Over-hyped and under-led - SAP users rebel over digital transformation

Profile picture for user slauchlan By Stuart Lauchlan November 22, 2015
Summary:
Over-hyped and we're over it. That's the message from the SAP user community to their provider on the subject of digital transformation. And it gets worse. Don't mention innovation...

New look user group

We don’t need to hear the buzzwords, we just need practical help.

An unambiguous shot across the bows from Philip Adams, Chairman of the UK and Ireland SAP User Group (UKISUG), in Birmingham today upon the release of a survey of user attitudes.

These surveys have become a regular feature of the opening keynote sessions at UKISUG conferences with SAP executives often not typically briefed on their results until the morning of release. (This year they got notice last week.)

This year’s theme was digital transformation, with the uncomfortable conclusion for SAP - and a lot of other providers, you know who you are! - that users are fed up of the hype cycles around new technologies and just want some sensible, solid, down-to-earth guidance.

Nearly 58% of respondents to this year’s study thought suppliers were creating too much hype around 'digitisation' and 'digital transformation'.

It also seems that users are increasingly conscious and dismissive of vendors attempts at refactoring their product offerings, a phenomenon most recently seen perhaps in the attempts at ‘cloud washing’ across the industry.

This long-standing and downright Orwellian - "We have always been at war with Eurasia" - practice  means that 80% of respondents are now sufficiently cynical as to assume that digitilisation is just a repackaging exercise by legacy vendors in search of relevance.

There’s more bad news for SAP in the survey with only 20% of respondents seeing the firm as a leader in digital, while only 18% see the company as an innovator. Some 62% characterise SAP as a follower or a laggard when it comes to digital transformation.

Despite its ERP credentials and strong presence among industrial and manufacturing companies, SAP isn’t convincing the users when it comes to the by-now-compulsary Internet of Things (IoT) story either. Only 16% see SAP as an IoT leader, a mere 9% reckon it’s an innovator in this field, while three quarters of respondents dub the firm as a follower or a laggard here.

Contradictions?

Of course, as ever, such surveys also tip up some seemingly contradictary stances. Less than a third of responents (30%) say they have a digital strategy in place, while 36% say they don’t have a strategy but are nonetheless embarked on digital projects - which is akin to setting off randomly in your car to go to work in the vague hope that you'll get there.

Awkward

Meanwhile although the majority of customers apparently don’t regard SAP as innovative or a digital leader in any significant numbers, two-thirds of respondents still believe that the supplier is best-placed to help them to digitally transform their businesses!

Adams says:

Our feedback has indicated there’s a lot of buzzwords, maybe a wee bit of hype, around the whole concept of digital business. That doesn’t mean that users don’t believe that the vendors or community have a value to add. We fully believe that you’re critical to our success.

So our message is plain and simple. We don’t need to hear the buzzwords, we just want to work with you in practical ways to help define [the] business case, to understand the process design, the hands-off transformation advice you can give us so that we can define our strategy and start implementing these projects.

He adds:

SAP is clearly part of these plans. We just need that help to deliver and transform against the backdrop of keeping our day-to-day business processes running.

On a more upbeat note, among the minority which does claim to have a strategy in place, more than two-thirds (69%) state that digital transformation is a priority for their organisations.

Meanwhile, although not apparently being driven by hype cycles, nearly three quarters (73%) of respondents have drunk the ‘Uber-ization Kool-Aid’ and are convinced that organizations that don’t digitally transform will be disrupted by others in the market.

My take

Every problem is someone else’s opportunity is the theme from the vendor side. So it is that Cormac Watters, managing director SAP UK & Ireland, bravely declares:

The results of the survey are encouraging for us. Users already believe that SAP is an innovator and leader in this space, and they are embracing change, we are focused on how we practically help our customers on their digital journey.

Hmmm. Well, perhaps, although that’s a very ‘glass half full, not half empty’ view of the survey findings. But then, as I noted, SAP doesn’t really get a lot of advance notice on the results of these surveys.

Two things strike me here - and seemed to be the vibe from the audience in Birmingham today.

Firstly, this is a long game. For all the talk of imminent Uber-ization and siren cries from vendors and analysts to get on with digital transformation, a lot of organisations are coming at this at their own sweet pace and aren’t in a mood to be railroaded into another round of ‘must have, must do’ investment. That has wider implications for SAP when it comes to the S/4 HANA upgrade push. We’ll return to that tomorrow.

Secondly it strikes me that SAP finds itself in a sort of IBM in the late nineties/early noughties situation. In other words, it’s the tried-and-tested, know-what-you’re-getting, enterprise establishment vendor that you don’t look to for the sort of innovation and disruption that you’ll get from the cloud or digital pureplays. The question for SAP is how can it excite its 'conservative-with-a-small-c customers' to view it as both a digital safe-pair-of-hands and forward thinker? One thing is for sure, the hype hasn't worked for this crowd.

Disclosure - at time of writing, SAP is a premier partner of diginomica.