How Real is SAP’s Intelligent Enterprise?

Executive Summary

  • SAP introduced the concept of an Intelligent Enterprise as a significant driver for its software.
  • We answer where this concept originated and how valid it is.

Introduction

The term intelligent enterprise is an outgrowth of the current obsession and hype around the term artificial intelligence. The term is problematic because it contains a virtue necessarily within its name, and so like terms such as “smart bomb” or “smartwatch,” it tends to be self diluting over time.

But let us keep an open mind and review what SAP says about its Intelligent Enterprise offering.

Straight From SAP….or, That is ASUG

We found several articles about the SAP Intelligent Enterprise from SAP, but we thought the article published at ASUG’s website was the most understandable. SAP marketing writes most of ASUG’s material, os when something is published at ASUG, it should be considered approved by or entirely written by SAP.

Let us take a look at how the article begins.

Intelligent Enterprise is for Next Generation Businesses?

Technology pundits, industry analysts, and enterprise technology providers are fond of sharing their visions for how next-generation businesses should operate. At the 2018 SAPPHIRE NOW and ASUG Annual Conference, SAP introduced its own vision, described as the “Intelligent Enterprise.” But what does this term really mean? And what does it mean for SAP customers?

Right off the bat, we now define one virtuous term, intelligent enterprise, through endorsing that it is what “next generation” businesses use. What is a “next-generation business?”

This is another reference to “something good.”

The logic goes something like this.

Good Item is Used….Only by Excellent Entities

This builds a series of positively associative assertions; good things are connected to other good things, which, of course, is all linked back to SAP.

Data-Driven Accelerated Outcomes?

SAP defines the term like this: “Intelligent enterprises effectively use their data assets to achieve their desired outcomes faster—and with less risk.” The speed comes from automating complex processes within the business and bringing them together around a united core of master data in the cloud.

Organizations need to buy into certain philosophies for this approach to work. SAP identifies four key enablers to the intelligent enterprise:

1. Customer-centricity

2. Data that drives differentiation

3. Digitized processes

4. A cloud-first approach

This is a bit generic. Several of these items are things that no company would not admit to following, except perhaps being “cloud-first.”

However, it does not ring true when SAP proposes this, because while SAP is aggressively cloud washing its revenues as we cover in the article A Brightwork Warning on SAP’s Cloud Extension Program. This is because most of SAP’s customers use their SAP applications on premises.

Business Processes + Intelligent Technologies?

When you consider SAP’s Intelligent Enterprise vision, it functions a little like a formula. It serves these key business processes through its intelligent suite of products:

  • Customer Experience
  • Manufacturing and the Supply Chain
  • Digital Core (ERP)
  • People Engagement (HR)
  • Network and Spend Management (procurement)

So SAP has very little customer experience business (read CRM). Yes, SAP customers use SAP for a lot of manufacturing and supply chain and ERP, and they use SAP for HR, and quite a bit less for procurement (SAP has little overlap between its ERP customers and its customers that use Ariba).

So all that we have here is a statement of things that SAP customers use from SAP. There is nothing notably different about this — and the same usage pattern could be documented ten years ago on SAP accounts.

AI/ML/IoT/Leonardo

Then, where businesses want to apply intelligent technologies like artificial intelligence, machine learning, the Internet of Things (IoT), and more, they’re able to add those through SAP Leonardo. Finally, businesses need to go through the process of making sure their data is not only harmonized but moving much of it to the cloud, so they can manage it efficiently.

This is the obligatory or seemingly obligatory part of the article that mentions AI/ML. SAP has close to nothing to do with AI/ML so that we can throw those terms out.

Now we are left with IoT and Leonardo.

This article was written in 2018, but at this time, Leonardo was already dead, which we officially declared in 2019 in the article Our 2019 Observation: SAP Leonardo is Now Dead. SAP has stopped promoting Leonardo — so if the SAP Intelligent Enterprise was based upon Leonardo, well, that is a problem as it does not have any real future.

Intelligent Enterprises in Practice?

Given SAP’s focus on financial ERP applications, it often cites the example of invoice and payment matching, along with all the related approvals and subsystem ratification procedures such as separation of duty. We can now almost completely automate these procedures, while leaving a gateway for human hand-offs when we need to resolve anomalies. Of course, these anomaly resolutions can also be significantly automated as needed.

