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“Asia is our biggest market”
 SAP for Professional Services is a set of solutions designed for organizations that provide project-based and managed services. Michael Lamade, vice president, professional services IBU, SAP AG, spoke to Network Computing’s Anoop K Menon on how SAP’s solutions can help organizations providing professional services improve operations and deliver client value.
What are the specific segments that SAP for Professional Services addresses?
Our solutions for Professional Services span a wide area from the traditional requirements of consulting, audit, tax and IT service management to emerging ones like legal, staffing/temporary labor services, power and utility management, and commercial real estate services. Global leaders like IBM, EDS, KPMG, Deloitte and PwC are our customers. We use solution maps to represent our solutions, starting with strategy, planning and portfolio management, to CRM-based processes like client and opportunity management, and all the way to project and resource management. These support key business resources around engagement management or order to cash process and service procurement.
What are some of the performance improvements that organizations deploying your solutions can expect?
One of the key performance indicators that professional services firms want to improve or optimize is utilization. With our resource management tool, they can model both internal and external resources, assign very detailed qualification profiles and proficiency levels, and optimize the organization’s external and internal resource mix. From a project point of view, companies can define what the demand is, and from a resource point of view assess resource capability at granular levels and do optimal matching.
We also help professional services firms integrate opportunity management and CRM with a project, which is another important performance area. If a customer has a project template or standard way of delivering their projects to clients, they can use that at the opportunity stage itself and get early indications about resource needs or costs.
What are some of the deployment trends in the Indian market when it comes to IT/BPO organizations?
When we talk to IT services organizations, large or medium, the first thing that comes across as a pain point is poor visibility of resources. For these firms, a resource is nothing but an inventory, so they want to have a visibility of where these resources are being allocated, what skills they are carrying, the projects they are working on, etc. They want to manage their people or talent supply chain. Our resource management solution helps resolve these pain points. Further, IT companies also need an enterprise-wide project management framework.
Typically, project managers tend to work through desktop-based project management tools that lack enterprise-wide functionality. When the project manager quits the organization, he takes all his knowledge and skills along with him. Our project management functionality enables project management on an enterprise-wide platform. On one hand, you have project managers managing these projects, on the other hand, you have support from analytics and dashboards.
On the pricing and billing front, our engagement management functionality can help companies address their unique invoicing requirements like fixed price, milestone billing, periodic rates billing, time and material or resource-related billing, or whatever conditions or parameters you can think of. Another growing requirement is compliance whether it is SOX, Clause 49 or US GAAP. Many Indian companies are listing on US bourses. A few IT companies here are using our corporate governance functionality.
How does the professional services sector in India compare with those overseas, like an IBM or KPMG? How close or far apart are they?
The backgrounds are radically different. We can look at global professional services in terms of clusters of companies. The KPMGs, PwCs and Deloittes of the world come from areas where they are practice leaders or have partners who basically manage the business. Business is managed locally, and within a country there would be 3-4 partners doing very different things. However, the consolidation wave has rubbed off on these players, many of whom have started consolidating partner structures into organizations per country. Recently, KPMG Europe merged its German and British subsidiaries. That’s the traditional evolution path.
Then you have companies like IBM and EDS that have emerged from a manufacturing background. In fact, IBM and EDS are starting to talk about service productization in terms of standardizing services, providing service catalogs and making it easy for them to sell and easier for the customer to buy. In India, the evolutionary path of the professional services industry is different. The roots lie in technical service provisioning in terms of IT outsourcing services, desktop services, call centers, software development services and maintenance services. They don’t have a big footprint in the traditional consulting business. There is a certain commonality between clusters of customers, but that’s all there is to it.
SAP has enjoyed great success with its pre-configured templates strategy, especially in manufacturing industry deployments, where it has helped bring down the total cost of ownership (TCO). Have you adapted this to the professional services business too?
We have addressed the TCO aspect, or rather, the implementation portion of the TCO equation. We have best practices; these are basically pre-configured systems that help customers implement all core applications in SAP for Professional Services quickly, without extensive configuration and at a reduced cost. We have two different usage paradigms. There are the medium and small businesses that use the pre-configured systems scenarios because they cover 90 percent of what they would implement anyway. Large enterprises use them as a template or starting point, and evolve their own scenarios or business processes. For a small company, a usage level of 70-90 percent is quite typical. For a large company though, it would cover only 30-40 percent of what they would implement because of their competitive differentiation.
We have found these best practices useful for the mid-market companies because they want to be up and running fast. We are also packaging certain solutions around the best practices. That is something we have brought into the picture from a consulting standpoint.
What’s the technology roadmap you will be following?
Once a year we organize an advisory council where we interact with strategic customers and discuss strategy for the next 2-3 years. This kind of lays the foundation for our product planning. Another key building block of our strategy is Web-enablement or Enterprise SOA. SAP for Professional Services is powered by the SAP NetWeaver platform. We are working closely with customers to define which scenarios need to be service-enabled and how these services would be utilized. We also have a major development focus on resource management because that is one of the areas where we have good coverage. We will invest quite significantly in this area to cater to the unique requirements of the Indian market.
We have laid out a product roadmap till 2010 for service enablement and continuous delivery of new services to enable our customers to have more flexibility. As of now, we have 1,400 services available; we will continue to build and deliver against that roadmap. From a growth point of view, Asia is our biggest market.
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