May represents the height of the spring conference season and these past two weeks have featured many, including SAP’s annual Sapphire and ASUG customer conference held in Orlando. Due to scheduling and other client commitments, this author did not travel to Orlando but did have the opportunity to view most of this year’s Sapphire keynotes.
As a supply chain and B2B industry analyst, as well as a former SAP supply chain management marketing director, I have attended and participated in many Sapphire events over the years. Each year brings a new set of messaging and often different personas related to SAP and its efforts to support customers as well as sell more technology and applications. In this posting I am going to share my first impressions from what I heard this year which I believe represent important shifts in strategy and a reflection that SAP customers are now the focal point for driving changes in ongoing technology strategies and not the other way around. The open question is whether such a shift will have a lasting presence.
The opening keynote address from SAP CEO Bill McDermott provided its usual surprises. The CEO openly admitted that he ditched his original keynote content 15 days before Sapphire. The reason cited was some pointed feedback received from customer CIO’s as well as from SAP Board members. Instead, the message was one of acknowledgement that SAP was not listening and responding to customer feedback. McDermott therefore declared that empathy would be the number one message delivered at Sapphire, “Empathy” for customer needs in technology adoption and to clearer roadmaps for the adoption of SAP’s newest business suite, SAP S4/HANA and other Cloud based applications and technologies. In fact, this and later keynotes provided some admission that SAP might have rushed SAP S4/HANA to market without deeper consideration on the overall impacts to customers from a number of dimensions. That is uncharacteristic of the SAP of ten years ago. In our Supply Chain Matters commentary in February of 2015, we reflected on the stated risks and implications of S4/HANA.
This analyst has experienced a similar frustration in that depending on who you talk to at SAP, you tend to often receive a different interpretation of an application’s support capabilities and roadmap. Finding the right person with specific knowledge remains a challenge and indeed, SAP employees are just as confused as customers- at least that act that way. An overall focus on revenue and profitability attainment has outdistanced sensitivity to the voice of customers.
Even more dramatic from my lens, McDermott flatly stated that he takes the issue of accountability personally and urged customers to email him directly if they were “not feeling the love from SAP.” A subsequent panel consisting of SAP line-of-business executives featured actions each executive is taking to assist customers in technology transformation, but this observer found such statements unconvincing and more related to marketing speak. McDermott declared that every major SAP engagement will have an executive sponsor accountable for customer results. Further declared was that SAP’s partners need to get on the bus as well, declaring that SAP requires that such partners will be required to adhere to a newly outlined value assurance pledge.
The takeaway is obviously a reflection that SAP and its partner ecosystem executives should now expect to be measured or rewarded on market responsiveness and meeting broader and more specific needs of customers. It is accountability time at SAP and that includes a delicate shifting from what SAP has desired in business outcomes to what it should have been, what SAP customers require and demand in their business process support needs and in supporting required outcomes in IT cost, adoption and flexibility.
In his 2015 book, SAP Nation-A Runaway Software Economy, Vinnie Mirchandani masterfully addressed his belief in what SAP needed to address to make its customers successful in their business and technology deployment goals. Included were specific observations on why other Cloud-based technology competitors have been able to gain attraction among the existing SAP customer base because of the building business pressures and frustrations over elongated development timelines, burdensome software and ongoing support costs. The consequence was described as a ring fence of applications that more and more, are surrounding SAP applications and that definitely includes technology supporting various procurement, manufacturing, supply chain and product management business process needs. As the adoption of Cloud computing continues to increase, the book opined that SAP runs the risk of becoming even more distant in understanding its customer business needs.
We again cite this reference because that is indeed what came to mind in listening to this year’s Sapphire keynotes. SAP customers are themselves making SAP change.
In a recent deal architect blog commentary, Vinnie has since opined: “… I am becoming more convinced the turnaround will not come from SAP or its partners, but from actions SAP’s customers take over the next few years.”
From my lens, what transpired this week at Sapphire was indeed the voice and influence of SAP’s customers in demanding that their business needs must be accommodated and that SAP will need to step-up its overall responsiveness to such needs. That is by far the most important takeaway of the 2016 Sapphire event.
Supply Chain Matters will feature some additional insights regarding the messaging and implications of this year’s Sapphire in subsequent postings.
© Copyright 2016 The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.