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The cloud has started becoming a game changer in the tech industry and many 80s Blue Chips have fallen flat and are about to become irrelevant as they lost contact to the change occurred. And this – simply because it is a different business, with different rules. 

There are several reasons but the most remarkable one is the way that enterprise IT is consumed these days. Building robust corporate and supply chain systems of records drove central – and sometimes lonesome – IT decisions in the last 2 decades. Business felt disconnected from decisions and is now catching up. IDC recently stated that by 2016 LOB Executives will be involved in more than 80% of all IT investment decisions. The tech industry calls it the Consumerization of Corporate IT. Creating end-customer intimacy is the ultimate way to drive solution adoption, and the perfect vehicles are cloud solutions.

Cloud solutions, also know as Software as a Service (SaaS) can not be successful without a clear strategy for a platform and for the infrastructure they run on or connect with. Thus SaaS, Platfrom aaS and Infrastructure aaS strategy should always be looked at together and play in concert if you want to have sustainable solutions you bet your business on.

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But let us focus in this blog on what the end-user sees and experiences as the ultimate outcome – the application. To be relevant in the cloud, you need to achieve enough empathy with the ones you build the solutions for, so you better know what you build, how you build and what value you can deliver. Thus the design principles and the co-innovation approach are key.

How you approach design is what influences your success

The design principles of Cloud solutions fit perfectly to Line of Business (LOB). Highly scaling environments allow to experiment with low investments, line of businesses representatives can start modeling processes without further need of complex technology background or need for IT experts first hand. And license models with typical pay-per-use scenarios allow going OPEX (Operational Expenditure) instead of applying for IT investment budgets – CAPEX (Capital Expenditure). And results come faster with better control inside the LOB.

So far so good, unfortunately this usually kicks back at a certain point in time, when it comes to data consistency and process integrity outside the framework of a single department. Try to get an ROI calculation from one of the niche cloud vendors beyond 2 to 3 years.

Lets be clear – IT is a Line of business as well, or should act like one, but there are some fundamental differences…

A line of business organization typically starts with a “we can” approach and a rough plan. Further problem identification is a step after “implementation action”, not before. IT lead approach forces different questions to start with. Line of Business is interested in quickly solving a problem, while IT is trained to see the larger picture upfront. IT department starts with a conceptual phase, issue are anticipated, logistics are planned before they go to action. LOB people love BYOD (Bring Your Own Device) to interweave business and private time while supporting IT organizations roll their eyes being confronted with an unlimited number of platforms and individual devices to support.

What is our lesson learned?

SAP, as the global leader in business software, has been in that center of gravity for the last 4 decades and understands the business of it´s customers and partners. This is why the SAP Cloud portfolio consists of the most comprehensive suite of cloud-based business applications and comes as Line of Business solutions. At the same time we equip our portfolio with all aspects, Corporate IT needs to ensure a robust enterprise ready environment.

We were thinking about the below portfolio overview for a while, our customers, partners and prospects should know which cloud solutions at SAP are available, where we do set the priorities – and where you can engage with us right away. The portfolio is significant, comprehensive and is building out fast – one release per solution every quarter.

Design principles

But let us start with the design principles, as per co-innovation and collaborative design thinking we have come up with the right set of solutions to address current most pressing needs:

More than 20 applications are designed to optimize a company’s most critical assets — its people, the money, customer and supplier relations. And lets be clear – enough enterprises want to run fully in the cloud – so we do have suites in the cloud.  In addition SAP offers a fast-growing set of cloud-based solutions in industry specific or special topic areas bringing the value and velocity of cloud solutions to even more areas of our customers’ business.

Every single application in the SAP Cloud portfolio is built to better engage & empower ALL people of the enterprise – Administrators, LOB Executives, and End-users.

  • Velocity
    • Fast innovation cycles (every quarter), cloud solutions run on latest release
    • Fast assimilation in dynamic business environments
    • Velocity of solution adaptation
    • Velocity of onboarding and time to value
  • Mobility
    • The world goes mobile and SAP designs cloud solutions “mobile first”, period. Instead of small mobile extensions, we take this serious – designed the way people work today
  • Higher Standardization
    • Support the “we can” approach and fast business results via sharing of best practice (based on SAP´s process and industry knowledge) resulting in less financial and resource risk
  • Single source of truth,
    • Based on higher LOB adoption and a hybrid cloud design – people use more, so the enterprise gains more
    • Co-existence (hybrid) cloud design enables single source of truth, accurate data – I can rely on what I see

