SAP Running Simple to Be a Cool Vendor

The SAPPHIRE NOW + ASUG Annual Conference in Orlando, Florida, was a well-organized event that afforded attendees the opportunity to explore SAP offerings from various viewpoints: industry, lines of business, market trends, and hot topics. The conference registered more than 20,000 participants, who packed the Amway Center to enjoy a concert performed by Bon Jovi.

A New Image for SAP

Throughout the conference, SAP attempted to display an air of coolness and to portray itself as not only a chill vendor, but also a fun employer. Most keynotes had plenty of signs pointing toward SAP’s intentions to dismantle its old image of a legacy ERP company—which still hovers over the enterprise software market—as it transitions to becoming a cloud company.

First, a full 30 minutes of the opening keynote was dedicated to millennial innovators, with polyglot Tim Doner, DJ Focus (Kelvin Doe), and Ayna Agarwal of She++ discussing how their innovative and entrepreneurial efforts have helped their communities and supported their intentions to better the world. This moment marks a clear effort by SAP to attract millennial talent. This effort to bring millennial discourse to the spotlight was echoed throughout the event with the "future of work" and "future of customer engagement" tracks. Indeed, SAP is serious about rectifying the current situation and increasing the millennial age group within its workforce.

Furthermore, a Pandora box was opened when SAP chief executive officer (CEO) Bill McDermott allotted most of the time of his opening keynote to SAP’s commitment to transiting from complexity to simplicity. The announcement made such waves that the internal turmoil caused by the sudden departures/layoffs of several key people at SAP was nearly overshadowed. The fickle human nature! But, of course, “simple” has the ability to portray a cool organization that sells cool products and sustains a cool business network.

We could see SAP heading toward a narrative where “simplicity” viewed as “the ultimate sophistication” becomes central for obvious reasons other than coolness. SAP believes in a full-suite mentality. Bill McDermott stated: “As we look forward, the suite always wins. In the late 90s and early 2000s, everything was best of breed. We need to have the best of breed. Well, they may have been best, but they sure didn’t breed!” But full suites are anything but simple. To obtain a full suite of solutions running tightly together, SAP has to undertake synchronizing its various SAP applications together and to remain open to integrating them with other third-party solutions. To this end, SAP needs to deliver the necessary technology—i.e., "the integrated cloud," an SAP version of the cloud posited to simply bring it all together and ensure that all customers are on the same version of SAP products.

Bill McDermott’s opening keynote

However, despite Bill McDermott’s mockery of best-of-breed solutions, it is the ability of these best-of-breed vendors to make software consumption simpler as they deliver software in the cloud and with no customizations that pushed SAP toward this very complicated and tenuous undertaking of simplicity. If the market is going in that direction, so must SAP. SAP Chairman of the Supervisory Board Dr. Hasso Plattner concurred that enterprise software in the cloud is superior to on premise. SAP’s gotta be cool!

And more coolness followed as Bill McDermott demoed the promised integrated cloud showing how a project manager can visualize data from SuccessFactors, FieldGlass, and Ariba Network for better decision making.

Demo of integrated cloud

Overall, SAP put a strong effort into looking cool and slick. And even if the vendor does not deliver on the promise of simplicity, it certainly inspired a lot of hope in its clients and partners during the event.

