The Digital Platform and Its Role in Digital Transformation Success

SAPinsider’s Rizal Ahmed discussed the role a digital platform plays in a company’s digital transformation journey with SAP’s Colin Dover and Dan Kearnan.

Find the full recording and transcript below.

Riz:

Hello and welcome to our podcast my name is Riz Ahmed and I’m the EVP of Research at SAPinsider.  I’m joined today by Dan Kearnan and Colin Dover both of SAP. Dan is a Senior Director Marketing with SAP’s Cloud Platform organization and Colin is a senior director in SAP’s Center of Excellence that covers both Platform and SAP’s Database and Data Management group.

The topic of today’s podcast is understanding the role a digital platform plays in a company’s digital transformation journey. These are topics I know have been very top of mind for our SAPinsider install base and the reason is the concept of a digital platform is becoming much more mainstream and understood. There are a lot of thought leadership written about it and we are seeing a bit more understanding as it relates to our own audience and SAPinsider community. I think the one misunderstanding out there is that digital platform is a single solution, it’s a single thing you can buy off the shelf and that’s not true. It’s a combination of technologies and it’s a combination of technology that deliver value in a bunch of different ways, whether it’s a unified data foundation, development environment, or cloud and on-premise solutions. It’s something that really provides the business agility and IT the ability to support the business as it undergoes different changes and as it starts to deploy new and innovative solutions, it helps support that.

One of the things we’re seeing that are tripping up companies is the way that technology and ERP has grown up. It grown up with a lot of custom solutions, a lot of silos, that aren’t completely integrated and aren’t completely together.  That makes digital transformation hard to scale when its being done in these types of silos.   One of the things that a digital platform does is provide integrated, automated intelligence that serves as a foundation and bridge between these silos. When a company needs to innovate and it needs to rely on reliable foundation of data, development, and integration, that’s where a platform really comes in. If you want to really have a business that can transform and innovate on a dime, this is a necessity.  

This is the backdrop of our conversation.  At SAPinsider, we are doing a lot of research around transformation and where people are, what’s tripping them up, and what’s accelerating them. I think this podcast is a great opportunity to talk to two experts and perspectives from the SAP standpoint and have them share with us what they are seeing, what their concept of a digital platform is, and how that can be translated to customers and customer success.    

Let me introduce our two speakers. Dan, can you talk a little about how SAP defines a digital platform and the role it plays in a company’s success from your standpoint?

Dan Kearnan (00:03:30):

Sure Riz. This is a hot topic here at SAP and I think first and foremost it’s a hot topic because we listen to our customers and we have a lot of folks who are in the IT. departments that are already challenged with the need to be more reactive and more responsive to business needs while at the same time trying to keep the lights on and maintaining a trusted data foundation for corporate applications. IT is often seen not as a hero to the company but sometimes as a bottleneck in getting business needs in an agile manner in order to respond quickly to changing market conditions.

With that as the backdrop, SAP has evolved digital platform which really combines the stability needed by IT to maintaining a trusted data foundation for corporate applications, while at the same time providing the technologies to allow them to be agile and nimble to business user needs employee needs and partner needs in this fast-changing economy. It’s a combination of stability and agility to make IT a hero in their organization and be responsive to business user needs.

That’s the backdrop and kind of the foundation for SAP’s digital platform. As you said it’s not just one kind of, out of the box, cohesive product. It’s really the evolution of two key product areas at SAP: our database and database management solutions focused on HANA as well as our cloud platform.  It is our cloud platform application development environment which provides the agile layer the ability to respond quickly. The database and data management solutions form that stable trusted data foundation that companies and IT departments rely on across your organization. There is kind of the background of the context and in a nutshell as SAP’s key solutions that make up the SAP Data Platform.

Riz (00:05:51):

Thank you very much Dan. Colin, Dan mentioned the critical role that SAP DDM solutions play as a foundation to the digital platform. Can you elaborate a little bit on what Dan said and, more specifically, focus on the value of building a unified, stable data foundation?

Colin (00:06:11):

I think the you know the main point to make here is, and Dan highlighted this, in terms of that description, of the IT organization in most customer organizations looking to move into that bi-modal way of behaving and supporting their businesses. The agility that’s required in order to do that, with less emphasis spent keeping the lights on and performing sort of the traditional IT function and instead getting more into an office of innovation, being more of a an enabler to the business at large, in doing things faster and in a more innovative fashion than they’ve ever done before, that presents unique challenges.

When I look at the data management capabilities requirements that are needed in order to support that move and that change in that mode of operation, it really comes down to a number of different disciplines and capabilities that fall into a framework in many ways. What we see in most customer examples is a situation where there are eight or so major areas of capability.  Those span everything from the ability to create common data models and identify common taxonomy, data quality and governance becomes an emphasized part and focus of the conversation, data integration, data aggregation, the virtualization of reporting, the analytics that go alongside that, the consumption of the data in turn from those reporting and analytical capabilities, and then also the leveraging and the tapping into the data lakes and cloud services that inevitably exist in most organizations, and then finally the data operations that provide the wrapper to all of those capability areas.

