Cloud Meet Rubber-Meets-Road
What does it take to leverage an Enterprise Cloud? How easy or hard is it to integrate into your business? And, is it ready for primetime?
In our prior two articles, we took a look at SAP Cloud and the business transformation it enables. But transformation does not just magically happen. Execution is the key to generating value, and Cloud transformation, like any other technology transformation, requires deliberate, coordinated actions across an enterprise and possibly beyond.
In this interview, we talk with SAP’s VP of Cloud & Infrastructure Delivery, Craig LeDonne. Prior to SAP, he was Ariba’s VP of Cloud IT Strategy.
It is fair to say, Craig knows Cloud, and what it takes to leverage it. Let’s see what Craig has to say about how SAP Cloud meets rubber-meets-road.
eCommerceCIO: Craig, can you tell us a little about the nuts and bolts of Cloud at SAP, and your role?
Craig LeDonne: Sure. Within SAP we have a group called the CID, which stands for Cloud Infrastructure Delivery. We house the entire production system for SAP Cloud in a global network of SAP datacenters, and we work closely with our Cloud customers to really understand their SAP Cloud experience ensuring it delivers outcomes.
At SAP, we love to talk about technology. But what I have learned by working with our Cloud customers is that at the end of the day, businesses don’t really care about technology. What they care about is outcomes. They don’t care about buzzwords like cloud, big data, mobility, platform or apps. They’re only concerned with what these things can do for them. They want solutions that can help advance their business strategy and deliver value fast.
So businesses today are scrutinizing the bigger picture IT environment and driving to eliminate complexity across all layers of the stack. They are looking for broader cloud business process suites, and they expect these applications to look and perform similarly, and interact with one another seamlessly.
Finance, IT, and other business functions are questioning the costs, risks, and longevity of today’s typical ‘potpourri’ cloud environment, where a host of discrete, process-specific apps are strung together through a series of loosely-coupled integrations that need to be maintained and upgraded overtime.
And they are demanding an application portfolio built on a common cloud platform that unifies all their apps, data, and processes with a common data model, reporting, and UX.
That’s why we’re moving everything to the SAP HANA Cloud Platform.
With all apps running on the market-leading technology for real-time computing, customers can handle more data, process more transactions, and derive more actionable insight from SAP Cloud apps faster and easier than ever before.
With a common platform, the need for integration is virtually eliminated. All the applications share the same data model with the same UI, look and feel.
And because the HANA Cloud Platform is also a development platform, customers and partners can create process extensions to existing SAP Cloud apps or quickly develop entirely new apps that meet the unique needs of their industry or business.
eCommerceCIO: Is your point of engagement more often than not the CIO? And is this changing?
Craig LeDonne: IDC predicts that by 2016, 80 percent of new IT investments will directly involve LOB executives as the lead decision makers in half or more of those investments, and I certainly see this trend developing. Within many of our customers, Cloud decisions are being driven outside of the Office of the CIO with Line of Business management more directly involved than ever before.
eCommerceCIO: When you engage with companies for Cloud Delivery or Integration, what seem to be their primary objectives?
Craig LeDonne: Early on conversations on Cloud were very much about infrastructure benefits. Today, talk is really swinging more to business benefits beyond infrastructure and things like business innovation and agility.
Companies today are turning to the Cloud to achieve outcomes they could not achieve before. Many of our customers, for instance, are viewing the Cloud as a platform which allows them to quickly adapt and capitalize on changing market dynamics, and to stay ahead of competition.
We are seeing more and more companies investing in the Cloud to not just do what they are already doing using a new delivery model, but to create new engagement models through which they can get new insights, develop new processes, and thereby run their businesses in new ways..
Let me share some examples with you.
T-Mobile is using SAP Social Media Analytics to manage its Call Center activities. Social Media Analytics is a Cloud-based solution extension developed by one of our partners, Netbase. Essentially, SMA provides accurate, real-time analytics for understanding markets through the social web. With SMA, T-Mobile is seeing a 15 percent improvement in productivity which translates to a fixed dollar average savings per resolution over their call center operations without SMA.
By moving their performance review process to the cloud with SuccessFactors, Kawasaki has sparked a cultural change towards greater consistency and discipline in all their talent management activities. The company estimates it has freed up the equivalent of two full-time employees’ worth of manual labor and says that by engaging employees increased performance, it has achieved its corporate goal of going from third to first in market share of Japanese motorcycles in 2011.
Telus, a leading Canadian telecommunications firm, is using Jam, SAP’s social collaboration tool to break down silos and foster interactivity and connectivity among employees, across all departments. Similar to Facebook, SAP Jam allows employees to create profiles, share content, and work on projects collaboratively. It has become the systematic social glue that holds the Telus team together. Since implementation, employee engagement has increased from 53% to 83%.
