Reality bites for itelligence at The New Reality, SAP UK's largest partner event

Den Howlett Profile picture for user gonzodaddy May 23, 2018
As Sapphire gets underway, a reminder of a recent reality check among long-time SAP customers. Do they care about disruption or do they want innovation?

the new reality itelligence18
Andy Steer, CTO itelligence sets the scene

This year, I jumped at the opportunity to attend The New Reality, itelligence UK's customer event. It's the first time I have a participated in a show of this type, let alone in the UK. These are marketing exercises but the catch for me was knowing that 30% of the sessions were customer led, mostly with little interference from the vendor and that there would be around 1,000 attendees.

Brits are largely intolerant of BS and as one customer caveated:

You might want to know we haven't rehearsed this and we ain't done yet.

In an early session, Stan Cawsey, director of consulting at itelligence said:

I do see customers who are in the middle [of implementing] when they’re failing. I want to hear from them.

You almost never hear that said on the main keynote stage.

But the most important statements came from Andy Steer, itelligence's CTO and compere for the day. He set the tone from the get-go with the show's theme of: "intelligently connecting people, things, and businesses," but was careful to ensure people understood he is thinking 'innovation' rather than 'digital disruption.'

Innovation versus disruption

Apart from compering the show, Steer led a session entitled: Discovering and delivering innovation use cases in your business - why SAP Leonardo isn't what you think it is. 

Those familiar with SAP Leonardo will know it has undergone a series of iterations while retaining the same moniker. I argue that regardless of what SAP says about products, Leonardo is a bag of bits surrounded by consulting that is design thinking led. Steer confirmed that. But he took time to make sure the packed room understood what he meant with some examples from Google Trends.

When I got back to base, I took these from Google Trends which helps to contextualize the story. First, check this snapshot from Google Trends on the topic of machine learning over the last year.

machine learning google trends


As you can see, there is plenty of interest although as fatigue sets in, Google thinks attention is drifting away. Now check this comparison between machine learning, digital disruption, and innovation:

digital disruption

Notice how much more interest there is in the general topic of innovation compared to machine learning while 'digital disruption' barely registers?

Extend the timeline to five years, and the results are even more interesting:

disruptive trends via Google

Notice how the topic of innovation has remained a near constant and that while ML is undoubtedly on the rise, the most current trends suggest it's about to hit the fabled Gartner trough of disillusionment.

Vendors are stuck between a rock and a hard place.  On the one hand, they have customers at various stages of technical proficiency and adoption. On the other hand, software suppliers continuously push the next shiny new toy.

In that context, Steer was quick to point out that customers do want innovation but that it is across a spectrum of needs. Whether that represents improving existing processes to become more efficient as is the case with NLP in its current form, improve pick and pack operations using the latest AR technology or, do things that were not possible before. As an example, we saw the use of 'farmbots' to optimize crop output using a combination of SAP HANA, sensor technologies and visualization tools.

Positioning for innovation

With that in mind, I later met with Steer and Justin Brading, itelligence SVP and UK MD. I wanted to focus on four topics: the innovation ideas Steer discussed, how itelligence becomes that trusted consulting partner, the AWS partnership and, of course, the indirect access topic. I'll come to the last point later in this story.

itelligence design led roadmap

The above graphic demonstrates now itelligence is interpreting the manner in which it fast-tracks innovation. The idea of using offsite design thinking workshops is not new, but it is a new service from itelligence. As Steer put it:

Are we doing hundreds of these engagements? No. Are we seeing positive results from the engagements we are executing? Absolutely. We work with established mature companies with mature products and services offerings of their own. Some are talking to us about their concerns around being disupted and those are the ones who are are typically talking to us. But predominanetly, our customers are not saying 'we need to uberize.' Many of these are manufacturing organizations with particular expertise that are highly  unlikely to be disrupted very quickly.

I then asked about co-innovation among customers. This was something I first saw at a Plex customer in 2014. Steer referred me to a customer who makes components for offshore wind turbines that works with its end customer - Siemens - in iterating components design.

They are also looking to figure out how they can take part in a network with other suppliers who put things into that assembly for connecting to the whole solution. Any time you have to bring things down and return to shore is a huge expense so anything you can do to be smart about that is a benefit. On the surface you wouldn't consider them innovating their business but their having to innovvate their product.

Steer agrees that it is an open question as to how these projects will scale. I was more concerned with how the company positions itself as less than your traditional IT 'plumber' and more as a line of business co-innovator when the likes of Accenture, Deloitte, and others are positioning themselves as the go-to consultancies with the marketing budgets to match. Brading provided the answer:

Our business is not founded on the implementation model as such. We are more in the lifetime engagement with the customer about running and supporting as much of the initial implementation as possible.

Are customers ready?

If questions from the floor are an indication, then there is indeed an appetite to listen and ask the important questions such as: How do customers decide priorities? What if priorities change? Can you deliver value as described?

This is relatively new, and customers have their challenges. One large manufacturing prospect's CIO said to me that internally, IT wants to partner with the business but getting LOB heads to agree on a date to meet with SAP partners is hard.

