SAP sets a course for the future

At its massive customer conference held last week in Orlando, SAP made it clear that it was charting a new course for the future. In announcing Leonardo — what it calls a digital innovation system — and in interviews with company executives, the message was unambiguous: SAP is an important part of the enterprise digital transformation story.

While the messaging around Leonardo was a bit muddled and at times felt like a bucket of buzzwords, it represents a decisive step forward in its effort to transform the company from a legacy, back-office technology player into the enterprise’s digital transformation platform and enabler of choice. According to its press release, the goal of Leonardo is to, “enable customers to rapidly innovate and scale that innovation to redefine their business for the digital world.”

Transformation by example

In many ways, SAP is the perfect guide for large enterprise organizations grappling with the dual demands of responding to digital disruption, while continuing to develop and support a legacy business.

After all, SAP itself is a behemoth company employing over 85,000 people in 130 countries. It looks and operates a lot like the enterprise customers it serves. And, like those enterprise customers, it was slow to see and adapt to its own digital disruption threat — in its case, the cloud.

Perhaps better than its legacy tech company counterparts, however, SAP has found religion and is in full, unadulterated pivot mode. Walking the SAP section of the show floor, you could easily think you had wandered into another event. Huge sections of the floor were devoted to design thinking, smart cities, the Internet of Things, 3-D printing and other transformative applications of technology that vastly overshadowed the sections highlighting its legacy solutions.

While SAP executives privately admitted that they are still working to overcome some legacy challenges related to licensing, data and other similar issues, there was no doubt that SAP’s own cultural transformation is well underway and is now resulting in tangible changes in how SAP is addressing the market.

Building a future on the past

The crux of SAP’s pitch is that the key to both surviving digital disruption — and perhaps even becoming the disruptor — is data.

Its belief is that the mountains of data that enterprise organizations have been collecting for decades are a goldmine that those organizations can leverage, exploit and convert into new products, solutions and competitive advantage that will be unavailable to their erstwhile upstart competitors.

Of course, much of that data comes from SAP’s legacy systems of record. So, it believes, there is no company better positioned to help enterprise organizations harness, harvest and exploit that data in new and interesting ways.

In my interviews, it was plain that the executive team was singing from the same page of this new hymn book. They seemed to authentically understand the true essence of digital transformation and shared impressive stories of how SAP was playing an important role in its customers’ transformational journeys.

But is their partner ecosystem ready?

As I ventured beyond the SAP section of the floor, however, it became apparent that there is a challenge with this vision: SAP’s partner ecosystem. While there were some interesting developments featured from SAP’s decade-old Co-Innovation Lab, walking the partner section of the show floor felt like I was stepping back in time.

The largest booths were sponsored by the usual suspects of consulting companies and systems integrators, all of which seemed much more interested in fat S/4HANA migration consulting gigs than in being part of the digital transformation journey. To be sure, the term “digital transformation” was everywhere on the partner floor. But there was little that was actually transformative.

Beyond a few smaller partners such as Tricentis, Celonis, Attunity, Kore.ai and Knoa, there was little that seemed even remotely part of the digital transformation story. The contrast between the lack of legacy solutions on the SAP portion of the floor and their complete dominance on the partner floor was striking.

Every journey begins with a first step

It was encouraging to see SAP embrace the digital future with such fervor. It was equally refreshing that its executives understand the true essence of digital transformation, the role the company can play in helping its customers on their transformational journeys and how SAP must transform itself to do so.

The company seems to understand the risk that the transformation of business models and operating paradigms poses to its continued dominance in the enterprise landscape. The company took an important first step last week in repositioning itself for a new future. The question will be whether it can continue to transform itself and its partner ecosystem fast enough to get there first.

Disclosure: SAP covered my travel expenses for this event, a standard industry practice. As of the time of writing, none of the organizations mentioned in this article are Intellyx customers.