Summary from SAP Insider Keynote (SCM, MFG, PLM, Procurement)

Competing in the “Networked Normal” : A Pathway to Growth through Innovation and Collaboration

SAP EVP Richard Campione began his keynote this morning at the SAP Insider Event today with an interesting statistic: 85% of executives expect complexity to grow significantly. Interesting, but hardly surprising given the setting. This event co-locates several conferences: Logistics and Supply Chain Management 2011, Manufacturing 2011, PLM 2011 and Procurement and Materials Management 2011. Professionals in attendance are all focused on getting product to market and to customers. Given the global nature of business today, the speed of change and the proliferation of data and data sources, increased complexity is the natural result. And yet even with this growing complexity, customers’ expectation of speed and responsiveness is not diminished. In fact, it is only intensified.

Mr Campione also opened with a bit of history. Two years ago at this event there was talk of a recession and even a depression. Strategies were all about cash preservation and survival. A year ago, there was a fair amount of optimism and talk of recovery. Sentiment was … companies could once more invest, but the overriding theme was to invest in order to save. This year, 2011 is a “new beginning” and suggested that a good place to start was in looking at the problem as one of managing from “idea to delivery.” Again, nothing new or surprising, but the holistic approach to supporting this (complete) process was impressive.

Mr Campione also characterized 2011 as a year of crisis and hope. Crisis certainly needed no explanation given the recent uprisings and events in the Middle East, combined with the earthquake and tsunami in Japan. Given the disaster in the Pacific, it seemed quite apropos to show his audience the Chinese symbol for crisis, which is actually represented by combining the symbol for danger with that of opportunity. He encouraged his audience to seize the opportunity to learn from leaders. These leaders operate better within business networks. They innovate faster, capturing 25% of revenues from new products, compared to others who only generate 5%. They reduce inventory, citing instances of as much as 55% reduction in days’ supply. And they manage risk. What better backdrop for the need for proactive risk management than the efforts to avert a pending nuclear crisis?

All this is very relevant to the global environment, but how do we really relate this to how SAP products can help businesses “run better?” To summarize, it is all about operating better, collaborating better and deciding better. Given the proliferation of data bombarding us from all angles, it is about turning fast into real real-time. In SAP parlance, this means more (mobile) devices, more applications and more analytics.

More devices equate to more mobile devices, and this was the primary reason SAP bought Sybase – for its mobility platform. There are a lot of different applications along the path from idea to delivery and Mr Campione emphasized the need for these to be "consumable, ready to deploy, packaged applications." "Consumable" is a word I have been emphasizing to ERP vendors for the past several years, so this was music to my ears.

SAP brought an entertaining duo on stage to demonstrate a scenario that took us from

·         consensus planning, to…

·         the identification of “killer features,” to…

·         engaging the right people, to…

·         readying the supply chain, to…

·         analysing the process and the results

This demo scenario started with SAP Event Insight, then turned to Stream Work, followed by SAP Sales On Demand and finally the BI element of Business Analytics. Implied behind the scenes were PLM, ERP and manufacturing execution including sourcing and procurement. It touched on ideation, sales and operations planning and on the innovation SAP had delivered within the last 12 months, including the following:

·         Mobility

·         Stream Work

·         Business ByDesign

·         BI 4.0

·         Innovations 2010

·         HANA (in memory)

·         Netweaver 7.3

If you missed this keynote and yet feel the urgency to address many of these challenges, including the need to eliminate dual entry in multiple systems, the need for improved visibility, better integrated quality management, and lower inventory and operating costs, take the time to get a demo. If you are running solutions that are not using the latest and greatest technology, you may be pleasantly surprised. And remember how fast that technology is changing!

Weighing in on SAP Sales OnDemand: Keeping competitors off SAP turf

In just one short day there have been numerous commentaries on SAP’S upcoming release of SAP Sales OnDemand, announced at CeBIT yesterday (March 1, 2011). So while I may not be telling anyone anything new, I felt I would be remiss in not commenting. Many have been headlining the announcement as a direct threat to Salesforce.com and Microsoft CRM OnDemand. Yes it might be, but not because it competes directly against either. But it just might keep these two competing products out of the SAP accounts.

