Cloud computing, jet engines, and the construction company that feeds inmates
I’ve spent the last 3 days at our headquarters in Newtown Square, PA, participating in our Executive Advisory Council meetings. It’s been great to talk with executives from our top EC&O customers around the globe to gain insight into their opportunities and challenges, and work together to guide the roadmap for industry-specific solution development at SAP.
One of our guest speakers was Dr. Chakib Bouhdary, Executive Vice President, Industry Solutions and Customer Value at SAP. It was fascinating to learn more about the trends he’s seeing across all industries, including SAP’s own, and relate those directly back to what we’re hearing from our construction-focused customers.
Here are a few things I took away from his talk:
- Businesses you’d never imagine are being transformed into a “pay as you go” model. As an example, jet engines are no longer sold to aircraft manufacturers or airlines; rather, they are paid for by the hour used and service-level agreements are in place to ensure they are always functioning properly (or major penalties apply). The manufacturer is responsible for performance of the product long after the sale, and therefore has a more vested interest in designing a product for long life, maximum reliability, and ease of maintenance/repair.
- SAP’s customers are seeing a similar trend in construction, especially in emerging and global markets, with owners that are looking for someone to design/build/maintain/operate facilities for them. Traditional construction companies need to quickly adapt and ramp up processes that they may not be familiar with, or they will lose deals to competition that has the flexibility. One customer mentioned that they’d never have expected that, as a construction company, they’d find themselves in the hospitality business serving 200 meals/day to inmates of a jail they designed/built/maintain/operate!
- Put another way, the “cloud computing” model that SAP is so focused on is being applied to everything – not just IT!
- The companies that will survive, and thrive, in this environment will be those that have the flexibility to adapt, but more importantly are willing to invest today in areas that may not be obvious or even profitable in the short term – like financing jet engines, feeding inmates, or focusing your development efforts on cloud solutions!
How is your company preparing for this new way of the world? Will you be the one winning contracts by providing end-to-end solutions that meet your customers’ needs, or will you be the one standing on the sidelines with a specific offering that answers a question no one’s asking?