Jim Hagemann Snabe during his visit in Mexico City

That was Jim Hagemann Snabe answer to the traditional “Are you ready?” question before starting this exclusive interview, granted to InformationWeek Mexico during his last visit. Today began Sapphire week in Orlando, so it make sense to publish this conversation.

What follows in a Q&A format is Snabe thoughts on Cloud Computing, Software-as-a-Service, big plans for Hana with 11 applications coming from now to 2012, Analytics and SAP CRM on-demand. He also mentioned 60% growth in Mexico, one of the fastest growing markets in Latin America.

Tim Jellison, an Accenture senior executive, believes that Cloud Computing is pushing technology companies out of the groove in which they are most comfortable. That is because, in the past, you used to sell “one size fits all” kind of products and proprietary software. But now users can pick and choose from different vendors and they can do as it fits. How is SAP responding to this new model?
First of all I believe that on demand cloud is fundamentally about easing the consumption of software. For many years we have now developed solutions to solve complex business problems and we installed them at costumers. So the costumer is left with the challenge of managing complex infrastructure that change all the time. For us, as a software company, Cloud Computing is a fantastic opportunity to allow the software to deliver the business value and at the same time simplify the consumption for the costumer. So, in many ways you could say that with this model is taking away all the manual work in the shop of the costumer, and as a consequence we can monetize the software more and we can provide faster benefits for costumers.

But, what about SAP as a company? It now has to change lots of its own processes and the way it used to sell to costumers. Is Cloud really challenging the way you use to operate? 

 I wouldn’t say the operation and the selling is so much different. I think even if its an on demand model at the end of the day its a long term relationship. I don’t believe in a world where you change your Enterprise Application pieces every month because there’s some other solution out there, even if it is On demand. That is not productive for the company. It is a long term investment where your assumption is that your partner (in this case SAP) would stay competitive all the time. Obviously if we are not, you can change but you don’t change all the time, you want stability on your IT. So where the biggest challenge reside is to understand how to build applications that have a much lower TCO (Total Cost of Ownership), much simpler way of managing and using the software, and we decided to go in a more difficult pad. Most of the On demand world today is in a very narrow function. In other words, it’s not mission critical and it’s very, very simple. So we said: “why couldn’t we, as the first company, provide everything you need to run a business On demand”? And that is much more difficult. So we had to learn how to bring the enterprise qualities of software into the Cloud, were many clouds today are not secure because they don’t provide the necessary infrastructure. You can run the whole business into the Cloud.

Talking about on-demand, can you elaborate on SAP Sales OD? It was just preview last March, and some said it’s a breakthrough on the way SAP used to think –and the rest of the industry– about CRM. And there are high hopes that this will be a good product that will challenge Salesforce.com and even Microsoft Dynamics.
It’s a very good observation. It’s exactly how we see it. CRM systems whether they are on premise or On demand today have been focus on what I would call “transaction CRM”, which is basically to provide companies with transparency into the pipeline. We took a very different approach with Sales OD: in a world where the power is going to people, why don’t we design a product which is not design for a company but for people? And so we spent most of our time together with sales people understanding how they work every day. A traditional CRM allows the sales people to update the pipeline. That’s not what they do most of the time, what a sales person does most of the time is, first of all, talk to the client which means he is not in the office –hopefully. He talks to his colleagues; he gets information all together in front of the costumer to get the best possible offer at the best possible price and that’s a lot of collaboration. So we decided to build Sales OD collaborative and mobile: it runs on iPhone, iPad, RIM devices and so on. It looks like Facebook, but it’s a productive Facebook because it helps sales people connect with other colleagues and people to do their job better and get in front of the costumer with the right proposal. So I think it is a breakthrough and right now we don’t know how to call this category, but I’m tempted to say so far we’ve built business software for businesses, and now we’re running business software for people, and the combination is the powerful thing. You put this kind of tools in the hands of people, designed based on how they work, and you connect to the business application of the corporate ERP and you get a very powerful combination, where you can empower your people to make the right decisions in front of the costumer.

