SAP is always a bit of a conundrum to me. They have extraordinarily talented people, an incredibly deep product portfolio that they are always extending, more often than not make good acquisitions that take some time but work out all in all, and seem to be actually dedicated to transforming their ecosystem - internal and network - when the world's conditions merit it. Which is more than I can say about a lot of similar companies. On the other hand, they make business decisions that I politely would have to say are perplexing and statements that they just simply shouldn't make.
All in all, I have to say, before I get too far into this post, I am a fan of the company. I find them to be innovative in places I don't expect; with some caveats, especially related to Territory Management, they've developed a CRM product, CRM 7.0 that will be highly regarded and is a valuable addition to the choices that that enterprises have. More on that in another post. They are innovative in ways that have nothing to do with software - but have more to do with culture (collaborative value chain) and with perception and intellectual influence - their unique and useful Business Influencers Group, an organization that is an exceptionally smart idea - and unlike any other at any company I know. But SAP has these flaws that just...just...shouldn't be there.
Now, I'm not sure of the size of the audience at Sapphire 09, Chris Musico, an associate editor and bright bulb at CRM Magazine tells me is 10,000 here and 8,000 virtually - they call it their largest audience ever but there are not as many here as there were last year - live humans that is. The numbers are impressive.
But what I am sure is that Leo Apotheker knows the message and believes in it. His sincerity, to my slight surprise, came across, to the audience and if you followed the Twitter feed on Sapphire 09, you'd see that.
But that doesn't mean the message was perfect. Nor the vision was totally clear.
Leo began his presentation by a grim look at the world economy and the effects of the recession on how the world of business is going to have to function. The net of that part of the discussion is that companies will have to function in a world that has limits and that is at greater risk. This means that in order to bring forward the next generation of business, its going to require "clarity." That means a clarity of purpose and strategy. Businesses must be able to make strong choices based on a realistic evaluation of "the situation" and then executing on those choices. It means full visibility into the operations of an enterprise with speed and accuracy. It means leaders who think clearly and act accordingly. He mentioned that he had hosted a conference of academics from around the globe and they all decided that it was urgent to rebuild trust and confidence with all stakeholders - especially customers and shareholders. That, I have to say doesn't take an entire conference to figure out, but it was still good to hear it.
Clarity, which consists of transparency, accountability and sustainability drove the core of his keynote. Around that, which was, of course to be expected, he pitched SAP software and services and SOA architecture. One point that i found interesting was that SAP now supports more than 25 industry specific best practices based roadmaps. SAP is working toward cross pollinating industry best practices, which in theory might sound good, but when it comes to best practices, history kind of bears out the idea that one company's best practices might be the reason for collapse of another company - so cross pollination of industry-wide best practices might lead to nothing more than a bunch of bee stings rather than honey. So to speak.
Without going on forever on this, there were two specific areas that I want to cover because I see them as exceptionally important - one good - excellent in fact, and one the continuation of a mistake that SAP just seems to keep making.
When it comes to this, SAP, as evidenced not just by the passion and sincerity of Leo Apotheker on the issue, but in their actions as a company and in the products they've acquired and produced are going to be if not already a leading force in sustainable business over the next several years.
Apotheker pointed out that in 2008, SAP had reduced its total corporate carbon footprint by 6.7% compared to 2007. In fact, Peter Graf has been named Chief Sustainability Officer to deal with all things sustainability at SAP including not only meeting their corporate objectives but also to provide their related products and services.
Their commitment went beyond just the achievement of their corporate objectives. Leo showed a Sustainability Solution Map that was comprehensive and valuable. Here it is.
They have not only committed to be a company that is socially responsible, but they've developed an initial blueprint for other companies to be socially responsible and sustainable. That is something that no other company has even considered that I know, much less done.
But they've also monetized it and kept it at a viable level.
For example, the always incredible Ian Kimball, who does many of the SAP presentations to loud applause (guy is a master of this), showed a web based ecommerce application an SAP Web Store (a construct) that had a product - GPS system - that you wanted to buy. Under the GPS system was a note that said, "Guaranteed: Most environmentally friendly product in its class." That doesn't sound like much until lan actually took us behind the scenes and showed us the algorithms and dashboards and KPIs built into applications that had the benchmarks for that guarantee built in. In other words, it wasn't just a claim, but it actually met standards that were provable via app.
