While a major event for the SAP community, like almost all SAP events, few major announcements were made at SAP TechEd 2009. Because SAP sits in a remarkable position across incredibly diverse industries, the company can observe IT spend, helping them predict macroeconomic forces, as well as watch which technologies are deployed and for what purpose, giving the company incredible insight into change, and even upheaval, in what processes and tools matter. The ability for SAP to capitalize on this knowledge is always the subject of lively debate, and one I will pick up in later post. The key perspectives share for me are the focus of this post.
First, SAP gave a clear view of the general direction it would like to head. In an invite-only session, Visal Sikka, Chief Technology Officer, sketched SAP’s worldview, which serves as an interesting reference point. In spirit, the chart is recreated below. Along the vertical axis, software is ranked on it the degree of flexibility allowed in the process, from processes such as payroll with distinct functions, to output agnostic applications (like Google Wave). Along the horizontal axis, processes are ranked by their degree of differentiation, essentially the degree of off the shelf versus customization needed. ERP clearly falls to the bottom left corner. Business process solutions take the company up and to the right. Multiplatform integration, go up and right. The assumption here is up and to the right is most desirable, with best margins and ability to differentiate against more commoditized solutions.
With that vision in mind, SAP had some key thematic points that reoccurred throughout the event, signaling what forces on which SAP may capitalize. For me, the most interesting were sustainability and social media.
SAP on Sustainability
With sustainability, SAP best shows it understands its potential role, although the pieces have to be teased together across time. A few months ago, SAP held an event during which the challenge of data storage and management of smart grid data was discussed. Clearly, SAP sees a major business opportunity for helping the soon to be inundated utilities. At the recent event, however, the focus had switched to enabling the average SAP customer to be “sustainable.” In any interesting discussion with Ranga Bodla, Senior Director, EPM and GRC, he admitted that few customers view “sustainability” as core to their business, and even fewer understand the impact it will have on processes and the bottom line. By showing how sustainability can be managed, and lead to a positive outcome (or at least one not to be feared), SAP figures it can help make sustainability a significant driver for future business for the broad customer base.
SAP on Social Media
For me, the social media story came out of left field, and at first gave a feeling to many of us that SAP was playing buzzword bingo. Key executives were touting their own discovery of tools such as twitter, in amazement of the power they’ve recently discovered, and this did seem like a genuine excitement. Digging a bit further, SAP realizes that social networking in the enterprise can generate vast amounts of crowdsourced data, outside of traditional (read SAP) systems. Herein lies opportunity and threat. While the announcement here a very safe agreement with LinkedIn, you can assume SAP is looking at future plays.
In a frank discussion with some SAP customers, most said social networking sites are blocked in their corporation, even though social media provides instant and free access to information and new connections to drive business. So what do they do? They bring in social media via the Trojan Horses of Blackberries (poorly regulated by IT), personal smart phones, iPods and laptops, and many fessed up to working extra hours at home to connect professionally on social networks.
Of course, SAP wants to bring this issue to light, and to encourage enterprises to embrace all this data. Summarizing the points of several executives, social media leads to better collaboration which leads to more data to analyze, and more complexity in the system, with more users on more system types generating data. Let’s just say this is good for business, and plays right into SAP’s more traditional business process practice.
I’ll be watching to see how these themes evolve into practice, and pushing SAP to build out the stories here.