And when is it going to be out there in the market?
We previewed it at CEBIT and we are right now collecting the first costumers. We will basically launch it at Sapphire 2011 in May. And then we will have, I guess, the first 50 customers or so to learn from, and rapidly improve the solution before we go big time.

Let´s now talk about Hana, the in-memory database system. There are 11 new apps, due out in a set of rolling releases through the year, that appeal to a line-of-business user, as opposed to the nerdy appeal of Hana. One customer said that with Hana they will skip building a data warehouse altogether.
That’s exactly right. We challenged a lot of the core assumption, which is “data must be store in discs, data must be pre-aggregated”, so that you have the answer ready when the user asks. Data needs to be collected in complex, large data warehouses, and we said “what if you could hold all transaction data of a company not on disk but in main memory?”, which is 10,000 times faster than disk. Then you could calculate on the fly anything you want. It’s real, real time, it’s the essence where you actually can do any calculation of anything you ask, any question you want and you get a sub-second response time. A couple of years ago must people set the equations and now we are able to prove with real costumers and real data that we can take the largest companies in the world with all the data in main memory , which is very cheap, totally revolutionizing the way data is store and used in companies. Why is this so important? Hanna is not just a product: it is a fundamental breakthrough in how you store and read data and we think this will be the future structure architecture for business applications.

But the applications appeal also to business users.  Because Hana itself is more appealing for techies, but the applications are aim to business users, right?
Hana has the technology foundation but the real value of SAP comes when we have the business context. So, I give you one example: I’m sitting with a large bank and we are discussing the speed of Hana and he offers me a cup of coffee because no speed is interesting, but coffee is also interesting. And then I say: and what if you could do real time risk management in a bank every second? And the conversation goes away from technology…. I never got coffee that day, because suddenly it was business value that could change the profitability of the bank.

Well, that brings me to the next question around Business Objects (BI) 4.0. SAP emphasized three aspects with its release: real time, easy and optimized. Is this the year of Analytics for SAP?
Both Hana and this release show that companies in today’s world begin to realize that the world has become unpredictable.

Companies deal with unpredictability so when a devastating earthquake happens in Japan they cannot say “we had a bad quarter because of Japan”. They are expected to be able to respond and change their plans real time. And that’s why companies are going away from the quarterly or even the monthly report to the real time one. And we truly believe transactional applications such as Supply Chain Management, CRM and Analytics will come closer and closer together and eventually become one. That’s why BI 4.0 is so important, because it moves business intelligence much closer to the transactional world and Hana accelerates the merge of the two.

Talking about financial results, SAP’s software revenue was $864 mi8llion dollars for the first quarter ended March 31, up 24% in constant currencies from the same period last year. Net profits, the measure that most disappointed analysts, were $597 million dollars up, 4% from last year but well short of the expectations by analysts. In the on-demand, software-as-a-service sector, SAP seems to be over-cautious about the roll-out of its Business ByDesing suite. How is it being adopted by business users, compared to CRM SaaS leader Salesforce.com?
So first of all, it’s now the fifth quarter in a row with very high growth rates and the good news about the growth rates is it verifies our innovation strategy. When others are consolidating the industry we chose to innovate. You mention all the categories: Cloud Computing, mobile computing and memory computing. Our three new categories that we think will transform the way business software is built and use. So, it’s very exciting and we now see that the costumers buy into our strategy. They love the fact that we are innovating faster and better than ever before, and that’s why we see high growth rates. By the way, I have to mention one of the fastest growing markets was Mexico: more than 60% growth is a tremendous leap forward, even in Latin America. It demonstrates that this region is very ambitious and able to grow.

