Building the business case for SAP BW on HANA

5 September 2012

John Appleby

John Appleby

Global Head of Sales

Implementing SAP's NetWeaver BW Data Warehouse on its in-memory platform SAP HANA (otherwise known as BW on HANA) might just be SAP's fastest growing product line in history, with 150 projects within 3 months of General Availability of the product. One of the elements my team is most involved with right now is building the benefits case and business case for the capital investment. This blog gives an overview of what is required and what the elements are.

As with any business case, we have a set of capital and operational expenditures, which offset or avoid costs, or bring tangible benefits. The biggest difficulty with this as relates to Data Warehouses is that the benefits of faster, better decision making are hard to measure. What we tend to do instead is to create the business case based on savings, and describe the benefits case as coming "for free". Yes - despite the capital expense, BW on HANA will save almost any business money.

Section 1: Capital and operational costs

a) SAP HANA licensing

The great thing about SAP HANA DataCenter Edition pricing is its simplicity. You pay one price per 64GB unit for all use cases including all features, including some that other organisations like IBM and Oracle charge for: compression, tuning, high availability etc. It is important though to understand how many 64Gb units you need for current and future needs - assessing how big your system will be and how much future compression you can hope to get.

b) Hardware

SAP HANA hardware is available from all major vendors in 128GB-1TB single nodes, or clusters of up to 16x 512GB or 1TB nodes. My advice for anyone with a moderate size BW system: only buy 512Gb "medium" nodes and start with 4.

c) Support

There is a cost to support SAP HANA. You will need to include software, hardware and systems support costs, depending on the period over which you choose to build the business case (I suggest aiming for 3 years with a 1 year ROI).

d) Implementation

There will of course be a cost to implement SAP HANA, either by migrating your existing BW system or by creating a new one.

Section 2: Capital and operational savings

a) Future project costs

Most organisations spend a substantial amount on BI projects, and with BW on HANA they will either spend less (fewer full time employees or consultants) or achieve more for the same, in a shorter elapsed time. Our benchmarking suggests that project build times are 20-30% less with BW on HANA, leading to an overall saving of 10-12% or more for capital projects.

This is usually enough to pay for SAP HANA on its own, several times over.

b) Performance optimisation and support staff

Most organisations have one or more Full Time Employee (FTE) dedicated to performance tuning of existing solutions. This may be a DBA or BI resource; I have run projects that used 500-1000 man days for performance tuning of large EDW environments. With BW on HANA this is a thing of the past.

In addition, SAP HANA is less costly to support than other databases because it requires almost no maintenance. Expect savings here.

c) Hardware

BW on HANA hardware is cheaper and greener than other EDW platforms. Many other platforms require hundreds of spinning disks which are costly and take up space. With BW on HANA you know exactly how much you need based on the size of your Data Warehouse and you do not need bolt-on accelerators like BWA or Exalytics, taking up more space.

How this inputs into the business case depends on your operating model. If you have a cost centre accounting model then you may pay for hardware from your departmental budget. You may be able to reuse costly UNIX partitions for other systems, saving money by avoiding the need to purchase more. Or, your hardware may have depreciated and it may be time to replace it anyhow.

d) Database license

Again this depends on how you license your existing database, but you may save in annual support costs. Or, you may be able to reuse the license elsewhere, avoiding expense. Or a charge may be made to your cost center that can be avoided.

e) Trade-up

If your are a BWA customer then SAP will allow you to trade in that purchase, often to 100% of the original purchase amount. Talk to your SAP account team for more details.

f) Services rebate

When you make your first purchase of SAP HANA, you may be eligible for a services rebate of up to 30% of your license price that can be used by a BW on HANA Systems Integrator (including Bluefin!). In some cases you can save money by purchasing more HANA units and getting a bigger rebate. Talk to your SAP account team for more details.

g) Infrastructure budget

Many organisations are set up in such a way that they have budget set aside for infrastructure projects like upgrades. If you have an older Data Warehouse then it may be time to upgrade it and if you combine the upgrade with the migration to SAP HANA then you will save money on the overall program of work.

h) Third party analytics

How much money does the business spend directly with third parties because the can't get what they need out of their existing EDW? Chances are with SAP HANA, you will be able to provide what they need and you can cut the cost of third party Analytics suppliers.

i) Project over-runs

Looks back through your last year of BI projects and talk to the project managers. How much over-run was there on those projects and how much was attributable to performance problems? Moving to BW on HANA will allow you to reduce over-runs.

Section 3: Benefits case

Hopefully by now you will be able to create a basic cost/saving sheet for BW on HANA - in every example I have seen, it has saved organisations money either in TCA (for new implementations) or TCO (for migrations of existing EDWs). This makes BW a "no brainer" in the eyes of the people I have spoken to, and so we can focus on making the soft benefits case attractive.

a) Better performance

Better performance is a nice-to-have but it is hard to put hard numbers against. As a side-effect of saving money by moving to SAP HANA, it becomes much more attractive.

b) More readily available information

With SAP HANA, a plethora of options of making data available more often or real-time are available to you. You can either reduce batch schedules or replicate data directly into the EDW. Either option makes the business users happier!

c) Self-service

I have talked to many BI managers who are scared of giving more open access to an EDW because it would impact performance. With BW on HANA you don't need to worry about that - in the worse case, they will crash Excel on their PC when they pull back millions of rows!

d) Adoption

More open access means more adoption which in turn means better decision making and a better return on the overall Data Warehouse strategy.

e) More granular information

Because SAP HANA is faster, and requires less duplication of information, it is possible to pull more detailed information into the Data Warehouse. This will in turn reduce the number of 3rd party vendors used to process data outside your company, often at massive expense.

f) More for less

IT budgets continue to get squeezed and the fact that BI projects can be done faster, with fewer objects and for less money is a very useful factor.

g) Reduced project escalations

Performance problems are the single biggest reason why BI projects overrun and are delayed. With BW on HANA you still need to design performant solutions, but you don't have to worry about large or complex data models.

Conclusions

Implementing BW on HANA becomes a no-brainer for most organising who try to build a business case in this way. What elements have I missed and what other components are you using to build the business case? Let me know and I will update this article to include them!

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About the author

John Appleby

Global Head of Sales

I've always been passionate about new technology. I cut my teeth helping global financial services and consumer goods companies build data warehouses to manage their business - especially when they wanted to run faster.

These days, I travel weekly across continents, helping clients differentiate themselves using analytics technologies. This then involved building a team to design the solution, make it work and lead it through to successful completion.

I believe that in-memory computing is radically changing the face of business so you can ask me about SAP HANA, or about any other data platform like DB2 BLU, Hadoop or MongoDB for that matter.

I'm passionate that giving back to the community reaps long-term rewards and this has shaped the last few years of my career - being a contributor to knowledge sharing websites as an SAP Mentor; and a sometime advisor to Wall Street investors on emerging technologies and those companies bringing to market new innovations.

When I'm not busy designing in-memory apps, you may find me pounding the pavement to the beat of music in the hilly suburbs of Philadelphia, or traveling the world to meet new people and new cultures.

Bluefin and SAP S/4HANA - welcome to the one horse race

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