Last week, I navigated my way through the perils of ash-laden flight cancellations to attend SAP Insider in Milan, Italy. It was tough travel with lots of drama.  I wondered if it would be worth the effort.   Only 50% made it.  The event was a bit like a ghost town (a well planned event with few attendees); but, at the end, I was glad that I made it.
I am known to be an open critic of SAP SCM. While I have given SAP tough love, I also need to give them credit. I believe that WHEN SAP understands the business problem that they write the BEST software of any company that I follow.  Their challenge is gaining a full understanding the business problem.
At the event, I wanted to get insight on customer acceptance of new releases.  To do this, I lingered by the coffee stand interviewing users, and peppered the solution demonstration presenters with questions.  Here I share highlights and missed opportunities. 

Highlights

I walked away being the most impressed with SAP’s progress in three areas:
1) MII: The manufacturing intelligence product purchased from Lighthammer in 2005 is coming of age in the SAP suite.  At the event, it was great to get insights from project leaders completing mature installations in Europe.  The use of manufacturing data store and more advanced connectors has improved the user experience; and MII in combination with the Visiprise purchase for MES (in 2008) offers discrete companies a depth of solution that is largely unrivaled. 
It is great to see SAP’s renewed focus on manufacturing.  The Company’s heritage are deeply implanted with manufacturing companies; and the need for manufacturing performance management for a global manufacturing company has never been higher. They need help. MII is a great step forward; however, it is a middleware product that is not well understood by clients. SAP has is a messaging and positioning problem on a good product.
While strong for discrete, tTe manufacturing solution for process companies has gaps.  It lacks a process-specific MES plug-in. If only SAP would invest in filling out a Visiprise-like MES component for process. This would accelerate the market. I would love to see them buy GE Fanuc for consumer products and Werum for pharmaceutical manufacturers. 
2) PLM:  My biggest surprise at Insider was the progress that SAP has made in Product Lifecycle Management (PLM).  With the high number of early project implementation failures –the product was released too soon without enough depth—I had largely written off SAP in the PLM space.  I was wrong. 
SAP has gone back to the drawing board to redefine the user interface, and has listened to customers to redefine the functionality.  Using design theory, the company has watched users work with PLM software, and has designed the solution based on the need state.  The user interface is very intuitive, and I was glad to see SAP recognize the need to NOT tightly couple the bill of material. Despite the few companies at the event, excitement was high at the PLM table in the solution pavilion.  I applaud SAP for recognizing the need to go back to the drawing board and try a new approach.  We now need to let it mature; but there is enough user interest to propel it along.
3) Transportation Management:  Another surprise for me was SAP’s work on transportation management.  SAP Transportation Management 8.0 ramp-up – with a planned start date of November 2010 – is oversubscribed.  With three strong case studies under their belt,  SAP is serious about transportation management.
It is good to see their departure from the prior transportation solution (TPVS). With increasing customer dissatisfaction,   I had hoped that SAP would have bought i2 Technologies for their transportation management product—versus paying 83 million in patent litigation—to give process companies a deeper transportation option. To my surprise, they have decided to build it organically.  The SAP Transportation 8.0 functionality —which will be showcased at Sapphire—will be competitive to JDA, Manhattan and Red Prairie transportation solutions.

Missed Opportunities

The event showcased major progress in solutions for discrete and high tech/electronics manufacturers. Progress in industry-specific solutions was not equal for process industries.  There was little change for consumer products and pharmaceutical company solutions; and visibly absent for chemical companies.   This highlights the need for the SAP installed base to actively support the industry-specific Customer Advisory Boards (CAB).
I leave the event with two major disappointments.  The first is that the integration of business intelligence and performance management is moving slowly. …too slowly for this curmudgeon analyst.  I was hoping to see the results of the Teradata/SAP Business Objects integration and the launch of a new generation of predictive analytics.  While there is some progress in Performance Management, it is largely traditional reporting/dashboards. 
The second is that SAP APO—SAP’s supply chain planning suite—was  largely business as usual. At the event, I saw small, incremental changes, but no major innovation like I saw in MII, PLM and transportation management.  I keep crossing my fingers. I would love to see  SAP have the courage to blow up APO and start again.  Who knows if it works for PLM, maybe there is a chance to bring innovation to a solution — and the larger Supply Chain Planning (SCP) market– that sorely needs to be redefined. 
What do you think?  Are you a fan of MII? What do you think of the new PLM user interface?  Are you ready to give the transportation product a try?
This week, I am back in the United States speaking at the High Tech Forecasting Conference and attending the IBF conference.  Look for my blog on driving the customer-centric response later this week.