SAP focused on innovation; improving communication flow and cutting costs

“Innovation distinguishes between a leader and a follower.”
Steve Jobs, Apple founder

Innovation is widely seen as the key source to gaining and sustaining competitive advantage, continually striving to better meet customers’ needs. SAP continue to remain focused and are committed to providing software innovations rather than being tempted by the acquisition opportunities which their rivals such as Oracle have been quick to take up.

“All in one is nice for the vendors. They control the relationship more and can pitch the ideal of an optimized technology stack. But they’re really sub-optimising innovation. Customers don’t buy stacks. They buy innovation, and that’s all in the software,” say Bill McDermott, SAP co-chief executive.

But there’s a problem with this. SAP isn’t known for innovation.

McDermott had an answer for that too. Today at the DEMO conference in Santa Clara he’ll unveil a series of analytics tools that he calls “a game changer”. In a recent interview with Victoria Barrett for Forbes, she said he whipped out his iPad (promising that everyone at SAP would have one soon) and showed her the full view of a company’s sales, with drill downs to regions, with details on inventory levels.

“The head of company has the same view, instantly, as a guy on the factory floor,” McDermott explained.

If it catches on, it will shift how companies operate. Being a middle manager no longer means simply sending news up the chain, and priorities down. That news is already at the top of the change, the second it happens. McDermott is clear here: “We’re disintermediating middle management. Their jobs have to change.”
He figures using data better will contribute to a 50% cost savings in IT organisations.

SAP committed to customer centric innovation

Customer-centric innovation is the core principle of SAP strategy, said Sanjay Poonen, executive vice-president and general manager SAP business and LoB solutions.

“The goal of SAP is to take care of everything behind the scenes, to provide the backbone and nervous system to enable companies to focus on core business”, he said.

SAP are aware and are paying attention to the fact that the needs of UK businesses are changing as they now and in the future are set to increasingly require and demand multi channel software and their strategy is being built in response to this shift.

On-premises, on-device, on-demand, and seamless orchestration of all of these are the four pillars on which SAP's strategy is based, said Poonen.

UK research shows companies will shift gradually to a mix of in-house, mobile and cloud-based applications, which SAP believes is as a result of increased recognition of the cost and business benefits of delivery methods.

According to SAP’s survey of 250 CIOs in large UK companies, on-premises software deployments will fall by 20% to 51% by 2015, as companies demand access to their applications on the go or via the cloud.

Additionally, the survey said, the share of on-demand implementations will increase 11% to 28% and on-device will increase by 8% to 21%.

Another key strategy for SAP is to focus on industry-specific analytics solutions as the firm believes this will be the next wave of demand.

The largest ever attendance at the SAP’s Sapphire customer partner and world tour events this year has indicated to SAP that businesses understand the value of IT.