“People may think digital is just a mobile phone or a website. However, you need robust, well-designed and well-engineered business systems to deal with digital activities and build hype around a digital economy. We have been in the business for more than 45 years and we are happy to share the information we have gathered, to ensure the success of Sri Lanka’s plan to build a digital economy.”
In an interview with Mirror Business, Simon Dale, General Manager, Innovation Sales for SAP Asia Pacific and Japan said that his organization is willing to share 45 years worth of global best business practices with
Sri Lanka, in order to strengthen the country’s journey towards implementing a robust digital economy. Below is an excerpt of the interview.
Could you give an overview about SAP’s business operations?
SAP has been in the business for 45 years now. We have seen economic cycles as well as technological cycles.
Every time we see one of these new waves of technologies, we had to look at how we apply technology to deliver business solutions for these demands. Given that we went through the last wave of clients where they moved into the 21st century technologies, we saw an ever-increasing shift in getting business transactions into a database and getting the results of these transactions out and doing something smarter with it.
When you have more and more mobile devices in the hands of consumers, which generate a ton of information that goes into a business database, it has been more difficult to get the information out. We saw that as an ever-increasing problem as more and more things got connected within the digital economy. Fundamentally, we saw that as an architectural problem. For products built in the 20th century, it was hard to deal with business data in the digital age. That was the fundamental design principal we had when we moved into the sphere and we thought about how we could bring that value to our customers.
We took a very data-centric view, based it on our business experiences, and we pulled together the thought that we need a new data platform on which we can do digital business transactions. We kept with our core business, which is running businesses better; to improve productivity. But with the ever-increasing importance of data as well as the business processes, we thought we need something to cope with this massive explosion of data.
That is where we decided to create a new technology of our own to deal with this, which is SAP HANA.Over the last past five years, we reengineered our application and launched SAP S/4HANA in 2015. It is a new generation of digital core, as we call it, based on a technology which is designed for dealing with all the data in the digital age.
We didn’t just decide to go and build a new database for no reason. We saw that the power and core value proposition of helping companies to improve the way they ran was compromised by old technologies. We created this new technology before we could create a new digital business application.
SAP HANA has been a phenomenal product over the last five years, as you mentioned. We saw several live implementations in Sri Lanka as well. How do explain the impact which was created by this technology within APAC?
We have been very successful and the reason for that is that organizations have realized the opportunities SAP HANA and SAPS/4HANA carries with it. SAP thought about the opportunity as well and we built something to serve those opportunities for our customers. One of the fundamental things we say about SAP HANA is that it runs in real-time. It means that your business can run live. Consider an online taxi booking app. Everything is mobile and the user experience is beautiful. The good thing about taxi booking apps is that it is not just the front-end which is a good user-experience but the whole end-to-end process in real-time. If I order a cab and my call still goes to someone in a call center and that person radioed the message to cabs so that it took her 20 minutes to find a one — the output is not as successful. The fact that the back-end is as real time as the front end is what makes it work.
A lot of companies are thinking about digital and they think that a beautiful mobile app and website is all they need. If their supply chains still take two weeks to deliver something it is not really a digital business. It is merely a digital wrapper on an old business. That is why we say this digital business application is necessary to fulfill the demands of the digital age. Our customers are starting to realize that this is what we are delivering. SAP thought about the whole end-to-end process, so SAP S/4HANA is that digital core, serving all the new waves of digital interactions. That is why people are seeing the impact
Running in real time in every business process is very important. It allows people to operate their businesses differently because an old business cycle running on old ERP software was defined by the constraints of the ERP software. A company’s financial close was dictated by the fact that it had to batch up all work and then do a financial close. We can do that whenever we like with SAP S/4HANA. There is no more business rigidity and knowing how much cash a company has to spend means it can do that whenever it wishes to.
