15 years of consulting in niche markets

How SAP is riding on Asia’s growth story

 

The enterprise software behemoth’s Asia-Pacific business is growing and believes its latest C/4 Hana suite is uniquely geared to the scale of the region. 

German software giant SAP recorded its 19th consecutive quarter of growth during the second quarter this year, backed by a growing cloud business led by S/4 Hana, its flagship enterprise resource planning (ERP) software.

For nearly 30 years, the Asia-Pacific region has played a big part in contributing to SAP’s fortunes, with SAP Asia growing faster than SAP globally in recent years, according to Scott Russell, president of SAP Asia-Pacific and Japan.

At the SAP Sapphire conference earlier this year, the company signalled its intention to be an even bigger force in the enterprise software market with C/4 Hana, a cloud-based customer relationship management (CRM) that promises to offer a single view of a customer through tight integration with its ERP portfolio.

In an exclusive interview with Computer Weekly, Russell talks up SAP’s growth momentum in Asia-Pacific, what C/4 Hana means for its customers in the region and the blurring lines between back- and front-office software.

 

How is SAP doing in the Asia-Pacific region?

Russell: We’re in an economic region that continues to grow despite global political and economic headwinds. We are very confident about the adoption of technology by businesses to run better and simpler, and to expand domestically, regionally and globally. 

Our results as an organisation reflect that. In 2017, and again in the first half of 2018, SAP Asia is growing faster than SAP globally. If I take the second quarter, for example, our software and cloud revenue grew at 11%. Our cloud subscription and support grew at 52%. It was our 19th consecutive quarter of growth.

We feel proud about that, but I need to highlight that that’s just not a natural thing. A lot of companies continue to explore how they can leverage the latest digital innovation and what Industry 4.0 means to their country and business. They want to take competitive advantage of that in whatever industry that they are in to create new business models and enhance the way they operate. So, it’s a very active market, and we feel good about our role. But there’s always more to do.

 

We’ve heard a lot from SAP at the recent Sapphire Now conference, particularly around C/4 Hana. How do you translate that into something more palatable to the Asia-Pacific region?

 

Russell: Yeah, great question. Let me first of all say that as a region, we feel blessed that we have a strong brand.We’ve got 41,000 customers in the region, and next year is our 30th year of being an active part of Asia-Pacific, an instrumental part of the company and a key building block of our future growth.

There are a couple of dimensions that I see in what you heard at Sapphire. First, we’ve got a customer base that understands and sees SAP as a value-adding part of their business. Obviously, that’s historically been in core areas, whether it be in finance, logistics, HR or procurement.

We have a strong platform which means we’ve got a brand that we believe will allow SAP to go to the market and say “How do you leverage your existing technology investments, which quite often involves heavy components of SAP, and navigate the future?” There are two key dimensions out of what we announced at Sapphire that are really important to that. 

The first is C/4. I’ve been working either with or for SAP for the last 23 years, and I don’t think I’ve ever been more excited about a portfolio and capability, and the intent that we are taking to market with C/4. Why is that? With companies like CallidusCloud joining the SAP family, we now have a platform that allows you to manage sales performance, I would argue, better than anyone else in the market.

But I think it’s uniquely geared to the scale of Asia, which is a very populous market. Being able to take solutions like this and make it local – and I’ll talk about how in a moment – is extremely relevant.

Our customer data cloud, Gigya, not only manages identities, but also the privacy and the security of those identities. It also allows customised and tailored go-to-market offerings that help enhance the customer experience, especially in markets like India, Indonesia and Singapore where e-commerce adoption is tremendous.

So, when I think about our technology and the relevance to the end-customer, I think we’ve got real relevance. The trick for us, and I think our unique offering and how are we are going to drive that and go to market, is in a couple of fronts. First, we are the only organisation, I feel, that can help deliver that end-to-end customer experience.

For example, Snow Peak, an outdoor gear retailer from Japan, is using our commerce platform to create a digital marketplace and manage their inventory. The real difficulty in delivering a good online experience with your customer is to be able to fulfil orders.

Snow Peak uses us to manage their supply chain and their financials, so they know exactly what their real-time profitability is for a product. They know their inventory levels and can manage their logistics.

I think the other thing that I would say is we embrace the openness of our platforms. So rather than ask our customers to run everything on SAP, we want our technology to seamlessly orchestrate with their existing technology environment, including in-house systems and acquired solutions.

With SAP, they can manage all of that in a much more orchestrated way through connections to our suite. It’s not a mandate. It’s not a pre-requisite. Instead, it’s about orchestrating within their environment so customers don’t have to change everything all at once.

In fact, it’s quite the opposite. They might start with finance, supply chain or logistics. But quite often they start from the customer experience, and that’s why C/4 is so important because we can help them at the front-end that ultimately leads to the enhancement of their supply chain at the back.

 

I’m sure many of your customers have asked you questions about C/4 right after Sapphire. Many of them, especially C4C (Cloud for Customer) customers, would like to know the pathway to C/4 Hana. What are you saying to them?

 

Russell: First, I try to explain what that C/4 comprises five different cloud platforms. They are all part of a suite and the roadmap is very much around orchestration of those platforms.

We also acknowledge that companies will say: “Well, I'm here today and I have some custom-built websites, mobile platforms and other technologies that I use for my marketing. I’ve got some others. How do I navigate?”

So quite often the first question they ask is how they can get started. Our answer is always: “Well, what’s the customer experience problem that is most important to solve?” And from there, we’ll work backwards. 

It’s important that these solutions are not seen as a big bundle that customers should get. In fact, it’s quite the opposite. They are niche, have the ability to orchestrate with existing technologies, but are also the building blocks of an orchestrated platform for managing the customer experience holistically.

And that’s why I don’t use the word CRM very much because I think that’s what the competition does. They talk about CRM. What we talk about is customer experience. How do we make customer experience the most wonderful it can be, and then how can our technology help enable that for a business?

 

Source: Computer Weekly.com, 2018 

 

Tuesday Oct 2, 2018