Global CIO: SAP's Top 10 Priorities To Become Undisputed #1 - InformationWeek

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5/16/2010
04:39 PM
Bob Evans
Bob Evans
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Global CIO: SAP's Top 10 Priorities To Become Undisputed #1

Welcome to SAP Week, our in-depth look at the company's strategy, products, and customers. Today: 10 steps SAP must take to reclaim its global leadership.

A highly directed mission like that will certainly help keep #1 and #2 above on track while also serving notice to the world that the SAP of 2010 and beyond is transcending the SAP of 2009.

4) Raise The Profile Of "Value Engineering." SAP has compiled extensive information the processes, approaches, outcomes, problems, and metrics of more than 6,000 of its global customers, which yields a knowledge asset that few if any companies in the world could match. For example, across multiple industries, SAP has metrics comparing the number of enterprise applications per billion dollars in revenue: at best-run companies, it's 3-5 apps. But at less-effective companies, the number of enterprise apps per billion dollars in revenue soars to 150. Such numbers might not solve any particular big problems, but they sure can give customers a sense of where they stand and how badly major change is needed.

In fact, for the past year, I've been making the case that those insights for what can be achieved with SAP's software are becoming as valuable as the software itself because in today's highly fluid and dynamic global economy, it's not just about how you "run" your business—it's more and more about how you anticipate changes, predict what's coming, and pounce on opportunities as they happen, not after all your competitors are fully aware of them. Here's a perspective from SAP Global Head of Industry Solutions Kerstin Geiger: "The pace and speed of innovation across the board is increasing dramatically, and it's no longer a flat world but rather a world that has been turned upside-down. Traditional industry boundaries are blurring significantly, and companies are beginning to play along their entire value chain and ecosystem instead of being just traditional players in one isolated part of the field," Geiger said in a recent phone interview. "A mining company acquires its way into the steel production business and extends its value chain, and in other cases ecosystems extend from growing wood to paper production—in all these changes, these new ecosystems are creating entirely new kinds of businesses." How can SAP share the promise and detail of such insights most effectively with its customers and prospects?

5) Data Integration And Making It All Work. SAP's pushing prominently the notion that it's an open environment with room and freedom for everyone, while it is stepping up its attacks on Oracle as a closed environment offering customers little or no alternative choices. That's fair criticism, because Oracle's new position is that heterogeneity breeds excessively expensive and complex infrastructure, as we discussed recently based on our interview with Oracle president Charles Phillips (see links to relevant pieces at end of this column in the "Recommended Reading" list). But to live up to its talk, SAP must do more than just hammer Oracle: SAP itself must make a huge commitment to simplifying the thorny and time-consuming problems that enterprises face in trying to weave together data from different applications, platforms, and departments.

6) Dazzle Customers With Mobile Innovation And Value. The acquisition of mobile-enabler and key partner Sybase is a great start because it gets SAP over a huge mobile hump that's plagued many big IT companies: many talk reverently about the coming mobile explosion and the need to lead, but almost none have matched the platitudes with specific action. Beyond Sybase, SAP has committed to mobile as a central element in its 3-tiered strategy—on-premise, on-demand, and on-device—and both Snabe and McDermott have said the day is very rapidly approaching when smartphones and PDAs will become the leading rather than the supporting platform for consuming and acting upon corporate information. SAP's Value Engineering team should be intensively tracking and analyzing the impact of the mobile enterprise—and while they're at it, maybe SAP should partner with a great research partner on that same topic. After all, leaders don't just talk about being leaders; they actually get out front and lead and do things no one else is doing

7) Bring Transparency To Enterprise Support/Maintenance/Annual Fees. The customer-led rebellion from a year ago has been well-documented and the company has said big customers are signing up almost unanimously for top-tier support. Good start, but not enough. Since many of SAP's customers still find the whole philosophy and business model of 20%-ish annual "support" fees to be baffling—and feel exactly the same way about Oracle's annual fees as well—SAP's new commitment to transparency and customer value would be well-served by the company explaining in great detail where those enterprise-support dollars go: product development? Advanced engineering? Value engineering? Bottom line? All three? If SAP wants to truly remake itself and be the world's greatest enterprise software company, it will trust its customers to see and comprehend how SAP is using those support dollars to generate significant value for its customers while also being able to drive profit levels that enable the company to create the next-generation innovations those customers will need going forward.

8) The Dinosaur Label:

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