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Biztech Jun 20, 2013

SAP HANA: Is The ROI Worth It?

By Robin Chatterjee

It is no secret that businesses gain highest value out of their data only by extracting deep insights that can influence business strategies, and then forecast and optimise future performance based on these insights. To sum it up, make an impact on the business bottom line. SAP's in-memory platform HANA looks very promising in this regard, but the real question is will the cost of implementation and maintenance entice enterprises to adopt this relatively new, and sometimes misunderstood, technology?

In a report titled “Behind the ROI of Deploying SAP HANA,” Holger Mueller, Vice President and Principal Analyst at Constellation Research dissects the case for SAP HANA in the areas of hardware, implementation, maintenance and the direct business benefits. In the report, without breaking non-disclosure agreements, Constellation determined that the cost of the new hardware was significantly lower than the expense of hardware that was required to support the same footprint on a conventional SAP hardware landscape. Since cost is one of the biggest deciders for the fate of any new technology, Mueller says, “The adoption of HANA looks more promising than previously thought. If a new technology delivers better business benefits on less expensive hardware, you are on to something.”

Subodh Dubey, Global CIO, Usha International, seems to share the same sentiments. The company adopted SAP HANA last year and was pleasantly surprised with the benefits that ensued. Dubey shares, “We have been able to reduce up to 50 percent in inventory and on an average 60 to 70 minutes of users’ time is also saved.” Dubey further adds that the real-time predictive analytics capability of HANA improves productivity within the organisation.

So far so good. But the report suggests that despite all the known business benefits, customers will want to see the tangible benefits in the overall picture of HANA. “SAP needs to create new applications, re-think how a 21st century enterprise operates on in-memory technology, make the associated business benefits tangible and evangelise those benefits among the market leader and fast followers,” the report reads. Mueller, in the report, also goes on to observe how SAP struggles the most to describe the business value, which he feels is quite unfortunate for an enterprise vendor of SAP’s tradition and stature.

Another concern raised in the report deals with the vision that SAP has for HANA and the kind of awareness customers have on the business benefit forefront. The report believes that SAP needs to think deeply to create a vision of how business applications, aided by in-memory technology, should look like and create more awareness around regarding actual business benefits. "SAP has done a good job describing HANA from a technical point of view but still lacks concrete business value propositions. In fact, some complex concepts could benefit from some more thought cycles," the report says.

However, Constellation believes that this lack of vision creates an opportunity for partners to create clever applications for HANA. "The good news - the lack of thought leadership on SAP's behalf on the next generation application side - drives opportunities for partners to create higher business opportunities with applications on top of HANA," says Mueller in the report.

Commenting on the awareness issue, Rajamani Srinivasan –Vice President, Application Sales, SAP Indian Sub-continent says, “SAP is doing its bit from the communication perspective. Working along with our partners, we are educating all the new customers and potential customers as well. Our partners have been well trained with suits on HANA platform.” Srinivasan further adds that the essence of HANA platform is being smarter, faster and simpler which will enable customers to achieve better ROI.

Overall, SAP needs to infuse more clarity on how HANA exactly works for businesses because at the end of the day if a new technology is not well explained and understood, it only fuels competition.

by Robin Chatterjee

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