ASUG and Sapphire Now – customers challenge SAP on simplicity and S/4 HANA

SUMMARY:

SAP was under pressure to pull off an effective Sapphire Now. During the keynotes, customers played their part by both validating and challenging SAP. Here’s how SAP and ASUG set a different tone.

sapphire-now-walmartThis year’s ASUG and Sapphire Now event was a far bigger success than 2014. Last year’s keynotes were a hot mess. This year’s keynotes were far from perfect, but they hit the right notes more often than not. A big reason: SAP’s own customers made their voices heard. And: during the ASUG customer keynote, stronger positions were taken on issues like “run simple” and SAP’s innovation roadmap.

The good news for SAP: customers expressed a genuine buy-in for S/4 HANA, not so much as a product to purchase immediately, but as a way to think about competing in a disruptive economy. But these same customers put SAP on notice: they perceive this as a partnership, not a technology festival or a product welcome mat. After the show, I revisited the keynotes and plucked out some memorable customer views.

On the day two keynote (replay here), SAP made the smart decision to get the CIO of Walmart on stage, and devote a good twenty minutes to a relaxed, seemingly unscripted conversation about Walmart’s challenges and how SAP fits in.

Walmart: technologists must come together to confront digital change

karen-ann-walmart-cioSitting next to SAP Executive Board members Bernd Leukert and Rob Enslin, Walmart CIO Karenann Terrel spoke openly about the challenges of running Walmart at scale, serving  250 million customers a week across 11,000 store locations, with massive e-commerce logistics to boot.But something more profound is happening: Terrel sees Walmart as a retailer re-inventing as a technology company. And when it comes to working with SAP, Terrel didn’t hold back.

Enslin opened with an interesting question: Walmart has typically been quiet about its internal IT operations. So why speak up now? Terrel:

Walmart is a very humble company, often times we don’t realize that the things we’re working on have that scope and scale… In the disruptive times we all find ourselves in with regard to technology, it’s time for us as a community of technologists and enterprise leaders to come together and talk about that. Walmart at its heart is really emerging a technology company in the middle of the world’s largest retailer.

Terrel referred to Walmart’s logistics efforts, which she sees as a constantly “disruptive” effort to lower the overall cost and serve up a better customer experience. Since 2007, Walmart has been using SAP to manage these global operations, including large scale HR and finance. But things change: speed is becoming an imperative, and HANA is shifting SAP from sa “back office” Walmart partner to a “front office” real-time data player.

Instead of the usual flowery keynote sentiments, Terrel dished out some truth on Walmart’s SAP collaboration. Partnerships are hard work, and companies that don’t find the right approach are going to be buried by digital change:

A tech organization that is not thinking about speed is a company that is going to to be disrupted from its position. Digitization is not just a buzzword, it is incredibly real – if you want to lower overall cost, to get to real-time and to serve customers. As we look at the work we’ve been doing at SAP, I really credit the strategic partnership – and I don’t use that word lightly. We don’t have a lot of strategic partners in the areas of technology – those are the ones we can fight with, and you know, we’ve had our moments, but we only do it to make each other better.

A 2015 HANA innovation award winner, Walmart is already using HANA as part of its “Hadoop-architected” data management. As Terrel put it, Walmart “pulled” HANA into their Walmart’s strategy. When Enslin asked Terrel for her views on how SAP innovation, she brought up S/4 HANA, but with a different implementation model:

The challenge in our business is that we need an ecosystem that allows us to move at speed, so the model of an SI and SAP as we go to S/4, we have to re-imagine and think outside of that, because speed, innovation innovation, and disruption is everywhere in the tech world. With Walmart as a tech company and innovator – the tale will be told on speed. That is a challenge for you, that is a challenge for S/4 team; we are “all in” on that. It needs to work; it will work. Challenging conversations will get us there, and than onward and upwards, because innovation doesn’t rest in the back office.

