Not impressed…….

Here’s a statement from Darren Roos of SAP:

“In the past, CIOs were consumed with a facilities management challenge,” said Roos. “They are now focused much more on the business, and on business outcomes. Licensing has become a new distraction for some CIOs who come from a generation where they were still working with a facilities management approach. But I simply don’t believe licensing is an issue. SAP’s licensing is infinitely flexible. And so they can get bent around the axle.”

My concern with this is that it feels a little or maybe more than a little out of touch with the reality of the situation. Let me explain why:

  • If you have ever tried to work your way through SAP licencing you would never, ever say that, just think about the current documents. Currently on premise runs to 86 pages. And cloud requires you to have at least 4 agreements (of varying length) including the order form, the cloud service description (and of course there will likely be more than one), the data processing agreement, and the general terms and conditions. And don’t expect many people in SAP to be able to answer the detailed questions around these…..they do exist but they are truly hard to locate (ask the SAP sales teams themselves about this!).
  • Then you have the transformation to cloud from on premise, how you translate this as most go through a hybrid phase of on premise and cloud together.
  • You also have the harsh reality of cost – and fundamentally as you move forward from hardware, facilities, people and software, you are looking at moving to more people and software through service provision (but some form of facilities even as a service will still exist). And the dilemma is getting this cheaper – so off shoring (or best shoring as it is often referred to today), or clearly demonstrable additional business value (emphasis on the clearly), through the purchase of these services.
  • External service providers have to make a profit, internal do not so cost challenges of moving will exist where the business has already best shored its operations.
  • And if licencing really wasn’t an issue why is there all this noise out there?

The comment about CIO’s that come from a certain generation I find to be certainly not empathetic with the customer (in some countries that might be deemed a discriminative remark) , almost saying they don’t know what they are on about, continuing the global theme that experts shouldn’t be trusted, because that’s what they are, people who have travelled the whole journey through what is an amazing period of time where technology has grown and grown to become almost the “saviour” of business. I say almost because good management is still needed…..

At the end of the day Indirect Licencing continues to be an issue in a more and more connected world…..that’s what the noise is about, and for whatever reason SAP seems to be getting the customer worried about it, based on surveys that have been done, which is a shame as SAP software has always been a trusted solution.

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Where there’s noise there is a problem…………

There’s an article on Enterprise Irregulars Dont write off SAP yet  By  on November 29, 2017 that I think is helpful….it highlights the challenges that are out there. It also highlights how problems of 20 years ago can get forgotten by those now in control…. Trust is the biggest key to success, and it feels like trust and therefore confidence has been, and maybe still is being, eroded.

In the FMCG world the key to success is repeat purchases, and those are driven by guaranteed safety, guaranteed quality which drives expectations of continued enjoyment of the purchase…….and you go back for more.

Experiences in software drive exactly the same behaviour! Trouble is the longer you leave it before you address the customer experiences, the faster the issue grows and the bigger it gets.

We need SAP, but it isn’t the only game in town, and we need them to up theirs.

Cloudy days…..

Back in 2009 I penned a piece for the User Group about cloud computing. That was 8 years ago and some of the same discussions are still being held.

The fact of the matter though is that cloud computing is being provided to all of us every day in nearly everything we do today. It’s interesting how things go through cycles – fashion being one of the most obvious ones. But in computing we had the mainframe, essentially a screen connected to a central computer somewhere, then we went client server where some of the compute was taking place on the client machine with server largely being a data repository. And now we have cloud where there are 2 schools operating – the browser to cloud, and the app to cloud. The browser to cloud is so similar to mainframe!

But the obsession with cloud computing obscures what is really going on. The digital revolution. It’s as big as the so called “Industrial Revolution”. What is the Digital revolution? The best way to describe this is to consider the concept of analogue television to digital television. In analogue days you watched it now, if you didn’t you missed it and there were 4 channels. In digital days you can watch it now, replay it, store it – watch it on tablets, phones, computers and TV’s on hundreds of channels. And therefore the choice moves from the provider to the consumer.

So there is a digital transformation underway, aided by ever cheaper and more powerful technology. The internet has provided a backbone to connect everything, and I mean everything. And this digital capability is no longer confined to business, it’s in the home, it’s in your school, it’s everywhere. In fact the digital transformation is being demanded and shaped by the consumer, not business.

