SAP wasn’t always the technology giant it is today and was originally founded by five engineers who left IBM to start the company. IBM Global SAP Practice leader Matt Schwartz remembers joining SAP in 2004, when it had fewer than 10,000 people in North America. “It was a much smaller, more intimate organization,” Schwartz recalls. “I pretty much knew every SAP consultant but it is a much different situation now.”
The growth of SAP has been exponential and fueled by a number of acquisitions which has created a new level of complexity. “It was easier to sell, consume and understand what SAP was at that time,” Schwartz admits. The company, its customer base and its product offerings have expanded. “I’d say the biggest change is that it was very easy to understand what SAP stood for 20 years ago. It was an integrated ERP system. It was one application and now it’s a multitude of applications – it’s an ecosystem. SAP calls it an Intelligent Enterprise. We believe the value now is connecting those Enterprise applications and adding intelligence to them through intelligent workflows.”
Do smaller, nimbler companies offering cloud native software solutions pose a threat to monoliths like SAP? “Its Déjà vu all over again, right?” Schwartz replies with a grin. “If you look back 20 years companies were buying SAP for finance and supply chain while others purchased a combo of SAP and best of breed capabilities in Supply Chain like i2 and Manugistics, PeopleSoft for HR and Ariba for procurement. You had clients that went with best-of-the-breed solutions and had SAP for their digital core back then, and this continues to happen today even with the newer SaaS solutions in the market. SAP has reached an understanding that customers will continue to make these choices and the power is in seamlessly linking these applications through capabilities in their Business Technology Platform underpinned by the capabilities of the cloud providers.
The real shift, Schwartz thinks, is in the way we think about integrating and building the next generation of SAP solutions. Architecting intelligent workflows means leveraging improved API integration capabilities, infusing intelligence with AI and machine learning algorithms. While delivering an outcome with business process management orchestration and continuous business process improvement mining. This is a new way of thinking for both our customers and even our consultants. It represents the way we need to move to ensure we are building cloud enabled solutions for the future while allowing customers to fully leverage their best of breed solutions as part of their end-to-end processes. This approach with S/4HANA as the digital core provides the ability to define and deliver the business case our customers require to drive their digital transformations.
The IBM-SAP partnership started at the founding of SAP and remains as the longest, strongest partnership in the ecosystem. What keeps that relationship strong? “At the core of our partnership is our shared goal of satisfied clients,” Schwartz explains. “Satisfied clients want to buy additional applications from SAP and more implementation services from IBM. Success stories help both SAP and IBM to gain new customers and satisfied customers are also willing to speak to others about their success providing more opportunity to IBM and SAP. Given IBM’s track record in the SAP business with over 6,700 projects delivered, SAP feels comfortable making commitments to their customers about IBM’s ability to deliver the business outcomes enabled by SAP. IBM’s ability to deliver on time, on budget with realized value for joint customers continues to fuel the strong growth of the partnership.
“From a sales perspective, our ability to partner with the SAP field has always been enabled by our support helping the C-suite, the board and the shareholders of an organization understand the value they're going to get from SAP.” When working with IBM, our joint customers understand the business case for change, the value of the transformation and how the different SAP applications can help them drive that transformation, as well as the return on investment they can expect. This helps SAP achieve their goals and this shared mission creates a level of trust in the partnership.
What happens next in SAP’s journey? According to Schwartz, it’s already happening. “Sustainability has become and as policies change will continue to be a key driver in commercial decision-making and software plays a part.” The ability to properly account for carbon impact and to manufacture and market sustainable products will take on a new level of importance for organizations. Looking for ways to lower the carbon footprint, increase the profitability of products while having a positive impact on the environment will become front and center. IBM and SAP are working together to combine their solutions and expertise to respond to this market demand supported by IBM’s work on the World Business Council for Sustainable Development. This capability is what organizations and shareholders are looking for and as a consumer, that's also what I want. It's about organizations working with IBM Global Business Services and SAP to leverage the technology to facilitate the changes required by the environmental agenda.