In Asia Pacific, we have customers in the supply chain industry who dynamically reroute their trucks depending on the demand that is coming in. If a customer has an urgent demand, we reroute because there is so much profitability. This means your whole business dynamics change. That is what we are allowing people to do.
You talked about data explosion. However, the industry still talks about siloed information. Few companies would have the mechanism to provide real time data analytics and what not. Data has become a big challenge as well as a big opportunity for organizations. How would SAP look into this matter?
I think we are in the best position right now because 73 percent of world businesses pass through an SAP system. The most important data you have is already within SAP. Adding to that, we have made it very easy for businesses because the technology underneath is going to expand to cope with any piece of data you add. Most businesses are going to access information on how SAP would help a specific business case and look up a specific technology product which is already in our product stack, instead of creating adatabase on top of another database. That is how SAP HANA works.
How has the database structure changed over the years from being relational to in-memory now? How does a platform like SAP HANA address database issues such as data fragmentation?
Traditional databases from 10-15 years ago have simply not kept up with business requirements due to the sophistication of modern businesses. This has resulted in terrible fragmentation of data which has slowed down the innovation aspect of a business.
SAP S/4HANA does attack that void head on and addresses customers on how to bring their capabilities into one place and providesthe right database processing competencies for sophisticated, multi-channeled, IoT-enabled applications.
You put your money in your bank account and assume it is safe. Likewise, you put your data in a database and hope your data are safe. As databases grew over the last 40 years, the complexity of applications on top of them and the sophistication have stressed out the databases. If databases don’t exist; imagine the complexity that a business with a different number of applications has to undergo.
The database platform is incredibly important for a business but basically, it hadn’t grown to support the requirements of a business over the last 10-15 years. That is where a platform like SAP HANA tackles that problem head on. If an organization needs a new architecture (on premise or cloud) to store data to support its sophisticated businesses; it is not a major issue for SAP HANA because it has the capability to implement new types of data like geospatial data, unstructured data, documents, mobile phone location data and so forth. In addition to this, the cost for putting your data into an in-memory system has dramatically dropped with the drop of memory costing. It has become commercially more affordable when you compare it with five years ago.
In Sri Lanka, one of the hot topics has been the digital economy. How can a global organization like SAP guide Sri Lanka in this journey?
We still comeback to our fundamental core competency, which is packaging global best practices and putting them into great technology.
We operate in 25 focused industries and we delve deep into these industries to understand their business practices and processes. For 45 years, we have been packaging this and we are now improving it with in-memory technology. We have a collection of white papers that are published by industry, which discuss how an industry can take advantage of digital.
These examples show people what is possible with digital user experience and proper in-memory analytics. As a company, SAP thinks about how a business runs an operation holistically, rather than just picking their data and creating a separate dashboard for them.
What challenges may we may face as a country when we try to extract these packaged best practices?
I think Sri Lanka will face the common challenge of adopting change. There is always a uniqueness which we allow by customizing our software to truly suit the business at hand.
The other advantage we bring is our global business network. We have over a quarter of a million customers in the world, across those 25 industries. We also have our B2B network. Sri Lanka is an export-led economy, so there is a clear advantage in being able to electronically transact with your business partners around the world who are also running SAP software; we make that bridge possible as well. We can deliver these features as a service on our cloud services to customers so that they could leapfrog the old way of doing everything on premise. This is a true value add for unlocking potential technologies for a business.
How does SAP see the growth potential of Sri Lanka?
My regional team invited me to speak to over 200 potential customers. That is a big event and it shows the potential in Sri Lanka. I see lot of potential in Sri Lanka. The economy is growing and Sri Lanka is known for its logistical advantages as well. SAP has a massive potential to help Sri Lanka’s economy by getting close to both public and private sectors.
A few months back, Sri Lanka formed a SAP User Group. An initiative like this shows you that a strong community base is growing for SAP in Sri Lanka. SAP is a community-based business and a partner-friendly company. That is how we like to build a sustainable economy around our solutions.