Dreams of a SAPPHIRE Keynote: What’s Your Innovation Path?

SAP’s ginormous SAPPHIRE user conference/sales event kicks off in a couple of weeks, and if you’re in any way involved in the SAP ecosystem, you’ve been caught up in the frothing frenzy that typifies the run-up to gathering over 15,000 souls into that soulless cauldron called Orlando.

In case you don’t know the drill, SAP’s biggest challenge of all is to funnel everything that’s good and true and important to the company into CEO Bill McDermott’s keynote. The process is simple – start with a blank sheet, put some ideas on paper, and then watch as the jostling, politicking, and pitching begins to fill out Bill’s time on stage.

While we can’t really know what will emerge until the bell tolls at 9 a.m. on May 17, I can’t resist playing the game of “what should Bill say” in his 75 minutes of fame. Here’s my take:

The first and foremost imperative for SAP is to synchronize its messaging around its major initiatives, which are almost too numerous to count. At the risk of missing something, in no particular order, and with overlapping concepts left in, these initiatives include: S/4 HANA, HANA Cloud Platform, talent management, contingent labor management, customer engagement and interaction, business networks and direct procurement, everything cloud, IoT-wannabe (it even rhymes!), next-gen training and education, next-gen services excellence, growing and enabling the partner ecosystem, building digital stores and creating developer outreach, digital transformation – and I’m sure I missed more than a few. There are also SAP’s 25 industries, a zillion geographies, support for open standards, open source tools and services like HADOOP and Cloud Foundry, and on and on.

Bill could just stand there and enumerate all the initiatives under way at SAP and easily use up the full 75 minutes. It might take off some of the pressure from the back-door politicking, but in doing so Bill would waste a lot of everyone’s time, and probably annoy/piss-off/scare/bore enough of his audience that they’d all decamp to Disney World and hang with Mickey and the gang.

Or… Bill could elaborate on a relatively simple, straightforward theme that ties it all together. Because behind this almost ADHD-like testament to techno-overachievement there’s a unique, unifying theme to what SAP is doing. That theme not only helps make sense of its efforts, but also helps connect SAP to a widely disparate customer base that is facing down an unprecedented set of business and technology challenges with more than a few questions about what to do and how to do it.

That theme can be summed up in a simple question, one with a simple answer, from which all of SAP’s efforts and, hopefully for SAP, all of its customers’ buying decision derive.

The question: Where do you want to take your company?

The answer: Wherever you want to go, SAP can help.

Pretty simple, no? Better than simple, it’s what customers really want to hear from SAP, much more than “HANA solves everything” or “no more aggregates” or “S/4 HANA solves everything” or “the cloud solves everything”, or, my personal favorite, “time to re-platform.”

The reason the above themes haven’t lit the collective customer fire is simple: One of the problems of being on the inside, inhaling the fumes of so many initiatives, is that it’s easy to pretend to know what’s right for all customers, all the time. That pretension means that at some point the conversation with the customer becomes didactic at best, dictatorial at worst. This “we can fix it” hubris is endemic to all tech companies, and has been baked into the engineering mindset since the modern tech era emerged from the primordial ooze of Silicon Valley’s garage culture almost half a century ago. With “fix it” baked into its DNA, tech culture is singularly focused on making things better, and singularly challenged at understanding that “better” is an extremely relative, rapidly shape-shifting concept, and nowhere near the absolute one that engineers fervently want to believe it is.

In SAP’s case, from a purely “fix-it” standpoint, the SAP customer base would be crazy not to embrace pretty much everything SAP has to offer – every company needs the “faster, better, more” results that are at the core of everything SAP does. Indeed, while some of the initiatives enumerated above are more theoretical and “pending” than not, most of them are spot-on when it comes to driving customers towards their inevitable, digital future.

But the real world isn’t run by engineers bounded by the relatively immutable laws of physics. It’s run by business people navigating a truly squishy, flaky morass of contradictory requirements, regulations, stakeholders, politics, and just plain “stuff” that perpetually militates against easy, rational solutions. In the real world, the best idea – much less the best technology – doesn’t win. In all too many cases, the race is not to the swift, nor the battle to the strong. Sometimes the race is to the expedient, the possible, and the compromise, and the battle is to the mediocre, the half-baked, and the politically safe.

So instead of assuming that SAP – or any vendor – can really articulate what’s best for all its customers all of the time, it would be much more useful for Bill to declare that, from SAP’s standpoint, what’s truly best for the customer is SAP’s willingness to help get the customer where it wants to go. Regardless of its starting point or perceived endpoint, SAP has an answer to the question: what is the path I need to take to move my company towards its goals and meet its challenges?

Importantly, this may mean that S/4 HANA, or anything else called HANA, isn’t on the table. And maybe a business network isn’t the next step forward. Or a big investment in IoT may not be what’s good for a given company today. It’s almost the anti-politicking solution to SAP’s embarrassment of riches: Much of what SAP has to offer might not be what your company needs. What’s important is that when you need it, SAP has it, or knows how to get it, or can find a partner to help you get it. Let’s engage, Bill should tell his audience, not in a journey dictated by my product development roadmaps but by your business roadmap. And if you don’t have one – fine, SAP can help you figure that out too.

What would be equally useful, and even harder for SAP to do, is to acknowledge that it’s a heterogeneous world out there and, again, SAP is here to help. This would mean accepting that SAP’s competitors are in the customer base and may be even there to stay. But, hey, if the customer needs help moving forward with an SAP ERP system tied to Salesforce.com or Workday, so be it: SAP’s here to help is better than “go fly a kite” or other variations on the theme of burying one’s head in the sand.

