Closing the gap between operations and experience: Insights from the SAP Industries Analyst Base Camp 2019

In July, I joined the 10th SAP Industries Analyst Base Camp in Newtown Square, Pennsylvania. This event is a “must visit” for all analysts covering specific industries, like me focusing on the manufacturing industry.

During two half-day sessions, a lot of updates were given on SAP’s go-to-market and portfolio enhancements that are particularly relevant for specific industries, such as manufacturing. For sure, many of those updates had already been given at the SAPPHIRE, however for me, not having been to SAPPHIRE, it was interesting to get a deep dive into relevant news for my industry.

So, what are my key takeaways from the SAP Industries Analyst Base Camp 2019?

First of all, the acquisition of Qualtrics was a major topic recurring through the whole event. This is not surprising, as the acquisition was a major one for SAP. Qualtric’s business revolves around collecting and analyzing customer and employee experience information by means of surveys and feedback forms.

By adding Qualtric’s capabilities to its portfolio, SAP’s new claim is to close the gap between WHAT is happening and HOW? (operations) and WHY? (e.g. emotions and experiences). In other words: While SAP’s ERP helps manufacturers produce and deliver products, the Qualtrics platform’s goal is to enable companies to verify how happy people (customers, employees and other stakeholders) are.

Closing the gap here certainly holds some interesting potential. SAP gave an example in one of the sessions, which was about water pump manufacturer Grundfos, who reports around 140,000 customer touchpoints a day. By using Qualtrics, a sales team is notified when a customer gives bad feedback. Being able to turn potential “detractors” into “promoters” very fast and early, is a true differentiator for Grundfos.

Another major topic, from my perspective, were SAP’s investments in tools to enable customers to make more use of their SAP investments and to help them transform and/or modernize their SAP landscapes.

From teknowlogy’s view, many companies currently feel the need to modernize SAP applications and infrastructure. In light of SAP’s announcement to discontinue standard maintenance for applications that do not run on SAP HANA (incl. SAP ECC) as of 2025, this is definitely a trigger for such migrations.

SAP offering such tools as the SAP Transformation Navigator therefore doesn’t really come as a surprise. The Navigator is a self-service tool offering guidance through the SAP HANA-centric portfolio landscape based on an assessment of customers’ current IT landscapes.

In my conversations with SAP executives, they reported that around 11,000 companies had already made a commitment to SAP S/4HANA adoption – of which 50% are existing customers and 50% new customers. In addition, they expect a peak in demand for consulting services around SAP HANA migrations as of next year, 2020. teknowlogy in fact expects this peak to occur later than that, probably only in 2-3 years, but we’ll see how companies will proceed on this end.

Another key topic from my perspective has been related to integration.

SAP undertook significant efforts in 2018 to better integrate its existing software solutions (also from past acquisitions) for design, build and operate functions to enable manufacturers to optimize processes end-to-end so as to achieve integrated processes (please see my blog post from Hannover Messe 2019). In the context of discrete manufacturing, SAP has defined 4 core processes, where it will, in a first step, continue to work on end-to-end integrations and, in a second step, bring (artificial) intelligence into the following processes:

  • Lead to cash, which is very much about integrating customer experience;
  • Design to operate, which is about integrating manufacturing and supply chain processes;
  • Source to pay, which is about optimizing spend management;
  • Total workforce management, which is about optimizing people engagement.

The art will be – and here I’d like to quote Stefan Krauss, Global General Manager Discrete Industries at SAP – to be able to serve customers that “…want a de-coupled, but at the same time integrated application.”

For more information on SAP, please also view our detailed SAP vendor profile and related blog posts, such as “SAP is pushing forward integration – something customers have been waiting for” by my colleague Frank Niemann.