As for the results you mentioned, at the announcement there was confusion around the margin. From our perspective, we increased the margin again, fifth time in a row. I believe the main thing that caused the disappointment was the fact that we have in our accounting principles stock base compensations, where we basically share the success of SAP with all employees and because the share went so much up last year, we certainly had to reserve for cost for stock base compensations. But if you look at the operational business we actually have increased the margin again 1%. So we are on a track. We see very high growth rates and we are very excited. With ByDesign we have reached 400 costumers. We have said we want to get a thousand by the end of the year and we are already on 400, which is faster than we had anticipated. So we hope to be able to cut to the 1000 earlier, and we hope to accelerate our country delivery of ByDesign, including Mexico, being one of the first countries in Latin America to get it.

This is the right product for midsize companies, right?
I believe this is very valuable for small and medium companies who don’t want to mess up with IT but still want to run their business the best possible way. And interestingly enough most small and medium companies have the ambition to be large companies; they don’t want to replace IT every other year when they are more successful, so we can scale with them. We are prepared to be the global partner of choice for them to really scale their business.

Finally, I am very excited to be here. It’s a lovely country, lots of business opportunities for SAP.

Detrás de la bruma, el Mediterráneo

Sophia Antipolis, Francia.- A pocos minutos de Niza, en medio del bosque y en lo alto de una colina desde donde se divisa el Mediterráneo, se encuentra el edificio que alberga uno de los cuatro laboratorios tecnológicos de Accenture en el mundo. Sophia, como es mejor conocido entre los adeptos, se especializa en tecnologías de información aplicadas al sector financiero, de ahí que en estas instalaciones se encuentre montada la que se considera la sucursal bancaria del futuro. Durante una mañana completa, el pasado 10 de marzo, los directivos de Sophia compartieron conmigo, entre otros periodistas, su visión tecnológica y las ocho olas que prevalecerán en 2011.  

Con Mike Redding, director general de Accenture Technology Labs

Con una inversión de $378 millones de dólares en R&D (Investigación y desarrollo por sus siglas en inglés), Accenture está por estrenar este año dos laboratorios más: uno en Reston, Virginia, que será dedicado exclusivamente a ciberseguridad, y otro en Beijing, China. Michael Redding, director global de los Tech Labs, reconoció que hace falta una sede en América Latina. Dijo que se encuentra contemplada pero no quiso adelantar fechas ni posible localización.

Por otro lado, una quinta parte de los ingresos de Accenture provienen de la industria financiera. Thomas Meyer, director de la práctica de Aseguradoras para Europa, Africa y América Latina, (EALA) aseguró que mucha de la innovación de IT proviene particularmente del segmento de las compañías de seguros.

Sobre estas últimas, Meyer compartió los resultados de un estudio reciente, en el que se plasman recomendaciones para las empresas de alto desempeño del futuro.  Las aseguradoras hoy se enfrentan a factores como: competencia cambiante, consumidores con familiaridad tecnológica (generación Y), mayores riesgos y presiones regulatorias, cambios en el comportamiento del consumidor, y un mayor crecimiento en mercados emergentes. De ahí que “el nuevo normal” para este sector sea: menores márgenes, más regulaciones, oportunidades en mercados emergentes, adquisiciones y nuevas asociaciones (partnerships). Pero sobre todo, dijo Meyer, los que sobrevivan en este nuevo escenario serán los que dominen las IT para ganar en agilidad y flexibilidad. Es decir, las aseguradoras tendrán que hacer énfasis en tecnologías de acceso multicanal, adoptar la movilidad,
recurrir al marketing social y analizar datos en tiempo real (Business Analytics).

Un ambiente inspirador

La visión 2011 de Accenture: Las ocho olas tecnológicas

Existen cinco grupos de R&D dispersos en sus cuatro laboratorios: analítica, ingeniería de software, seguridad,  datos y plataformas e interacción multicanal.

Redding compartió la visión tecnológica de Accenture y describió las ocho olas que redefinirán el panorama de los negocios en 2011.

1.- Los datos adquieren su sitio correcto como una plataforma.- El incesante crecimiento de los datos hace indispensable voltear la vista hacia la información y su correcta clasificación como activo a proteger y fuente de conocimiento.

2.- La analítica de negocios como una evolución discontinua del Business Intelligence.- Hoy el imperativo es analizar datos en tiempo real para la toma de decisiones.

