Last week, ERP and B2B Supply Network tech provider SAP SE kicked-off the start of three different virtual online customer conferences that are being conducted over the next 2-3 weeks. Simultaneous sessions are being offered to North America, Europe and Middle East, along with Asia based Sapphire venues. The SAP Sapphire conference is an annual event and one that sets the go-to-market direction for this technology provider in the coming year.
Last week’s opening Sapphire keynote address featured the company’s CEO Christian Klein, along with SAP’s newly appointed Chief Marketing Officer, Julia White in a moderator or host role.
From this Editor’s observation, the keynote could have been retitled as the Julia White Show, complete with all of the marketing buzz and platitudes.
That aside, within the executive keynote came one of the most noteworthy SAP business enterprise and supply chain management focused announcement’s ever, that being a declaration to create: “.one of the largest and most comprehensive” B2B Business Networks.
SAP has been messaging the vision of interconnected product demand and supply networks for quite some time since the acquisition of the Ariba B2B procurement Cloud based platform in 2012. A lot of time and effort has been allocated since then to integrate Ariba with SAP’s HANA data management capabilities as well as existing SAP ERP integrations in a Cloud native architecture. There have been a lot of fits and starts, not to mention a series of other rather expensive Cloud platform acquisitions orchestrated under the reign of former SAP CEO Jim McDermott.
Last week’s announcement was bold in the sense of setting a direction for creating the platform architecture of a “network of networks” that would address business process support needs for direct and indirect procurement, contingent labor and travel expense management along with supply chain logistics and trading partner global visibility. The timing of hopefully the post-pandemic next normal of required supply chain visibility and collaboration capabilities is advantageous.
It was bold in the sense that SAP finally realized the one asset that could drive broader B2B and B2C business process visibility and decision-making capability as well as at the same time provide orders of magnitude expansion in recurring revenue flows. The strategy further helps SAP to provide more coherent solution value to other prior rather expensive Cloud based platforms in Concur, SuccessFactors and Fieldglass. But that is SAP’s management and investor objective, whereas the company’s customer base resides in a global-wide, multi-tech provider universe of differing Cloud based platforms.
SAP’s messaging stresses the over 4 million companies that are now on the Ariba platform, but the reality is that many are indirect procurement materials or services providers. Direct procurement requires a far more complex and integrated approach with product management, supply chain planning and aftermarket services. It will require multi-tiered supplier visibility which implies large as well as a whole lot of smaller-scale suppliers.
A lot of time has been expended in making direct procurement-to-pay process more integrated not only with the SAP technology applications landscape, but in a multi-tech vendor landscape as well. From our lens, that remains a work-in-progress.
The other notion is the addition of deeper end-to-end supply chain logistics visibility within the capabilities of existing Cloud based logistics network platforms such as E2open or project44. The latter already has a partnership in providing SAP customers global logistics and transportation visibility.
SAP further has a strategic partnership with the Open Text Business Network for electronic document and invoice exchange along with electronic transactional messaging. There is a significant overlap of SAP and Open Text Business Network customers.
Further mention was made for the creation of new industry specific networks, which this particular industry analyst has covered for the past decade. The history of industry networks has been fraught with stakeholder conflicts, over promising and under delivery and in attempts to have suppliers finance such ventures without appreciable value.
The More Significant Challenge
All of the above are challenges themselves, but minimalist compared to the overall scope of what network of networks implies. Talk about a mega hairball of a many to many platform scope of complex information and platform integration challenges.
As Supply Chain Matters has indicated in our prior SAP specific commentaries, this provider remains genuinely concerned with maintaining direct customer control given the tech provider’s global network of termed Cloud platform hyper-scalers, systems integrators and boutique process integrators. The reputation of large, rather expensive multi-year SAP deployments lives on. The Business Network is a hyperscaler’s dream come true in terms of a multi-year transformational effort.
The new “Rise with SAP” program was created to be a “massive accelerator” to customer digital transformations including broader adoption of the S/4 HANA Cloud based ERP platform, but at the same time, allow SAP to maintain more direct customer control relative to scope and time-to-value.
Last week’s opening keynote, true to the notions of the marketing accelerator for customer adoption included an offering for complimentary on-boarding for the first 100 suppliers for early adopters. That of course, begs the question of what the equivalent value for onboarding 100 suppliers is when the technology professes to make this fast and seamless. Not so compelling as a motivator. More compelling, how will SAP manage its strategic partner base in making all of this happen, and provide a revenue share with strategic partners.
A final note relates to the targeted buyers for all of such capability since this functionality spans multiple line-of-business and organizational functional dimensions including supply chain management. This will assuredly be SAP’s biggest go-to-market challenge, one that the new CMO will have to dedicate lots of time and attention.
In summary, a thumbs-up to SAP in the vision category.
In the overall development timeline and in the managing scope and customer expectations, a lot of additional work remains.
Recall that decade of experience this Editor has acquired in the B2B technology platform area. As the saying goes, I have seen this movie before, and the plot and ending is predictable.
Bob Ferrari
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