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Key Takeaways from Sapphire 2017 May 24, 2017

SAPPHIRE NOW 2017 was an awesome conference, as usual.

Our customers presented incredible benefits they have experienced with multiple SAP solutions. We shared our experience with our own implementation S/4 HANA, an endeavor we completed in just 6 weeks, and is the lynchpin of our own digital transformation journey. There were some fantastic stories from companies that have transformed their businesses on SAP solutions. Most of all, we had a great time connecting with customers, partners, our friends at SAP, and members of the larger SAP ecosystem.

SAP continues to roll out new innovations. After introducing HANA to the world a few years ago, they have now upped the ante with Leonardo, which I am sure we will be hearing more about in the coming years. But that was not all.

As I reflect on a very successful conference, five trends stand out to me.

#1 The movement to the cloud is accelerating… but companies want flexibility

Adoption of the Cloud is established and accelerating. Large enterprises are finally beginning to move their investments in on-premise technology to the cloud. CIOs of prestigious companies I met with told me that they are thinking about the Public Cloud first. But they still want the flexibility to choose between Public and Private Clouds.

In some cases, they need to comply with strict data, regulation and governance obligations. They need the ability to customize the compute, storage and networking components to best suit their specific IT requirements. In these instances, they will need to run their applications on a Private Cloud. In other instances, they need the flexibility, agility and lower costs of the Public Cloud. It is therefore imperative that business applications be cloud agnostic.

I see great opportunities ahead – and some failures too – as companies embark on this journey. They will fail if they follow their old playbook to modernize their business application stack. To succeed, they need to keep three considerations in mind.

First, they need talent that is well versed with the Cloud, end-to-end business flows, and solutions from SAP. Second, they need to develop their ability manage composite environments that include their legacy on-premise infrastructure as well as Public and Private Clouds. Finally, they need to ensure that applications and business processes can work seamlessly regardless of the infrastructure they are deployed on.

#2 IOT and IIOT are set to take off… and Leonardo is in pole position

We have been hearing about “IOT” and “IIOT” for a while now. There are some real successful stories, mostly on the consumer end. But in order for businesses to realize the potential of these technologies, they need comprehensive solutions that tie these technologies into core operations including their manufacturing and the supply chain. This is where I believe Leonardo stands ahead of similar efforts from GE (Predix), IBM (Genius of Things) and Microsoft.

SAP understands Manufacturing and Supply Chain better than any of these vendors. They have the broadest suite of applications to address these needs and they are now building on that experience to deliver a range of solutions that merge these technologies into core operational processes. Vending machines that can automatically order supplies are cool. Having these orders propagate through manufacturing and procurement in real-time without human intervention is even better.

However, this is not going to happen overnight. IOT and IIOT applications will be niche in the near term. In many ways, it will be similar to how autonomous driving has evolved. A decade ago, OnStar and in-vehicle navigation systems heralded a new technological frontier. That was followed by more automation such as rear view cameras with parking assist, collision detection, automatic braking, cross-traffic alerts and surround vision. Today, Tesla and other pioneers have brought us to Level 2 autonomous driving with a promise of Level 5 autonomy. It will be a similar progression here – we are at a tipping point, and with Leonardo, it’s going to accelerate.

#3 The S/4 Public Cloud has arrived… and is already a compelling value proposition

We are surrounded by a constant drumbeat extolling the virtues of “SaaS,” “Cloud” and “on-demand,” making it easy to forget that these are just delivery mechanisms, and that customers care more about the value they get out of their business applications. SAP has been delivering compelling solutions for decades now, and they have leveraged that experience to deliver modern solutions that are cloud agnostic.

Intrigo is a case in point. We are growing fast and globally. Our consultants are constantly crisscrossing the world and need to be able to log their time and send in their reports while on the go. We are building new practices to better serve our clients. Supporting our global and mobile workforce while growing the business meant that we needed to transform our operations. We decided to build our business on a single, end-to-end platform, and guess what we chose: S/4 Public Cloud.

In just 6 weeks, we were live. Sales, Marketing, Finance and Professional Services are now working off one seamlessly integrated platform. And in a few weeks from now, two of our clients will be going live. Our experience with the S/4 Public Cloud tells us that these solutions have functional parity with, and exceed in many instances, on-premise solutions such as ECC. Our customers confirm our assessment, and this movement is set to accelerate.

#4 Planning and execution are converging… heralding the truly adaptive enterprise

Traditionally, there has been a gap between planning and forecasting, and execution. In today’s world, customer preferences and market trends shift so quickly that even the slightest gap between these functions can catch the best companies flat footed. Take Apple. When they released the iPhone 5, they had 5 million phones ready to sell on release day. Yet, demand was so high that customers were left waiting for weeks (and fuming about it).

It is therefore imperative that companies close the gap between planning and execution. The growing maturity and adoption of the IBP product, and the ability to closely couple it with the Ariba product (both on the cloud) is making this a reality. For the first time, companies can operate with zero latency between planning and execution, even when the have outsourced manufacturing and global supply chains. They can now move to a continuous planning model.

The age of the adaptive enterprise is upon us.

#5 The HANA Cloud is becoming more open…and more intelligent

The HANA Cloud is becoming more open and intelligent. Machine learning, predictive computing, chatbots and AI are going to change application paradigms and how businesses interact with technology sooner rather than later. The recent announcement of an alliance between Ariba and Watson to make procurement smarter and redefine the source-to-settle processes. The announcement states that the alliance “will use data insights to empower procurement professionals to make smarter, faster decisions across their supply chains. The new applications can impact the entire procurement process from improving spend visibility to assisting buyers and enriching content management.”

HANA is becoming an open platform, opening up white spaces for innovative companies to build powerful new applications on the platform. Intrigo is building a Bot to improve IBP interactions and demand sensing. To give just one example, the Bot will automatically detect fluctuations in demand, place new orders (or cancel existing orders) that percolate down the manufacturing and procurement processes.

You can fully expect to see a lot more innovation happening around the HANA Cloud in the near future.

SAPPHIRE NOW was confirmation of the accelerating pace of innovations coming out of the SAP world, and the value derived from these solutions by customers in the real world. But it was also a fascinating window into what is yet to come. I could not be more excited. Let me know your thoughts.

– Padman Ramankutty (CEO, Intrigo Systems)