Tapping the dynamic discounting capabilities of theAriba® Network’s MediaFly a Chicago-based startup, was able to accelerate payments from one of its buyers and get the cash needed to hire developers to produce the next set of features for its solution. Overall, the company has been able to speed the market-to-cash cycle by 50 percent and gain greater clarity of cash flow management that allows it to project business further out and hire great people earlier in the cycle to get ahead of demand.
Nebraska Books uses SAP Cloud for Sales. By their analysis, with SAP Cloud for Sales, they eliminated over 50 percent of what their sales reps were spending their time doing, which were the more mundane tasks of looking up contact information, researching companies, looking up past interactions, and the like. Now, they are able to focus their sales reps on the more strategic action of generating revenue!
Then you’ve got the HANA Cloud Platform, which provides the extensibility for companies to create new extensions or entirely new applications, on their own or with partners. And Danone, the French food-products company that produces the yogurt and bottled water that many of us eat, is a great example of this. With SAP HANA Cloud platform technologies, they can easily scale to create web and mobile apps that link customers directly to the company’s back-end systems, giving Danone the ability to react to billions of customers worldwide in real-time.
So as you can see, the benefits of the Cloud extend well beyond TCO…
eCommerceCIO: Are Cloud implementation projects faster than on-premise projects?
Craig LeDonne: Absolutely!
In most cases, Cloud projects are measured in weeks, whereas traditional on-premise implementations are measured in months or sometimes years. I have seen some Cloud deployments executed in a matter of hours, but to be fair these are outliers.
One reason Cloud implementation is much faster is because it is more about connecting and configuring. The installation and deployment chunks of work are cut out of the timeline.
But perhaps what is even more impressive is that once you are up and running in the Cloud, your speed to design and deploy applications or processes is many times faster than traditional on-premise solutions.
eCommerceCIO: Does SAP support a hybrid cloud model? If so, why is it important?
Craig LeDonne: At SAP, our approach to Cloud is not an “either / or” proposition, it is not an “and” proposition, it is an “and better” one. We give businesses flexibility and choice. Companies can mix public Cloud apps and services, private cloud management services, and on-premise technology to meet their specific needs.
A recent Wakefield study found that more than two-thirds of CIOs have adopted hybrid cloud models, and we certainly see that trend in our business. In many cases, we are seeing our customers extend the functionality of their on-premise installations through SAP Cloud offerings.
Hundreds of SAP customers have extended processes, automation, increased spend under management, and achieved greater savings in capital performance by extending their SAP ECC, SRM footprints with Ariba Cloud applications and the Ariba Network.
Hundreds more have improved their employee recruitment, training, and performance management by extending the SAP HCM Cloud and the Cloud Based Talent Management solution that comes with SuccessFactors.
Many customers have created new levels of customer engagement insight by expanding their SAP CRM deployments with the SAP Cloud for Sales application.
In essence, they are getting Cloud their way, and in so doing, they are unlocking new value for their business through new processes, insights, and deeper connectivity with partners, customers, and employees.
eCommerceCIO: When it comes to SAP Cloud opportunities, how do companies understand what the possibilities are, and then how to do it?
Craig LeDonne: Our plan is to move the entire SAP portfolio to the HANA Cloud Platform. And this will offer three key and differentiable benefits to our customers:
o Superior performance with all apps running on the market-leading technology for real-time computing – enabling customers to handle more data, process more transactions, and derive more actionable insight from SAP Cloud apps faster and easier than ever before.
o Transformational integration – in fact, with all SAP Cloud apps running on a common platform, the need for integration is virtually eliminated. All the applications will share the same data model with the same UI, look and feel. So integration becomes activation – allowing you to start with say HR in the Cloud and then add Procurement with all your profiles, rules, and integrations ready to go.
o Finally, and possibly most exciting, is that the HANA Cloud Platform is also a development platform – so customers and partners can create process extensions to our existing Cloud apps or quickly develop entirely new apps that meet the unique needs of their industry or business.
So how will they be able to take advantage of all this?
SAP has always been a leader in delivering deep and seamless process integration…and this is a guiding principle for the Cloud. We support integration through three primary methods – open APIs, hundreds of pred-defined and packaged business process integration adapters called iFlows, and the HANA Cloud Platform, which I’ll get to in a moment.
These are pre-packed, proven adapters that are already in use by thousands of SAP Cloud customers across three predominant integration scenarios: On-Premise to Cloud (such as SAP ECC-MM to the Ariba Network); Cloud-to-Cloud (such as SFSF to Jam); and Cloud to 3rd-party (such as SAP Cloud for Sales to NetBase or SFSF to Kronos for time and attendance).
