SAP TechEd 2015, the 3 day conference for technologists, started with Bernd Leukert's key note address on 11th March. If the 1st wave of digitization was in the 1970s with ERP as the core of the enterprise applications, the 2nd wave going beyond enterprises using XaaS to vendors and partners, the 3rd wave is driven by convergence of connectivity of things, people and processes, according to Bernd. Content from the first 2 waves is driving the 3rd wave with IoT where there could be issues with who owns the data – the equipment OEM, the consumer generating the data or the software companies. SAP's strategy to not stop the IoT journey with enterprises but to extend it beyond to the overall society is interesting.
SAP's approach is three pronged:
- Open platform – this is a shift in strategy where HANA on cloud becomes the canvas on top of which enterprises can develop applications for any device – the web, a mobile phone or a table in quick time. IDC's opinion has been that embedding analytical processing into transactional systems can provide new capabilities such as better user interfaces and faster decision making and this is starting to happen, depending on how businesses use it. A 15 minute demo along with the key note address showed how an insurance claim application can be conceptualized, designed using an IDE on the cloud and deployed on the web or smart phones quickly.
- Innovative applications with a simplified data model
- Connected networks
Asian Paints was a customer story where CIO Manish Choksi spoke about how the company went through a paradigm shift repositioning the customer at the center of the enterprise with the entire ecosystem of products and services positioned around the customer and with empowered employees. The SAP S/4 HANA journey was not a big bang approach. The journey started with BW, migration to analytics, to CRM, real time offer management and suite on HANA. The future plan is to implement SimFin for simplified Finance processes including modules such as product profitability.
The analyst session with Bernd went deeper into questions such as 2-tier ERP architectures. Large enterprises who see the need to extend their ERP to their suppliers do not expose the core ERP but build a lighter ERP on a cloud integrated with the core and use it for information flow outside the enterprise. Bernd does not see this as a threat but complementing the core ERP. Business One is for small enterprises and SAP Anywhere the cloud version of it. Business ByDesign is for medium enterprises with no industry specific implementation and a multi tenant architecture. Business Suite and S/4 are for large enterprises. This clarity of segments and the go-to-market for each industry segment is crucial for SAP to ensure the correct fitment.
IoT is seen is an opportunity with India as a dedicated market given the growth expected and the openness of the consumers and government. There is still investment to be made in infrastructure and this can be an opportunity to leap from some technology waves other developed countries went through. It will be an interesting journey to see this intersection of IoT which is seeing quick adoption in Indian manufacturing, in sync with the ERP refreshes that are happening from small to medium enterprises that are aware of what SAP has to offer for their specific segment. SAP is in a unique position to expand their offering to IoT given their installed base on the ERP side. Partnership will be key to fill gaps in SAP's value proposition and offer comprehensive IoT applications.