - Customer manager - Event review - Event day management - Internal web-based training - Supplier training - Business Practice Center 1. Customer Success Manager (CSM) - This person is assigned by Ariba post deployment to help you with User Adoption, locating best practices from other customers and generally helping you to get the most out of your investment. The CSM success is gauged largely from customer sat scores 2. Other services available directly within the application for various activities include: 1. Event Review - Ariba Sourcing help desk reviews customers sourcing events for format and setup prior to submission to suppliers 2. Event Day Management - Sourcing Events from all customers are proactively monitored 3. Internal web-based training 4. Supplier training COST: Included in the Subscription price 1. Best Business Practice Center This shared service is available post deployment and provides customers with guidance, information on existing and new features, discuss the impact of adopting existing (not implemented) or new features, small demos on different use cases and help with configuration and administration 1.Not Available COST: $Additional One Time COST: $Additional 2012 SAP MENA. All rights reserved. 28

30 Why OnDemand? Faster Time to Value Time is of the essence - an on-demand model removes the complexity of installing a new solution in-house by bundling software, hardware, systems development, integration and management into one offering. Lower TCO and Quicker ROI On-demand solutions lower the TCO (total cost of ownership) by enabling the software to be used in a multi-tenant architecture, which amortizes the technology and service cost across all customers. Lower Risk Solution experts manage the administration, maintenance and upgrades to the technology, offering measurable availability, reliability and performance based on service-level agreements. The data centers have infrastructure redundancy and disaster recovery to ensure application availability and business continuity. Faster Adoption The on-demand model provides for faster adoption SAP MENA. All rights reserved. 30

32 Software as a Service (SaaS) Web Resources Ariba.com: Ariba s Position on SaaS Salesforce.com: Cloud Computing Video Supply Excellence: Can SaaS make CIO s Strategic Again? esourcing Forum: On Demand I: The Good esourcing Wiki: Introduction to a Rapid Software Deployment Model Supply&Demand Chain Exec: How True SaaS Delivers More Value SearchCIO.com: Spend Mgt Software helps CIO s cut cost 2012 SAP MENA. All rights reserved. 32

33 Thank You! Contact information: Tarun Mittal Group Director Ariba MENA SAP Arenco Towers, Dubai ,

34 Example TCO Comparison Customer already owns ERP System and is looking to add Procurement Functionality Option 1 is to just turn on the Procurement module in their existing ERP system Option 2 is to subscribe to Ariba s P2P solution On Demand 2012 SAP MENA. All rights reserved. 34