SAP lays out cloud vision for customers and partners of all sizes

believes it can provide a differentiated value in the cloud compared to other vendors, and with IDC saying that partners who create and sell their own software in the Cloud will projected by 24 per cent over the next five years, is focusing on that as an area of opportunity.

Timo Elliott (L), Alain Dubois, and Franck Cohen (R) at the SAP Partner Business Forum 2018

NEW YORK CITY – Cloud has been the focus at SAP for the last several years, and so it came as no surprise that it was front and centre at the SAP Partner Business Forum 2018 here last Thursday. The company fleshed out some details of its high-level cloud strategy, with a focus on the partner play involved. They also released a small amount of data from a forthcoming commissioned study from IDC on the cloud opportunity for partners.

“The cloud means that you don’t have to be a big company to have a big vision,” said Timo Elliott, VP of Global Innovation at SAP, who gave the keynote presentation at the event.

Elliott laid out SAP’s vision of the intelligent enterprise, which he termed their view of the future of digital business in the cloud.

“It uses a modular suite of integrated applications to intelligently connect every line of business,” he said. “That requires a strong digital platform to orchestrate data and integrate processes, a platform that leaves data where it is, where possible, but allows it to be used with full governance. It also uses intelligent technologies to detect patterns, predict outcomes, and augment decisions.”

That will allow companies to act in real time to avoid accidents, by pivoting business processes to have maximum business impact in reaction to changing trends, and using ecosystems of organizations working together to provide optimum customer experience.

“Organizations can benefit from this by redefining the end-to-end customer experience,” Elliott said. “The Palladium Hotel Group in Spain has implemented a strategy to turn guests into fans by looking at the end to end customer journey and using technology like augmented reality to optimize the experience. They’ve seen a huge increase in marketing efficiency.”

Elliott noted that SAP just acquired experience management company Qualtrics last month – for $8 billion – because Qualtrics’ experience data, together with SAP’s operational data, will be able to provide unique insights. He presented a demo indicating how the experience data works, measuring two people side by side on a roller coaster ride. As one person became increasingly excited by the ride, the other became clearly uncomfortable.

“It captures all the human emotions and feelings, and we will be able to measure the best of the operational data with experience data,” he said.

Another example of a change in processes involved Hilti AG, tool makers who now include sensors in their tools with geofencing to deter theft, a common and expensive problem on construction sites.

“They have used this to add new services around their drills, including location and alerts,” Elliott said. “Tools-as-a-service required changing all their front and back end applications.”

Other elements of SAP’s intelligent enterprise include enhancing productivity with memory architectures, and facilitating digital transformation by allowing people to adapt with new skills and knowledge.

“S/4 is similar to a smart car compared to a normal car,” Elliott said. “It looks like traditional , but has a new architecture. And in digital transformation, we need to make sure every employee has data they need to do their jobs. Conversational interfaces make this easy in everyday language with smart assistants across Suite, such as SAP CoPilot an ENTERPRISE digital assistant.”

Franck Cohen, President SAP Digital Core & Industry Solutions, who is in charge of the development of S/4 HANA, said that customers have to rethink their processes in order to leverage the capabilities of the new technology, as turning the data into insights remains a key issue.

“Digital means we can collect more data than at any time then before, and detect patterns that no human can detect, but the question then remains what you do with it,” he said. “We recommend redoing the way they rethink the processes. There is no value to spend millions building accounts receivable processes today. They need to be brave enough to rethink and reconsider the ways they do business. Only then can they do these kinds of business processes. Automation is coming big time, but you need to accept best practices so that you don’t have to automate every part of the process.”

Alain Dubois, Partner and VP of Business Development at Montreal-based SAP integrator partner Beyond Technologies, described how the digital foundation of S/4 HANA let them design an effective system for womens’ clothing and accessories provider Tory Burch.

“In 15 weeks, we implemented from scratch a system that records every transaction in real time, regardless of where it comes from, which began as an initial pilot in three stories and was expanded to 97 stores in a month,” Dubois said. “When a new collection comes out, they can look at their customer base and target customers with the best propensity to buy this new collection, and match it with the store associate with the best propensity to sell it. We could do that because we can rely on 100 per cent accurate information from the digital core. Now with in-memory computing, it runs at the same speed as business, so you can trust what you see in your system.”

Elliott noted that luxury fashion house Burberry in the U.K. does something similar to provide a personalized experience for their customers.

Dubois said that the challenge partners face is being agile enough to design customized solutions for the customer on top of the SAP platform, rather than just make customizations to the core.

“Its easy as an SI to accept what the customer wants to do and just customize it, but what’s the ROI for the customer in that,” he said. “The SI community needs to do a better job at resisting customization. As SIs, we need to be more relevant to specific industries. For retail and wholesale, we built an accelerator, which provides a layer of additional detail to address different scenarios that we can implement quickly and create preconfigured solutions.”

