SAPPHIRE NOW: Welcome to the Networked World

Jim Hagemann Snabe, Co-CEO SAP, at SAPPHIRE NOW and SAP TechEd in Madrid, 2012. (Photo: SAP)

With the eurozone crisis, a general strike in Spain, the uncertain economic outlook, SAPPHIRE NOW in Madrid gets underway in less than auspicious circumstances this year. And yet in his keynote speech opening SAP’s most important customer event, Co-CEO Jim Hagemann Snabe described today’s opportunities as “fascinating.” New technology and innovations help companies advance. In his keynote, Co-CEO Bill McDermott said: “We are in the age of the consumer. There will be five billion consumers by 2030, and they will change the market. We are no longer in a business-to-business or business-to-consumer world; the future is business-to-business-to-consumer.” The convergence of social media, mobile applications, cloud computing, and big data into what Gartner calls the “nexus of forces” is changing the game.

In the nexus of forces, information is the context for better social and mobile user experience. Mobile devices are the platform for social networks and drive growth in developing countries. “In Kenya, a ten percent improvement in mobile penetration is equivalent to a one percent improvement in GDP,” said McDermott. Networks generate business, and social networks now account for ten percent of all sales. Listening to social networks to identify new business opportunities is very important, according to McDermott.

Design thinking as the recipe for success

SAP wants to use design thinking to exploit the nexus of forces. Design thinking enables designers to focus on users when designing products and solutions, creates new possibilities, and enables us to combine “desirability with feasibility and viability,” according to McDermott. “We want to help our customers master the transformation of consumers, industries, and business networks. We already have the right ideas in place for the nexus of forces.”

With SAP CRM powered by SAP HANA, SAP presents the first SAP Business Suite product that uses in-memory technology to bring about a real-time view of customers. And that’s just the start. “Our customers can expect more products of this kind – we call it SAP 360 Customer,” said McDermott. This new SAP solution brings together all the elements of the SAP universe: cloud, mobile, analytics and big data, and transactional and operational data.

Zeinal Bava, CEO of Portugal Telecom, explained how companies can benefit. Having survived a takeover bid a few years ago, Portugal Telecom turned the corner by investing in technology, and its markets in Portugal, Brazil, and Africa are growing. “We have already started our journey into the cloud. Our customers want speed and reliability,” said Bava. “Diversification is becoming more important. And we have developed road maps for innovation for each business segment.”

Benefits of business networks

Uncertainty is the new reality. “We need new leadership, not just in politics but also in business,” said Jim Snabe in the morning’s second keynote. Europe has to overcome the economic crisis, and the biggest challenge is unemployment among young people, as they “have the fresh ideas and thought innovation.” “Fascinating” is how Snabe described the challenge presented by economic crisis, as it “opens our minds to new opportunities.” Nessun dorma – none shall sleep: Referring to Puccini’s aria, he moved on to his main subject: business networks. Taking the music industry as an example, Snabe explained what it means to be caught sleeping when technology is changing dramatically. In the past twenty years the music industry has undergone transformation driven by technology, evolving from vinyl to the birth of the MP3 format, to peer-to-peer file-sharing services such as Napster, and to digital music on Apple’s iPod, which made music truly mobile.

Record labels used to control the value chain. Now processes such as distribution and sales are the domain of companies like iTunes that operate in the cloud. “MP3 brought the simplification of data, Napster simplified the supply chain, and the iPod simplified consumption of music,” said Snabe. Technology-led “disruptions” have brought about completely new – and fascinating – business models.

Each company in this network focuses on what it does best, and together they can offer entirely new services. Cooperation is key. It works in all industries, as customers want tailored offerings. “These are companies that focus on their core processes and leave non-core processes to the specialists. So together you become world class across your value chain,” Snabe continued.

Next page: Ariba shows us how it’s done

Visitors attending the keynote on the first day of SAPPHIRE NOW. (Picture: SAP)

Ariba shows us how it’s done

Ariba, a new SAP subsidiary, recognized this early on. Today, the company is behind the largest business network in the world that connects over one million companies. Giving the example of Caterpillar, Ariba’s Chief Marketing Officer Tim Minahan explained how Caterpillar used the network to bring together data from its eight SAP ERP systems around the world. Today the construction equipment manufacturer handles 98% of its invoices electronically at considerably lower cost. He announced that rapid deployment solutions will be available soon to enable SAP customers to get onto the network.

Big data, no problem

Minahan sees huge potential from leveraging new technologies such as SAP HANA. “The Ariba network has 15 years of transactional and relationship information. With SAP HANA we can benefit from the insights this data can provide.”

The next logical step is uniting the latest innovations. SAP 360 Customer combines proven SAP solutions with in-memory, mobile, and cloud technology. The new SAP CRM powered by SAP HANA is the first step in this direction. “This will give us much simpler data structures and reduce complexity. You will discover how business software will be really fun to use,” said Snabe. “We live in fascinating times with fascinating opportunities in a world of seven billion people. SAP wants to increase value for customers in all industries while reducing costs for businesses.” Now is the time for companies to improve people’s lives.

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