Lets have a look at the current portfolio

4 Line of Business solutions and Suites as focus pillars

    • People
      • Enable Business Execution Drivers that create Business Results. Solutions that help you drive better business results through empowering people and creating a compelling, real path forward, focused on business results. Improve strategic alignment, increase efficiency and productivity through team execution, and accelerate business results with people performance and learning management. Our SuccessFactors HCM portfolio (Business Execution – BizX) has a strong leader track record with proven results.  
      • Now together with a complete Core HRIS in the cloud, Employee Central – the largest clients in the industry, THE largest installations are on EC. And another key component has been added recently – payroll in the cloud – supporting more countries and legislations than anyone else in the market.
      • SAP delivers ‘social with a purpose’. Exploding numbers of emails, “searching context” rather than “finding” require a different engagement model for the modern employee. SAP Jam drives social enterprise capabilities to a new level of productivity.
      • But social is not a separate layer at SAP. Social capabilities in the fabric of each solution that engages people around specific business processes, irrespective of the deployment model – like social on-boarding, social learning and social customer engagement.
    • Customers 
      • The Salesman of the 21st century is a social, collaborative and cross-linked persona who is able to manage customer relations in the most comprehensive and collaborative way. Sales Force Automation is legacy. Dynamics and Innovation takes place in CRM-market every day, a sales rep can´t win with 10 years old technology and weapons. The SAP Customer portfolio equips the Enterprise with state of the art tools for Social Engagement, Sales, Service, and Marketing. SAP boosts this offering with HANA because none of our customers have time to loose doing the next sentient analyses or sales forecast.
      • And to be clear here as well – many important processes are still run on premise, so our offering like Customer 360 (including then CRM on HANA) and our integration technology is the right answer. We deliver on the integration promise – simple and scalable.
    • Suppliers
      • The Ariba Network and application enables our customers from strategic sourcing to contract lifecycle management run the best in class supplier management. Size really matters, because the largest global procurement & finance network guarantees the fastest time to value and it is the most compliant global network, which gives it the lowest risk profile you can get.
      • Our supplier solutions deliver great value to both, supplier sand buyers.
    • Money:
      • The next generation financial solution helps the controller and/or finance departments to deliver what they are asked for: strategic decision support instead of being stuck in transaction entry
      • Powerful solutions leverage SAP´s long term leadership in the finance solution space with a highly modern set of capabilities to support the broader roles and responsibilities of modern CFO´s
      • And of course an option if you want to run your complete finance in the cloud
      • Travel OnDemand is a traveler-centric end-to-end solution for a #1 travel experience
    • Business
      • Cloud suites for SMBs and large enterprise subsidiaries are a fast growing market with amazing amortization times: comprehensive solutions that enable to run your business better in the cloud.
      • Economies of scale that requires “reduced capital expenditure” in uncertainty and changing market structures require low capital investments
      • Joint Ventures, mergers & acquisitions, divestments to consolidate in new and emerging markets. Next level of flexibility and speed of on-/off boarding make it easier to separate or consolidate processes
      • Startups and small fast growing companies who want to have a clear path of growing systems – covering “glocal” needs from the start.

Collaborative business processes and social is the new enterprise normal


SAP delivers ‘social with a purpose’. Exploding numbers of emails, “searching context” rather than “finding” require a different engagement model for the modern employee. SAP Jam drives social enterprise capabilities to a new level of productivity. But social is not a separate layer at SAP. Social capabilities in the fabric of each solution that engages people around specific business processes, irrespective of the deployment model – like social on-boarding, social learning and social customer engagement.

Embedded in all solutions you will find collaborative/social capabilities, analytics providing dedicated insights and of course we do develop our solutions mobile first. Needless to say we do leverage HANA and the respective innovative in memory technology where best makes sense and are building it out with every release.

We also offer special solutions to cover vertical needs, specialization and dedicated segments in the portfolio. Developed on SAP´s HANA cloud platform enables SAP´s Ecosystem and customer to build new solutions or extend existing solutions in a cloud deployment model.

Net Net


With strong investments and focus on cloud SAP has the most comprehensive business solution portfolio in the cloud. Beauty and Simplicity characterize the solutions that come with integration for hybrid deployments. “Rip and Replace “ have never been SAP´s mind set, but flexibility and choice for the best run business process in co-existence with the already made investment. Why should end user care about Integration: “Single source of truth, accurate data – I can rely on what I see, better customer meetings, faster education, higher pipeline conversion, clear strategy alignment – just to mention a few” exemplifies the new solution priorities.

But don´t get us wrong, if you are up for full cloud – we are your partner as well. The largest clients trust their most critical processes with SAP Cloud solutions. Being it subsidiaries, divisions or complete business entities. And of course our DNA with the ERP in the cloud helps to get the problems solved faster – velocity in innovation with highest standard and most modern technology.

SAP is in the unique position to offer customers choice. True choice in where and how to adopt cloud based solutions. To complement or innovate existing processes in a non-disruptive mode and at your own pace. This makes our entire customer and partner base WIN in the cloud.

Looking forward to your feedback Sven Denecken (@SDenecken) and Bert Schulze (@BeSchulze)

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http://de.slideshare.net/SAPcloud/sap-cloud-strategy-update-q1-2013-sapcloud

http://de.slideshare.net/SAPcloud/sap-cloud-strategy-update-q1-2013-sapcloud-16220637


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3 Comments

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  1. Luke Marson

    Hi Sven,

    Good job on this and it’s great to see the Cloud strategy evolving and becoming more clear. I like how it’s formulating into clear strategy for Lines of Business and technology components.

    Your comment about OPEX v CAPEX is interesting, since a number of customers I spoke with at HR2013 were concerned about how they could justify the expenditure of a subscription-based model when they had no asset to show for this like they would with an on-premise system. With smaller organizations this probably doesn’t have much of an impact, but for the larger enterprise this has a significant impact on the balance sheet. I’d be interested on your thoughts and what you have heard from customers regarding this.

    Best regards,

    Luke

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    1. Sven Denecken Post author

      Thanks Luke, also following your posts – very balanced helpful for the community! Keep it on.

      Regarding your question a straight forward answer – most LoB representatives we talk to, like in sales, marketing, HR, etc… want OPEX, they can run it via their budget. This is by the way how SaaS took off in the first place. Exceptions of course we do see, but majority as described.

      But always keen to get more feedback, keep it coming.

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      1. Luke Marson

        Hi Sven,

        That’s an interesting perspective and I can see why different organizations will find advantages or disadvantages to the OPEX v CAPEX debate. But I think it’s down to maturity versus the Cloud and this might change over time.

        Thanks for the feedback and taking the time to continue to keep the community informed with SAP’s Cloud strategy.

        Best regards,

        Luke

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