I’m writing this blog post while waiting for a flight from Barcelona to Dublin. I’ve spent the last couple of days at the SAP Hybris event in Barcelona and, as is always the case with Hybris events, it has been a fascinating glimpse into how the Hybris culture of innovation and agility is being adopted into, and adapted by, the SAP mothership.
At an analyst Q&A today, Robert Enslin, a member of the SAP board and President, of SAP’s Cloud Business Group sat down next to Carsten Thoma President of SAP Hybris and Moritz Zimmermann, CTO of the company to be grilled by the attendant analysts about the company’s strategy, messaging and product mix.
I came out of the session frustrated. Not at anything that SAP Hybris is doing, but rather at the attitude among my peers. One attendant criticized Enslin for not being visionary enough, especially as it relates to the use of artificial intelligence across the SAP product line. I joked that the person in question wouldn’t be happy unless SAP started articulating a vision of product fulfillment from the International Space Station and robots fulfilling all customer service roles.
While this could seem like the over-opinionated view of only one person, that room of a handful of analysts and media was a good proxy for what SAP faces in the marketplace. Let’s be realistic here, for better or for worse, SAP touches an absolutely massive proportion of the worlds commercial transactions – the biggest consumer and B2B brands in the world run on SAP core systems. And we all know, as consumers ourselves, that often the experience that we have when transacting with these brands is far from optimal.
So while the analyst in question wanted SAP to verbosely articulate a vision of IT system science fiction, the reality on the ground is that for these businesses it only takes a small amount of innovation to make a big difference. And, let’s face it, simply connecting back and front office systems to deliver a consistent experience and data path constitutes huge innovation for many of these companies.
Doing the right thing by customers
It’s important to take a minute to reflect on where the largest organizations in the world are in terms of digital transformation. While we all like to point to [insert your favorite example of a disruptive digital company here] as the role model for how the Fortune 500 companies should work, the reality for those more traditional organizations is completely different.
These companies have massively complex supply chains, huge numbers of internal and external stakeholders, and more than their fair share of legacy IT systems holding them back. For them, boiling the ocean has zero viability. Rather they need vendors to be trusted partners showing them how to increase agility and deliver innovation but within the context of their existing systems, processes, and culture. Were SAP to take the advice of the enthusiastic analyst and go stratospheric with a message super high on future vision, they would be likely to, in the process, leave a great number of their customers behind.
Change, but measured change
In putting this frustration to Enslin, I was pleased that he agreed with my view. At the slight risk of being pilloried by other analysts for dragging the proverbial chain, Enslin’s response was that I was 100 percent correct in my assessment and that he meets on a daily basis with some of these massive companies that simply want a trusted partner to help them move from their situation today to a better version – they tend not to ask him about how they can all of a sudden become an Uber, an Airbnb or a Pinterest, but rather their questions are parsed more in the way of “we have a big, expansive, sprawling existing IT footprint and we want to find ways to, within that context, move faster in terms of our products and services.”
Which is absolutely where Hybris comes in and shows the value in SAP’s acquisition and post-acquisition with regards Hybris. Hybris has been allowed to continue innovating but encouraged to do so from the perspective of SAP’s own core solution set. By doing so, SAP customers get all the goodness that Hybris brings (and, let’s face it – new approaches to how they transact with customers, and new omni-channels across the web, mobile and in-store are a whole lot of goodness for these customers) but they get to do so within an SAP footprint.
The net-new opportunity
So if Hybris’ approach is entirely appropriate for existing SAP customers, what does it mean for those newer organizations that don’t have an existing SAP footprint? Well, your assessment of this question rests largely on your impression of whether SAP really has something to offer more nimble organizations. If you’re a cloud-first competitor of SAP, say NetSuite for example, your standard line is that SAP is too monolithic, too inflexible and too difficult to work for companies moving at warp-speed. of course, if you’re an SAP advocate, you simply point to the companies – new and old – successfully using SAP to run their operations.
Characterizations of SAP as a big, slow, lumbering beast that can’t get out of its own way don’t really help any. You don’t get the sort of customer base that SAP has without doing the right thing by customers, and continuing to do that on an ongoing basis. Obviously, SAP has, like other traditional vendors, traditionally been slow to get the cloud-love, but that has clearly changed. While it’s certainly not singing from the NetSuite playbook and suggesting that cloud is the ONLY option, they are moving to increasingly support cloud or more traditional models.
MyPOV
Hybris is doing some interesting stuff, and the number of customers at the summit who were using Hybris to unlock agility and innovation is a testimony to the fact that they’re delivering value in the market. Sure they may not neatly fit into some arrogant analyst’s personal take on how things should be, but that is largely irrelevant.
