Global CIO: SAP 2.0 Promises Business Value Over Products: Can It Deliver?
If SAP can deliver on the vision of its Chief Value Officer, it will make available to CIOs best practices, benchmark metrics, and breakthrough thinking and innovation.
Talk can be cheap because the gap between what companies promise and what they deliver is often enormous. On Tuesday at SAP's glittering new headquarters in suburban Philadelphia, an executive with the unprecedented title of Chief Value Officer made some sweeping promises about how SAP is prepared to arm customers with intense new insights into best practices, benchmarks, customer insights, process optimization, and "creating value along the entire IT investment lifecycle."
If SAP can fulfill those promises, it's going to dramatically alter in its favor the countours of the battlefield on which it's currently engaged with Oracle and, to a lesser extent, Microsoft and a few other players. That competitive aspect is compelling in the way that a great boxing match is compelling—visceral, brutal, artful, often surprising—but the reality is that such battles take place far away with little or no real enduring impact on our own worlds. Good theater, kinda riveting, but eminently forgettable because it's got nothing to do with us mortals back on planet Earth.
No, the real impact—the real import—of SAP's new vision is not what it might mean to Oracle but rather what it means for CIOs charged with raising performance while lowering costs, with rebuilding their enterprise architecture on the fly while also becoming revenue generators, and with squeezing latency out of every facet of the company's operations while also making everything more flexible.
Yes, if SAP can truly make good on its brand-new vision expressed publicly for the first time by Chief Value Officer (and former customer-side CIO) Chakib Bouhdary, it will for the first time redefine the obligations enterprise-software companies undertake if they want to keep their customers. It will elevate in the hierarchy of CIO needs the position and role of industry insights, best practices, and breakthrough thinking and innovation.
It will mark the beginning of an expectation on the part of CIOs that enterprise-software companies will be willing to surround the stuff they sell—their code—with the knowledge and insights that turn that stuff into competitive advantage, new-revenue generation, and process optimization. It will push the CIO-level discussions beyond SLAs and other important but increasingly tactical considerations to those focused on growth and opportunities.
And, handled properly, it can also be the sort of thing that helps a critical mass of CIOs get over the tactical-technology trap they've partly fallen into and move ahead instead to even more-intense focuses on growth, customer engagements, and new-product development.
Pretty heady images, aren't they? Yet that's exactly what Bouhdary was saying SAP is prepared to promise after several years of exploration and analysis and intense interactions with customers.
"We're now willing to talk about this publicly because no one can build a database like we have—no one—of 4,000 customers' experiences and best practices and benchmarks," said Bouhdary, who'd been an SAP customer as CIO and vice-president of business transformation for Armstrong World Industries before he joined SAP in 2001.
In his new role as Chief Value Officer in SAP's Global Field Operations, Bouhdary reports to Global Field Ops CEO Bill McDermott and is the "founder of SAP's Value Engineering framework," according to his company biography. That framework, SAP says, is designed to help companies move beyond the heads-down-and-try-to-survive approach to one that is predicated on growth, excellence, and market-leading competitive advantage.
"The first question I always ask CEOs or board members is, "Where do you want to be in five years?" Bouhdary said. "We have a long talk about business. Software doesn't come into the discussion til much later."
That's not a coincidence, and Bouhdary offered two perspectives to support his point: first of all, he said, "At SAP, we have always focused too much on products: we're a product company. But we are at a time now when we need to have our conversations with CEOs and CIOs go beyond products and instead begin to help guide our customers on issues of strategic value."
The second supporting point involves SAP's unfolding attempts to connect its Value Engineering consulting expertise with more and more of its clients, and it is requiring a huge change from SAP: