Analysis: SAP’s Big Analytics Push

There’s a lot more upside than downside in SAP’s actions

At its SAPPHIRE 2005 user conference, held last week in Copenhagen, ERP giant SAP AG announced SAP Analytics, a collection of more than 100 new industry-specific, pre-packaged analytic applications.

SAP’s action is the second analytics push from a major applications vendor in recent months. Late last year, CRM giant Siebel Systems Inc. expanded its own line of pre-packaged, industry-specific analytic applications.

Siebel, of course, had marketed branded analytic applications for some time before aggressively promoting its revamped analytics expertise last fall. Notwithstanding its ubiquitous SAP Business Information Warehouse (SAP BW), SAP Analytics marks the German software vendor’s first substantive foray into the business intelligence space. In this respect, SAP is betting—not unreasonably, in all likelihood—that many of its customers will be enticed by the promise of tight integration between SAP Analytics and its bread-and-butter ERP stack.

SAP officials hammered this point home at SAPPHIRE, contrasting the ability of SAP’s branded BI offering to facilitate real-time access to operational data with the so-called “after-the-fact” reporting capabilities of other offerings.

Collectively, SAP says its new Analytics solutions address the requirements of more than 25 different verticals. For example, officials say, SAP Analytics for retail can help store managers understand and predict how time-sensitive initiatives, such as trade promotions, are performing.

Similarly, SAP Analytics for credit management lets financial services companies display customers' credit information, buying behavior, past purchases, and credit lines in the historical context of data in SAP and non-SAP systems—or in syndicated services such as Dun & Bradstreet.

Elsewhere, SAP Analytics for high-tech manufacturing gives plant managers and other decision-makers better visibility into order status, plant utilization, and order backlog restock levels, among other data points. SAP says its business partners have built SAP Analytics applications that unify manufacturing execution system data with order supply chain and production data from SAP systems. This gives managers highly detailed views into specifics such as the uptime of an individual machine or its throughput capacity.

The SAP Analytics applications are powered by SAP’s NetWeaver application architecture, which ensures their plug-and-play interoperability with the rest of the company’s Enterprise Services Architecture. They exploit a code-free, model-driven interface, SAP officials claim, which means they can be highly customized—and can also be made to work with non-SAP data and applications. Finally, SAP Analytics applications tap Macromedia’s Flex visualization technology, which should result in an attractive, if not intuitive, UI.

Risk and Reward

In a certain sense, says Mike Schiff, a senior analyst with consultancy Current Analysis Inc., SAP Analytics is at once a slam dunk and something of a risk for the German software giant.

For many customers, the promise of tight integration between an analytic reporting tool and SAP’s MySAP enterprise application stack will indeed prove compelling. How else to explain the success of a not-quite-best-of-breed data warehouse like SAP BW, for example? By the same token, SAP Analytics takes SAP further afield from ERP and places it more directly into competition with some of its long-time partners in the BI space.

“SAP has an established history as a credible, if not market-leading, enterprise application software vendor,” Schiff writes. “Its reputation as a vendor of business intelligence and analytic solutions is somewhat less established.”

Indeed, Schiff says, most customers deploy SAP for its OLTP expertise and complement its core application stack with third-party analytics, or (increasingly) with homegrown analytic applications based on SAP BW. “In general, organizations do not first select SAP’s business intelligence offerings and then decide whether or not to deploy SAP’s OLTP systems,” he notes.

Schiff doesn’t think SAP Analytics will invert this process, of course—just that it will give customers a greater incentive to choose SAP, and will also expand SAP’s reach in many long-time accounts. In this respect, he suggests, it’s also fraught with peril for the German ERP giant.

“SAP must tread carefully so as not to upset the cadre of partners whose BI tools and solutions complement its enterprise applications,” he says. “Analytic application vendors that chose not to partner with SAP to create additional SAP Analytic components could find themselves in competition with an enterprise applications giant.”

SAP Analytics will be available later this year, according to SAP officials.

Related Article:

Siebel Gets Serious About BI

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.

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