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I recently attended a day-long session at SAP’s campus in Newtown Square, just outside of Philadelphia, PA. The company referred to the session as an industry analyst base camp. If you’d like to follow the proceedings in bursts of 140 characters or less, you can here: https://twitter.com/hashtag/SAPIABC?src=hash.
The landscape of a digital economy according to SAP
SAP industry leaders Pat Bakey and Christoph Behrendt discussed their for-industry strategy, emphasizing cloud advancements and a business transformation enabled in a digital economy. Peter hit on the five tech trends SAP believes are driving this digital economy transformation: hyper-connectivity, supercomputing/data science, cloud, smarter world, and block chain.
In their view, they see six core business models working within the digital economy:
- Outcome-based models
- Expand to new industries
- Digitization of products and services
- Compete as an ecosystem
- Shared economy
- Platform business
Within that context, SAP describes its model as a platform business. As such, the company also believes HANA can be the technology core for a digital economy. Overall, SAP speakers consistently communicated that they believe they have moved from building a platform (the focus of last year’s base camp) to actively engaging customers in business transformation projects based on that platform.
Apple and ATB Financial provided some interesting case studies. ATB’s story was particularly compelling, as it focused on the use of block chain to reduce financial process complexity and time. ATB’s Rita Sly showed that she has her finger on the pulse of what digital transformation means when she opined that, “no customer ever complained about digital disruption.”
The role of block chain in a digital economy
To me, one of the most interesting aspects of the day was SAPs identification of block chain as one of the five critical tech trends. As the group discussed digitization throughout the day, it became apparent that simple, secure, transparent transference of data is, well, neither simple or settled in many instances beyond its current use, mainly in financial markets. However, block chain is well suited for a key concept of digital economy, as it is particularly adept at data transfer where business and customer processes and even industries blend. We at ARC have been discussing the implications of block chain for some time. Here are some more recent perspectives on diverse uses: Why Grid Edge Asset Management is Key, which touches on electric distribution grids and Will Block Chain Technology Revolutionize Supply Chain Applications?.
From efficiency to transformation
Throughout the day, SAP reinforced many of my long-held beliefs about them. On a consistent basis, the company clearly defines and articulates its market vision, from the across-industry level through each of their verticals. SAP also markets effectively. For example, the company’s plans for oil and gas and utilities are succinctly visualized, informed by the industry landscape, and backed by a solid track record. They are also ambitious.
As SAP tries to win industry-specific battles for all things digital and cloud, the company will be consistently challenged to move cautious customers beyond hyper-efficiency enabled by digitization. While that level of business efficiency is necessary, it shouldn’t be mistaken for true business model transformation. SAP doesn't face this challenge alone. The same can be said for most every other major solution provider.