SAPs recently announced supply chain product road map flags its intent to develop new capabilities and exploit its Hana platform, and will effectively give SAP APO clients a planning timetable for major product transition.
On 1 April 2014, SAP announced its new supply chain solutions strategy at an SAP event in Las Vegas. The announcement was made in a keynote speech by Hans Thalbauer, senior vice president, Line of Business Solutions for Supply Chain. Gartner analysts were in attendance. No official SAP press release has been published to date.
With this solution strategy, SAP has taken a positive step toward realizing the goal of a more integrated, technologically powerful and user-centric solution set for global supply chains. The challenge for SAP will be in its execution and communication of road map details to its customers — particularly to the SAP Advanced Planning and Optimization (APO) installed base, which will stop receiving standard SAP support in 2020; customers will have the option of three years of extended maintenance beyond 2020. Some initial supply chain execution and planning capabilities are expected to roll out in 2014 as part of a multiyear development plan.
SAP APO customers will want to begin migration planning in the next 24 to 36 months. Gartner expects that over the next couple of years the majority of supply chain planning capabilities will be built into the Hana native solutions — though SAP APO may still be required to support some operational and optimization features, and parts will be merged with enterprise resource planning (ERP).
As the market leader in supply chain software based on annual revenue, SAP has built a solid business selling supply chain applications into its ERP installed base. Gartner believes SAP has substantial potential to better meet companies' evolving needs with Hana, but it has needed to show a coherent, forward-looking road map to address the limitations of its existing applications.
Gartner believes SAP’s new supply chain road map is not an empty vision. This new strategy is the beginning of SAP commercializing Hana for SC beyond the disparate Hana applications released over the last couple of years. This new strategy, centered on supporting more global, complex and volatile supply chains, merges cloud, in-memory computing, mobile, scale, speed, multienterprise networks, and new integrated planning and execution paradigms.
If fully realized, this strategy will deliver a granular, real-time, horizontally and vertically integrated capability that converges planning and execution. Additionally, the strategy would enable full visibility across many disparate supply chains. Presently, most systems cannot offer this kind of holistic view. At its core is Hana, its in-memory computing platform that can leverage the ERP Hana data model, if present, which extends several existing SAP supply chain capabilities, including Sales and Operations Planning, Transportation Management, Enterprise Warehouse Management, the Ariba Business Network and SmartOps. SAP also plans to add new capabilities including integrated business planning, supply chain visibility and respond planning.
If SAP executes well it could restore its competitive position in the supply chain market. SAP still has a lot of work to do to help users understand the options they may have and the impacts on their current SAP landscape.
Existing SAP supply chain management (SCM) solution users: Discuss with SAP when key, existing capabilities are moving over to the new strategy. Align key business requirement milestones with potential risks of product obsolescence.
SAP SCM solution prospects: Approach proposals and contracts cautiously. Identify attendant risks of the new strategy on your decisions. Negotiate based on these risks to your business.