In a video clip, Georg Kube, head of Industry Marketing at SAP, outlines SAP’s industry strategy. Ramin Hummel, head of Industry Communications at SAP Global Communications, took the opportunity to follow up with Georg on how the company’s strategy and technology innovations benefit its customers throughout 24 industries. Below, watch a video and read our follow-up interview.
Play the video below and watch Georg Kube, head of Industry Marketing at SAP, together with Alfred Becker, Solutions Manager of IBU Mill Products at SAP, presenting SAP’s industry strategy in more details.
Ramin: Thanks, Georg, for taking the time for us. In your video presentation, you focus on SAP’s strength in supporting many industries on a single platform. Nevertheless, right now, it seems that SAP is focusing more on technologies – has SAP moved away from its strong industry focus?
Georg: The opposite is the case. SAP goes to market by two dimensions – by industry and by line of business (business function or corporate role such as Sales or IT). This said, we dedicate all our efforts to provide the most value to our customers in any industry or corporate function. This is why we’ve made strategic investments into in-memory computing, mobility, on-demand and analytics; because we firmly believe that these represent the key enablers of current and future market requirements across our large industry solution portfolio. In order to get most out of these technologies, customers need to rely on a single and integrated platform that reduces cost and complexity and increases speed. This is the only way companies can stay or even become a truly best run company.
Companies need to have new capabilities which will give them a competitive advantage. These are the technologies that you hear about: in-memory computing, mobility, on-demand and analytics. But in order to decide if a given technology is relevant for them, decision makers need to have a business driven context. This is where the industry focus comes into play. At SAP, we understand what makes a company a truly best run company in any given industry and what contribution our technologies have to transform businesses. So it is about applying technology for business benefit.
Ramin: Could you provide some industry examples?
Georg: OK, let me give you 2 examples from two very different industries on how in-memory computing can enable business processes that have not been possible in the past and thus transforms the way companies can compete and be successful:
1. Retailers analyze the buying behavior of their customers as well as their shopping baskets and frequencies to be able to optimize promotions and create up-selling offerings. A large number of single transactions and thus high data volumes have made this difficult, leading to long upload times and the need for aggregation. So, at the time of analysis, the information is already out-of-date and often it is not as detailed as required.
With all data held in-memory, retailers can instantly analyze highly granular, detailed data to get deep insights into shoppers’ behavior. This allows them to run more targeted and focused promotions, optimized at individual level, on a daily basis, which opens additional revenue opportunity and drives shopper satisfaction and loyalty.
2. Aerospace and Defense: a key success factor in A&D is the ability to manage complex programs on time and within budget. With in-memory computing, program managers can analyze huge amounts of supply chain, manufacturing, quality and financial data and thus detect problem areas early which could potentially erode program profitability and jeopardize the overall schedule.
With in-memory capability, aerospace and defense companies can dramatically reduce the time it takes to bring new, state-of-the-art products to market. These companies’ production processes are largely decentralized and involve a lot of disruptive factors. For example, along manufacturing and PLM [product lifecycle management] processes, there’s massive usage of new materials such as carbon components and a corresponding massive need to access deep knowledge and ongoing learnings in integrating new materials. These companies deal in huge projects, where it is difficult to maintain overall visibility over the critical processes in these programs. An incredible number of factors can tremendously impact and delay timelines, like for the first test flight and of course delivery. This, in turn, impacts competitiveness and profitability. With in-memory, A&D companies can logarithmically increase the speed, availability and certainty of all the information and processes that drive their decision-making and keep them to their stringent program timelines.
You see, these are both examples with the same technological capability, but it is applied very differently to the specific success factors of a given industry.
Ramin: These are interesting examples. Are these only “one-off’s” or how do you go about putting technologies into an industry context?
Georg: As you know, it is SAP’s mission to make companies and organizations “run better.” What sounds like a very high-level marketing slogan, actually is anchored very firmly in real business management. The question that we need to answer is: “What is it that makes a company in any given industry a best-run company?”
To answer that question, we are fortunate not only to have excellent relationships with market-leading companies, but we also have our value engineering organization, which assesses industry business processes in a very systematic and data-driven way. This allows us to identify those business processes and KPIs that are truly differentiating per industries, and that align our technology innovations in a way that they have a true business impact.
Ramin: That sounds like SAP’s strategy is to take generic functionality and make it industry relevant. What about industry-specific functionality? Has SAP stopped industry-specific developments?
Georg: In order to drive value out of very specialized pieces of functionality, you need to make sure that your systems and core applications are natively integrated so that customers are flexible enough to change their processes or add an additional step. This said, the foundation of any automated process lies within the range of the core applications. Nevertheless, there is the need to differentiate in an industry-specific context. This is why we also develop very deep industry-specific capabilities with our own development organization but also increasingly with our partner ecosystem. Let me give you two examples:
In aerospace and defense, the maintenance, repair and overhaul [MRO] process is absolutely critical and if executed correctly can be a true differentiator. To deliver the very specific functionality for MRO, we work together with our partner HCL-Axon. Another example of very specific industry functionality is transportation management for logistics companies, but also for other companies that need to manage their shipping processes. In this case, SAP has decided to develop a solution as part of our own solution portfolio. And there are many more examples already in the market or coming soon.
Ramin: Georg, thanks a lot for the additional background.
Georg: My pleasure and I will be happy to answer any further questions the readers may have.