In our Part One commentary, Supply Chain Matters reflected on a rather contrasting year of highs and perceived lows for SAP. Certainly, many executives at SAP may take issue with the notion of lows, but feedback should also be taken with an open mind.
At the SAP Influencer Summit, SAP executives stressed that the company will not pursue a growth by acquisition strategy, but rather an innovation based strategy. CTO Vishal Sikka made a bold and revealing statement: He noted that customers don’t really care or seek a technology stack. They are instead seeking solutions to their business problems. While that was an obvious barb toward Oracle, bravo for telling it like it should be told. SAP executives are also fully aware that not all customers elect to follow SAP’s technology direction, and many remain on older platforms. This year alone has brought even more choices and another upgrade to the SAP Netweaver integration platform.
Customers do seek support for their business process challenges, and that especially includes procurement, contract management and supply chain process needs. We continue our view that SAP has been somewhat remiss in stepping-up innovation across the entire SCM area. An increased global supply chain presence introducing higher levels of complexity coupled with business process needs for more timely synchronization of planning and execution process activities certainly qualifies as needs for streamlined business solutions. It took nearly five years to bring transportation management capabilities up to customer expectations for required functionality. Similarly, SAP Supply Network Collaboration has experienced a promising, but elongated period of planned enhancements, with much remaining to bring this application to current ‘best-of-breed status’.
As we approach 2011, SAP should perhaps reflect more on Vishal’s statement and adopt some company-wide New Year’s resolutions. Here is a potential list for consideration:
- A continued focus in innovation combined with consistent execution and quality in product release programs. Enough of the re-branding and spiffy videos. Customers know SAP and new prospects can find out more about SAP in social media than in expensive videos and branding campaigns. We believe that SAP customers seek clear communication of product direction, firm delivery timetables and logical customer upgrade paths.
- Serious efforts directed at simplification in organizational structure coupled with more accountability for senior management performance. We trust that accountability for the oversight and direction of the ill-fated TommorowNow venture would be included and serve as a milestone for accountability.
- Continue to compete on what brought SAP its success. That would include deep roots in understanding and responding to business and unique industry business process needs, the scale and scope of SAP footprints, and a renewed desire to work in partnership with customer needs. SAP could garner more widespread customer goodwill if it focused more on customer timetables vs. those of SAP
- A renewed emphasis on enabling win-win ecosystem partnerships with smaller as well as larger partners, with genuine opportunities for joint goal accomplishments.
- Achieving its five year old vision of enabling more adaptive and more globally oriented supply chain planning and execution processes for its customers. That would include a serious step-up in the synchronization functionality of SAP Supply Network Collaboration and a faster, more streamlined SAP Advanced Planning and Optimization (APO) application that could perform more rapid planning cycles. APO is a natural for enhanced in-memory computing technology enhancement. Deeper supply chain planning, collaborative execution and coordination within SAP Business By Design should be a resolution as well.
Installed base customers know that they have a stakeholder interest in SAP’s continued success and market performance. Customers also need a more responsive and predictable SAP. The highs and lows of 2010 should be tucked away as a learning. Customers really care that a vendor such as SAP can not only support scale of implementation, but have the flexibility to serve individual customer needs, large or small.