SAP TechEd 2019 Barcelona - thoughts on a changing style and transition

Profile picture for user gonzodaddy By Den Howlett October 14, 2019
Summary:
TechEd 2019 had a very different feel from previous years. In my mind it represented a prequel to a reboot.

SAP intelligent enterprise

For me, SAP TechEd 2019 had the feel of an event in flux where the main stage messages were not wholly aligned with what was happening on the show floor. Juergen Mueller, SAP's CTO, did a competent job pushing the marketing messages around SAP's current X-O theme. But there wasn't a lot of technology on display, no mention of ABAP, the cornerstone of SAP development, and no demonstrations of running code. The closest we got was the demonstration of a planning scenario that showed how a variety of technologies come together for business planning optimization. DemoJam, a developer highlight where teams showcase all sorts of crazy stuff was MIA - on hiatus, I am told. In short, there was no fun in the keynote, and as such, Mueller didn't get the rapturous applause that has greeted prior CTOs.

Note - we have included two podcasts at the end to reflect the views of different constituents in the SAP ecosystem. 

A tale of two shows

By comparison, the show floor Developer Garage and Community Lounge were given pride of place and were a hive of learning activity and invention where attendees get to play with all the cool stuff - yes, you read that right - cool stuff and get to meet some of the best and brightest in the SAP ecosystem. To the side, SAP hosted its first technology analyst summit, and in parallel, I met with several leaders to scratch my SAP itches. 

The most popular learning sessions were those that address the ECC to S/4HANA transition. That is not a surprise and should be welcome. We have noted before that despite SAP's relentless push for all things S/4HANA, there is a shortage of consultants and developers who can reliably deliver S/4HANA projects. That's not to say there are not plenty of people certified in S/4HANA, but it is an experience that matters for a product that demands a rethink about which processes are taken forward from ECC into S/4HANA and which are left behind.

I said in my first report from SAP TechEd that the keynote seemed heavily skewed towards business topics rather than those focused on developers. During the analyst summit, SAP put on a mix of technology leaders and those engaged in sales and marketing. Indeed, Mueller said that sales and marketing are being embedded inside its R&D. This has a profound impact on what happens next at SAP. 

If you look at the historical method of selling and implementing SAP solutions, it goes something like this:

  1. Account executive has a variety of meetings at the C-Suite level, often with the CEO and/or CFO. 
  2. CEO/CFO buys the Kool-Aid and then dumps the problem on IT. 
  3. IT then does a bunch of 'stuff' including outsourcing business process design/change management but with the idea of rolling out what was sold to the CEO/CFO. 
  4. Project is delivered, sometimes but rarely on time, and in a configuration that reflects what was doable and what the business said it wanted. 
  5. The project goes live but often looks very different from what the CEO/CFO was sold.
  6. Upgrade and project cycle kicks in to fix all the stuff that didn't happen and hopefully get some innovation out of the delivered solution. 

The above is a broad generalization and is not always true, but you get the picture. The problems arise early in a project precisely because the business is not involved soon enough such that the delivered solution solves for underlying issues. 

All change in S/4HANA thinking

Listening to Mueller and other execs, it seems that  SAP is changing that model. According to Sven Denecken, SVP S/4HANA, Head of Product Success and Co-Innovation and a person who has been close to the S/4HANA cloud story for some time:

The question I ask is who is the customer? Is it that loyal IT person who for 20 years has run a competency center that delivers functionality to you the business user or is it someone else? This is a critically important question when considering the cloud, net new and how deployments are undertaken. 

Denecken then went on to give the example of Colgate, which is consolidating 12 ECC instances to two S/4HANA instances. Colgate started in Brazil, where the ECC instance was not overly customized as a way of proving the value of S/4HANA. So they have both ECC and S/4HANA.

In parallel, Colgate took two subsidiaries - which were recent acquisitions - and put them on the public cloud rather than put them on the 'big mama' template. So now the company learns how putting your business on the public cloud is a good thing. But I think it is unfair to say we need to be at code parity (between ECC and S/4HANA public cloud) but we need to simplify and then con-innovate on the cloud platform. 

We then came into the gnarly topic of integration. Denecken acknowledged that the acquired products, in particular, represent a challenge but pointed to the early work that Klein undertook in bringing together teams from the core development units and those at SuccessFactors. The idea was to communicate the problems the business customers experience rather than merely talking about enhancements across horizontal applications. Both Denecken and Klein are confident that we shall see the fruits of those endeavors shortly. 

I am, as Dick Hirsch put it, reluctantly hopeful. The fact remains that SAP's portfolio represents a hodgepodge of competing architectures, some of which are cloud-native, some of which are not. Right now, it seems that SAP is betting the majority of its large customers will be content with making what amounts to a brownfield conversion/upgrade with limited simplification in going from ECC to S/4HANA but using SAP Cloud Platform as the place where industry-specific functionality is rooted alongside business innovation for entirely new processes. 

From a developer perspective, that means SAP will not only require generalists who transition their knowledge from ECC to S/4HANA but also that SAP finds the right way to build mixed teams that can architect an optimized landscape. That will be much harder for both technical and cultural reasons. Denecken's response suggests SAP has found a working model:

If someone is building a service then I think they need to be compensated on its usage, not its build. I think also that when you bring teams together then you have to compensate them equally. You are right that at the board level there are different responsibilities but two or three levels down the people are working together. 

SAP Cloud Platform

I also spent quality time with Gunther Rothermel, EVP, Head of SAP Cloud Platform and Leonardo Technologies. He confirmed that SCP is the integration and extension platform for the SAP ecosystem. You can think of that as an SAP specific PaaS.

We are certainly closer to what you'd find with Salesforce with the Force, Mulesoft, and ServiceNow, but to be clear we want to offer business value and are not competing in the IaaS world. So, for example, in mobile, as you know, 70-80 percent of the development effort is in managing all the back end security and connections to processes. We provide that for Apple and Android so that developers can concentrate on building the front end experience and process flows. In some scenarios, you don't even have to create logic in the mobile application. 

Returning to my integration hobby horse, Rothermel notes that while it is great to have four large end-to-end standardized processes as outlined in Mueller's keynote, SCP serves as the place where variants for industries and customers will play out as a way of providing a new level of flexibility. Also, Rothermel says that SCP is the place where RPA allows for automation of repetitive processes that directly enable customers to save cost. We already see this in examples like Döhler.  

If we get this right then the combination of flexibility, extensibility and automation means that process is back big time for SAP and its customers. 

My take

Coming out of the opening day keynote, I was left wondering if there was that much new to consider. Indeed, on their face, the announcements had the feel of incremental change. But having seen some of the 'cool stuff,' listened to the various presenters during the analyst summit and met with both customers and execs, the impression I get is that SAP has (finally) understood what it takes to get its internal development teams working in a cohesive manner to deliver what customers need. 

That vision, now in the hands of Klein and Mueller, has some way to go before we see value propositions that are obvious to the customer base. Laying out broad stroke process maps is a good start and ensuring that everyone is on the same page certainly helps. But make no mistake. SAP customers are extremely demanding and impatient. SAP's laggardly R&D outcomes have allowed competitors in CRM and HR to walk in almost unimpeded. SAP knows that it cannot continue in that fashion, hence the sense of urgency I detected among execs. The big question now is whether SAP can expand the base of developers who have lived in the relatively comfortable on-premises ABAP world and who now need to understand that development isn't just about code but about consumption that reflects value delivered. 

Podcasts