The opinionated Sapphire Now 2021 preview - my top questions SAP needs to answer
- This year, SAP Sapphire Now is spread over several weeks. How to track it? Look no further than my top five burning questions. Here's the standouts from my pre-Sapphire Now research, along with exclusive quotage from SAP CEO Christian Klein and ASUG CEO Geoff Scott.
No, we're not in Orlando, but Sapphire Now 2021 is upon us. Starting this morning at 10am ET, the global keynote kicks off (you can stream the keynote and register for sessions with this link).
SAP took the virtual event option of spreading Sapphire Now over several weeks. Probably the best choice, but it can make plotlines harder to follow. What are the burning questions to track?
In the lead-up to Sapphire Now, I've been bearing down on SAP's potential agenda, through a flurry of pre-briefs, deep dives, analyst briefings, and customer use cases. I've even plowed through some long-winded webinars. I'll hold a few items that are NDA until the keynote is over, but for now, here's the questions I'm tracking.
1. Can SAP "RISE" to the occasion?
I considered using this phrase as the article title, but two things stopped me: one, it's so corny. Two, I'm pushing back on the idea that Sapphire Now should be all about "RISE with SAP." Yes, SAP is jazzed up about SAP RISE. But: one of the biggest mistakes SAP can make with RISE is over-emphasizing RISE over other pressing customer concerns (See my first SAP RISE review, SAP RISE in review - CEO Christian Klein responds to the "one handshake" issue, and SAP user groups air out their top questions).
In the past, I've posed two RISE challenges to SAP:
- If the early SAP RISE customers are so enthusiastic, let's hear from them.
- If smaller SIs are being included in RISE, let's hear from them also.
I'll add one more challenge to SAP for Sapphire Now:
- Can SAP give customers a clear sense of RISE's relevance, without getting bogged down in the range of services offered, or evoking past keynote misfires around HEC and Leonardo?
On the point of early RISE customers, I give SAP credit for surfacing two on-the-record RISE customers for diginomica, both with very different stories (Inside Hillrom's business transformation into "Connected Care" - an SAP RISE use case), and Can the upstarts at Electric Last Mile win the urban delivery vehicle market?).
In terms of the smaller SIs, I've urged SAP leadership to give smaller SIs airtime at Sapphire Now. Why? I'm biased towards specialized SIs; I believe they often deliver greater value than the flagships that always seem to corner the keynote airtime.
Put my bias aside: perhaps the biggest sweet spot for SAP RISE will be in the SME space. Why? Those companies are more likely to want immediate help navigating and simplifying their hyperscaler/ERP relationships. But those same companies want different SI options. So why has most of the SAP RISE partner fanfare been about the big SIs? In my view, it's not the right tone to set (I did dig out one "smaller" SI, Dickinson + Associates, which has put out their enthusiastic pitch on RISE with SAP in webinar format).
Prior to Sapphire Now, I put this "smaller SI" question to SAP CEO Christian Klein by email. Here's what I wrote: [SAP should] expand the SIs who deliver RISE beyond the global SIs, to niche and specialist SAP players - firms that may be able to offer industry specialization, custom tooling, or pricing that brings the SI costs down proportionally. What do you think?
Klein's pre-Sapphire Now response:
RISE with SAP was developed with our partners right from the start, including our trusted global SI partners. We built this offering with the customer at the center of our perspective, and that perspective continually becomes more informed as the market evolves. Considering that our 400,000+ customers have relationships with partners of every size and shape, we are of course adding partners on a case-by-case basis according to customer request. We know our customers want their long-standing partners to continue delivering to them the benefits and business advantages that cloud acceleration is now presenting.
That response hits the right notes, but it doesn't take the place of giving smaller SIs visibility. Now SAP has that chance at Sapphire Now. Finally, on keeping SAP RISE relevant and easy-to-understand. The definition of what RISE with SAP entails now encompasses everything from BPI (Business Process Intelligence) to Business Network Starter Packs to the Business Technology Platform, which now includes the former SAP Cloud Platform. And speaking of BPI, SAP RISE offers this now, but the Signavio acquisition is still being integrated. Still clear on everything? That's SAP's Sapphire Now challenge.
