SAP Gets Serious About Its Data Warehouse Product

MUNICH (05/02/2000) - With release 2.0 of its Business Information Warehouse (BW), German ERP (enterprise resource planning) vendor SAP AG hopes to attract customers away from traditional data warehousing providers in the R/3 environment. Technically, SAP's BW is no great shakes, according to analysts, but the close connection between the software and SAP's ERP R/3 suite is reason enough for many users to try out the software.

At present about 100 customers work productively with SAP's BW, according to market research company Gartner Group Inc.

"Who would have imagined that? Two years ago, we still had no data warehousing product of our own, and today there are events where we discuss the SAP BW and alternative solutions", Peter Grendel, in charge of SAP's corporate marketing data warehouse, said at a recent panel discussion at Information World 2000.

The organizer of the Düsseldorf event, Management Circle (Eschborn), was able to attract approximately 400 potential data warehousing customers to discuss the advantages and disadvantages of BW. The participants agreed with SAP's fundamental strategy behind the product, but there was also an ample amount of detailed criticism.

No Technical Masterpiece

BW 2.0 a, which has been available for a few weeks, is no technical masterpiece, according to analysts.

Bill Inmon, best known as one of the fathers of the data warehousing concept, said that the SAP product is not even a real data warehouse. In his paper entitled "SAP and Data Warehousing," Inmon objects to the company's closed proprietary architecture.

"Customers should know what they commit to when they decide for the SAP product," said Gunnar Weichel, a data warehousing expert with CSC Ploenzke in Hamburg, agreeing with Inmon's assessment. The complex structures familiar from R/3 are also reflected in SAP's data warehousing product.

Starting with the interfaces, BW can only be accessed from data sources such as SAP's R/3 or other external systems through the company's own Business Application Programming Interfaces (BAPIs). To connect external tools for OLAP (online analytical processing) and presentations, it's possible to add in Microsoft Corp.'s OLE DB for OLAP (ODBO) standard in addition to SAP's BAPIs.

In comparison with other data warehousing tools, SAP's BW overall is too closed and inflexible, according to analyst Weichel.

Carsten Bange, an analyst at the Business Application Research Center (BARC) in Würzburg, tested BW 2.0a. "The SAP BW represents the documentation from R/3 in a more user-friendly form -- nothing more," Bange said. Because of its architecture, BW is less suitable for on-the-fly online analysis, an area of application for data warehousing technology.

Homework Partially Finished

However, with release 2.0 of BW, SAP also finished a part of the development work not done in previous versions of the software. This includes for example the incremental loading of data of functional systems and the ability to navigate between different fields of analysis (Infocubes) such as personnel, marketing and controlling -- known as "drill across cubes."

It is now also possible to collect data for evaluations from the Operational Data Store (ODS), the heart of a data warehouse, or directly from the functional R/3 system. Furthermore, precast warehouse models -- so-called Business Content with the corresponding extractors for R/3 data and precast analysis cubes -- guarantee short implementation periods, promises SAP Manager Grendel. All of these improvements are already standard in competing products from SAP rivals such as Acta or Informatica.

However SAP's Walldorf-based development team didn't want to earn technical laurels. In marketing the reporting and analysis tool, their strongest argument is integration. BW is closely related to the company's ERP R/3 suite. "This connection enables customers to implement solutions rapidly. Data and its descriptions are already entered into R/3 and can be imported one by one into the BW," Grendel argues. Therefore, a SAP-BW project takes on average only 4.5 months to implement.

Effective Integration With R/3

However, first of all, it is important that not only a technical integration exists between the two SAP software systems but also a transmission of business assessment content. "The time-consuming description of meta data can be dropped because the definitions in R/3 and BW are identical," Grendel said. In this respect, SAP seems to strike the right note with many customers. "We gladly take cutbacks in capability and functions as long as integration to the R/3 system is guaranteed," was the common response from customers at the recent event in Düsseldorf.

The experiences of Robert Marek, managing director of Bertelsmann AG service provider CM4, underline these arguments. "The expenditure for extraction, transformation and loading (ETL) of data out of R/3 into BW is limited to a minimum, thanks to the interlinking," he said. CM4 implemented a data mart -- a cutdown version of a data warehouse -- for the book club section of Bertelsmann, in which BW analyses control pieces of CRM (customer relationship management) applications. Specifically, results of reports from the data mart can be fed automatically into the telephone service center for direct distribution measures, Marek said.

