SAP Demos Commitment To Business ByDesign

SAP's announcement, nearly two years ago, of the Business ByDesign on-demand software suite was unquestionably premature, given SAP still hasn't indicated when it will be broadly available.

But one thing is certain: SAP still intends to bring Business ByDesign to market.

It is testing the software-as-a-service suite with 90 customers, and SAP hopes -- but can't guarantee -- that it can accelerate the rollout next year. SAP originally planned to sign up to 1,000 customers for BBD in 2008 and 10,000 by 2010; a goal apparently set before realizing it hadn't worked out a feasible cost structure to host software for that many customers.

It was a premature rollout fueled by SAP's urgency to join the SaaS trend, which CEO Leo Apotheker has since acknowledged as a mistake, while insisting, as recently as the Sapphire user conference in May, that BBD is not dead.

Indeed, a demonstration provided to InformationWeek on Thursday -- including interviews with two SAP executives, one whose very title emphasizes his job to bring BBD to market -- indicates that SAP continues to put considerable time and effort into the product.

SAP said on Thursday that Feature Pack 2.0 is now available to those 90 test customers. It allows them to integrate SAP Business Object's software, including Crystal reports and Xcelsius dashboards, with more than a hundred business processes supported by the on-demand ERP suite.

The upgrade also offers better integration with related processes, such as CRM with automated billing and time-and-expense reimbursement, and integration with Microsoft Outlook and MS Office for improved collaboration with customers. Thirty five new processes were added to the suite, including order-to-cash and procure-to-pay.

SAP demonstrated a process for requesting a quote from suppliers. Through the Outlook integration, the upgrade allows the process and negotiations to be handled using an Adobe document with an e-mail.

SAP chose Outlook because it is the most popular e-mail choice among BBD's target audience, small-to-midsize companies, said Markus Schwarz, senior VP of SAP Business ByDesign Go-to-Market.

Other functions include automatic search for suppliers who have been used in the past, and the ability to compare quotes among suppliers.

Customers may also customize their own suites upon implementation from dozens of processes, which include sales planning, inventory management, market development, customer care, personnel management, and compliance management. That's designed to reduce time and money spent on consultant/IT implementation costs.

Schwarz emphasized that SAP is still fully committed to bring Business ByDesign to a broad customer base. "We have a lot of folks on Business ByDesign; it's a very large development team," he said, adding that SAP considers BBD strategic and has "never lost focus" on it.

In March, Financial Times Deutschland reported that SAP had reduced its BBD team from 2,600 to 1,800 people, moving many developers over to the team for the SAP's core product, Business Suite.

Schwarz said Thursday this was done because the core work of BBD has been completed. "This is a product we created from scratch that's now in its third iteration," Schwarz said. "You need less people for a new release than you need to create something from scratch." Developers moved to the Business Suite team are now helping to incorporate some things developed for BBD, including in-memory analytics and the Adobe documents for communicating with suppliers, into Business Suite, said Rainer Zinow, SVP SAP Business ByDesign Innovation.

Schwarz said that SAP still has some work to do to get its own costs down before it can offer BBD more broadly. "Our experience with traffic client interaction, with 2.0 in the next six months, will help us a lot with that," he said.

While SAP's intent is clear, it still must prove it can make the BBD business model work. The worst-case scenario—meaning intent never segues into reality—wouldn't be a total wash, since there's clearly a plan in place to share some of the best of what's being developed for BBD with the Business Suite team.

InformationWeek's Informed CIO series lays out 10 steps to achieve excellence in service assurance initiatives. Download the report here (registration required).