We spent three months getting everyone on the same calendar to discuss a HANA upgrade and a week beforehand it got canceled. Other things were deemed a higher priority.

Asked why this happened, the CIO told me that IT struggles with positioning itself when LOB often only wants to know two things: how much and when? In our conversation, he agreed that technology implementation fatigue plays into that equation. But I also think that IT departments have yet to learn the value of promoting their abilities and achievements in much the same way that community managers have not found the time to gain visibility.

You won't find me being a fan of PR anytime soon, but I do think there is a case to be made for IT to seek assistance from communications teams as part of projects to reshape alignment.

The AWS thing

AWS has emerged as genuine infrastructure partner for the enterprise and today has a dedicated global SAP lead who got a slot on the keynote stage. That tells me something important - SAP matters to AWS. Their partnership goes back a good number of years. This graphic stood out to me:

AWS SAP positioning

Anyone notice what is missing from this compared to just about all other things with which we tend to associate AWS? Price.

I asked Steer about how this works for itelligence given that SAP has partnerships with AWS, Microsoft for Azure and Google Cloud, with Azure and Google getting their share of airtime at SAP led events over the last year.

We are working with customers who already use AWS to see where that relationship can be extended. We are already working with customers who are on the Google Cloud platform. The primary relationshup today extends to AWS but we are working with the others.

I was also interested in learning whether customers are willing to push POCs that have been spun up on AWS into production.  Brading says:

We are number one or number two (depending on whose figures you want to believe) running data centers (based on AWS) across corporate entities. The nirvana that some vendors are putting out there in terms of public cloud is not the right deployment model in most cases. But whether it is public data centers for SuccessFactors, our own or AWS branded, there is a huge opportunity to integrate those clouds.

Our relationship with AWS is relatively new and yes, there are pluses and minuses from operating in one or other environment. Flexibility, cost model all figure and I think we're blessed with the opportunity to give customers the right solution.

SAP's slot - some super coolness but plenty of pragmatism

SAP got its slot and the crowd's favorite Timo Elliott, one of SAP's best-known innovation evangelists didn't disappoint with his smooth run through of the latest and greatest that SAP has been playing around with at customer sites.

In that context, customers might want to note that natural language processing (NLP) is coming to an SAP generated report near you soon. While that might seem 'meh' to some, Jens Amail, the recently minted SAP UK and Ireland MD contextualized that idea with a demo voice-activated system that 'spoke' the latest stats on itelligence contribution to SAP's revenue. As if to drive the NLP message home, another SAP person showed in a live demo, how Alexa could be used for service request alerts and triggering resource allocations.

We are often dismissive of Alexa and other NLP system demos as are customers with whom I spoke. But then as I have discovered, we are in the very, very early stages of understanding how these technologies add value at a time when we are all beta testers for solutions that are OK in the consumer world but which have to be bulletproof in the industrial environment.

As a marker for SAPPHIRE Now, I'm not sure. I hope that despite SAP's natural urge to glom onto any of the popular buzzphrases, it spends plenty of time talking to where customers are at and where they will likely be in the near term.

Indirect access

While not a topic of discussion on the agenda, indirect access is not something we can avoid as a talking point. Customers I spoke with were either in the 'we dodged a bullet' camp or 'we are struggling to figure out.'

Those who fall into the first bucket were alive to the situation in sufficient time to get ahead of the problem through discussion with SAP. Those in the second were not so aware and had to go through the hoops of understanding where they are impacted.

Most important to me was that everyone I spoke with agree this makes sense as the first step towards a fully fledged consumption model. However, indirect access is not as straightforward as it sounds. Brading said:

It is a difficult conversation and especially with long-term customers who were not aware of it or who looked at it and said it didn't make sense. And in fairness, it didn't. The new model is understandable but that doesn't mean the conversations are any easier. For new customers - it's relatively easy.

My take

The New Reality was an excellent opportunity to get past marketing rhetoric in a way that's often missing or overly managed at other customer events.

The customers I met were clearly on the pragmatic side of the evolutionary scale representing, I suspect, the large majority of SAP customers. Yes, innovation is on the agenda, and yes, itelligence continues to grow its business from what at first would seem like an endangered business model.

The fact that IT often struggles to get its voice heard AS a business partner is a concern but one that itelligence believes it can help overcome by having conversations with the LOB as the first port of call rather than going via IT's back door. The fact they showed success across the spectrum of what we understand as innovation is equally pragmatic.

SAP walks a tightrope between those with which it would prefer to align with, i.e., the cool kids on the block and those from whom it earns most of its money and the rest. In that second category are those long-lived, inter-generational businesses that most people have never heard of but which are essential to our daily lives. It would vbe wrong to describe them as laggardly, it's just the case they walk at a different place to the early adopters.

Finally, we did get one pointer from Elliott that's worth remembering. He talked about 'purpose,' i.e., making the world a better place as a part of what SAP delivers today. It's a good moniker on which to hang a sales pitch at a time when there is much discussion about sustainable business. Again, let's see what SAPPHIRE Now brings.

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