(To those of you who scoff that this coopetition strategy is for the birds, ostriches or otherwise, take a look at Microsoft in the last year or so. CEO Satya Nadella keeps showing up at other vendors’ conferences preaching the gospel of coopetition, and his company’s results are looking pretty good for these efforts. Moreover, customers love this approach, even as the internal teams that compete with Satya’s latest BFFs seethe. Of course, Satya’s back story is that it’s better to be “all-in” with Microsoft’s vast product portfolio than go hetero – the seamless integration is all the more seamless inside the house – but in the end, it’s better to coopetate than be an ostrich.)

I think the “we’re here to help” approach will help SAP in a couple of important ways. First and foremost is the problem of audience. Virtually every conference I’ve been to recently – SAP, Microsoft, Infor, Salesforce, pick your favorite vendor’s conference – has been saddled with the same problem: On the keynote stage is tomorrow’s message, playing to last year’s audience. Time and time again I hear this future-focus from the keynote clashing with the now-focus of the audience. And that clash can become a little cacophonous when multiplied by the increasing number of tomorrow’s messages customers keep hearing from their vendors. Which begs the collective question of enterprise software customers looking at the reality of their tech/business strategy in light of this tomorrow-focus: To hell with pushing the solutions of tomorrow, doesn’t anyone really care about what’s happening to my company today?

Played out in the business world, this kind of “tomorrow’s message, yesterday’s audience” disconnect makes for some interesting conversations – like trying to talk about global business networks to a procurement clerk looking for a better user interface, or discussing support for IoT-driven contingent labor processes to an HR manager whose job description doesn’t include asset management, or opining how strategic and valuable a given vendor’s newly integrated and rationalized products and services are to an end user trying to find out whether the current version of their software is being sunsetted or upgraded – and when.

Get it? The real world’s problems aren’t easy to cram into a sound bite, they’re can’t possibly be covered in 75 minutes, and to try is to fail. But if SAP listens carefully, instead of just talking about its great achievements, what the company will hear is that the unifying problems of “where do I need to go with my company” and “how can I get there” are resounding across the industry. Not a lot of business execs wake up in a cold sweat at 2 am thinking “I gotta get me some of that techno-whiz-bang stuff my vendor is peddling this week”. But they do wake up at 2 am thinking “my customers hate me” or “my invoicing process is killing my DSO” or “Amazon just entered my market as a free add-on to Amazon Prime”. And in many cases – I would argue a significant number of cases – the solution to the problem doesn’t start with implementing the latest and greatest shiny new penny from your vendor.

Once the “we are here to help” theme is kicked off, Bill could easily fill out the rest of his 75 minutes by enumerating exactly how SAP can help. This doesn’t mean avoiding all mention of long-range strategic initiatives and cool new stuff, but it does mean keeping an eye on the practicalities of what customers really need. For some companies, going omni-channel must start with the mundane task of fixing the inventory system, not buying hybris, at least at first. Lowering DSO might ultimately be about creating an online e-commerce function, but the first step might be to hunker down and fix that creaky old supply chain. Sometimes better training is the place to start, not a new cloud platform.

If the bar for innovation at the customer is set low enough, and believe me it often is, maybe just upgrading to the latest ERP back office is the earth-shattering innovation the customer really needs, not an upgrade that puts S/4 HANA and the entire enterprise back office in the cloud. Talk about heresy.

Of course, as CEO, Bill has to keep the Wall Street wolves at bay, who are always hungry for the freshest innovation meat and the best margins, and that means trying to set some reasonable quotas so that the field sales effort syncs with the rhetoric of innovation delivered to Wall Street. That hunger from Wall Street is not misplaced – there is no doubt that the changes promulgated by the massive shifts in how business is conducted across the world mean that a wholesale re-imagining of the interplay between companies, employees and customers is needed. Wall Street is right to ask companies like SAP that wear the innovation mantle to put up or shut up. And there is no doubt that SAP is dedicated to providing the technology and tools – like S/4 HANA, HCP, business networks, next-gen talent management, advanced planning and predictive analytics – that fit well into the “put up” side of that imperative.

However, focusing on helping the customer with today’s problems might mean that sales of flagship new technologies would not be as smoking hot as Wall Street would like. But focusing on what customers would like will have the better long-term impact. SAP and other vendors have backed themselves into some complicated corners by pushing new technology on customers who don’t have an immediate need, but are willing to take the shiny new penny if they can get a better price on the products they actually do need. This always works well for a couple of quarters until someone starts looking at the delta between licenses sold and licenses implemented. At which point the house of cards starts getting a little shaky.

Helping customers by providing them the choice of the broadest range of solutions and not force-feeding them innovations they can’t use helps build customer satisfaction and loyalty. Asking them to buy something they don’t need and signing them up to be bit players in a cynical game of license counting with Wall Street leaves a sour taste in everyone’s mouth.

So, good luck Bill, with getting that keynote sorted out. At a minimum, my “we’re here to help” approach will help you navigate the conflicting messaging battle now raging for every second of your keynote time. But it is also designed to make sure that your customers see you and SAP as an ally who has their best interests in mind, not a selling machine trying to close the next deal. One of the great sins of modern enterprise software is that vendors tend to sell software the way they build it, not the way the customer buys it. At this point in the 21st century, everything in the business world is up for grabs, including the way that customers choose their vendors and buy their software. SAP should rethink how it positions itself for this new reality: Offering itself as a means to an end, and not just a collection of products chasing opportunities, is, I think, the best way to go for SAP and its customers.

See you in Orlando.

One thought on “Dreams of a SAPPHIRE Keynote: What’s Your Innovation Path?

  1. Pingback: How to Maximize Your Time — and Questions — at SAPPHIRE NOW | SAP News Center

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