3.- Cloud Computing  creará un mayor valor en lo más alto del stack.- Para el científico, Cloud Computing “llegó para quedarse”, ya sea que se recurra a nubes privadas o públicas.

4.- La arquitectura cambiará de centrada en el servidor a centrada en el servicio.- Las aplicaciones entregadas como servicio están desplazando a otras formas de desarrollo.

5.- La seguridad IT responderá rápidamente, progresivamente y en proporción.- Los riesgos informáticos se mitigan con la aplicación de medidas de protección bien alineadas al negocio y bajo principios de gobernanza.

6.- La privacidad de los datos adoptará un enfoque basado en riesgos.

7.- Las plataformas sociales emergen como una nueva forma de inteligencia de negocios.- Escuchar y luego actuar. Las empresas no pueden sustraerse a las nuevas comunidades.

8.- La experiencia del usuario es lo que importa. - Las interfaces naturales se imponen (al estilo iPad, videojuegos). E integración a lo largo de todas las interacciones para enganchar a los usuarios a nivel personal.

Finalmente, otros ejecutivos de Sophia mostraron las distintas iniciativas de Accenture en Cloud Computing y Movilidad, para concluir con una visita a la sucursal bancaria modelo, en la que destaca el uso de las tecnologías de avanzada.

La sucusal bancaria futurista de AccentureMicrosoft Surface con una aplicación de simulación hecha por AccentureTecnologías biométricas para identificación de clientes

Tecnologías biométricas para identificación de clientes

Microsoft Surface con una aplicación de simulación hecha por Accenture

Las Vegas, 26 de octubre de 2009.- Con un asistencia estimada de 6,000 personas, dio comienzo la tercera edición de la conferencia IOD (Information On-Demand) de IBM, en la que IBM está mostrando su arsenal completo de herramientas para inteligencia de negocios y analítica. De acuerdo con Ambuj Goyal, gerente general de Business Analytics & Process Optimization, “la analítica de negocios es hoy lo que el ERP era hace 20 años”.  

IBM ha invertido la friolera de $12,000 millones de dólares entre adquisiciones e investigación y desarrollo para mejorar su portafolio de Business Analytics.  Entre las últimas compras figuran Optime, Filenet, Infoshpere, ILOG, Cognos y, por supuesto, la joya de la corona: SPSS.

Para responder a la pregunta de cómo alienar los negocios y la tecnología, IBM creó una estrategia y una hoja de ruta de largo plazo, de acuerdo con Goyal. Es decir, ayudar a los clientes a pasar de proyectos de información a empresas basadas en información.  “Ahora lo estamos llevando al siguiente paso, es el  nuevo valor del software y los servicios en el espacio de la información, que es un activo estratégico en las organizaciones. Necesita ser manejada, gobernada y tomar ventaja de ella. Estamos tomando el siguiente paso en información, cómo los partners trabajamos juntos no solo en la agenda de información sino asociado con analítica, y traer el know how para optimizar el Call center, o el manejo de categorías de producto, lo que el ERP hacía hace 20 años. Esto será mucho más brillante”, dijo el ejecutivo.

Frank Kern, vicepresidente senior de Global Business Services, habló de la capacidad de predicción para los tomadores de decisiones. “Estamos invirtiendo mucho en analítica para disminuir el riesgo, par poder predecir el futuro y poder responder a la pregunta What if? Hoy en día tener algún grado de certeza no es suficiente”,  dijo Kern.

Kern también se refirió a la explosión actual de información, pues todo está dejando una huella de datos, desde las mercancías hasta los servicios. Esto requiere el poder del análisis.

Uno en cada tres ejecutivos está haciendo decisiones basados en información que no tienen o que no confían. Y uno de cada dos ejecutivos no tiene acceso a la información que necesita para su trabajo. En el reciente estudio global de CIO, 83% de los respondientes identificaron business intelligence y analytics  como la forma en que pueden mejorar la competitividad de sus organizaciones.

