According to Wikipedia, SAP is the largest non-American software company by revenue, the world’s third-largest publicly traded software company by revenue, and the largest German company by market capitalization. This means that pronouncements from SAP need to be taken seriously. SAP’s musings on the future of business might offer a window into where the software behemoth is heading and an opportunity to judge SAP’s chances of maintaining its enviable pole position.
Oil IT Journal has form in reviewing SAP’s writings. Back in 2011 we reviewed SAP’s book on ‘In Memory Data Management: An inflection point for the enterprise’ and wondered if the book might include an element of FUD*. In a letter, co-author Hasso Plattner denied any FUD, kindly explaining the link between the in memory database (IMDB) and various seemingly unrelated topics. We were duly chastised.
Business as Unusual (BaU) by SAP’s Thomas Saueressig and Peter Meier enumerates eight ‘megatrends’ that influence businesses, shape strategy and transform the structure of value chains. First megatrend is for ‘everything as a service’ – i.e. new business models that move from selling ‘products’ to ‘delivering outcomes’. For the oil and gas industry with its privileged operators who have been outsourcing their activities (and risk) to service companies for a century the novelty of the service model may surprise. Other trends, sustainable energy, mobility, supply chain resilience, are less contentious.
As an illustration of the service trend, BaU offers a thought experiment revolving around ‘coffee as a service**’ where a CDO ‘fantasizes about coffee consumption data’ that could be used to feed personalized ads to drinkers or develop a new line of lifestyle products aligned with a consumers habits’. Such musings may lead to the development of ‘thousands of digital twins of coffee machines’, networked with AI to perform predictive maintenance.
One poster child for the services economy is GE, ‘probably the first manufacturer to internalize digital disruption’. While this is undoubtedly true, GE’s early foray into digitization (with Predix) did not prove to be quite the success that was hoped for.
BaU is of course a soft sell for SAP’s vast software portfolio as is illustrated by a diagram of Capgemini’s ‘servitization’ architecture with a constellation of products running under SAP C/4HAHA, the ‘customer experience’ portfolio. BaU is some 300 pages long and ranges widely. Topics include lifelong health, the covid-19 ‘catalyst’, the work done at the Heidelberg University Hospital, and SAP’s vision of a ‘patient centric network’. Financial services, an SAP forte, get extensive treatment that includes a goodly does of FUD viz the Gartner quote that ‘by 2030, 80% of heritage financial service firms will go out of business’. It’s not clear whether this will be a good thing for SAP which currently boasts ‘14,000 customer banks in 150 countries’. Bank poster child for SAP is the Bank of London, a financial services disrupter with a new business model and ‘TBOL’, a patented, SAP-based information technology stack.
BaU’s grasshopper approach means that we jump from financial services to Lego’s transformation in the face of competition from Netflix. And then to the use of Rise with SAP (the cloud platform) to ‘transform capex into opex’ by ‘moving to a hyperscaler’ which probably sounds smarter than it really is.
Oil IT Journal readers will probably want to skip to the chapters on Energy. These focus on the sustainability issue and the energy transition. Citing a DNV study, BaU has it that in 2050, half of the worlds primary energy will come from renewables (up from under 5% in 2021). Coal, oil and gas will still be producing the other 50%. SAP’s role in the energy transition includes a commitment to run its data centers on clean energy and extensive support to customers in terms of emissions reporting, notably via the SAP Climate Strategy Framework (possibly now the Sustainability Control Tower) and an ‘Emissions Intelligence’ program developed with Accenture. This section is one of the most complete parts of BaU with a good drill down into the complexity of decarbonization. However, as Benjamin Beberness, SAP’s oil and gas lead, warns, ‘our world runs on oil and gas, this is not something we can change overnight!’
A section titled the Shell story recaps Shell’s ‘Powering Progress’ strategy. Here BaU makes a bold forecast, that ‘a few years from now the archives will document the massive transition that Shell has undertaken to accelerate the transition of its business to net-zero emissions’. This reviewer, benefitting from 100% hindsight, can observe that Shell, like others, appears to be backtracking already on its 2021 goals. In the sustainability stakes, both Shell and SAP, under the auspices of The Open Group’s Open Footprint Forum are reported to be collaborating on a ‘common model for footprint-related data covering all emissions types .. to normalize and aggregate industry data’. They are not alone in this rather overcrowded field.
BaU concludes with a chapter ‘The Road Ahead’ looking to a future which already seems rather dated. The Metaverse? Maybe. Artificial Intelligence? Perhaps. As baseball superstar Yogi Berra is reported to have said, ‘it tough to make predictions, especially about the future’. All in all, BaU is a bit of a hodge-podge of anecdotes and factoids garnered from SAP’s extensive online and conference presentations. It merits a read if you have the time and want to bone up on some ideas for ‘unusual’ business. But as a testimony to the achievements, philosophy or future of the EU’s software champ, it falls some way short.
* Fear uncertainty and doubt
** Starbucks is an SAP client as in this ‘SAP storytelling’ video.
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