SAP has been a dullard for years. Silicon Valley types snickered at the mere mention of the very German software company. In a word: Irrelevant.
That might be changing.
This morning I had coffee with SAP co-CEO Bill McDermott. He was brought in earlier this year after an awkward management shuffled that of course confirmed the snickering. He now runs SAP with Jim Hagemann Snabe.
McDermott is taking a bold stand compared to the rest of the industry. SAP is sticking to software, he says, untempted by the acquisitions moves of his rivals including Hewlett-Packard and Oracle. (Most notably, Larry Ellison buying Sun Microsystems.)
“All in one is nice for the vendors. They control the relationship more and can pitch the ideal of an optimized technology stack. But they’re really sub-optimizing innovation. Customers don’t buy stacks. They buy innovation, and that’s all in the software,” he says.
This is a nice message. He’s saying his competitors are distracted and growing for the sake of big numbers instead of their customers. Hardware is a commodity; software is what matters. “I can get you the best prices on hardware and services, no problem,” he added.
But there’s a problem with it. SAP isn’t known for innovation.
McDermott has an answer for that too. Today at the DEMO conference in Santa Clara he’ll unveil a series of analytics tools that he calls “a game changer”. He whipped out his iPad (he promises everyone at SAP will soon have one) and showed me a full view of a company’s sales, with drill downs to regions, with details on inventory levels.
“The head of company has the same view, instantly, as a guy on the factory floor,” McDermott explained.
It was impressive, and if it catches on, will shift how companies operate. Being a middle manager no longer means simply sending news up the chain, and priorities down. That news is already at the top of the change, the second it happens. McDermott is clear here: “We’re disintermediating middle management. Their jobs have to change.”
He figured using data better will contribute to a 50% cost savings in IT organizations. That’s a lot, and I can only assume it applies to organizations that are woefully behind.
McDermott is a slick pitchman, has been for a while. Mobility and analytics, the company’s big pitches right now, aren’t entirely new. Other companies, smaller ones, have been at this for a while. But the devices are here, and the opportunity to deliver a useful experience, is new.
Now that McDermott is in charge of SAP, expect relevance.
AltaFlux Corporation is a global HCM cloud consulting partner based in Troy, Michigan. We empower organizations by streamlining, transforming, and optimizing key human capital management (HCM) processes with industry-leading HCM cloud solutions like SAP SuccessFactors, Benefitfocus, WorkForce Software and Dell Boomi.