MUFI Rating & Risk – SAP SmartOps
MUFI: Maintainability, Usability, Functionality, Implement ability
Vendor: SAP (Select For Vendor Profile)
SmartOps, before its acquisition by SAP in 2013, was one of the significant inventory optimization vendors. For some years SmartOps was involved in a partnership with SAP, where SAP was primarily a reseller of SmartOps. This was one of the primary ways that SmartOps became the best-known inventory optimization and multi echelon-planning (MEIO) vendor. It was not, as SmartOps has repeatedly proposed (or believes themselves) because they had the best technology.
SNP is marketed as a leading solution, but it does not have the most advanced method in supply planning, which is inventory optimization and multi-echelon planning (MEIO). There are some reasons why MEIO is a far better method than cost optimization for supply planning. However, one of the most important is that service levels are far easier for companies to set than determining their costs.
SmartOps was always more of marketing phenomena than an innovation leader; therefore, its acquisition by SAP is a very logical move for the company. At SAP marketing is dominant, and technology is a distant second. SAP has been controlling SmartOps marketing messages essentially since they initiated their partnership — years before the acquisition.
SmartOps was the leading proponent of trying to simplify its marketing message to minimize what MEIO would do. MEIO should be used to replace the supply planning method and system. However, if SmartOps has taken this approach, it would have put them into conflict with companies like SAP. Therefore, they developed a marketing message which allowed MEIO to be viewed as adjunct or assistive technology to either the ERP system or to the already installed supply planning system. In this case, SmartOps, or the MEIO application calculates merely master data parameters – the most common being the target stock level and even more commonly safety stock. These parameters are then entered into the ERP system or planning system, and then these systems go through their routine planning. The SmartOps approach considerably adjusted how MEIO was used and oversimplified the work that was required for companies to get their application to work correctly. We do not have a separate SmartOps vendor profile because the company no longer exists as an independent entity, however, if we did, we would point out that SmartOps was always more focused on what was marketable versus what was correct. It was their marketing that differentiated them from other MEIO, making them the best selling MEIO application vendor. Still, unfortunately, this marketing has placed MEIO into a much smaller space than it should have been. This is one of many reasons that we consider the quality of the information provided by SmartOps provided to customers to have historically been extremely poor. We have observed this not only through reading their marketing documentation but also in participating in software selection presentations.
As all acquiring software vendors do, SAP announced that the SmartOps acquisition was going to allow them to be more strategic than ever as the following quotation attests.
SAP has acquired SmartOps in a move the company says will allow it to develop real-time supply chain applications that take advantage of SAP’s HANA in-memory database.
However, that is just for marketing purposes; in fact, the development of SmartOps will probably be only minimal from the time of the merger onward. This is a problem for buyers because SmartOps was a lagging application living off of its partnership with SAP when purchased, followed a flawed implementation approach (as described above), and has a low level of buyer satisfaction and a poor implementation track record.
For years SAP and SmartOps have been telling companies that these two solutions are integrated, but in fact, the integration of master data parameters is straightforward. The applications are not integrated regarding transactions, so there is no point in paying much extra for this integration. Secondly, because SmartOps is just an adjunct to SNP or SAP ERP, much of the benefit of having an MEIO application is lost. This is not a solution architecture designed around business requirements or based upon leveraging MEIO functionality but is a marriage of convenience based on the fact that the dominant software vendor is offering a dated solution to their customers.
Both SNP and SmartOps are weak applications that score in the bottom of the supply planning software category. Combining them (in fact there only needs to be one external planning system) will not make them better, and would lead the highest TCOs of any supply planning solution on the market.
All scores out of a possible 10.
Vendor and Application Risk
SmartOps faces similar issues of the problems that come with socializing inventory optimization. In reviewing post-go-live projects with various buyers of inventory optimization software, it is quite common for many of the business users and the executives not to understand how inventory optimization works. SmartOps deliberately understates the complexity of inventory optimization to get the sale, which makes implementation difficult. There are also serious sustainability concerns when SmartOps is co-implemented with SAP SNP, as SNP already consumes so many resources to keep operational.
Likelihood of Implementation Success
This accounts for both the application and the vendor-specific risk. In our formula, the total implementation risk is application + vendor + buyer risk. The buyer specific risk could increase or decrease this overall likelihood and adjust the values that you see below.
Finished With Your Analysis?
Brightwork MRP & S&OP Explorer for Tuning
Tuning ERP and External Planning Systems with Brightwork Explorer
MRP and supply planning systems require tuning in order to get the most out of them. Brightwork MRP & S&OP Explorer provides this tuning, which is free to use in the beginning until is sees “serious usage,” and is free for students and academics. See by clicking the image below:
Software Selection Book
Enterprise Software Selection: How to Pinpoint the Perfect Software Solution Using Multiple Sources of Information
What the Book Covers
Essential reading for success in your next software selection and implementation.
Software selection is the most important task in a software implementation project, as it is your best (if not only) opportunity to make sure that the right software—the software that matches the business requirements—is being implemented. Choosing the software that is the best fit clears the way for a successful implementation, yet software selection is often fraught with issues and many companies do not end up with the best software for their needs. However, the process can be greatly simplified by addressing the information sources that influence software selection. This book can be used for any enterprise software selection, including ERP software selection.
This book is a how-to guide for improving the software selection process and is formulated around the idea that—much like purchasing decisions for consumer products—the end user and those with the domain expertise must be included. In addition to providing hints for refining the software selection process, this book delves into the often-overlooked topic of how consulting and IT analyst firms influence the purchasing decision, and gives the reader an insider’s understanding of the enterprise software market.
By reading this book you will:
- Learn how to apply a scientific approach to the software selection process.
- Interpret vendor-supplied information to your best advantage. This is generally left out of books on software selection. However, consulting companies and IT analysts like Gartner have very specific biases. Gartner is paid directly by software vendors — a fact they make every attempt not to disclose while consulting companies only recommend software for vendors that give them the consulting business. Consulting companies all have an enormous financial bias that prevents them from offering honest advice — and this is part of their business model.
- Understand what motivates a software vendor.
- Learn how the institutional structure and biases of consulting firms affect the advice they give you, and understand how to properly interpret information from consulting companies.
- Make vendor demos work to your benefit.
- Know the right questions to ask on topics such as integration with existing software, cloud versus on-premise vendors, and client references.
- Differentiate what is important to know about software for improved “implement-ability” versus what the vendor thinks is important for improved “sell-ability.”
- Better manage your software selection projects to ensure smoother implementations.
- Chapter 1: Introduction to Software Selection
- Chapter 2: Understanding the Enterprise Software Market
- Chapter 3: Software Sell-ability versus Implement-ability
- Chapter 4: How to Use Consulting Advice on Software Selection
- Chapter 5: How to Use the Reports of Analyst Firms Like Gartner
- Chapter 6: How to Use Information Provided by Vendors
- Chapter 7: How to Manage the Software Selection Process