This key change, where the consumer leads, is sadly not understood by everyone. Businesses can no longer drive, they have to predict. They have to establish intelligence that sets them up in the way the consumer demand is going to go. Only the very lucky will be able to pull the customer along with them.

And this is now 365/24 – the always on and available culture that is becoming the norm. There will be some brakes in the ecosystem – internet availability – cabling and fibre are likely to be surpassed by mobile with 5G on its way giving mobile 1GB per second speeds along with 5ms response speed. And then people – and this is the part that seems to get overlooked.

For some areas people will actually not want an always on culture – most likely in the work arena. All work and no play makes Jack and Jill dull people, so expect some legislation starting to segregate work and home life.

This people culture change is the largest of the black holes in the digital transformation roadmap. No longer can companies dictate to their staff that this is what is going to change from upon high if they want success. It has to be a hearts and minds approach, so if you are starting your digital transformation then you need to have proper people change management strategies and processes in place. Ignore this at your peril.

Now remember I said that the consumer was leading this transformation? That is also something you have to understand. The consumer is split into many groups, by ability to change, willingness to change, and fear of change. These are not always age related but can be……… So you have several streams to contend with which is why I believe there will be hybrid solutions primarily adopted out there. The same inevitably applies to your own workforce.

Some companies get it….I’m quite impressed with the Digital Eagles campaign. So yes Barclays are being nice to their customers to help them get digital, but it’s really about them having recognised that to get their consumers through their (Barclays) digital transformation they need to help them. Change management!

This Digital Revolution is the biggest change to our world since the Industrial revolution. And it offers so much to so many….if it is done properly.

 

 

SAP reveals more in South Africa….

SAP promised to reveal the results of its internal investigation at the end of October, and it seems there was fire behind that smoke. The South African headlines with “SAP apologises to South Africa, reveals truth over SOE and Gupta dealings”.

SAPs statement reads ““The investigation has not revealed any evidence of a payment to a South African government official, including Transnet and Eskom employees. It has, however, uncovered indications of misconduct in issues relating to the management of Gupta-related third parties. To this end, SAP has instituted formal disciplinary proceedings, in accordance with South African labour law, against three employees who were placed on administrative leave at the beginning of the investigation. SAP has been clear from the outset that it will not tolerate misconduct or wrongdoing.”

All credit for SAP for bringing in an independent team to review and more credit for introducing a policy of no sales commission will be paid in any countries where there is a perception of corruption score below 50 based on Transparency Internationals published league table of corruption which basically means that nearly two thirds of the worlds 176 countries drop into that category.

SAP Q3 Results are out…..rounding up what some of the press says.

The Register in it’s typical style, suggests some challenges “SAP reassures market: Cloud is sustainable, just don’t look at our wheezing bookings

Whilst Reuters highlights below market expectations and the reassurance that Q4 will be good   “Just relax, Europe’s tech leader SAP tells investors, fourth quarter will be dynamite“.

The FT though focuses on warnings of the impact of the strength of the Euro on SAP earnings “SAP leads warnings on euro strength hit to earnings”

My POV – Q4 is always a strong quarter for any software vendor, it’s when the deals are made and the discounts applied. The underlying interest is cloud sales as a percentage of the SAP business and what impact it has on licence revenue. The 2 key questions being, firstly is SAP getting new revenue from the business that it is putting all its effort into (Cloud and HANA)? And secondly is SAP adding to the revenue base with service subscriptions? And the answer…..probably too difficult to say.

This could get very messy……

I mentioned a growing scandal in South Africa a number of days ago. Well it seems that now others are concerned that links with those either under investigation or investigating, might drag them in and their links to those companies are now being questioned. It remains to be seen how this will be untangled, but there are some nervous corporates out there. Standard Bank is now considering its links to McKinsey and SAP and also having conversations with KPMG. As the old saying goes “there’s no smoke without a fire”. Question is where and what is the fire? Everyone is keeping very tight-lipped about it.

I like the video clip…..

Every day we are all bombarded with marketing clips and then one comes along that catches your attention….in this case for me it’s an SAP one. My view is that this is slick and good marketing……doesn’t tell you that much but works exceptionally well as a teaser, and does what it says on the tin. It gets you thinking.

Click here.