SAP Fiori: Putting a price tag on usability?

Traditionally, how individuals and groups use on-premises ERP applications has not been a core driver in designing the software. Instead, usability has been an afterthought, only addressed once the ERP applications were in the hands of customers and their implementation partners. With the rollout of SAP Fiori applications that began last year, SAP customers now have the option to adopt software that is specifically aimed at simplifying their ERP user experience.

The old ERP design mindset, which was fixated on transaction execution and not usability, has been crumbling in the face of the rapid and widespread adoption of cloud, mobile and consumer applications. More firms want to empower a broader set of employees to access and interact with specific ERP data and processes, ideally without making additional investments in training. ERP vendors keen to grow their user-penetration percentages are extending the scope of their applications to redefine the meaning of "end-to-end ERP," a move that will increase the numbers of occasional users. The vendors are also developing a single, unified software infrastructure to underpin and link those applications together.

SAP exemplifies why and how ERP vendors are changing their attitude about usability. Over the years, many SAP customers have struggled with the ERP user experience and have either tried to work with or around the complex and monolithic applications as is, or poured resources into usability work performed in-house or by implementation partners.

From time to time, SAP has tried to address usability, but never to the extent of putting the user experience at the heart of its ERP design. As SAP moves to a HANA-powered in-memory infrastructure for all its applications, the vendor is also expanding its efforts to support business networks in verticals such as retail by bringing in brand-new user communities.

And this is where Fiori -- SAP's new role-centered way of thinking about application design -- comes in. Powered by a combination of SAPUI5 (its HTML5 user interface control library) and NetWeaver Gateway, Fiori applications aim to present an individual with the on-premises ERP information they need to execute routine tasks across a variety of devices. SAP released the first wave of Fiori applications in May 2013 with 25 applications and followed that up with a second wave of 200-plus Fiori applications in December 2013. So far, Fiori applications aim to refocus and enhance the user experience of SAP's on-premises financials, human resources, sales, procurement, manufacturing, supply chain, research and development, and engineering applications.

There are three major kinds of Fiori applications: transactional (e.g., when an employee submits a travel request or that request is approved by a manager); analytical (e.g., how a cash manager monitors a cash flow); and factsheet (e.g., how a financial controller views a cost center). While transactional Fiori applications can run on HANA and non-HANA databases, the analytical kind require the HANA Live operational analytical engine, and the factsheets require Business Suite on HANA. Basic support for transactional Fiori applications starts with SAP ERP 6.0 SPS 15, and some transactional applications will need the capabilities available in ERP enhancement packs.

Fiori is priced at $150 per user, and it's a perpetual license, so a single user could theoretically be using one or all 200 or more Fiori applications. Because $150 is the list price, organizations can expect it to be heavily discounted.

One issue is how the per-user license model will work in practice for organizations with large fluctuations in their populations of casual users. A bigger issue is how amenable firms are to paying specifically for usability -- even with the promise, in Fiori's case, of analytical and factsheet applications that come with new capabilities.

So far, there have been rumbles of discontent from some midsize and enterprise SAP customers and SAP system integrators. In the on-premises world, firms in search of more usable ERP have traditionally paid extra, but that approach suffers in comparison nowadays with the Software as a Service model, where vendors can -- and do -- roll out new user interfaces and additional functions to all their subscribers as part of the latest automatic upgrade.

Still, it's early, experimental days for Fiori, with customers numbering in the hundreds rather than the thousands. Some of the early adopters are multinationals such as Colgate-Palmolive and Nestle, which regularly coinnovate with SAP. I anticipate SAP will soon move away from charging a per-user flat fee in favor of more nuanced and striated pricing for the different types of Fiori applications. With more than half the current Fiori applications requiring HANA technology, SAP will want to make Fiori more attractive to its customers to help drive HANA adoption. It will also be interesting to see what SAP does with the insights into common pain points of ERP usability it will likely gain from Fiori use patterns.

For now, the focus with Fiori is on being device-agnostic, but as SAP embraces Fiori design thinking across its entire application portfolio, Fiori seems set to become deployment-agnostic as well. Going forward, SAP will need to demonstrate to its existing customer base how using Fiori applications can deliver quantifiable savings in time and money, improve employee efficiency, and ultimately help contribute to employee retention.

About the author:
China Martens is an independent business applications analyst and freelance writer. Email her at [email protected] or follow her on Twitter at @chinamartens.