It has been a collection of events that lead me to finally blog again here on SCN, apologies for the absence!. In correct order was a nice mail from Mark Finnern which helped me to find the right subject and angle. Then I came across this photo which I found on Linkedin and I thought it was simply brilliant since it described a reality in such direct beauty that it was almost brutal.

too busy tu improve?.jpg

What you see is the reality of many managers in IT. They are too busy to “keep the lights on” that they cannot focus on innovation. I come across those situations almost everyday at customers. In a former job I used to say that I will write the book “1001 reasons to not do anything” in reference to an attitude of people who were not willing to think outside of the box or maybe even not capable. Just in case somebody feels this is a Rant, wrong!!! Simply when we talk to customers or partners we find often times motivations on their side which leads them to say “No” and it is important to understand what those motivations could be and what could be “goodies” we can offer in order to drive the motivation in the right direction.

Hint: There is not Penicillin at this point in time. Most customers have different motivations and triggers which will lead them to drive change in their organisation, for sure this will change over the time as adoption is growing.

I saw yesterday on Twitter a link to the following ASUG Survey: ASUG Member Survey Reveals Successes, Challenges of SAP HANA Adoption Thought it is just the preview but I did find some things that I were really interesting.

  • 3/4 of the respondents who said that they have not purchased yet SAP HANA said it is because they have not found the right business case yet for it
  • 65% of the respondents started their SAP HANA journey with BW on HANA

Please take the time to read the full document in the link provided. Whilst I have seen already comments that those numbers are “not good” I would be more positive and say well we have some points on which to work and there must be a starting point somwhere.

The first point to me is not really a surprise which does not mean that it is not an area that deserves much more focus. In a recent conversation with an IT Director of a Retailer he told me “You know, HANA is really expensive and I do not think that we need it”. This is a very standard answer that I hear, yet it is the moment when the emotions rise and I like to ask some questions. Especially in a retailer who have many times 60-90.000 cost centers, how do you measure the profit of your sku? Can you tell me at what profit you are selling for example a 1.5l Water Bottle of Brand X in your stores, differentiated by store. The answer is in 99.9999% of the case “No”. Taking this a step further it means that an IT Department today is not able to respond to the business with one of the que KPI for a retailer (profit of good sold). Yet he says that he does not need it. Where am I going?

I agree that customers need more guidance in order to understand what are the fundamental differences he / she can achieve with HANA. There are many and this is actually the beauty of it. Cost is an important factor? For sure but if you look at how customers are operating today with many disperse systems, ETL etc there is huge cost in there as well which after all delivers very little to no added value. Being able to drive down cost is very important and, yes we are doing it!

In most of my customer engagements we are doing a HANA journey and use the DesignThinking in order to help them identify the areas of where HANA would be driving value for them. It is a very important step in a sales cycle since this moves us out of pure IT but talks to business.

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What I like about HANA is the fact that allows you to take the journey. It is your decision on how much you get out of it. Just like you can take a sports car to just drive in the city or on a speed limit highway at 100km/h, but you can take it much further and this is when you really get to the most of it.

Most of my customer have started the conversation with Cost Reduction and Increased Productivity. By reducing the IT Stack significantly we are helping to lower the overall cost. Productivity is being increased by use cases like BW. If a BW System is slow the tendency of the users is to use it only if there is not other way around or not at all. This makes the investment even more expensive since there is no ROI!

I am very critical on using the speedfactor of HANA as an argument. But yes it is also an argument but by far not the only one! If the BW is fast and has a simplier structure (allowing more drill down to the user) this will increment their satisfaction level = usage level!

These two points alone already justify the move towards HANA by themselves. But then we come to the areas of Innovation and Innovation (DataDriven – BigData) and Transformation where you do really disruptive things. Remember the phrase of Henry Ford “If I had asked people what they wanted, they would have said faster horses” yet he drove the revolution!

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With traditional solutions most people try to answer the three dark squares. The real value however lies in the area of “I don’t know that I don’t know”. Many times this is related to IT. Coming back to my example of the retailer and the profit calculation. Why do they not have this on their #1 priority list? Mainly because it was not thinkable to do such complex and data intensive operations in a timely and cost-efficiently manner, though it is a core question of retail!

There is a lot more todo and even more to explain and educate but it is really on us.

Last but not least: This might be a good analogy

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Of course this should not be done by one person alone!

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  1. Marilyn Pratt

    This is a thoughtful piece and provides a good read.

    Forgive me for being seemingly “nitpicking” (looking for small errors in order to criticize unnecessarily).  But I am stuck on the second slide and struck by a small nuance of language (or language consistency) that could be easily remedied and fixed.  In some of the cases it appears (or does to me) that the words “what” and “that” are confused. It reduces the power of an otherwise great illustration.

    I think there is an important difference between “what” and “that”.

    • We may know “that” we know…..which is a generic and amorphous general idea of knowing indefinite things
    • We may know “what” we know….which is a specific list of the things we know
    • We may not know “what” we don’t know …which is that we don’t have those specific data points

    So “I don’t know that I don’t know” when thinking of the data analysis and by extension that HANA helps resolve really should read: “I don’t know what I don’t know”….and those “things that” or “what” HANA can help with.  Perhaps customers are stuck in the “that” as well.

    In summary “what” = “things that” = specific form or data

    Whereas “that” (used alone) = doesn’t have form or data

    Henry Ford asked people “what” they wanted ….not “that” they wanted.

    Or he could have asked for “things that” they wanted.  Which still implies the ability to make a list and analyze it and understand it.

    Thanks for indulging my being a bit pedantic about the language here…

    Again I enjoy the way you tell the story and illustrate it!

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    1. Carsten Nitschke Post author

      This is really cool. You are right the small nuances makes a big difference. The “I do not know that I do not know” will make it more powerful. Yet usually I am not a big fan of using presentations since they have exactly that fixed words which can be interpreted. I like much more to just talk with them (note: not to them !!!) It is more enriching.

      I just came across another threat for this subject which I will try to put into a story. I am very glad you like my way of telling !!!!!

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  2. Carsten Nitschke Post author

    I just came across this article SAP HANA continues to baffle customers | Applications – InfoWorld . I am quite surprised by the the comments made by RWang since he says that customer is looking for use cases. Let me make one of my famous analogies:

    You enter a store for mens boutique (let it be a Zegna or Boss etc), the shop attendant reaches towards you an tells you he has a great suit and that this is just what you want. How does he know ? Just because you have suits ? Because you are wearing one ? Would it not be much more logical that he says “Hello, welcome, how may I help you?” and listen to them.

    Ray forgets in his line that selling is about listening not so much about talking !

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    1. Marilyn Pratt

      Yep. Empathy factor.  Or Sufi factor: “is what I am about to say true? necessary? improve upon the silence?

      You can’t be listening when you are talking.

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      1. Carsten Nitschke Post author

        Leads me to one of my written in rock lines “Sales is an Art and strongly linked to Talent”. If you just want to Dispatch (note different word = different meaning) than it is a different thing. Typically high value goods & services are not dispatched but sold. So we need to all look at our belly (easy for me 😉 and see if the way we interact and communicate is the right one.

        I know that I could earn a lot of “heat” but the very critical lines of Dave, Ray and Christian do not seem to be correct to me. A more in depth analysis of the numbers and backgrounds would be good as well. Further if you have a great suggestion on how to make it better “share the joy”!

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  3. Alan WATKINS

    Very interesting and informative blog. It reminded me of a number puzzle in another blog I read only this morning on SAP Business Innovations by Nick Skillicorn called “How much does a shadow weight?” http://blogs.sap.com/innovation/human-resources/curiosity-breeds-creativity-01257861?source=email-us-bib-newsletter

    Check out the video half way down the blog called “Can you solve this?”

    I think you have hit on a key issue in relation to HANA and the more we can get our heads around how best to communicate the benefits of HANA, the more successful we will be.

    Great blog Cartsen.

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  4. Joao Sousa

    Coming back to my example of the retailer and the profit calculation. Why do they not have this on their #1 priority list? Mainly because it was not thinkable to do such complex and data intensive operations in a timely and cost-efficiently manner, though it is a core question of retail!

    Actually, I’m not too sure if it is that critical. I work mainly in IS-Retail projects and from my experience margins are measured at a category level not SKU level. Unlike distribution companies that have a controllable SKU number, retailers work with many thousands SKUs.

    To complicate things, since management is made at a category level, some products are heavily discounted in order to drive sales of other goods from the same category. The margin in these products is lower, but it doesn’t matter as long as the category margin improves which is the end game.

    You asked “Can you tell me at what profit you are selling for example a 1.5l Water Bottle of Brand X in your stores, differentiated by store”, and got the answer you were looking for: “No”. But did you ask if it was really a critical KPI?

    Don’t mean to nitpick but since you came back to this example….

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    1. Carsten Nitschke Post author

      Hi,

      I would say it all depends. Since until recently it was not possible to manage at SKU level nobody has asked the question I would believe. But if we are able to go down to the details and many details make a sum I am quite sure that there might be room for improvement in general.

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      1. Joao Sousa

        Since until recently it was not possible to manage at SKU level nobody has asked the question I would believe.

        When I’m installing a new SAP system (two IS-Retail implementations in the last 10 months), business side doesn’t know what is possible and what isn’t. And the fact is they never asked for margin at SKU level.


        They want the expected margin to show when they are defining pricing, and that’s it.


        EDIT: And margin for each SKU is stored in S120 structure, so it isn’t that impossible to report, even without HANA. Not possible online, but feasible for overnight reporting.

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  5. Mark Chalfen

    Hey Carsten

    Great, relevant content.

    The use cases of SAP HANA seems to be restricting the growth of the product within customers.

    The rise of the Chief Innovation Officer (CIO) in forward thinking companies should align to the possibilities of SAP HANA.

    I oftern here customers talk of when not if they will move to SAP HANA, so some of the barriers have been pulled down. The ability to challenge in all walks of life is important for growth.

    It will be interesting to see how SAP changes tact to make SAP HANA more attractive.