Those are really the essential underpinnings the essential components of that platform and that foundation that are going to support that transition to innovation, digital transformation, and ultimately support the intelligent enterprise aspiration that many of our customers that certainly I spend time talking to week in week out are trying to get to.

Riz (00:08:31):

I’ve got a few follow up questions. I want to stick on the data topic for a bit because I think it really is important and data has been so such a large part of customers ERP implementations, part of the way they conduct their business, and now they’re truly trying to take to get the most value out of it. But what are some of the key challenges that they face when it comes to building a strong data foundation? Where do a lot of companies go wrong?

Colin (00:09:00):

It’s the question of the moment. Very topical and probably nine out of 10 meetings that I’ve been party to over the last three to six months start with that exact question. What do we do to overcome these difficulties and the inherent challenges in the data discussion? I look at it in a sort of from the other end of the challenge in terms of what are the business leaders in these organizations really struggling with? For the most part it comes down to, as Dan alluded, to trust.

Various surveys from all the industry sources are indicating that senior leadership in most corporations and most organizations around the world are fundamentally concerned and questioning how much they can trust the data that they see that’s available to them and throughout the business.  I think something in the region of 55 to 60 percent of CEOs polled in a major survey last year were concerned about the quality of their data.

When we talk about digital transformation initiatives, which is something we’ve been focusing on at SAP with our customers for the last several years, only 8 percent of those organizations surveyed felt that they had reached what they were defining as transformational levels of maturity in their use and management of data and the associated analytics that went with them.  An even more fundamental problem that really supports those numbers is that only three percent felt that the company data overall met a minimum threshold of quality.

Wrapped up in those three big numbers that indicate a lack of confidence, a fundamental mistrust in what’s available to them, we’re hearing businesses basically saying we don’t think we can trust our data, we’re not sure about the inherent integrity of that data and therefore the usability of it. The challenges are compounded by the maelstrom of environmental pressures that are also coming to bear on any one of these organizations and whatever industries they work in, whatever services products or otherwise they provide to their customer constituents.

The complexity represented by the fast pace of business, a perennial fact that simply isn’t going to change, the pace of changes is never going to be as slow as it is today. It’s only going to get harder. We’re only going to have more connected devices. We’re only going to have more channels with which to reach our customers and to gain a view of them from. That whole traditional sort of big data discussion of the volume and variety and velocity and veracity of data, we’ve put that somewhat to the wayside over the last few years. But the fact of the matter is, many of those problems inherent in those various attributes of the data discussion are very much part of that challenge today. A significant number of organizations lack a comprehensive and all-encompassing platform approach to the way they manage data and they manage information. Many of those organizations are spending tremendous amounts, and indeed disproportionate amounts, of time trying to find data that is meaningful and supportive of the business goals and the ambitions for growth or profitability or innovation that they have either publicly, or behind closed walls and doors expressed they want to meet.

The Chief Data Officer is, in many ways, uniquely challenged by this problem. I think in the perception of many that I’ve spoken to over the last few months to a year or so, are really struggling with this concept of creating the organizational capabilities of putting the technology foundation layer in place and bringing those two together in a way that allows for sort of this notion of an information product to be delivered back out into the business.

Infrastructure is one thing but the capabilities to go with it, the maturity in those various capability areas are also part of the problem. In many ways I think this comes back to the volume issue, the speed of doing business today and the challenge that represents. Then the additional complexity in simply the way that most businesses go to market and do what they do.

The need for the creation of something, and I think you mentioned this in the introduction, this notion of indemnification of a data management platform providing a mechanism that will grow and flex and shape with time to the needs of the business and starting to do that now and not being inhibited by the legacy of technologies that, again many organizations describe as being the single biggest problem they see standing in their way and in their path to the digital transformation objectives that they have. That is really what at SAP we’re looking to address with these data management solutions and with the digital platform.

It becomes possible for the first time, with the backdrop of those challenges I just outlined. With that desire to create that indemnification against the future challenges, it becomes possible to start thinking about how we deal with data in a sustainable way in a way that grows and flexes over time and allows for unique use cases to be supported in a way that otherwise, traditionally, would have been very, very difficult to do.

We start to think more about what we would have called historically logical data warehousing or the creation of an information fabric or data tapestry. It could go by any number of labels, but the fact of the matter is the data management approach that we support here at SAP, the digital platform approach and the support of this notion of the intelligent enterprise and the aspiration of that. That’s a very different way of doing things and that will inherently build in the trust and the usability the confidence and the action ability of that data in a way that most customers haven’t seen in the past.

Riz (00:15:35):

I’d like to turn the conversation back to Dan to talk a little bit about Cloud Platform and the concept of agility.  Dan, you referred to the Cloud Platform as the agility layer for the SAP Digital Platform. Can you dive into this a little bit more and give us a little bit more detail on what you mean by that?           

