According to my wife I am often pig-headed and can never admit when I am wrong.
So you can well imagine how traumatic it is for me to have to write a blog with a title telling the world that I (may have) messed up. I would like to say that more accurately I think I may only half wrong but my wife would see this as a further demonstration of the character flaw I have just mentioned…
Anyway enough of the deficiencies in my character I now disagree with comments I made in a blog I wrote about S/4HANA on the day it was unveiled at FKOM. Now in my defence I had only just heard about it, I had a numb behind from sitting in a very uncomfortable chair for nearly three hours and was fairly hung over, however that being said I do now regret saying ‘It (S/4 HANA) still feels like a technology looking for a problem rather than the answer to a specific real world gap’.
Nearly six months on I am now firmly of the belief that rather than smelling vaguely of irrelevance I wholly failed to grasp the sheer ambition of SAP with S/4. I now see that S/4 is SAP’s method by which they will attempt to drag businesses kicking and screaming into the world of the digital enterprise, a challenge that is fraught with difficulties and challenges.
Now before I continue further I should quickly clarify what I mean by a ‘Digital Enterprise’ and as laziness, along with pig-headedness is another character flaw I possess I googled the phrase and happily the first definition was perfect! So lets consider that ‘A digital enterprise is an organization that uses technology as a competitive advantage in its internal and external operations’.
As I have stated above what SAP is trying to do should not be underestimated as it is attempting to engineer a complete paradigm shift from IT being a necessary, but somewhat dull and marginalised supporting function to a proposition where technology is a fundamental driver for business success and business growth.
To try and illustrate this point let’s take the examples of Uber and Netflix. Now these two companies are trotted out at every opportunity when talking about the disruptive nature of technology but I want to use them to illustrate how the application of emerging technology can be the most important differentiator for an established service.
The generic services offered by both companies are hardly revolutionary (films and taxis) but the use of emergent technology has allowed them to provide these established services in a manner that is so agreeable to the consumer that it give these companies unprecedented competitive advantages over traditional organisations who offer the same generic services but through traditional delivery methods.
Other examples obviously abound, however two other companies often cited as paragons of the digital age; Facebook and Google are, to my mind at least not two of them. The difference may be subtle but unlike Uber and Netflix the likes of Google and Facebook have used emerging technology to create completely new services that did not and could not have existed without the underpinning technology. So whereas companies could offer taxi and film rental services pre-internet the services provided by Facebook and Google could not.
So why was I so wrong about S/4? Well as I see it, what SAP are doing with S/4 is enabling all established businesses to remain relevant in the age of the all-digital enterprise. With the elimination of batch processing and its real time, on demand capabilities S/4 has both the power to enable established businesses to provide brand new services (a la Facebook and Google) but also far more importantly (to the established business) provide new and innovative methods of providing the same generic services and products upon which the company is founded (as per Netflix and Uber).
The problem, and the gargantuan task that SAP now have is in persuading these established businesses (that have typically seen IT as a necessary and unglamorous back office function) that technology must play a pivotal role in the future success of the organisation. A task that is far from simple especially when dealing with huge multibillion pound leviathans that have remained structurally and conceptually unaltered for decades.
Indeed more than this, if these organisation can be convinced then they must be shown how to make this huge paradigm shift and guided through questions relating to how digital enterprise should be structured, what skills are needed and how can the strategic goals of the organisation be married to the capabilities of existing and emerging technologies. This task sounds complex and in reality it certainly will be, indeed this challenge cannot be overstated as it requires a fundamental shift in thinking within industries and organisations that have remained ideologically unaltered for decades.
Indeed I will conclude by going further and suggesting that being able to persuading businesses of the need to digitise will be far more important to the success of S/4 that any specific use case or tranche of functionality within the product itself. If SAP fail to convince then S/4 will never fulfil its undoubted potential however if businesses can be convinced of this new role of technology then the future for SAP, S/4 HANA and crucially for those businesses that do digitise look rosy indeed.