ASUG keynote views: run simple is a big challenge – for SAP, and for customers

During the ASUG keynote, CEO Geoff Scott and Keith Sturgill, ASUG Vice Chairperson and VP/CIO of Eastman Chemical, hit on similar views. But their standout comments came in response to SAP’s “run simple” approach.

geoff-scott-asug-keynoteSpeaking first, Scott made the case for the power of community. Then he tackled simplicity:

We have been on a journey of process automation – to do that, we integrated systems, lots and lots of systems. We all know that this integration is extremely hard… Steve Jobs said: ‘Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple, but it’s worth it in the end, because once you get there, you can move mountains…’

I’ve come to realize that speed matters, that simplicity matters, and getting clarity in an ever-increasing tidal wave of data is essential. Simplicity, in the view of ASUG, is not just about reducing the number of tables in the database to increase the speed of applications, simple must also include easier upgrades, easier migrations, easier upgrades, and faster ways for all of us to develop, test, and implement change.

Scott explained how ASUG plans to help customers handle change with dedicated communities on Human Resources, the Internet of Things, user experience, HANA, S/4 and Simple Finance. Particularly encouraging were the announcements of a closer ASUG partnership with SAP’s University Alliance to address talent cultivation from SAP’s university programs. An ASUG partnership with the Customer Startup Network, part of SAP’s Startup Focus program, should also bear fruit – I’ve been disappointed in the past by the lack of exposure to SAP’s HANA startups in the customer base.

keith-sturgill-asug-keynoteUp next, Sturgill built on these themes, using a picture of an Alaskan bear to represent fear of change, joking that the bear “is not your SAP account executive at the end of the quarter.” For Sturgill, SAP’s simplicity challenge is also a customer challenge:

At this time last year, I watched Bill McDermott on this very stage stand up here and talk about this idea of “run simple.” I remember thinking, “This message is really resonating with me, more than I thought it would.” And I went away thinking, “Wow, that’s a big vision. I can’t imagine a bigger challenge for SAP.” And you know what? It won’t be easy for SAP. It won’t be easy for us as customers…

Things that are transformative are never easy… I’ve thought a lot about this: Wouldn’t it be great if we could deliver software that was so intuitive that it didn’t require training? Or: wouldn’t it be great if we had an easy way to identify and remove value-destroying complexity from our companies? This idea of run simple is more than just making software easy to use… If we’re going to succeed at this, we’ve got to rethink how our businesses operate from the ground up.

Wrapping it up – a challenge to SAP

Even from this small collection, you can tell that SAP customers found a stronger keynote voice. SAP deserves its share of credit; I’ve lost track of how many SAP customer “panels” turned into yawn-fests because of over-scripting and over-moderation.

Giving Terrel center stage was a smart move, but asking open-ended questions takes some guts. Enslin asked Terrel what she thought of SAP’s innovation strategy, giving her plenty of room for an honest answer. Speaking on S/4 HANA, Terrel had one of the quotes of the show:

The S/4 work you’re doing leads you closer and closer to SAP at speed; I want to just encourage you and challenge you: I want my SAP implementation to be within my lifetime at Walmart. I’d like to conclude that; I have that on my bucket list;  it is important.

Instead of looking like they were filming a Southwest “Wanna get away?” spot, Enslin and Leukert took the comments in good humor. A few minutes later, Enslin summarized with:

All of you out there are laying out the same challenge to SAP, and we accept the challenge. I will personally take on the challenge at Walmart as we’ve done the last seven years.

That’s a dramatic improvement from the hollow bravado of the S/4 HANA launch event in New York. In the final Sapphire Now keynote, Hasso Plattner brought it home with a terrific/funny/blunt keynote that had me tweeting:

Nothing is certain, but a challenge issued and accepted is a good place to start. And no, I didn’t watch the Michael Strahan guest keynote. I’ll leave that review to someone else.

End note: if you want a deeper dive into the SAP cloud learnings and S/4 HANA nuances of the show, check out my 30 minute “director’s cut” Sapphire and ASUG podcast show wrap with Dick Hirsch.

Image credits: pics are screen caps from SAP keynote replays

Disclosure: For the quotes I selected for this piece, I transcribed from the keynote replays and made minor edits for readability and clarity. For exact quotes and the context around them, I strongly recommend the keynote replays. SAP is a diginomica premier partners as of this writing. SAP also provided the bulk of my travel and accommodation expenses for this event.

Update: changed a description of last year’s keynotes as the description seemed insensitive in light of a current non-software news tragedy.