The old ERP systems are fading rapidly into the sunset and being replaced by new, modern intelligent enterprise...
This was one of the themes that SAP CEO Bill McDermott stressed during a roundtable meeting at the SAP Ariba Live conference this month at The Cosmopolitan of Las Vegas. McDermott was joined at the roundtable by SAP Ariba President Alex Atzberger.
The intelligent enterprise McDermott envisions encompasses SAP's core business, residing on the in-memory HANA platform, with an escalation of "hyper-growth" happening in the cloud. This involves a host of networked applications and services in the cloud, including line-of-business applications, analytics like SAP BusinessObjects and the interenterprise business network assets -- SAP Ariba, SAP Fieldglass and Concur.
"That core is also being serviced by an SAP Cloud Platform. And you can think about SAP as a very open company -- a company that's very ecosystem-friendly, and [with] an open API hub where we're going to write new applications in very fast innovation cycles, [as will] our partners and customers," McDermott said. "That core is going to be cloud-based, in-memory, rocket-fast and provisioned in the cloud. But there's going to be different hybrid models that customers will want for their own reasons, and they're entitled to choice."
The SAP digital core now features SAP Leonardo, McDermott continued, which incorporates a variety of elements, including SAP Cloud Platform, machine learning (ML), artificial intelligence (AI), internet of things (IoT) and blockchain, that will help businesses to develop completely new and innovative business models "at a rate never before imagined."
Intelligent enterprise helps reinvent business model
An example of this is Trenitalia, Italy's primary train operator, which implemented an SAP HANA-based system that uses Leonardo elements, including IoT and cloud analytics, to apply preventative maintenance operations that have improved service and efficiency.
"If you take Trenitalia and what they're trying to do to reinvent the rail system to give passengers happiness, but also to reinvent the business model on IoT, you realize the power of cloud, in-memory, a modern-day ERP system," McDermott said. "If you think about what we did with farmers that make great products -- Barilla is an example, they're making things from the farm to the fork -- where they can completely reimagine the supply chain and take advantage of all the AI, ML, IoT. The core is there, but they're reaching out to do net-new things with SAP, so we need an umbrella brand for all those net-new things."
SAP Ariba, for its part, wants to take advantage of SAP technology and the SAP ecosystem to solve business problems, Atzberger said, and to make procurement a much more visible and valuable business process.
"There are real big problems that procurement can address and should be addressing -- for instance, no surprise in supplier lists; when you talk to a financial services company, this is something they spend billions on today," Atzberger said. "The problem is that most of them try to do it with point solutions that are not connected either to the digital core or to the network. When we talk to financial services institutions, it excites them to see how can we actually address these problems and look at the technologies that SAP provides like Leonardo with ML capabilities and apply that."
Having SAP Ariba on an in-memory platform that allows a live-trading network is one of those fundamental business process innovations that would not have been possible a few years ago, McDermott said. Rather than just being viewed as an area to contain costs, procurement can be a part of a "digital boardroom," where it takes an important role in improving a company's efficiencies.
"For some of these point solutions that don't have the power of the network and that don't have the power of the R&D [research and development] that SAP has to capture that end, where you get the ML/AI, IoT, blockchain, it's game over," he said. "Because we're not just talking, 'I like the configuration of your UI a little better.' We're talking fundamental business process; we're talking globalization; we're talking industry-specific; we're talking domain expertise; we're talking, 'Can you keep up with the arms race to invest to take your company from here to there?' Those questions are going to get tougher and tougher on the point-solution providers."
The roadmap era is over
The era of long development cycles appears to be over, as well. Atzberger said SAP Ariba is committed to agile development and quarterly releases. This will lead to more responsive innovation, where the new technologies can help businesses fix the right problem when needed.
"One of these is the trust people have in transactions, being able to track and trace beyond the immediate suppliers, which is blockchain's value, and we will invest in that," Atzberger said. "Another example is smart contracts: Why do you start with a blank page? Why can't you have some of the contract elements already in there? That's part of the contracts roadmap, and we will leverage it across the entire portfolio."
McDermott stressed that SAP has a major commitment from the top of the company on down, with the top priority to integrate everything seamlessly into the HANA core.
"Our differentiation will be the intelligent enterprise, because the applications themselves will be intelligent," he said. "At the base layer is HANA -- one platform that does the transactions and the analytics, while never having to take the data out of the main platform to run some numbers on a sidecar or alternative supercomputer. You can have self-contained, integrated, best-run businesses all over the world in every industry."
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