Business process management software maker IDS Scheer announced in January that it had signed an agreement with SAP America, the U.S.arm of SAP AG, to support its efforts to build a partner ecosystem and distribution model for SAP's new on-demand suite, Business ByDesign. The back story for that announcement is that in 2006 SAP announced that it would spend somewhere in the neighborhood of $400 million to build an on-demand ERP (enterprise resource planning) suite for the midmarket. Released in September 2007, Business ByDesign represents a brand-new business model for SAPas well as for its partners. Dr. Dirk Oevermann, a member of the IDS Scheer Executive Board responsible for Global Consulting and Small and Midsized Enterprises, and Lutz Lambrecht, senior vice president of Consulting Services at IDS Scheer, recently discussed with eWEEK Senior Writer Renee Boucher Ferguson the company's strategy and plans to develop a Business ByDesign practice.
What is your strategy as a SAP Business ByDesign partner?
Oevermann: Just to start with an overview, we [have been] working as a close partner with SAP for many, many years now. I think since 20 years we are a very close partner. In my role in worldwide consulting, SAP makes approximately 60 percent of our overall business-the SAP implementation and process-related business. The Business ByDesign area is a special area of the midmarket strategy of SAP and it also becomes for us at IDS Scheer a more important area. We originally started our business process business in the large account area, and since four to five areas, we worked in this midmarket area, starting with [SAP's] All-in-One suite. We are quite strong in the United States, Canada and some countries in Europe. One is Germany, the other is Russia. We had several discussions with SAP-should we step into Business ByDesign or not-because this is a segment of the market we did not address so far. So we decided to step into this business and we will start our Business ByDesign business in the U.S. and the next country we will focus on will be Germany next year.
Based on the process-centric, integrated business model of Business ByDesign, what is IDS Scheer's rationale for partnering with SAP in this area?
Oevermann: The story behind this target strategy of SAP and IDS Scheer is a very interesting one. If you see the large account areas, for example, in Germany, the penetration of SAP is 95 percent in the large account area. So this midmarket area, especially the lower midmarket, is a very interesting area for SAP and for IDS Scheer. This [Business ByDesign] is a solution that is very much configured and process-oriented, and this is very close to our business and to our know-how, which is business process management-oriented, especially the process area. And all the mythology behind ARIS is very close to Business ByDesign.
Since customers can configure processes right from the start, with the test drive of Business ByDesign, my assumption is that SAP would have process modeling capabilities already built into the suite. So where does IDS Scheer fit in as a partner?
Lambrecht: We start even earlier, when you quote and select processes. Where does ARIS fit in? It's kind of what we do in the normal All-in-One consulting side. We don't have SAP customizers, we have these two consultants that we bring out and combine the business process knowledge and the SAP knowledge. Business ByDesign brings that to a new level because it's totally preconfigured, pretty much. You don't go out and analyze the client and then set up the client. You take a solution, you can adjust it a little, but that's it. That's why we don't play in every single industry; we play in the areas where we speak the language of the client in specific business processes in these areas. Then they learn the SAP customizing, which is probably the smallest part. So it brings this consulting to a whole different level.
OK, but when you go out and engage with customers, are you going out and saying, Let's figure out your processes? What level do you come in to a customer engagement at?
Lambrecht: In the traditional approach you go out and say, OK, show me your processes and we set up a system. This is more [that] we would go out and say to the customer, Where does this system match to you? So it's a totally different approach.
Oevermann: For us, it's a different approach and we need to build up really dedicated resources for this business. It's not our traditional business. It would work in a different way than All-in-One [consulting] with different delivery resources. So we decided to build dedicated teams for this Business ByDesign business. It's more of an out-of-the-box approach with this configurator. It's not a traditional consulting practice.
Exactly, which is why I asked the question about where you come in with consulting engagements...?
Oevermann: Right, yeah. We clearly have to learn, our organization has to learn how. We only can be successful if we build up these dedicated resources, separated from our original or normal consulting organization within a separate team.
In terms of the team you are looking to build, what are the skills you are looking to develop?
Lambrecht: We have an inside sales team and a shared service team. We have the first certified sales person in the world on Business ByDesign. So she's already very active, and they have some very good leads already and we're more or less trying to schedule an implementation, which is very early because we're just certified the first consultants [by SAP] on Business ByDesign. Even the first project would be-they call it a shadow project. So our consultants would go out there together with an SAP consultant to do the project together.