“Los clientes nos dicen que necesitan más velocidad y al mismo tiempo tener certeza. Necesitan predecir las consecuencias y finalmente necesitan una capacidad de predecir y adelantarse para alcanzar sus objetivos”, dijo el conferencista.

Kern fue acompañado en escena por representantes de Elie Tahari, BlueCross BlueShield Association y Chevron, quienes ya han comenzado a tener beneficios de las herramientas de BI.

Entre los distintos anuncios de la conferencia, a continuación se reproducen tal como aparecen en el comunicado de prensa:

• New analytics software for sales, talent management and procurement. These pre-configured applications help organizations improve business performance by providing ready-made reporting and analysis capabilities so they can gain faster insight from information more cost effectively than if they were to build it themselves.

• New Content Analytics software that will help employees more easily access and analyze structured and unstructured data, such as email and blogs, to drive smarter decisions based on external and internal insights.
• Enhanced stream computing technology that enables organizations to make sense of structured and unstructured information stored in data warehouses and process it in real time.
• New Master Information Hub software that makes it easy for clients to go beyond the pre-configured data categories offered by traditional master data management products.

Today, IBM also announced new offerings that support IBM’s Smart Archive strategy that enables clients to effectively manage structured and unstructured information. Businesses can apply analytics to stored information, extracting key content as business needs arise, regardless of the storage location.

Last year, IBM introduced 18 industry-specific workshops and services to help clients establish a cross-enterprise strategy called Information Agenda for using information as a strategic asset. In the past 12 months nearly 500 companies, including Lufthansa Cargo, have participated in these workshops with IBM vertical industry experts. Formed in 1994, Lufthansa Cargo is one of the largest freight carriers in international aviation, handling over 1.76 million tons of cargo and mail each year across a network spanning more than 500 destinations worldwide. Part of Lufthansa’s objective is to maintain a competitive edge in a highly contested market. With business analytics technology using IBM Cognos BI, Lufthansa is now able to carefully manage their global delivery chain, accurately monitoring transportation times, measuring quality of service, identifying and correcting trouble spots, and tracking overall performance trends.

“To maintain a lead in this market, it is crucial that we be able to quickly access accurate critical information about our delivery chain,” said Kerstin Hofmann, Manager of Business Intelligence and Planning at Lufthansa Cargo AG. “IBM business analytics gives us the real-time performance insights we need to confidently make the right decisions that will deliver optimal services worldwide and significantly improve the customer experience.”

Gaining Faster, Deeper Insights
New Content Analytics applications from IBM can be applied in any industry to combine the internal view of the organization based on transactions with the external view of the organization based on customer correspondence or market trend reports. The result is an integrated view of all the information that is relevant for a business in one place regardless of where it is being stored.

Using content analytics, an organization can take a deeper look at data obtained from external sources such as email, forms, documents, blogs and websites. For example, with this new information, businesses can better manage and control their data, while providing valuable insight into their content across the enterprise.

IBM Cognos analytic applications for sales, supply chain procurement and talent management provide reporting and analytics technologies that give line of business professionals faster insight into their department’s performance, with the ability to quickly adapt content to meet changing business conditions. The new offerings work with existing transaction systems helping businesses avoid costly vendor lock-in while making it easy for people to access the insights they need to make faster decisions. New offerings include:

• IBM Cognos Customer Performance Sales Analytics provides business executives and sales managers with faster insight on sales performance that extends across sales reps and customers to the actual order. This detailed visibility helps businesses recognize and anticipate emerging market trends, create an integrated view of performance that extends beyond the sales department to other areas of the organization and respond more quickly to existing and emerging revenue opportunities and threats.
• IBM Cognos Workforce Performance Talent Analytics provides capabilities for organizations to fully assess recruitment and learning performance. It is designed to help human resource departments evaluate the effectiveness of recruitment, training and succession planning and evolves with the changing talent management requirements of the organization.
• IBM Cognos Supply Chain Performance Procurement Analytics provides procurement professionals with the ability to assess the performance of suppliers’ capacity to provide products and services in accordance with the contractual obligations and the business goals of the organization. As a result, organizations can gain greater insight into overall spending and supplier performance through a ready-made package that services the unique information needs of procurement professionals, enabling them to make smarter decisions on spending and sourcing.

