Will SAP lead the next generation of enterprise applications?

Franck Cohen, President SAP Digital Core & Industry Solutions, presented the slide below at SapphireNow last week. He did not spend much time on it and I would likely have not thought much of it if he had not shown it in an earlier meeting. It is a simple slide yet could herald the next generation of enterprise apps. I have taken his thoughts and added my commentary.

Digital Age UX

I had a chapter in the 2010 The New Polymath about emerging interfaces.  It’s taken a while, but at home we are getting used to digital assistants like Alexa. In our cars, we are starting to feel haptic interfaces and get comfortable with heads up displays. On the shop floor (see this Plex keynote) we are moving to digital capture, wearables and AR/VR. (and the Kopin WhisperChip described there should make voice interfaces work even in noisy environments). During the Super Bowl earlier this year, I was struck by a Dr Oz commercial where he described how wondrous the five human senses are. The enterprise is (finally) starting to recognize that and diversify beyond the keyboard and mouse.

Automation

In Silicon Collar I described how BP is using robotic crawlers on rigs and drones for pipeline inspections, how KPMG is redefining audits with cognitive computing, how digital agencies like Grok are using CGI, how Amazon is leveraging Kiva robots in its distribution centers, how banks are using RPA and many other man-machine combinations. No profession or business process is exempt yet amazingly enterprise software has been somewhat oblivious to this automation-everywhere trend.

Next-gen processes

Today’s cloud solutions have mostly taken features and functionality forward from the last wave of client/server ERP, CRM, EAM etc. They have adapted to compliance driven changes, but not so much for business model and practice changes.  And they have mostly tackled horizontal accounting, HCM and CRM functionality.

So much has changed in the last two decades. If you are a utility your billing needs to factor net metering where your consumers are selling power back to the grid. If you are a retailer you deal with your customers across multiple channels, through countless delivery methods and have to adjust to reverse logistics like you never did in the past.  If you manufacture, your bill of materials has a lot more silicon and software as products become smarter. You have plants around the world close to your major consuming markets.   In reverse, you may also be dealing with contract manufacturers. If you are a CPG company, your marketing budget is increasingly digital and social but you still have plenty of analog spend – radio, print, billboard, events. HR processes – recruiting, training etc. – appear oblivious to the fact that only 10% of the US civilian work force now works for the Fortune 500. No, the rest are not contractors. The talent is in their supply chain, in their service firms (accountants, attorneys, advertising firms), on their platforms, in their franchises etc. We need new processes to track and develop this very widespread talent base.

It’s nice to hear Franck lay out his vision, but can SAP wake up Rip Van Enterprise Software from its 20 year slumber and catch up to modern business? It’s not like SAP’s performance has been stellar in the same period

• SAP has often been distracted by infrastructure and platforms, not applications – NetWeaver, Sybase, HANA have taken a lot of attention.
• S/4HANA is largely a re-skinned ECC. It has not pushed the ball forward on new functionality. It has not even begun to focus on industry book of record functionality.
• SAP has been timid about cloud computing. Its acquisitions – SuccessFactors, hybris etc have brought it cloud revenues, but the majority of customers are still on on-prem software. Early S/4HANA adoptions have been mostly on-prem or in private cloud
• It continues to be very dependent on its traditional SI partners who themselves missed out on the many new trillion dollar markets which have emerged in the last couple of decades.

Yet, for the first time in the last several years at SapphireNow, as I wrote here, I felt some optimism about the application vendor buried in that organization. Maybe that will spur some more action in the competition.  Oracle has appeared to be more interested in catching up to Amazon and Microsoft in the IaaS market than in growing the application footprint. Infor had a grand vision of servicing several verticals but has been slow to do so. Workday is highly focused on finance and hr, Salesforce on its somewhat narrow vision of CRM.

The biggest strength for SAP is its customer base across industries and geographies. My books have cataloged many of the innovators in that base. The opportunity awaits to turn their innovation into application features and functions.

Will SAP grab it?