However, the advantages of interchangeability between ERP and data warehousing systems are only applicable in the SAP world. For BARC's Bange, this isn't enough. The customer has to be aware that the advantages in the ETL process, which can constitute up to 70 to 80 percent of the expenditure for a "normal" data warehousing project, only work in a closed SAP environment. Even SAP knows that 92 percent of its customers use supplementary solutions from third-party manufacturers, as a study ordered by the ERP manufacturer demonstrated.

Integration of External Data is ComplicatedThose who trust in a pure SAP world have their work cut out for them when seeking to integrate external data. In its "Research Note" from March 17, Gartner Group analysts only recommend using SAP's BW if a company is importing at least 50 percent of evaluation-relevant data from R/3. BW tester Bange raises the Gartner figure up to approximately 80 percent. The reason: the integration of external data sources is complicated. SAP only offers two possibilities: on the one hand, in-house BAPIs as well as the integration of the data as a flat file -- a common but antiquated procedure. On the other hand, there is a data warehouse data provider interface (DW DPI) available to access data from Dun & Bradstreet and AC Nielsen. These sources can be integrated in the BW front-end, the Business Explorer, without being physically imported.

Instrumental in the integration of external data could be ETL tools from third-party software providers like Acta, Informatica or ETI. These tools offer noticeably more possibilities to accepting data from external systems.

Moreover, these tools come with R/3 as well as more user-friendly programming since they don't require users being knowledgeable about SAP's proprietary programming language ABAP, which is required in the case of SAP's mechanisms.

However, the downside is the high price for third-party ETL tools: the data collectors are not available for less than 100,000 German marks (US$46,479).

"Only if many sources must be combined and numerous meta data are to be managed, is the high purchase price justifiable," summarizes Norbert Egger, data warehouse specialist and manager of the IIT in Switzerland.

Continuously Increasing Complexity

Nevertheless, customers also have to be prepared for increasing complexity in a pure R/3-BW environment. SAP is increasingly trying to "think ahead" in terms of the content of analysis applications -- the ERP vendor calls this Business Content, which is essentially contained in Infocubes. According to SAP's Grendel, there are more than 450 reports (queries and work folders) included in BW 2.0a as well as more than 110 Infocubes. Infocubes store correlated data in a multidimensional model. For example, there are cubes for marketing, human resources, finances, controlling and so on.

Analyst Bange warns that Business Content increases strongly with every release of BW because SAP attempts to fulfill more and more customer requests. "As a result, the system becomes very complex and there is a risk of not finding reports which are really needed, the analyst said. With its fast development, the BW warehousing tool might soon be as complex to operate as R/3 users are now used to when having to deal with approximately 25,000 tables. "The analogy (between R/3 and BW) is striking," Bange says. "Without outside help, BW isn't controllable anymore."

SAP Manager Grendel does not accept the criticism of uncontrolled growth of Business Content and Infocubes. "The cubes are professionally divided according to industry and customer roles, facilitating the selection of the required elements," he argues. Furthermore, the cubes are merely serving as a basis and can be complemented or adapted smoothly with SAP tools. "The glee of competitors that cubes should be thrown away as soon as external systems are to be tied in, is unfounded," he added.

Excel Too Weak as Analysis Front-end

Business Explorer delivered by SAP (Bex), the analysis front-end gives weight to users' criticisms. It is based on Microsoft Corp.'s Excel spreadsheet software and is only usable within limits and rather inflexible for clear management graphics, according to CSC Ploenzke Consultor Weichel. IIT's Egger goes even further -- "The Visual Basic programming is not reasonable for the Excel Front-end. Personally, I refuse projects," Weichel said. As soon as something changes in the database, the adaptation and maintenance of the macros gets prohibitively expensive. In his opinion, BW in the R/3 environment is still unrivalled. Only the correct mixture of tools is important -- for data procurement, a suitable ETL tool from a third-party provider, the business content of SAP and the front-end from a specialist like Arcplan, MIS or Business Objects.

Despite criticism, BW is apparently the hit software among SAP's so-called "New-Dimension" products. While SAP's CRM applications stay on the shelves, BW has already sold strongly, including installations by countless software and consulting partners. However, numbers relating to BW installations that are already up and running vary. According to Gartner Group, approximately 100 customers are using BW productively, while SAP's Grendel names 200 BW applications in operation, the largest system presently containing 0.5T bytes of data.

Proponents and critics agree on one point: with BW, SAP has the potential to become a market leader in the data warehousing industry. With a foundation of more than 20,000 R/3 installations, price dumping because of grouping tactics à la Microsoft, many customers willing to wait for SAP software, as well as weak professional arguments from its competition will all help SAP on its mission to dominate the data warehousing arena.

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