What’s going wrong with the Business Case for SAP HANA?

A former boss of mine once told me ‘so what?’ is one of the most useful questions you can keep up your sleeve.  His view was if people can’t answer that properly when you ask, at the very least you won’t waste your time with them.  I’m clearly paraphrasing a conversation from a few years ago but it was, and remains, fantastic advice.  It’s also really very relevant when thinking about how one justifies any investment in SAP HANA.

Last week SAP released some data regarding the adoption of HANA across their customer base.  Despite the positive spin, and without getting into questions around what percentage of these figures actually represent live operational systems, the numbers are still a very small percentage of their global footprint.  To loosely quote from an article on the Business Insider website, the basic HANA database offering has 6,400 customers out of a base of 291,000 (that’s around 2% if you can’t be bothered to do the maths), and around 370 customers have taken up the S4 HANA offering since its release.    Considering the airtime SAP have been giving it over the last couple of years; why hasn’t there been greater adoption?

I don’t think solution immaturity, perceived or otherwise, is the answer.  SAP HANA has been out there nearly five years in one form or another and now represents a mature enterprise offering - for example latest the Support Pack Stack for HANA has technical content aimed at bringing HANA’s resilience up to an acceptable standard to close down some the criticisms levelled at HANA from the likes of Oracle.

There is also reasonable implementation capability available across the market.  At Capgemini we’re seeing more and more work in this space every day and there’s real demand for our people with SAP HANA experience and expertise. We have great people who understand this stuff…and much as it irks me to say it…so do some of our competitors.

So, if it’s sound from the technology standpoint and there’s the know-how available to deploy it, why the slow uptake?

I think it’s down to the fact that we’ve all struggled when the business says ‘OK it’s quicker…but so what?’  Up to this point the good answers have been few and far between so the investment decisions simply haven’t been made.  I’d be interested to know how many of the 6,400 customers above are stuck at the pilot stage and are trying to work out whether they want to go further or not.

This clearly hasn’t gone unnoticed and last year SAP commissioned Forrester to do a cost-based analysis of HANA using their Total Economic Impact (TEI) methodology.  Aside from the fact I don’t think it’s a particularly good piece of work, the main flaw is that it focusses solely on technology driven cost savings and there is nothing a CFO, COO, CMO or anyone outside IT would care about anywhere in the paper.  It’s simply a (bad) sell to a CIO.

For me this paper typifies why it’s been so hard to justify investment in SAP HANA. Our arguments always seem to be technical and there is little true business justification and this is where we’ve collectively been getting it wrong.  We’re missing out the most important bits of the argument, the part where we explain the ‘so what’ to a CxO outside of the IT function.  And before anyone says it, the simple ‘one shot uses cases’ or process improvement suggestions from a BSR report don’t count as a real business justification I’m afraid.

This all paints rather a bit of dark picture...so do I think it's possible to create a credible business case for SAP HANA?

Absolutely. 

The methods to create a business case and measure the benefits for a programme of work are well understood and documented – so use them. They’ll force the creation of decent answers to the questions the business will ask because the their perspective is the primary consideration rather than the technology angle. The technical experts from SAP or your favourite SI are a great bunch, but they won’t be able to provide all the ammunition needed for a compelling business case. They will only ever represent one of the benefits streams that must be considered, clearly that’s unlikely to give you the whole case for change. 

For our own part we’ve great experience of justifying investment for the new SAP technologies - an example is the User Experience work we’ve been doing - and I have a small team applying that understanding to the HANA question as we speak. I will update you all when that work is completed…so watch this space!

So, based on my experience and discussions with some very clever people who are doing this stuff for real, the things to bear in mind when trying to create a business case for SAP HANA are:

1. It’s not all about the technology - quantifiable business benefits need to be at the centre of any argument. It’s very unlikely you will be able to create an entire benefits case for a move to HANA based solely on the technical arguments.  There will be exceptions to this rule – but I don’t expect them to represent the majority of cases.   And given all the cool solutions that are available now from SAP, I suspect any programme will involve the implementation of more than one type of technology anyway, and they will all have to be justified.  So, those technology arguments focussed on HANA will still need to be included…but they just got a little less important. 

1. Your single killer application for SAP HANA probably won’t cut it. A business case has to demonstrate exactly how technology can be used to create business benefit so there won’t likely be a single argument.  Think about it…how many single line business cases make it through an organisation’s approval process?  I believe the truly compelling transformation cases will involve the quantification and aggregation of benefits from across different areas of the transformation (and in all probability the different technologies that underpin them).

1. Be careful what types of benefits are included. The intangible ‘blue-sky’ stuff is still really important but you mustn’t try to pay for your programme with it.  You need to frame a tangible and quantitative argument that explains what the business will get day 1 after deployment.  In my estimation justifying an investment on HANA based on anything other than immediate benefits is tantamount to buying a sports car on a high-interest credit-card…probably a risk not worth taking.

1. But do be aware some of your arguments may evolve the more you learn so you need to be flexible. In the work we’re doing with our clients we’re seeing that sometimes the benefits cases can’t necessarily be fully complete when we put them together.  The technology is moving so quickly you need to be prepared to cover some areas at a later date and this is posing an interesting challenge within the models - reporting strategy for Simple Finance is a great example of this.  So yes, justify with the benefits you know but also you’ll need to build in some flexibility as you should expect the benefits case to evolve even if you can’t fully articulate how just yet. 

Finally, I’d just like to say that we, as a community of SAP professionals and users, need to stop being blinded by the technology and start answering the proper ‘so-what’ questions the business will ask us before loosening the purse strings.  Once we do that – the arguments will improve; the business cases we create will become credible and compelling; then we’ll see a HANA trickle become a flood. 

Technology is important, it’s the lifeblood of our industry.  But if we can’t articulate a ‘so what’ to people like my old boss – we all may as well go home now.

(Note:  I’d like to thank Alex Bennell for helping me kick the ideas about for this piece and one or two of his excellent observations have been included)