Note: for more context on how RISE with SAP impacts SAP customers and their cloud/hyperscaler/services options, I recommend the UpperEdge webinar, RISING with SAP S/4HANA: SAP RISE, Hyperscalers and Traditional Approaches Compared (free registration required).
Update: see my colleague Phil Wainewright's analysis, ASUGForward 2021 - how is RISE going down with SAP customers?)
2. Can SAP make sustainability down-to-earth, and business-relevant?
At last year's Sapphire Now, SAP's sustainability messaging didn't hit home. For whatever reason, it came off as a bit tone deaf. Now, I do believe SAP is sincerely committed to sustainability; this theme goes back deep in SAP's culture. Maybe last year, the pressing concerns of the pandemic made sustainability seem abstract. Can SAP shift that this year?
During a pre-Sapphire Now chat with John Wookey, President, Intelligent Spend and Business Network at SAP, Wookey pushed back on my concerns from last year. He made the case that sustainability has a deep relevance right now. He told me customers he talks to are echoing SAP's concerns. They're asking for visibility into the sustainability and diversity commitments of their suppliers. How can SAP make its sustainability message resonate this year?
- Emphasize bottom line benefits that will help companies emerge from the pandemic - beyond "GRC" compliance, reporting, and corporate responsibility.
- Show how capabilities like rating the sustainability of suppliers and tracking carbon footprints are being productized, and made accessible to all SAP customers. If you don't productize it, it's mostly just happy talk.
- Claim the global voice that is SAP at its best. Continue to acknowledge the pandemic crisis that impacts many SAP customers in hard-hit regions - and how sustainable business practices may boost our abilities to help.
- Treat sustainability as a work in progress, not the terrain of the enlightened. All companies have sustainability weak spots. Be careful about annointing companies as sustainability role models; we all have work to do.
3. How will SAP tie in its Business Network, CX, and "HXM" offerings?
Each of these three areas deserves its own deeper dive; we'll aim to provide them. The diginomica team has already interviewed SuccessFactors and SAP Business Network leadership (stories pending). An interview with SAP CX head Bob Stutz on deck.
Questions for each, starting with Ariba/Field Glass/Concur: we've heard the "Business Networks change everything" mantra from the SAP keynote stage years before. What's different this time around? Has SAP succeeded in making Fieldglass, Concur and Ariba greater than the sum of their parts, or are these solutions still too siloed? Update: see my John Wookey interview and analysis, Sapphire Now 21 - SAP touts the business networks revolution, but can it deliver?
For SuccessFactors, I think the overriding theme is: how SAP can help companies craft flexible, inclusive, and thoughtful return-to-work approaches, where employees are treated like assets and given workstyle choices? That might sound bloody obvious right about now, but I don't think it's going to be. We run the risk of reverting to an exhausting, compulsive-office-presence normal, or turning remote workers into second-class citizens. Update: this analysis is posted; see my colleague Phil Wainewright's Sapphire Now 21 - SAP SuccessFactors chief Jill Popelka on flexible working and the digital experience.
On the CX side, obviously SAP is not the king of market share in cloud CX, where the action is. But: SAP has some compelling CX leaders and products assembled now. Does SAP have a chance to redefine the CX market, without falling into the treacherous trap of the CDP and "customer experience" buzzwords? I'll dig into this with SAP CX chief Bob Stutz.
I'll say this much: this is as confident I've been in the leadership of these respective teams in many years. For me, that comes down to expertise, vision, and transparency. That's a good thing, but it doesn't guarantee success either.
