by twieberneit | Jan 25, 2024 | Analysis, Blog |
The News On January 23, 2024, SAP announced the results of its Q4 and fiscal year 2023, along with an update of the company’s 2025 ambition. The ambition includes a shift of focus on key strategic growth areas and a restructuring program. This program will cost around 2.2 billion dollar and affect about 8,000 employees. Notably, SAP does not look at lay-offs but a “voluntary leave program and internal re-skilling investments”. No details are known yet. One of the core investment areas going forward will be Business AI; in addition, the company will strive to capture organizational synergies, leverage AI-driven efficiencies and prepare the company for the expected growth. Looking at the numbers, SAP had a very successful year, meeting or exceeding the outlook metrics set and communicated for 2023. SAP key financial results FY 2023; source SAP According to CEO Christian Klein, the “current cloud backlog increased by 27 percent to reach an all-time high” growth. This number and the cloud revenue are particularly driven by S/4HANA growth. In addition, SAP communicated a bold outlook with a CAGR of 25 percent plus through 2025 and beyond. Wall Street was excited. The Bigger Picture AI is the new cloud, currently the biggest thing since the invention of sliced bread. The industry is at the peak of an AI hype cycle. So far, we have seen a lot of low-hanging fruit being showcased while being promised an age of AI that “changes everything”. According to the recently published results of the PWC annual global CEO surveyhttps://www.pwc.com/us/en/library/ceo-survey.html, around two thirds of CEOs believe that the use of generative AI will improve their company’s products...
by twieberneit | Nov 10, 2023 | Analysis, Blog |
The News A lot is going on in the SAPverse during October and the early days of November 2023. First, SAP conducted its CXLive event with CX-related announcements, then the company reported good Q3/2023 figures, a new version of its CX software that includes new generative AI capabilities got released and lastly, it executed its SAP TechEd event with a good number of AI-, BTP-, and ERP related announcements. As this is quite a lot, I covered the CX world in a previous post and will cover the TechEd related news in this post. So, what is new at SAP TechEd? For one, it is enough to fill a 17-page pre-event news guide that SAP sent out. SAP certainly is able to stack up the news for major events. I took the liberty to ask ChatGPT for a summary of the document, which I slightly edited afterwards. Here we are: AI and Development Environments: SAP introduces SAP Build Code with generative AI, improving application development and testing, while new AI capabilities are integrated across SAP’s ecosystem to drive automation. Business Technology Platform (BTP): BTP is augmented with new guides for application deployment and makes the SAP Cloud SDK for Java open source. A new vector capability for managing unstructured data via high-dimensional vectors is announced as part of SAP HANA, enhancing developer productivity, and allowing for Retrieval Augmented Generation (RAG) that combines large language models with business data. SAP Graph is generally available, and now extends API management to offer a unified API for streamlined access to enterprise data, boosting productivity and integration efforts. Cloud ERP: SAP introduces new...
by twieberneit | Nov 6, 2023 | Analysis, Blog, News |
The News A lot is going on in the SAPverse during October and the early days of November 2023. First, SAP conducted its CXLive event with CX-related announcements, then the company reported good Q3/2023 figures, a new version of its CX software that includes new generative AI capabilities got released and lastly, it executed its SAP TechEd event with a good number of AI-, BTP-, and ERP related announcements. As this is quite a lot, let me focus on SAP CX in this post. I will cover the TechEd related parts in another post soon. During his keynote to SAP CX Live CEO Christian Klein named CX “a very critical part of SAP’s portfolio. There is no intelligent enterprise without CX”. This got later reaffirmed by Chief Marketing Officer for SAP’s industry and CX solutions, Sven Denecken, who said “SAP is very serious about customer experience. If you heard otherwise, that’s not true”. Why is this important? You’ll find out in the next section. The bigger picture Like every other company, too, SAP has jumped on the generative AI train. For some time now, we are hearing of a lot of announcements and available functionality. This includes an own co-pilot as well as an own foundation model that focuses on business data and business decisions. Focusing on CX, SAP announced the availability of a number of AI driven assistants that cover the whole chain from marketing through service but also lead into fulfillment. With all these, SAP is in tough competition. The company is not perceived as a CX leader, some people even doubt it being serious about CX at all and also question the company’s...
by twieberneit | Jul 25, 2022 | Analysis, Blog |
The News On July 21, 2022, SAP reported its numbers for the second quarter 2022 and the first half of the business year 2022. In contrast to the last times, I’d like to cover this in written form, as this one is quite interesting and probably takes a bit longer than 5 to 10 minutes. SAP changed the report structure to reflect the common cloud service terminology. It is reporting IaaS, PaaS and SaaS now. The overall cloud revenues increased by 34 percent, with some tailwind by the current weakness of the Euro. The cloud backlog surpassed € 10 bn for the first time, growing at the same pace. S/4HANA Cloud revenue is up by 84 percent, with the backlog even growing at 100 percent. This revenue growth is consistent across the reporting regions. For the first time, SAP broke out PaaS revenues, which came in at € 389 million, up 49 percent yea over year. Not surprisingly, the profitability went down, which is attributable to loss of business due to the war in Ukraine and unfavorable conditions for SAP Ventures. The bigger Picture The enterprise cloud market is extremely contested. It is a saturated market that is dominated by few vendors that are able to support important parts of or even the complete business value chain. The challenge facing all these vendors is the necessity to scale down into the mid and lower mid-market. This, however, is a region that is covered by smaller vendors with similar aspirations, e.g., Creatio, Freshworks, Hubspot, Odoo, Pega, ServiceNow, SugarCRM, Zendesk or Zoho, to name but a few. The big vendors in this Clash...
by twieberneit | Apr 28, 2022 | Blog, Sponsored |
These days, customer experience is one of the biggest topics. Many, if not most, vendors have restructured, reshaped, or just renamed their portfolios to reflect customer experience one way or the other. Customer experience is great, customer experience is valuable. Now, what is customer experience? According to Paul Greenberg’s definition, “customer experience is how a customer feels about a company over time”. Bruce Temkin defines customer experience as “the perception that customers have of their interactions with an organization.” Similarly, the Gartner Group defines customer experience as “the customer’s perceptions and related feelings cause by the one-off and cumulative effect of interactions with a supplier’s employees, systems, channels or products.” What all these definitions have in common is that they are talking about something that is not in the realm of the business and quite abstract. I often say that good customer experience (CX) is the new differentiator as products and services delivered by businesses are increasingly becoming a commodity. Only few brands can truly differentiate themselves based upon their products/services, price, placement, i.e., the classical tools of the marketing mix. This leaves customer experience as the lever that businesses can and need to work with. But customer experience is not an end. It is a means. Businesses mostly need to be profitable, which means that the CFO is always on the table when it comes to approving new projects or initiatives, even in important areas like customer experience. The CFO’s main questions are about financial KPIs – and are often not answered in a better way than “everybody knows that good customer experience is good for business”. This...
