Is Cloud about technology? No, it is about business – technology is an enabler.
I am fascinated by the role Cloud Computing plays in the business transformation that is underway the last few years. Every day there is a new customer example, statistic, survey or analyst report that reminds us that we are in a new era of business performance. When engaging with customers and partners and we hear that the pace of change is accelerating to the point that many line-of-business leaders are paralyzed by the speed at which they need to move, because they don’t always know what direction to take. Of course there are other trends influencing this change as well…
I have alluded to some of those trends (10 trends for the year ahead) influencing business today, this convergence of cloud, social, mobile, big data analytics has forced companies to be quick on their feet and adapt to industry forces on the turn of a dime – or risk becoming obsolete. And let’s not underestimate what is at stake: Organizations large and small are all wrestling with how to win in their market, how to get that edge that can deliver unmatched value to their customers – and timely profits to their investors. The payoff is huge for those who execute well.
At SAP we know this better than anyone, as our substantial customer base and vibrant eco-system deals with this change first hand, and we partner with them to deliver innovative solutions that help them keep the engine running, while allowing them to change the tires for the next race. This is the single greatest challenge that organizations face: keeping the lights on, while simultaneously scaling for the future and focusing on gaining a competitive edge. A key enabler is technology, with the goal to achieve business velocity by adapting the right mix of solutions with the right foundation.
> click here to see version on slideshare
Few companies want (and can afford) a “rip and replace” approach – nor should they even consider it in most cases. We constantly hear from long standing customers that they want to maintain some of their core systems that serve them extremely well, but need the innovation that the cloud affords. They also need a trusted, dependable partner that supports their needs and maintains a strong relationship as their business grows.
So the key business question is: How do you manage change and capitalize on emerging trends in a cooperative way?
A hybrid landscape supports fast adaptation in areas where velocity is key, and stabilize those areas where the current approach still makes sense. It is about how to leveraging a Software as a Service portfolio – “apps” – to drive change and a Platform as a Service – platform – that enables interoperability between cloud, hosted and on premise. A hybrid scenario that will be reality for a very long time. This is flexibility, choice, and control for customers who need to dynamically adopt new solutions for evolving their business. As a result, companies can generate new value and save costs while reducing disruption.
Lets get down to details:
- Unique Needs:
- When do you need a unique, customized solution and when is standard just fine? Identify unique needs, and see where velocity can be achieved by leveraging best practice – do not loose the cloud benefit of speed.
- At SAP, we co-innovate with our customers and partners to define the right strategies that are unique to their company, industry or line of business and allow them to stay focused.
- Bridge the gap between IT and the Business:
- Global spending on public cloud apps is skyrocketing – estimated at a CAGR of 17.7% from 2011-2016, from $76B to $210B –wow. But that’s not the most interesting stat. For me rather, it’s that over 60% of it purchases are now being made by the line-of-business, not IT.
- That is a recipe for silos, duplication of data, and wasted resources – all the while your customers are seduced by your competition who figured out how innovate, be nimble, and integrate cloud with their core systems.
- You need to be aware that integration done wrong or taken lightly can have real consequences. However it is key to success, which leads me to the next point…
- Leverage and Extend Existing Environments:
- We heard this loud and clear from organizations all over the globe – They have spent time and money on software solutions for their business needs, and the last thing they want to do is throw it all away only to be disappointed by the new, shiny solution that doesn’t quite match their needs.
- Plug and Play Innovation:
- Rather than rip and replace, we see the critical need to help organizations plug in the innovations that cloud solutions afford.
- At SAP we listened, and we support this need with new pre-packaged integrations that help our customers adopt and consume innovation faster than ever before in a hybrid scenario. Integration is sill an effort many many organizations under estimate, but critical to success.
- The Big Picture (AKA – Silos are for Suckers):
- Your company needs to see the big picture on how all the pieces fit.
- SAP customers know this and depend on a consultative approach to placing the puzzle of customer, employee, sales, service and financial data at the fingertips of who needs to know.
- Gone are the days where companies can afford to see knowledge, data, and creative energy fester in functional silos.
- The secret sauce is interoperability – between departments as well as between systems.
- End-To End Customer Intimacy:
- You told us – Point Solutions are for Suckers too (and so are Silos!): Yes, I said it because I hear it.
- There is a reason SAP made the significant investments in SuccessFactors and Ariba, and then brought together all our SAP cloud line of business solutions together as one portfolio. And that reason is you as customer.
- You are demanding that everything work better together, beautifully with an user experience that engages your 21st century workforce and delivers on the reality of the consumerization of….everything… including corporate IT.
Subsequent blogs will spotlight e.g. how technology is an enabler. In the end, we are all consumers. We demand seamless, engaging experiences and reject anything that does not live up to these expectations. However, we won’t be seduced by a point solution that cannot deliver on the true business value of the holistic business picture.
I believe that Cloud stands for velocity (the right combination of speed and direction) and cloud adds maximum value when it’s user friendly and engaging, analytical in context, fast, mobile and integrated. Technology leveraged in the right way is an enabler – helping you to achieve business velocity.
Have a look at our SAP Cloud Solutions Portfolio (detailed in this eBook), a portfolio that is based on our tight co-innovation with customers and partners. These Cloud solutions not only stand on their own merits but also provide a complete solution.
These SAP Cloud solutions serve the key strategic purpose of helping organizations like yours, accelerate innovation by plugging in what you need, when you need it, to your existing environment. Now THAT is velocity – speed, coupled with the right direction.
Let us know what you think,
Regards Sven Denecken (@SDenecken)…
see http://insights.wired.com/profiles/blogs/velocity-wins#axzz2Y7G2fsds for baseline POV content
Fantastic. This topic is extremely relevant and important, and your blog with infographic helps us understand the implications and possibilities.
My congrats to you on an excellent piece that puts our customers and their business issues - both challenges and opportunities, front and center of the cloud discussion. Your post clearly illustrates the why and how for customers to use the transformational potential of cloud to solve their business problems, while making a parallel case for SAP's unique perspective in cloud. Thank you!
Very informative. Please keep us up to date with the newest developments. Your writing style makes it a joy to read about news in the field.
very helpful and conceptualize content. thank you !
Excellent article. I agree with almost anything, except for the title, where I am afraid I'd need to differ and say: "Cloud is about Technology".
Of course it does enable a whole bunch of business changes. Most notably, and I beleve to be in line with the core message of this article, agility in all shapes and firms.
Agility is about business, cloud it a techlogogy based enabler for agility. If the business needs more agility, cloud may be the answer, but there may be other answers (e.g. start a bonfire with that 5000 pages HR policy handbook).
Call me an unbearable germanic know-it-all for stretching this technicality, but we have been fighting for so long to get people differentiating between deliverables and business benefits and I just don't wish to see so many more business cases or program missions saying "the business objective of this project is to move our HR system into the cloud" - you know what I mean 😉
I do actually assume we are not even in disagreement in the essence, but you are assuming it is all to obvios to be misunderstood. Trust me: it's not. I'm sure I'll meet sime manager before the end of this month, who'll answer the question "what would mae this project a business success" with "deploying this or that SAP HCM module in time and in budget" 🙁
anyway: thanks for the article!