4. Where are the "small wins" going to come from?
For the last 3-5 years, SAP has been pushing the following model of transformation: become a so-called "Intelligent Enterprise." The good news for SAP? Few customers question the need for some type of transformation now. No choice. You must become adaptable to quickly-changing markets; the adverse events of the last year and a half took care of that. I also think most customers would accept some form of an "intelligent" enterprise as a desirable result. Though they might not use that phrase, they understand why achieving "actionable insights" and expanding business models makes sense.
But SAP has a couple of big problems: embracing "transformation" as a corporate agenda doesn't mean SAP necessarily has a seat at the table of those discussions (RISE with SAP, in fact, can be viewed as a vigorous push by SAP to be at that table, and not be squeezed out by SIs, hyperscalers, and other vendors). Nor does achieving an "intelligent enterprise" mean you have to upgrade to S/4HANA to get there.
So SAP has an S/4HANA-centered transformation case to make (this is the ERP as a real-time digital core model, NOT the ERP-as-back-office or "ring fence your ERP" transformation models that have also gained traction). If the S/4HANA transformation case is made, one more thing is essential: quick wins along the way. Customers simply won't put up with a multi-year wait for a digital payoff.
To cite one example, Plex's cloud manufacturing prospects have expanded considerably, now that Plex has componentized a number of its offerings, including MES and QMS. They aren't alone - many SaaS vendors are pulling this off. SAP customer Hillrom told me they delivering on quicker wins by adding SAP cloud products as they go, while S/4 is the longer game (Hillrom's CIO Sven Krause calls that a "two train" approach).
Will SAP attempt to make adoption of their products more bite-size? Would componentizing their ERP solutions be a way to accomplishing this, or would it be an overstep? Starting with S/4HANA Central Finance is one "quick win" option. Another is to lead, not with SAP's own products, but with sticky industry apps from partners. How will SAP address that?
5. What will the SAP user groups have to say about all this?
My goal is to be informed by multiple SAP user groups. SAP has always benefitted from a number of active international user groups. In this case, I'll have an interview coming out with DSAG leadership (the German-Speaking SAP User Group). ASUG has a major event coming, ASUGForward, which we'll be covering. I also plan to check in with the SAP UKISUG for their reactions. For now, here's a pre-Sapphire Now quote from ASUG CEO Geoff Scott. Scott warns that SAP's challenge is to overcome past history:
SAP comes out every year with a brand new, flashy, shiny thing. The customer base has learned to go, 'Oh, flashy, new, shiny thing. Let's see if that's still around next year. And if it's around next year, well then maybe I'll take a more serious look at it.'
That's not what SAP wants to hear - SAP doesn't have a year to wait on this. But on the good news side, Scott does see ASUG members with renewed S/4HANA interest.
We are seeing a lot of customers take interest in their S/4HANA journey. If they're interested in re-engaging their S/4 journey after a pandemic year, they should absolutely positively look at RISE.
And what is the top concern or clarification about RISE Scott is hearing from ASUG members?
Help me separate out the infrastructure costs from the application costs. Is SAP RISE really more cost-effective, for me to include infrastructure in my SAP BOM, or not?
That's not all, of course. We're going to need customer stories. As you can expect, diginomica will be scouring for them; we'll write up some of the keepers. I'm also looking for signs of progress on the S/4HANA public cloud front - particularly in terms of the S/4-SuccessFactors integration SAP needs in the public cloud, to compete with the SaaS offerings of Workday and Oracle Fusion. I'm also on the lookout for more on expanding the industry functionality of the S/4HANA public cloud, as that's a big barrier to adoption. I should have also noted: this marks the big (virtual stage debut of Chief Marketing and Solutions Office (and Executive Board Member) Julia White, who is emceeing the kick-off keynote.
Well, it's time to put those bunny slippers on, brew up a hot cup, and see how these keynotes play out. Stay tuned..
Sidenote: I'm actually appearing at Sapphire Now, via a recorded session with SAP's Meg Bear and fellow analyst/miscreant/blogger Josh Greenbaum - in the Reinvent HR and Reinvigorate Your Workforce Track on June 9.