Innovating with Streaming Data
Designed for perpetual analytics, InfoSphere Streams helps organizations analyze information from any source to narrow down precisely what people are looking for and continuously refine the answer in real-time. Now, with the InfoSphere Streams Mining Toolkit demo organizations can re-use existing scoring models such as PMML, an open-standards-based language used in data warehousing, in InfoSphere Streams to obtain real-time insights from data in-motion.

Researchers at the University of Maryland, Baltimore County (UMBC) are using InfoSphere Streams to analyze smoke patterns during wildfires. The goal of the research is to provide fire and public safety officials with a real-time assessment of smoke patterns during a fire, allowing them to make more informed decisions on public evacuations and health warnings. Current analysis of smoke patterns is limited to weather forecasting data that is updated every six hours, observations from front line workers and low resolution satellite imagery. With InfoSphere Streams, the UMBC team will be able to instantly process the massive amounts of data available from drone aircrafts, high resolution satellite imagery and air quality sensors to develop more effective models for smoke dissipation.

Expanding the Single View to Cover New Types of Information
To achieve better business outcomes, organizations must have access to a single version of truth among the data spread across their systems. IBM is introducing Master Information Hub, an optional component of the newly released InfoSphere Master Data Management Server 9.0. Master Information Hub was created for clients seeking to build a master data management system that includes custom-built data domains instead of or along with pre-built domains for customer, product and account. These clients can use Master Information Hub to customize their MDM Server to establish a trusted view of any type information — including reference data such as state and country abbreviations. For example, a retailer could add a calendar of store events and relate it to participating suppliers; a food manufacturer could use a list of GPS locations to track the provenance of the ingredients it buys; or a hospital could see government codes for infectious diseases together with patient records.

Today’s announcements are part of IBM’s ongoing focus on helping customers use their information as a strategic asset through Business Analytics and Optimization. IBM recently created a new Business Analytics & Optimization services organization, with 4,000 consultants who can help clients get up and running with deep analytics capabilities and made significant acquisitions in the analytics space such as the recent $1.2 billion acquisition of SPSS.

Jim Davis: “Innovation is fueled by information”

Jim Davis is a unique kind of writer. He is the vice president and Chief Marketing Officer of SAS, a provider of information analytics solutions, who found his way to be a co-author of “The Information Revolution: Using the Information Evolution Model to Grow your Business”.

We had a short interview when he presented the book in Mexico City a few weeks ago, and since I started to read it. The interesting thing about the SAS Information Evolution Model is that it offers a way –some sort of test–, for organizations to determine how mature they are considering how they manage and utilize information as a corporate asset. But it takes into account the three dimensions: culture, people and processes. When I asked him which of these three aspects of all organizations was the most important to him, he replied “culture”. “Culture is the most important specially en mature markets, where change is not accepted easily. We have to pay attention to culture in developed markets and learn to accept change”, said Davis.

I don’t know if he was kind to us when he said that emerging markets are going to surpass more mature economies, because the latest keep doing things the same way.

For Davis, we are living in an Information revolution, since so much data is being generated each day. He said to me that in 2009 there will be 260 Exabytes of information, which exceeds de storage capacity available. At the same time, innovation, he said, is fueled by information.

Through the Evolution Model, Davis is contributing to determine which actions should be accomplish in order to be able to order, analyze and make sense of information. The model considers five levels of maturity, where the first one is typical of small organizations or “start-up” type of companies, while the fifth is like heaven: the company achieves a level of innovation where growth and income potential are powered by constant change, creativity and renewal. This is possible thanks to the use of analytic tools that let people predict the future more precisely and create wide networks that include customers, providers, business partners and others.

The Information Revolution is a pleasant business technology reading, but mostly a very practical one. At least try the self-test to find out where is your organization in the Information Evolution model. You could be surprise.