SAP Sales OnDemand is exactly what the name implies… a tool for sales. It is just one of the three legs of CRM (sales force automation, customer service and support and marketing automation). But let’s face it, many companies that deploy CRM only use it as a sales tool.  Yet in spite of this limited slice of the CRM pie, John Wookey, SAP’s EVP of Line of Business OnDemand claims this solution is unique in that it is a more comprehensive solution.

More comprehensive? How?

Software solutions in the past have modeled a business process in a rather linear fashion. Instead, SAP went back to the beginning and looked at the business problem, which presumably in this scenario was and is, for SAP customers, how to sell more. What are the roles that all come together in achieving this goal? How do they interact now and how do they want to interact? Does it take a “village” to make a sale? When I first heard how good Sales OnDemand was at allowing sales to collaborate I was skeptical. The desire or motivation to collaborate isn’t always included in the DNA of a sales rep. But if it means truly getting a 360^o view of a customer, then yes, collaboration is required.

And for that you not only need a sales tool, you also have to connect it to your other solutions, like ERP. I have always argued that a CRM solution does not provide a 360^o view of a customer unless you use it for something other than what it was intended for. Where are the transactions, the shipments, the receivables?  And what about the unstructured data that floats across the Internet, feeding you important data about your customer? Feeds about their earnings, legal battles, trends in their market with a direct impact? Take a look at the demo on YouTube (http://www.youtube.com/watch?v=fftC39Q7jM8&feature=player_embedded ) and you’ll see this kind of Feeds and collaboration is really “Home” for the sales rep using Sales OnDemand.

So to me SAP Sales OnDemand is more about connecting the dots. If it can truly complete the view of the customer, the prospect, sale for the SAP ERP customer, then there is no need to look further.

SAP positioned for explosive growth in channels - that means SME

In 2010 SAP got very serious about channels, setting out to make profound transformational change. Not satisfied with incremental progress, SAP was looking to change the very DNA of its channel programs. A year ago, there were 5 different channel programs. Today there is one. Recruiting from the outside and shuffling the deck internally resulted in a 90% change in the management team. According to Kevin Gilroy, SVP Ecosystem and Channels, the current team is fired up “to make history.”

What’s happened in the past year? First of all… a lot of training. No longer is the channel just about the P&L, it is also about the balance sheet. There was a concentration on speeding the time to revenue and understanding the value of having an off-payroll sales force. But to keep those off-payroll channel sales partners interested and engaged, SAP needed to become more predictable. In August, SAP Business ByDesign, and SME in general went 100% channel. Since then only 2 or 3 exceptions have been made for direct sales.

Secondly, the new management team challenged existing processes. Here there was a definite advantage in having new eyes taking a fresh look at the old ways of doing business. They ripped out non-value added steps and sought to reduce disruption for the customer. They went so far as to remove the operational flavor of the team and replace it with a focus on the experience. The directive from management – if you aren’t improving the experience of the employee, partner or customer, either re-engineer the process or don’t do it. One example, the “experience” team took a 20 page leasing document and reduced it to 2 pages, reducing the turnaround from two weeks down to one day. The goal is one page, one minute turnaround. They have also simplified contracts so as to simplify the conversation and not to scare away customers.

The focus in 2011 is on meeting the needs of the SME. This means:

·         Delivering more choice and more packages tailored to the SME

·         Increased sales capability and capacity through channels and inside sales

·         Building a volume-based marketing engine. Marketing dollars will not be distributed evenly across the channel. SAP will pour more money in to fuel those with marketing engines.  

·         Continue to work on the” experience”. Optimize operations and processes around the needs of the SME users and partners.

But probably most important of all is to work on market perception. The ultimate objective of course is to turn the channel into a real volume business and this means selling more to smaller companies. SAP still is viewed as the 800lb gorilla in the market and many SMEs simply assume it is not for them – either it is too complicated or too expensive. Over the past year in talking with both Business ByDesign and Business One customers, it was not unusual for them to say to me, “I never thought I would be here. Who would have thought SAP had a solution for me that I could afford?” They don’t realize that 79% of SAP’s 109,000 customers are SME. That translates to 86,000 SMEs running SAP.

I think that Business ByDesign is going to play a very significant role in changing the market perception. ByDesign has the advantage of being a brand new product, engineered for the SME to reduce complexity. In fact SAP is finding it to be a real door opener that may lead either to a SaaS ERP (ByDesign) sale or an on-premise sale of All-in-One or Business One. Once that door is open, many are finding the price tag of the on-premise solutions is far more affordable than they assumed.