Q&A: America's SAP Users' Group28 Feb, 2006 By: Kenneth Wong
With 45,000 members and a 16-year track record, ASUG knows a lot about PLM, CRM, ERP and more
Rod Masney is executive vice-president of ASUG.
That's why he, along with ASUG President Mike Perroni, recently embarked on a media outreach initiative to talk about how these users, through gentle nudges and frank conversations, are gradually transforming the enterprise-software giant into a more nimble creature.
Taking advantage of ASUG's offer to discuss trends and issues that are on the minds of SAP users, Cadalyst talked with Masney, currently the global information and technology architect for O-I, formerly Owens-Illinois, in Toledo, Ohio.
How does ASUG help shape SAP's strategies and products?
ASUG is an independent volunteer-run organization. SAP, as a partner, participates in our events. Our annual conference, which is our flagship event, will be May 14-17 this year. For the first time, it will be colocated with the signature SAP-hosted SAPPHIRE user event, May 16-18. Companies can send their folks to learn best practices, implementation stories and where SAP is going. We collaborate on forums and symposiums, focusing on PLM (product lifecycle management) and CRM (customer relationship management), for example. Then there are Webcasts, where our members may bring a hot topic forward or SAP may bring a topic forward.
ASUG's influence occurs at different levels. There's the DRQ (development request system), for slight changes in SAP products. There's an Influence Council, where a group of SAP customers interested in specific topics work with SAP and talk about the product direction. These councils take many forms -- face-to-face meetings at our annual events, forums, symposiums -- where product managers take requests for changes in products.
There's also strategic influence, where ASUG member company executives come together with SAP executives. For example, we have an Executive Exchange, where CIOs come together to discuss things like return on investment, security and benchmarking models. While we maintain our independence, we collaborate tightly with them on strategic and tactical directions of SAP products and services.
What's on the minds of SAP users these days?
IT leaders are focusing on topics like return on investment -- where is it and how do we quantify that? -- and total costs of ownership -- how do we maintain or lower it and how do we benchmark that? Security is a very hot topic, not just SAP security but the notion of risk management and enterprise security. Also Sarbanes Oxley compliance. This is where a lot of companies are spending a lot of money.
SAP is listening closely to our constituents. Other topics are benchmarking, supplier-relationship management, procurement and human-capital management. There's an interest in learning what leading companies expect to get out of their investment. Enterprise service architecture is a hot topic. The technology's changing, and SAP is looking to ASUG and the Executive Exchange to help craft the message for the marketplace, to make it understandable to the customer base and to create a roadmap from where they are to where they want to be.
Are SAP offerings suitable for small and midsize businesses?
One of the initiatives from the Executive Exchange was the whole notion of SAP's relationship management with the customer base. Our CIO/CTO group helped craft a document for SAP. It was three years ago that we started the initiative. At that time, there were challenges between SAP and their customer base. Our executive team talked to SAP. A lot of the changes we've seen in the relationship model have been the direct result of that body of work. There are always going to be challenges in customer or business-partner relationships, but it's much clearer to the SAP customers now.
SAP is not just for the global-size customers but also for the midmarket and small and medium business (SMBs). I can talk at a personal level. I came from a business that was a midmarket company, and SAP changed our business. It's important that the midmarket customers leverage not only SAP as their partner, but also a community like ASUG that can help them be influential in product directions. We provide the Business One community with opportunities to educate themselves about the Business One product line and network (for SMBs). We also have a midmarket group.
It's interesting that when we look at SAP's breakdown and our breakdown of global-size customers, midmarket customers and small- and medium-size customers, there is a pretty consistent reflection between SAP's market penetration and the people who participate in our community. I can't tell you specific demographics, but they closely mirror each other. We classify $200 million and below in revenues as SMB, from $200 million to $2.5 billion as midmarket and anything over $2.5 billion as large enterprise.
Is ERP and PLM integration a priority for SAP users?
I think it's very important. There's a lot of passion among our membership there. Our PLM event last fall was one of our larger events. There's a lot of focus on this particular topic in the market. Folks who have gotten beyond ERP (enterprise resource planning) are now really starting to focus on those higher-value systems, like CRM and PLM. We're seeing that in our customer base. From my own business perspective, the integration of engineering CAD tools to the back-end processes for developing new products or key strategies is my focus as well. With the evolution of enterprise architecture and its growing importance over time, and PLM being a part of the overall enterprise architecture for different businesses, we are providing an enterprise architect community around the overall integration in businesses and IT systems. There's much greater focus on how these products integrate globally.
Are SAP users likely to adopt SAP PLM solutions or are they likely to explore tools from other PLM vendors?
Based on activities within our user community, my belief is there is more of a bias today toward looking at products from the partners or the people they've been working with. From my own business perspective, we recognize that best-of-breed solutions may not be the ultimate solution for our architecture. We're focusing on how to get more value out of what we have purchased -- higher return out of what we've purchased at a lower total cost of ownership, once again, leveraging on partnerships and relationships.
Last year, SAP officials were only lukewarm about the notion of on-demand software. But this February, SAP, one of the holdouts, released an on-demand CRM application. Is that a welcome change for SAP users? Are they likely to ask for on-demand solutions for other applications, like ERP?
Let's talk about CRM on demand. The Executive Exchange had the privilege of meeting immediately after this was announced. We had an opportunity to discuss this with SAP. My perception is it's a very positive announcement. In the context of my business, we perceived it as quick implementation. CRM is where our organization has had influence over the model too. The influence and direction are certainly something SAP is listening to. There's market interest; see things like Salesforce.com and so on.
On the other product sets, I'm not sure I can speak about them. But if you start to look at SAP's enterprise architecture and the whole idea of business process outsourcing, I'm sure interest will emerge in other products. I'm not sure that's in the works, but certainly their enterprise architecture suggests that may be an opportunity.
When SAP users think about SAP, does it invoke warm and fuzzy feelings, like, say, Apple users might feel about Apple and its products?
I absolutely believe SAP is that kind of company. Companies that run SAP are proud. That shows in their advertising campaign, in the kind of religious attitude you see in the way they talk about their implementation and the value it brings to their businesses. I think our members identify themselves not only as a part of the SAP community but also as ASUG members. Belonging to the ASUG community is important to them personally and professionally.