Garrick Keatts took over from Schwartz at the top of America's SAP practice in 2020. He thinks IBM’s SAP proposition is unique. “When you look at IBM's core fundamental offerings of what we can do for clients to help guide them and what that journey should look like, actually implement it for them and get them to that state of utopia that they seek,” he says. “And even from a business perspective to be able to manage that both at an application and from an infrastructure perspective, we're very unique in the SAP partner ecosystem that we can do all of those things. There's not a partner out there that has the offerings to do the strategy, work, the implementation, the run from an application and an infrastructure perspective.”
Keatts is obsessed with data cleanliness, and suggests that in the past data was moved around to the extent that it was effectively massaged before reaching decision makers. “Today, the business user is seeing that data in its raw state in an instantaneous fashion. We know getting that data into these environments in a very clean and continuously governed state is critical for business operations and program success. It’s incredibly important for both the expectations and the outcomes the business desires, and to see successful delivery of projects.
Truth in data
“There’s less appetite from business users to be held from the truth today than ever. They want to understand where the issues are. They want to get to them quickly, and they want to be able to identify those issues before they become a major problem. They want the opportunity to fix them in flight versus having to initiate some sort of project 1, 3 or 12 months later.”
IBM was awarded the SAP North America Award for Partner Excellence for 2021. For someone who has spent his entire career in the orbit of IBM and SAP, Keatts has a granular understanding of the partnership. He sums it up as “alignment of objectives”. “We’re both about helping our clients be more successful in their business operations. When we're both on that mission path, it creates a lot of complimentary synergies and it doesn't create much conflict. That's why the relationship has been so strong for so long and will continue to be.
“When you look at what SAP is taking to its clients, IBM has to support that with the business strategy up front around business transformation. We have the ability to execute on every migration option that’s out there for our clients from ECC to S/4 HANA. And we have the ability to run that infrastructure platform using the most proven technology that has ever run SAP on the IBM Cloud. That aligns us, and lines us up very nicely to continue to be successful together.”
Allan Coulter, CTO for the SAP Practice, has also been with IBM for over 20 years. He has witnessed the evolution of SAP from a single-ERP solution to one that has evolved over time to a software stack that underpins the Digital Transformation ambitions of IBM’s customers.
“However Digital transformation hasn’t simply appeared. It’s been evolving for a long period of time. Even 10 years ago, we had clients that started to infuse automation into the way we were building out the processes…..what we are delivering today is the next iteration, what we call the Intelligent Enterprise. For me, it’s really as simple as making SAP simpler, smarter and more connected to the rest of the application portfolio using a set of new technologies from IBM and SAP.
Truly a partnership
For Coulter, the relationship between IBM and SAP is “truly a partnership”. “We know the strength that each party brings to the table. We’ve been a partner of SAP for over 40 years, but it is constantly evolving…a great example of this is the ‘Evolution Partnership’ we signed last year with SAP that is how we collaborate on taking the Intelligent Enterprise story to the market.
The partnership is really about how to accelerate that ambition level….“How do we use the new technology solutions from SAP, the likes of Data, AI, Automation, IoT combined with the core ERP system to create new outcomes for our customers. When you combine SAP and IBM technology, you have an amazing platform foundation for creating new innovations, new ways of working, new customer and employee experiences – at the end of the day, this is what it is really about – it’s about the creation of new experiences powered by technology.
But the biggest change in Coulter’s opinion is the new integration approaches. “Companies are moving away from this wall-to-wall ERP story – they’re adopting a balance of ERP and best of breed…so the new technologies need to reflect this change…and to shift from old fashioned integration techniques into a more API-based approach.
As part of Evolution, we’re constantly building out end-to-end process solutions that are designed to easily integrate SAP with these new cloud-native applications…this means that we have the platform foundation to help any client realize their Digital Transformation journey irrespective of their complexit
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