“Accelerators let you bring in standardization without restricting innovation or what needs to happen at the customer level,” said Bronwyn Hastings, SVP Business Development at SAP, who manages SAP’s strategic partners. “It’s getting that balance between standardization with best practices, and allowing innovation to be part of the intelligent learning.”

Simplicity is the key here, said Sabrina Sigourney, CEO and SAP Practice Director at boutique SAP consultancy Blue Marble Consulting.

Meaghan Sullivan, SAP’s Head of Global Partner Marketing (L) with Sabrina Sigourney, CEO at Blue Marble Consulting, Darwin Delano, Deloitte’s Chief Technology Officer for SAP, and Jim Newman, CEO of HRizons

“There is lots of great technology, but if you can’t sort it all out you are in trouble,” she said “We emphasize a SIMPLE methodogy [an acronym for Stakeholder alignment, Iternative, Migration best practices, Prepping data, Leading meetings, and Ensuring people know what’s happening.] It lets you do things in a repeatable, scalable way.”

“Customers were early to adopt the HR cloud, because it gave Lines of Business the ability to implement as opposed to just rely on IT,” said Jim Newman, CEO at SAP partner HRizons. However he said that the disparate systems that emerged left customers looking for innovative products that address manual processes.

“Job descriptions are a huge pain point, so we built a solution for that, and it’s our number-one best seller,” he said.

Several analysts at the session vocally questioned the commitment of the large Global Systems Integrators to make these kind of pivots to better serve their customers, since they go against the tenets of the GSIs’ long-time business models. Darwin Delano, Principal and Chief Technology Officer for SAP Technology at Deloitte, acknowledged this had been an issue, but that Deloitte has been evolving its own model in an attempt to overcome past issues.

“It’s a very exciting time and a very nervous time for us,” he said. “Consulting has been based on a scarcity model. We feel there is an existential challenge we are facing, but we feel we have the brains to navigate that. SAP is a large partner for us, and we are starting to migrate our services onto the SAP platform because we see an existential threat to our business model. We are redefining how we serve our clients, applying intelligent automation on ourselves to make our implementations faster, cheaper and of higher quality. We can now deliver intelligent enterprise capabilities with this platform. We believe that within the next 12 months we can accelerate implementation time by 25 per cent. I won’t pretend all 20,000 people at Deloitte have evolved, but we know we can’t charge for the same things we did 25 years ago.”

The process of customer transition to the cloud-based intelligent enterprise is a highly segmented one.

“Some customers consume the intelligent enterprise quickly, while others are more incremental,” said Claus Gruenewald, Global Vice President, GPO Portfolio Management, at SAP. “We have to be able to do both. S4/HANA is for fast deployment, but it doesn’t make sense for all customers to do the full- blown intelligent enterprise right away. So the ‘big bang’ route exists, but also step-by-step. Some might put their HR and in the cloud now, and do other things in three or four years.

“ERP is a tough cookie, where it takes longer for a high degree of adoption,” said Bobby Vetter, SVP Global Partner Operations – Solution Portfolio Management, at SAP. “People-centric applications move faster to the cloud than production-centric ones. S4/HANA is a growing platform, however, and we are asking all partners to invest in it.”

That doesn’t mean that on-prem partners are getting ‘march or die’ orders as far as the cloud as concerned, but Gruenewald said that partners know that it is the future.

“There is a market for on-prem still, but cloud market is growing faster,” he said. It’s a matter of single digits compared to high double digits. “We aren’t telling partners to give up on-prem. But if they want to exceed benchmarks, they need cloud. That means investment in the cloud, and the tools and methodology for it.”

To encourage partners to make the investment, SAP announced some teasers at the event about the data from a forthcoming SAP Partner Opportunity study they commissioned from IDC some months back. The study is slated for release in the new year, and is not yet out. Some of the data points are, however.

Over the next five years, IDC projects that SAP partners will generate nearly $200 billion in net new revenues, with more than 60 per cent of these net new revenues coming from the cloud. The study will indicate that partners focused on creating and selling their own software in the cloud will grow the fastest – at a 24 per cent rate over this period until 2023.

“The market opportunity in the cloud has been growing for years, and these numbers show that it isn’t slowing down anytime soon,” said Paul Edwards, Director, Software Channels and Ecosystems at IDC. “As both customer demand and profits relative to cloud-based solutions continue to rise, there has never been a better – or more urgent – time for partner ecosystems to embrace the cloud.”

  2 comments for “SAP lays out cloud vision for customers and partners of all sizes

  1. January 8, 2019 at 3:39 pm

    Oh, That’s Great, this is good in SAP. This change can make better customers experience.

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