But they went beyond even that. They actually have identified a path for themselves as a company that means a rigorous adherence to a set of sustainability KPIs that are probably a first for the industry.
All in all this is a world-class effort that they mean. This isn't a marketing ploy or a trick to play on the conference. This is a passionate and serious commitment by a mega-giant company that can affect the next generation business models if they can follow through. I think they can and will.
He even then said, "if you think SAP is a newcomer to on demand, then think again. We've been doing it for five years. You can do your research."
First, they have been doing it for five years - and doing it badly. I had a conversation in Dallas with an SAP VP when the first "hybrids SFA" came out and was told that the reason for it wasn't to meet a market need but instead to stop the encroachments of salesforce.com on their customer base. Awful strategy.
Not much real progress has been made. I truly hope that SAP someday gets this right because its almost impossible to be in the market without a SaaS product. They have Business Objects BI On Demand which is an actually good product, but we heard nothing about that. I guess we can continue to wait, but the message was "we don't have much yet" whether it was intended that way or not.
What makes Explorer important is that even a mathematical moron like me can use it to get results of real interest and it provides results lightning fast, so that you don't have to crunch numbers for hours or days before decision gets made.
For example, if you are doing a simple product analysis, and you want to look up all the refrigerators in a massive catalog - style and price - it takes milliseconds to get an answer. They did a run on some actual data from Sara Lee, one of their beta partners and they were able to go thru 266 million rows in a third of a second. It was breathtakingly fast.
But you can do much more complex analysis - let's say a comparison of television models that are over 43" and cost over $2500 or more that are located in inventory in the southeast states compared with all the same criteria for the EMEA and that are plasmas and LCDS but not DLP or any other variety. That would take a couple of seconds of clicking and, apparently, since they didn't actually do this study, less than a second to get the answers.
Here's a screenshot to show you the simplicity.
Now, of course, there are questions - which mostly revolve around data types. In the press conference Ray Wang, a superb Forrester Group analyst, raised the issue of data quality - what is the quality of the data going in - how that affects it? All in all, it will obviously but that's out of the hands of SAP. He also raised the question of Master Data Management (MDM) - can it handle multiple data sources with different data types? They say yes, but how well remains to be seen. The SAP claim is that it can do that or it can operate as "accelerated Explorer" - which enhances queries power and speed when it comes to SAP own's Business Warehouse - especially those that are over a million records in length - which even they admit start grinding BW's analytic capabilities when things get that big. Explorer can easily handle it.
The combination of the extraordinarily intuitive interface and the speed of results makes this a truly interesting and potentially leading product.
That's the good thing in the press conference.
I'm sure that you heard that there was an SAP reduction in force that affected 3000 SAP employees. I just want to say that I assure you there was little impact in that loss and that in fact, SAP will probably operate leaner and more efficiently as a result.
I wonder if Mr. Schwarz, who I'm sure rests on millions of dollars of personal wealth, remembered that these people, who in effect he is saying are useless (no impact) fat (leaner), have families and no livelihood. I wonder if he remembers that we're in a recession and its hard to find a job now. I can't speak for how many of the 3000 are still not working, but I'm sure a significant amount are still looking.
I could excuse this shockingly cold comment by saying that Mr. Schwarz didn't mean it and he may not have. But he is a member of the SAP Executive Board and what he says carries serious weight. This was a cold, cruel and callous statement that can't go unnoticed. Literally everyone at that press conference I spoke with later (about 5 or 6 others) - analysts, journalists - were aghast at this.
There is no other way to be. Mr. Schwarz should apologize.
Damn if they didn't do it again - this time around their message of Clarity and Timeless Software. Not more than ten minutes after Leo Apotheker's on the whole excellent vision and speech, John Schwarz said the same thing about Clarity and Timeless Software in the same way. Scripted and micromanaged again. Inauthentic again.
I won't dwell on it. Suffice to say, there are two mantras I recommend to SAP that they repeat - in different ways and tones of course:
Develop the message and then free your spokespeople to present it in any way they want to. Stop telling them how to say they. They have their own personalities and styles and interests and vocal chords. Let 'em loose. You'll get much better results.
But they still have weaknesses that their competitors can exploit especially in the SaaS space. They didn't help their public image either with the Schwarz faux pas.
But on the whole, they are a company that is not only competing but in areas that matter like sustainability in business, it seems they are becoming actual leaders who have both smart business plans and a moral and ethical benchmark that other companies might do well to imitate.
Let's see what today brings.