Dan (00:15:56):

Colin did a good job of underscoring the challenge and the opportunity IT has in providing that trust in a stable data foundation that business needs can rely on when making decisions. What cannot also be lost in this discussion is the fact that IT’s also challenged with being able to meet the needs of business users in an agile and flexible manner.

For example, there’s often discussions that happen between the business and IT and that they might need a new approach to engage customers or have a more compelling approach to engage employees. IT sits there with the business and they need to be able to meet those needs maybe in the form of a new application or a new portal a new user interface. And they can’t wait six months to get that done. We’re in a very fast paced economy. The customers what they need and what they demand can’t be something that they get six months from now they will go elsewhere.

Aside from, and not underscoring, the importance of a trusted data foundation, IT also needs the technologies and the applications to be able to give business users what they need, to be able to react to customer needs, and to engage employees more in the form of new applications, new interfaces, and portals. That’s done with the complementary solution to our SAP Digital Platform, which is the SAP Cloud Platform, our platform-as-a-service, which provides that agile layer. The ability for IT to quickly build new applications, portals, interfaces, UI, or even to extend into customize existing applications to get more out of that application, to deliver more personalization to those that need it. That then does give IT that agility and the flexibility needed to meet business users’ needs and to make them the hero.

We really have two fundamental parts to the SAP Digital Platform. The components that call and talk to our database and data management provides the trusted data foundation, the governance.  The stability, along with the SAP Cloud Platform, provides the agility, the flexibility, for IT to be reactive and responsive. We have a complete picture with those two key solutions that make up the SAP Digital Platform.

Riz (00:18:28):

Great. Thank you for that overview.

Let’s talk about customers. Where are you seeing some of the early use cases for SAP Cloud Platform and what are some of the benefits and great stories you are hearing.

Dan (00:18:42):

Well it’s a good question. We’ve been on the market now for over four years. We have for thirteen thousand customers. And growing. And from that there is a boatload of use cases that the customers have used the Cloud Platform to help either innovate and create new business models, to be reactive and agile as I mentioned, or to integrate and provide a more holistic understanding of the business by integrating business processes or data from cloud and on-premise applications.

There’s a number of key use cases but because the SAP Cloud Platform is not a LoB or an industry specific solution, it’s amazing when I look to see how businesses are using the Cloud Platform in very innovative ways. It spans the spectrum. We have for example the non-profit. Rainforest Connection, which has used the Cloud Platform to create an application that helps to detect chainsaw activity in rainforests to therefore alert the authorities that there may be some illegal activity going on, through the application they created.

We have companies that such as Exxon Mobile that are using it for very pragmatic business needs, to help with upstream and downstream activities in oil production. When you look across the spectrum, you’ll see a whole plethora of different use cases spanning the spectrum of how large and small companies need a more innovative approach to how they’re doing business. A lot of those can be found on our Cloud Platform website under the customer area.

Riz (00:20:35):

Great I love that rainforest story too. I know we profiled it in SAPinsider and it’s a real innovative way to take technology and use it to do some good in the world. I really love that story.

So those customers that are listening and say hey this all sounds great. You know I want agility I want to replicate some of the successes of some of the customers you just talked about. What can they do to start preparing for SAP Cloud Platform? How can they start to think about the value it can bring to their organization?

Dan (00:21:12)

To get started quickly, I would say the best thing is to go to the free trial we have on Cloud Platform. That provides you a whole boatload of services within a free trial period to see how you can start to apply a use case that you might currently have. Say you need to build a new application to engage employees more and you don’t know how to get started, the free trial is a great way to look at how to do that. Of course, we have these things called blueprints on our Cloud Platform site which lays down how to get started based on the use case that you have identified in your company, so hopefully there’s a blueprint that maps that out for you so that it’s much easier to get started. We have tutorials on that same site and other kind of quick started guide to get you from conception to reality using the free trial if that is one approach you want to start with. So that would be my recommendation

Riz (00:22:16):

Dan, who typically within the organization, you know the SAP teams, are the ones that start with SAP Cloud Platform, the ones that kind of get it and can start developing or integrating applications.  Are these mostly the developers, the enterprise architects, or all the above?

Dan (00:20:38):

I would say it’s hard to. When I start defining job titles that tend to look to the Cloud Platform to get started it could alienate others to think well we don’t have those job titles so I’ll just say if you pull back a bit, its anyone usually within the IT organization that has to sit down with business to figure out what they need to better enable them to do their job. It’s usually looking to those folks, whatever you call them, the IT liaisons with business, the application development lead, that are tasked with that responsibility. Those tend to be the folks that look to something like a Cloud Platform as a cloud technology to help better enable them to meet those business users needs

Riz (00:23:20):

Thank you Dan.

I want to thank both Dan and Colin for participating in this discussion. I thought it was very thought provoking and practical, both in the same ways. I know as I mentioned before from talking to our SAPinsider audience that digital transformation is a big pressure that business is putting on IT. As Dan mentioned, agility is extremely important and as Colin mentioned data and getting the data right is critical to the success of these projects so I’m glad we got a chance to drill into both areas over the course of this conversation.