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SAP Business Network major focus at Sapphire Now 2021

SAP announced new initiatives such as the SAP Business Network to help companies become intelligent enterprises. Experts described the messaging as impressive but lacking in detail.

SAP believes the next steps of building an intelligent enterprise center on establishing strong business networks and placing a sharp focus on sustainability.

To that end, SAP announced several new products at the start of SAP Sapphire Now, which was held virtually again this year for SAP customers and partners.

During a prerecorded keynote, SAP CEO Christian Klein and executive board member Julia White highlighted three new initiatives to help companies transition into an intelligent enterprise. The biggest initiative is the launch of the SAP Business Network, a B2B social network made up of 5.5 million connected businesses. During the keynote, Klein said COVID-19 proved that a network like this is critical to help companies avoid costly disruptions.

"No business does business alone, " Klein said. "And while one intelligent enterprise alone can achieve great things, we're living in an interconnected world."

Initiatives also included an expansion of the Rise with SAP product called Rise with SAP for Industries, and the launch of a portfolio of products for sustainability in the enterprise.

Three major announcements

The new SAP Business Network unites three existing SAP networks to enable businesses to quickly search for and find new partners that meet specific criteria.

"Many businesses manage complex relationships between suppliers, buyers, logistics providers and manufacturers as static, one-to-one connections," Klein said. "But COVID showed how crucial it is to have real-time transparency across the entire supply chain. The value comes from the network."

The SAP Business Network combines the Ariba Network for procurement, the SAP Logistics Business Network for logistics and supply chain management, and the SAP Asset Intelligence Network for asset performance management and equipment tracking under a unified user portal and common data model.

SAP CEO Christian Klein speaking at the Sapphire Now 2021 virtual conference.
SAP CEO Christian Klein speaking at Sapphire Now 2021.

Rise with SAP, which launched in January, is a subscription service that bundles the S/4HANA Cloud ERP core system with managed cloud infrastructure and services in one contract. The product extension now includes packaged services for five industries: retail, consumer goods, automotive, utilities, and industrial machinery and components.

The sustainability products are intended to enable businesses to foster environmentally conscious initiatives and new business models. The product portfolio includes SAP Responsible Design and Production, which allows product designers to make sustainable choices from the outset; SAP Product Footprint Management, which tracks sustainability through a product's lifecycle; and SAP Sustainability Control Tower, which provides visibility into sustainability programs.

"As part of our commitment, SAP will provide standard reporting and analytics on all sustainability metrics of the World Economic Forum," Klein said.

The company also announced SAP Upscale Commerce, an integrated customer experience platform, and an employee experience platform that integrates SAP SuccessFactors with Qualtrics.

Becoming a more intelligent enterprise is all the more important as businesses adapt to changing conditions and crawl back from the COVID-19 pandemic, Klein said during the keynote. Migrating old IT landscapes to a cloud infrastructure is not enough, and businesses will "need to have the courage to leave old business processes behind."

Some want more details

The message out of Sapphire Now's keynote was high-minded and forward-thinking, but SAP may have missed the mark in some areas and the details were less than fleshed out, according to some observers.

Overall, the keynote message was good, but much of it needs to be taken with a grain of salt, said Paul Saunders, vice president and analyst at Gartner.

Paul SandersPaul Sanders

"The SAP Business Network is really good in theory, but I'm a bit skeptical on the reality of this," Saunders said. "For example, if you think about all of the pieces that go into making an electric vehicle -- and all the suppliers, processes, systems, data -- it sounds great, but will it become a reality and will everyone trust SAP or any technology company with so much valuable business insight?"

Plus, the focus on business networks and sustainability may not be top of mind for customers right now, and SAP must show its customers how it can help them solve real problems, he explained.

"As companies come out of the pandemic, they're looking to make up lost ground but also to learn from the disruption they experienced and the opportunities that were created," he said. "SAP's message addresses some of this, but it isn't a one-size-fits-all, which has been SAP's approach historically. Companies need SAP to truly help them and not just sell them something shiny."

Holger MuellerHolger Mueller

But Holger Mueller, vice president and principal analyst at Constellation Research, said in some areas, SAP's message was long overdue.

Packaging up its network capabilities into the SAP Business Network is a good move, as this is what enterprises need to master as they restart their activity after COVID-19 or -- even more importantly -- to pivot to new areas of business activity, Mueller said.

"Adding the [industry] vertical capabilities to Rise with SAP is a good move," he said. "But in my view, this comes a little too early, because SAP needs to get the horizontal value drivers of S/4HANA right first to attract broad upgrades from ECC in the post-pandemic economy."

Don't just tell, show

SAP's messaging was good, but the real story will need more details, said Cindy Jutras, president of Mint Jutras R&A, an enterprise computing research and analysis firm in Windham, NH.

Cindy JutrasCindy Jutras

"The premise behind all of these announcements is sound, but I am still waiting to be convinced of their execution," Jutras said. "At least [Klein and White] both seem to have their feet firmly planted in the ground of reality and avoided technobabble, and the focus seems to have shifted from pure technology to more business value."

SAP is addressing the real needs of its customers, she said, but it must show that it can truly knit all the elements of its broad product portfolio together.

"Many of the elements were acquired, and it remains to be seen if all of the different applications are really using the same data model and can work together seamlessly," Jutras said. "This requires a microservices architecture, which SAP has developed, but has it been applied consistently across the board? And longstanding customers need to know how much effort is required to take advantage of it."

John Appleby, CEO of Avantra, which provides automated IT services for SAP systems and is based in London, also described SAP's overall message as positive, saying SAP showed how its products can solve business problems.

Coming out of the pandemic, business leaders are focusing first and foremost on the strategies they need to move forward, Appleby said. CEOs are thinking about how they can transform sales or make the supply chain more efficient so they can get products out to market, rather than updating their ERP systems.

 "SAP did a pretty good job of broadly speaking to different pain points which people might be feeling and [may] find one that actually speaks to them," he said. "For example, the SAP Business Network might speak to some if they're struggling to get supply and products or need to reduce the cost of supply chain."

Overall, Sapphire Now delivered more details on products than Appleby was expecting.

"Recent Sapphires have tended to be a bit more visionary and a little bit less specific, so they were pretty specific about what they're doing," he said. "It was the most product-centric Sapphire of the last 10 years, for good or for bad -- not everyone wants that, but you can't please everyone."

Sustainability important but may not resonate

Sustainability consumed much of the time and focus at Sapphire Now but may not be something that resonates with businesses at the moment.

"Sustainability, as important and laudable the topic is, is not a top three or even a top five topic for enterprises right now," Mueller said. "So it will be a good-to-have capability after the S/4HANA upgrade has happened, but I don't see sustainability capabilities being the main driver for an S/4HANA upgrade."

Gartner's Saunders, on the other hand, described SAP's focus on the issue as very welcome.

"The sustainability message is much needed, and if SAP can get it right, it can be groundbreaking," he said. "I'd love to see the day when someone can say 'Alexa, tell S/4HANA to optimize production for minimum waste.' I think we are some way off though, but to have a company like SAP champion this is wonderful."

Jim O'Donnell is a TechTarget news writer and covers ERP and other enterprise applications for SearchSAP and SearchERP.

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