Top Trending Topics during the Event

The first big announcement was that SAP will offer Fiori and Screen Personas free of charge to its customers. This was a natural move for the vendor, as this year we have seen a large number of software-as-a-service (SaaS) vendors migrating toward product interfaces that follow the "mobile first" approach, thus supporting seamless user movement across devices. Offering Fiori for a fee was never a great idea, as user experience should be part of any software package and not something that companies should have to pay for. But, besides these obvious reasons, Fiori can also bring users closer to the latest versions and upgrades of SAP software solutions—as Fiori works with only certain versions of SAP products.
“Not all clouds have been created equal. Ours is different,” said Bill McDermott. But even if this is not a multitenant cloud, SAP is proposing that customers run their entire business on the business suite on HANA in the cloud (including line of business applications, the business network, and the social cloud with SAP Jam). And this is a multilanguage and multicurrency global cloud, with data centers in key locations of the world. The market has been somewhat concerned about SAP’s delay in embracing the cloud. But SAP had to figure out a cloud that made sense to its long-term clients, who are not that comfortable with the idea of a cloud to begin with—that is, a cloud that feels more like on premise.
Dr. Hasso Plattner’s announcement: “SAP will eliminate the aggregates.” Instead of aggregates, SAP has built models and algorithms to be applied to all the data that resides in-memory. As a result, predictions and simulations are possible. But the main concern with such a major infrastructure change is ensuring that there will be zero impact on the operations of the clients.

Simple and the Future of Work

Nothing is ever simple, and yet it looks like we are all in some sort of Gen Y—or Gen Why Wait—driven simplicity trance. Millenials do not want to wait. They change jobs and career paths every few years. According to a 2011 PWC survey about the future of work, “38% of millennials who are currently working said they were actively looking for a different role and 43% said they were open to offers.” Millennials also demand from employers ongoing and non-complicated engagement and excitement. These are characteristics of youth. This begs the obvious question: Why does no one tell millenials that this is not how things actually work; that indeed everyone needs to wait and that any structure is dependent on building blocks that require much thought, and thus time to formulate? And that a simple veneer means complex back-end choreography and architecture?

But the millennial thought leadership and lifestyle are not without favorable consequences. There are real advantages to cross-functional or cross-departmental careers. Instead of living in isolated bubbles where only a limited number of activities takes place, employees can learn about an organization or economies at large as well as develop multiple skills and recognize how the quality of their work can lead to a company’s success and customer recognition. Chesley Sullenberger’s (Capt. Sully’s) keynote revolved around the idea that one skill set or even one career path cannot suffice to support an entire professional lifecycle, and underlined how learning and intellectual development must remain in place at all stages of life.
Indeed, this is where we seem to be headed. The millennial workforce and leadership are in great demand by both the private and public sectors. The future of work track at SAPPHIRE NOW sent a clear message to millennials that the world is counting on them to change the status quo as they take the reins from older generations and lead human thought and civilization into the future.
So the SAP message was not necessarily that the vendor wants to be simple because customers have been struggling with SAP complexity, but rather that SAP wants to effect change as demanded by youth. But there is a danger in that, as SAP’s largest employee segment is Gen X. While Gen Y is loudly promoting its good intentions, Gen X may feel neglected. And, with CEO Bill McDermott contrasting leadership and management in favor of the former, Gen X employees, who occupy many managerial functions, may feel even more pushed into forgetfulness.

Furthermore, a company investing in one generation with important mandates while looking at other generations with sorrow is like parents focusing on their favorite child while neglecting the other children. The future of work track was heavy with millennial lingo—i.e., “speed of change,” “challenging conventions,” “changing nature of work,” and so on. Some grounding, some stability, and a reasonable pace may come to be appreciated by millennials, just as with the Gen Xers, as they grow older.  

And along the same lines of neglecting certain segments, simple should most definitely include diversity. The image below speaks for itself, as we do not see a great deal of diversity in SAP’s executive board.