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    1. Carsten Nitschke Post author

      Hey Mark,

      regarding Use cases I am still thinking about it and how to best address this. To me one of the beauties that HANA has, is the fact that it opens you many new possibilities. Interesting enough there were always voices who were shouting to more flexibility and openness to SAP.

      The use cases are coming from SAP but should be also coming more and more from you the Partners. This will drive more adoption for sure but also allow Partners to play a new role in the whole ecosystem.

      I like the Chief Innovation Officer concept. I believe it is very much needed in order to tear down the walls that have kept information and its use very limited until now.

      I have worked on a different blog regarding to the why HANA now. I will let you know when it goes public.

      Regarding your last sentence, what would you suggest ?

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      1. Joao Sousa

        I like the Chief Innovation Officer concept.

        I on the other hand particularly dislike it. Innovation should be a responsibility of each department, having an innovation department is almost insulting to the others. Every manager from every department should be evaluated by forward thinking instead of creating yet another CXO.

        Regarding your last sentence, what would you suggest ?

        It’s quite easy. Quietly make more and more functionality of the ERP depend on having HANA or not. Devious solution, but certainly the easiest.

        You can check Fiori apps, most are HANA dependent. Smart Financials, etc. Use your real strength to push HANA, the ERP, instead of making all these weird non best of bread use cases like HANA XS (not that I don’t see value in HANA XS).

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        1. Carsten Nitschke Post author

          Joao,

          thanks for your POV. The reality is that in most countries and most companies at this moment people are more worried about keeping the lights on. This is especially true for those companies who are operating mainly in crisis struck markets. You will see very few people only leaning out and say “I have a great new idea” or even dare to implement it. With innovation there is always a possible chance of failure, as small as it might be but it is there. It would be easier to have really people focused on innovation, but again this is a POV.

          I agree with you on the second point and I guess only time will tell how things are moving forward.

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          1. Joao Sousa

            The reality is that in most countries and most companies at this moment people are more worried about keeping the lights on.

            Yes I know, but that’s also a reason why they won’t be open to listen to the “innovators”.

            If the company has available financial resources (after all they are recruiting a CIO, his team, and have a budget for innovation roadmaps) then probably the focus should be on understanding the problem in each department, and maybe increase the budget of said department.

            Because let’s face it, if a department in so swamped that they have legitimate reason to only “keep the lights on” then they need more budget. If these legitimate reasons don’t exist, you have a management problem that needs to be fixed, not patched over with this new CIO.

            Having “innovators” from outside the business will probably mean (and I say this from experience) that they are too theoretical and detached from the realities of the business. They will come to meeting saying “Lets to X” and the business will say “We already tried X”.

            I’m a firm believer that you need to shake up your teams, instead of sending a message that says:

            • “You don’t need to innovate, we are paying this guy to do it”;
            • “You know that budget increase you asked for and we said there was no money? We are spending it on this guy”.


            I believe that has a demoralizing effect and I’m speaking from experience.

            This is my POV, it’s normal we disagree.

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      2. Mark Chalfen

        Re my last sentence – that is the million dollar question – or in SAP eyes the billion dollar question.

        I personally dont think price is the blocker to adoption, my view is attitude is the real blocker for SAP and it takes time to change or influence attitude.

        Having great customer case studies is really important – rival customers will be looking over their shoulder to catch up with their peers. However the flexibility of SAP HANA is another issue to the adoption of SAP HANA. Each customer will have a slightly different focus and therefore there is no “one size fits all solution” that can be rolled out.

        Offering a one month SAP HANA trial – migrate a core SAP environment to SAP HANA, and allow the customer to play for a month for a low cost (this would need to be a cloud based offering) would reduce the FEAR of SAP HANA and target the change of attitude.

        The last question is SAP needs to be clear what they are trying to achieve:

        Do they want to take some of the database market away from other providers like Oracle?

        Do they want to take customers on a real time data journey?

        Do they want to improve the core and offer a robust cloud solution?

        Do they want “In-memory” processing to be the standard?

        I am sure there are others !!

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        1. Carsten Nitschke Post author

          Hi Mark,

          I strongly agree with you. Customers have clearly in mind that HANA can be of value but want to understand their very particular value case, this is due to flexibility. On the other side it is very good that it is this way since this means there can be a real differentiation in the market place, and less of a met too.

          Since my background is Business & Marketing “only” one of my favorite phrases is “do good and talk about it”. We have already done a lot of great things with our customers and partners but yet we need to talk more about it and I would dare to say also more about different customers!

          Yet there comes exactly the first point into play. Customers are getting a competitive advantage by innovation and are not really keen on sharing what they have done to be stronger in the market place.

          I understand your point on the “1 month free offer”. I believe we have already some of that in place to testdrive on AWS. You get some value out of it but this becomes many times “just” an IT Validation. Whilst it is needed the value add you deliver would need some furhter analyisis in my opinion.

          Regarding the questions you raise, to me the best way to answer it is to listen to our founder Hasson Plattner. In his Keynote The Futures of Enterprise Applications you get a good feel for it and the why. But again this is just a very personal POV

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