We also know that the transition to Cloud is a journey. No one size fits all. So we offer Flexible Delivery Options so customers can leverage our best-of-breed public cloud apps.
Customers can move their existing SAP licensed apps to the HANA Enterprise Cloud that is fully managed by SAP and has the added performance and scalability benefits of running on HANA. Or, they can choose hybrid options, where we can extend your existing on-premise SAP investments with the Cloud to enable new business processes or new insights for your business along the lines of the examples I shared earlier.
eCommerceCIO: Given the objective is shifting from infrastructure to business benefit, what does the company-side implementation team look like? What skill sets are being marshalled? What is required?
Craig LeDonne: As we talked about earlier, Cloud projects are with increasing frequency being led by Line of Business executives and the talent that reports into them.
And we see that smart IT organizations are partnering very closely with the business units, and are rebranding themselves to be more business-savvy.
The Cloud is promoting a mind-shift change from what IT is today, to the sort of business-orientation required for tomorrow, and as such, IT is outsourcing the utility play, the hosting and application maintenance so that they can shift from a focus on technology implementation and maintenance to business processes, assembly, and innovation.
eCommerceCIO: Has the role of change management or the importance of training changed with regards to Cloud?
Craig LeDonne: Whenever something new is brought into the enterprise, it is still a change management question. We have multiple avenues for training and have developed content and training methods that streamline the training process for faster time to value and higher adoption rates. But, change management which includes training is still very important with Enterprise Applications, even Cloud.
eCommerceCIO: Would you say at this stage the Cloud is a proven platform for business? Or, is it still a platform for early adopters, those willing to accept risk in exchange for early mover benefit?
Craig LeDonne: The wins I mentioned earlier are not outliers. We have numerous Cloud customers with similar success stories.
So the Cloud is a proven platform for business. Companies are using it to collaborate, to be more efficient and productive, and to connect with ever-expanding communities of customers, suppliers and peers.
And it isn’t just large companies. Businesses of all sizes from the Fortune 10 to small- and medium- sized businesses are using the Cloud to not only accelerate processes efficiently, but to gain customers and partners in new ways, and even to unleash new operating and business models to drive profitability and advantage in today’s ultra-competitive market place.
And this trend will only continue. One recentstudy projects that by 2016, 75 percent of new IT expenditures will be on Cloud or hybrid systems. So I think we have hit and are passing that inflection point where Cloud becomes the norm.
eCommerceCIO: Without fail, any conversation around Cloud leads to a conversation about security. How exposed are companies when they leverage the Cloud? How should they approach Cloud security, and how does SAP help?
Craig LeDonne: Security is a well-established topic. The conversation has to happen, of course, but I do not see it as THE topic during the decision-making process anymore.
Having said that, security is a top priority for us as a vendor. We are constantly advancing our security profile to make sure the latest standards are always in place. SAP subscribes to international security standards such as SAS 70 Type II, ISO, SSAE, PCI, 128 bit encryption, and more, and all of our datacenters are certified accordingly. We employ a wide variety of measures to monitor attacks and attempted exploits through the digital world. And, I should mention, the physical security for our data centers is world-class as well.
Some of the most security-conscious organizations in the world are using SAP Cloud, from government and military, to R&D, and Financial institutions. Many companies are finding that we are a more secure and up to date environment than they can achieve on their own.
In fact, security is one reason companies are turning to SAP Cloud – it is easier in many ways for them to rely on us to keep their IT environment up to snuff from a security perspective.
eCommerceCIO: In the public SAP Cloud, if I am on a shared platform, and it is locked down, how tailorable is it to my unique business needs?
Craig LeDonne: We know that for our Cloud to be successful it must be configurable and tailorable and so we have engineered our platforms accordingly.
We take full advantage of advances in Cloud platforms, such as Platform as a Service to empower businesses to rapidly develop and deploy new applications and business processes that meet their unique requirements.
For example, SAP HANA Cloud enables companies to develop industry, process, or company specific extensions to any SAP application and to achieve new innovative process and transactions that advance their business and keep them ahead of the market.
Or they can access pre-built applications on the SAP Cloud Marketplace.
eCommerceCIO: What do you find most satisfying about what you do with SAP Cloud and your customers?
Craig LeDonne: SAP is the Cloud company. And when you consider the impact that our solutions are having – helping companies to eliminate complexity and improve their performance and productivity,, it’s clear that we are driving the next phase of business productivity and efficiency universally.
I take deep satisfaction in being a part of making the future of business happen. Waking up knowing that what we are going to do today will help businesses prepare for – and succeed – tomorrow is truly gratifying.