Simple and the Future of Customer Engagement

A few customer relationship management (CRM) concepts received a prominent place during the "future of customer engagement" track.
  • The channel-less experience. This encourages companies to design tight communication and collaboration among the three main points of customer interaction (sales, marketing, and customer support). As a consequence, customers avoid duplicating efforts in explaining their history to the company each and every time they interact with the company.
  • Vertical focus. Customer engagement applications and platforms need to be built with industry-specific needs. For instance, food and beverage businesses need to organize online hangouts where people can "chill" and chat while drinking or eating their favorite products in various locations. Utilities companies require fast responses to ongoing customer inquiries to sign or extend contracts, report issues, etc.
  • Centralized and consistent 360-degree views for customers and businesses into each other’s actions. Knowing your vendors and having intuitive responses from your vendors is central to customer engagement. So the challenge for businesses is not only to access a 360-degree view of their customers, but also to offer a transparent and unified source of information about the company to their customers.
  • Data is big. Either structured or unstructured, in large volumes, and collected from all sources—i.e., customer-facing activities, operations, social media, etc.—the data organizations have to grapple with today is all about customer behavior in the end. So, companies need to continuously interrogate the data to guide their decisions into their business and customer strategies.
These pillars are expected to lead to personalized and optimized customer experiences—falling in line with current discussions about customer engagement.

In light of human rights and government-led public debates about privacy and security, continuing the conversation about anything customer engagement should put these two topics at the forefront. Again, the millennial generation is viewed as a game changer, transforming the world into a place where privacy will be treated as a lesser concern—for millennials appear to be more willing to relinquish data in exchange for goods. But SAP should not dodge concerns about privacy because somewhere in the future a generation of people may or may not see privacy as an issue.

Today, privacy is an issue, and if businesses are to be committed to customer engagement and customer centricity, then the ability of customers to control who has access to their private data is essential to the success of any business in customer engagement. And customer engagement technology and thought leadership ought to place that in central position. Even if companies gain a better understanding of their customers and consequently may serve them better—thanks to rich data about customers, individual customers should have a choice on how they want to be known by their vendors.

Keeping customers engaged remains an art that requires much craft. Sometimes it takes courage to not follow the status quo, and to move into a more human-oriented rather than sales-oriented direction. Some companies rely heavily on artists and designers working alongside engineers to provide beautiful and well-made products. Others pamper their employees to ensure excellent customer care. While SAP fits most of these bills, I think the opportunity still exists for the vendor to make more concerted efforts about how customers want their data to be known and shared with others—which ultimately may become a differentiator for vendors in the customer engagement arena.

My Top 3 Favorite Moments at SAPPHIRE NOW
  1. On flight to Orlando I occupied the middle seat between an SAP transportation management (TM) solution owner and a senior manager of the SAP Project from CN—whose names I promised to keep anonymous. I appreciated the wealth of information that both of these individuals shared with me. Although I do not cover TM, the conversation shed light on my own concerns with how multiple parts of an enterprise interconnect and how the employee at one end always meets the customer at the other, regardless of the employee’s role in the company. Although the SAP TM solution owner made the case for the SAP TM solution, it was nothing of the overbearing sales pitch that sometimes one has to witness. It’s nice to see engineers promote a solution. Sounds much better than salespeoples’ spiel. On my way back, I also had the pleasure of hanging out and sharing impressions with the senior manager from CN before our flight to Montreal.
  2. The dialogs between Hasso Plattner and Harvard Business School Prof. Clayton M. Christensen during Wednesday’s keynote. This conversation revolved around Prof. Christensen’s disruptive innovation theory. But although disruption has its validity, it is a theory that approximates parts of actual experience. In other words, while SAP HANA may be viewed as disruptive innovation, according to Prof. Christensen’s theory, it is much more than that. Disruptive as it may be, it is a technology that helps businesses address typical business problems—such as detecting problems for preventive maintenance, performing root-cause analysis, minimizing downtime, and improving customer experience. It is also a technology that requires common business efforts such as intense labor and commitment, partnerships with wireless telecommunications operators, and extended relationships with partners like Red Hat, IBM, HP, and VMware. That is why the dialog between the two professors failed. Because Dr. Hasso Plattner was going into the many nuances of SAP HANA, while Prof. Christensen was trying to confine SAP HANA to his disruption theory. To me this is great, as I always appreciate anything that does not resemble a grant narrative but rather captures the tension between idealism and actual business and technological challenges. I love a good story but I much more appreciate reality.
  3. Former SNL star and movie actor Dana Carvey’s act of Hasso Plattner. No comment required.
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