This is our third Supply Chain Matters commentary regarding attendance at this year’s SAP Sapphire Now and ASUG conferences being held in Orlando.  Readers can reference our previous two commentaries at the following links;

Commentary One

Commentary Two

Because of some significant supply chain related news, this commentary comes “on the fly”, and we will elaborate more in our conference summary posting.

Traditionally, day three of Sapphire Now keynotes are dedicated to SAP’s strategic direction and reporting card on technology initiatives, and in our view, this is the real takeaway story for this year’s conference. Significant is not so much as what was happening in front of podiums and cameras, but the significant technology changes that are being orchestrated in SAP technology labs around  the world. Make no mistake, there ar significant technology direction changes underway at SAP.

Vishal Sikka, SAP’s CTO and member of the executive board for technology and innovation, did a superb job of avoiding the usual technology detailed updates by inserting multiple videos declaring testimonials of support for SAP efforts and initial prototyping on HANA based technology in various real world business applications. This was a prelude to the GA release of HANA upcoming in June, and a much more powerful use of messaging, incorporating the voice of customers as the means of communication.  As a side note- many other software providers can benefit from this approach.  We really liked it.

In our summary of last year’s Sapphire, we observed that if successful, SAP’s efforts in in-memory architecture and applications would be a game-changing event for the industry.  This year’s messages, especially those coming from multiple customers, tended to reinforce the potential.  But with anything dramatically new and innovative, the real proof comes in the actual mainstream deployment, and SAP customers seem to be very interested in the potential benefits of HANA.

Vishal again reinforced that the HANA architecture is fundamental to the long-term direction of SAP, and that was reinforced in multiple dimensions by the appearance of Dr. Hasso Plattner, chief technology evangelist and chairmen of the supervisory board of SAP.  Where Vishal leveraged customer testimonials, Plattner directly addressed why SAP is committed to this direction, and more importantly, directly addressed 13 rather candid and direct questions posed by various other customers spanning the direction, benefit, impact and deployment of HANA across the entire SAP suite of software and business applications.

Since this blog is focused on the global supply chain functional and IT teams, we will in this commentary distill some of the more important takeaways for our community.

First, most all of the current customer pilot initiatives and testimonials stem from the IT community.  There were many senior IT executives featured in today’s testimonials.  The ultimate user adoption of HANA will ultimately come from end-user leverage and use, and SAP is still rather distant from that goal.  The potential however remains enormous, particularly in the area of supply chain planning, business intelligence and real-time sensing applications.  That point was driven home in a live demo of a complex ATP check performed by a HANA powered application, which faltered during Hasso’s session.  Hasso assured the audience that it worked earlier.

In his remarks, Hasso declared that within the SAP BusinessSuite, the most strategic effort that SAP can accomplish is to have all planning applications rewritten to take maximum advantage of the capabilities of HANA.  Specifically, Hasso cited SAP APO as the number one priority, with some bantering with Co-CEO Bill McDermott as to whether he agreed.  “It will be faster- trust me, Bill” That is very big news for the SAP Supply Chain installed base community to consider in long-term deployment and future functionality considerations. Vishal also made mention of the again rumored Sales and Operations Planning HANA powered application.  More on this in our later commentaries.

Our impression is that Hasso and the rest of the SAP executive team has set a very aggressive technology direction, described By Hasso himself as the largest technology transformation undertaken by SAP in the last ten years. While many will not be utilizing HANA in the coming months, the longer term potential and implications are significant for the way supply chain response management, fulfillment, execution decisions are performed in the coming years.

It is rather important that SAP customers keep a careful and watchful eye on these efforts, since the technology and functionality gaps could well be significant. For now, gaining a basic understanding of direction and implications should be an agenda item for SAP supply chain teams.

More detailed commentary later, including highlights of an interview held with Steve Lucas, the global sen ior executive leading SAP’s business analytics initiatives.

Bob Ferrari