SAP Business ByDesign: will it reduce project failures?

SAP's new Business ByDesign (formerly called A1S) software as a service (SaaS) offering represents a substantial departure from previous SAP products. What are the implications of Business ByDesign on deployment and implementation; in other words, will this new product reduce implementation failures?

To answer this question, let's examine Business ByDesign from the perspective of four issues that often drive success or failure on IT projects:

1. User interface

Writing on this issue, ZDNet's executive editor, Larry Dignan, commented:

[SAP's CEO Henning] Kagermann said SAP didn’t impose any design limitations. “From the beginning we designed it for end to end processes with a user interface people can tailor depending on roles and responsibilities,” said Kagerman.

Good start so far. Business ByDesign was planned from the ground up according to the specific needs of small- and mid-sized companies. Based on this comment and others, it appears the user interface was carefully designed to help small businesses feel comfortable with the software. Gold star for SAP on this point.

2. Ease of getting started

Fellow ZDNet blogger and Enterprise Irregular, Phil Wainewright, had this to say on the subject of getting started with Business ByDesign:

Try-before-buy [is] by far the most impressive aspect of Business ByDesign as demonstrated today. Customers will be able to go to a website, select the set of features they want to implement, and get an instance provisioned within five minutes. They will then be able to get a full trial version up-and-running and start creating their implementation. The website will also have extensive documentation, help, and access to the community of existing customers and prospects. Business ByDesign does this better and more comprehensively than many of the current leading names in SaaS.

Anyone remembering the old SAP R/3 installation procedure will immediately recognize how substantial this change is for SAP. In the past, SAP installation was a job reserved for rarified, highly-paid experts called "basis consultants." Definitely another gold star for SAP.

3. Customization requirements

Code customizing has long been a major source of implementation risk and cost for SAP customers. Dennis Howlett, another ZDNet blogger and Enterprise Irregular, offers these thoughts regarding customization in the world of Business ByDesign:

Earlier in the year, Hasso Plattner, one of the company’s founders said the company made an early mistake by allowing customers access to the code. This lead to code proliferation and the creation of one off processes over which the company had little control but which it has had to support ever since. Expressions like ‘never again’ and ‘over my dead body’ are the ways in which SAP executives have described their forward looking approach to customization. Instead, Kagermann adds: “We’ll provide rich configurations and extensions as and when customers are ready. But not customizations.”

However, Phil Wainewright has concerns about this approach, saying the ability to customize remains important in some situations:

There’s a lot of configuration flexibility in Business ByDesign, and a creditable acknowledgement of the role business managers need to play in configuring business processes. But I’m not sure that SAP really understands the degree of customization and verticalization that the SaaS market demands, even in the midmarket sector it’s targeting. And it may hold back from catering to that demand for fear of impacting the market for its existing products.

There's always a trade-off between simplicity, flexibility, and risk. In this case, I believe SAP made the right decision limiting customization, to reduce implementation and deployment risk. Nonetheless, in deference to Phil's comments, SAP only gets a gold-silver alloy star on this point.

4. Pricing complexity

SAP's opaque and complicated pricing has long added complexity and risk to customer implementations. Enterprise Irregular, Zoli Erdos, describes SAP's pricing for Business ByDesign:

Fixed, transparent pricing (which, I might add will put the squeeze on Salesforce.com and NetSuite)

Simple, straightforward pricing earns SAP another gold star.

These four issues are only the tip of the iceberg in predicting whether or not Business ByDesign will make SAP implementations more successful. Nonetheless, the launch of SAP Business ByDesign demonstrates positive forward motion by addressing important issues that often lead to failed projects.