SAP’s financials in its ERP system is the most robust functionality in any of its applications.

However, it is not true that these processes are “completely automated.” They function about the same in S/4HANA as they did in ECC, and not many companies have moved to S/4HANA (and far fewer than stated by SAP).

This quotation is just inaccurate.

Embracing Automation?

Customers today can start to use this intelligent software-supported automation to shoulder repeatable, definable tasks. Embracing this change will allow companies to free up employee time and empower them to do more meaningful and strategic work.

What is intelligent software?

Did we miss something?

This is the same software as before SAP’s Intelligent Enterprise program was rolled out. All software contains intelligence, as does SAP’s, but there is nothing here to support the creation of a new term.

Let us see if the rest of the article justifies this claim.

Deeper Human-Like Intelligence?

As mechanized and back-end as these technologies are, customers can use SAP products to bring a human-like front end to the intelligent automation now being engineered into the enterprise. For example, we can create personalized and unique customer experiences using AI, chatbots, and other related voice technologies.

What is the human-like front end? I am serious because I have never heard this term before. It implies that the front end is like a human. I have never used or seen a UI that looks like a human. The author may have meant that it is user-friendly.

SAP has SAPGUI and then lower used applications like SuccessFactors or Ariba that have more usable UIs (as they are acquisitions), but it is not like human-like. There is no new automation. The AI is non-existent, and no one is using chatbots on SAP projects. Chatbots are for a company’s website, which is not something that SAP competes in, and chatbots aren’t particularly useful. Try asking one a question sometimes.

Applying Something That is Not Demonstrated

Companies that want to apply these intelligent technologies can turn to SAP for frameworks to make this happen, such as SAP Conversational AI, an end-to-end toolkit for training, building, and monitoring chatbots. According to SAP, “These chatbots can be integrated with SAP and non-SAP systems and are available as preconfigured industry-specific bots. So far, users have built 60,000 SAP Conversational AI chatbots.”

Is this primarily coming down to adding chatbots to SAP? Again, chatbots are for website visitors (at least mainly).

The Crucial Cloud Connection?

The cloud is the essential connection across the entire intelligent enterprise. Whether on premises, public, or hybrid, the degree to which the intelligent enterprise gets smarter is a direct factor of the amount of secured network connectivity it engineers into the fabric of its new computing stack.

Why is that true? A hosted solution, hosted in a data center (that is not cloud) is also a connection across the entire intelligent enterprise. SAP then contradicts itself by saying

“whether on premises, public or hybrid”

Doesn’t that deny the claim that it is cloud….that is what was stated in the previous sentence?

Intelligence that Comes from…..Blockchain?

Part of this “connectedness factor” will set customers up to harness new innovations like blockchain. SAP says it has recognized the part that blockchain plays in creating more-intelligent enterprises, so it’s developed SAP Cloud Platform Blockchain. This offers blockchain as a service, delivered at the right power and scope, based on individual customer needs.

SAP may have a cloud blockchain offering, but many SAP customers do not use blockchain. Furthermore, blockchain is an online register — so why is it intelligent, or why does it contribute to the SAP Intelligent Enterprise?

It is not at all clear. SAP also states that it has 65 customers that participate in its blockchain initiative, but that still does not explain why blockchain is part of something intelligent.

The Intelligent Enterprise Adoption Curve

Ultimately, becoming an intelligent enterprise is about adapting and changing so you’re ready for what’s ahead. These types of enterprise-wide changes require significant investments and culture shifts, so SAP acknowledges that customers will adopt these changes in phases. And some organizations will undoubtedly move faster than others, acting as the early adopters.

But the nature of these changes can start to create a virtuous cycle. As organizations adopt technologies such as automation controls, chatbots, blockchain, and machine learning (ML) to gather more information, they will get smarter—continuing to speed up the cycle of innovation.

Many customers will still have a way to go before they become full-on intelligent enterprises. But these technologies exist, and SAP is ready to help customers start getting the most from them now.

In this explanation, SAP threw a lot of somewhat disassociated things into a big Christmas stocking and called it “Intelligent Enterprise.” And many of these things are things that SAP has very little to do with.

Conclusion

This article by SAP is an incoherent and disassociative attempt to make some old things that SAP is involved with and things that are trendy but have little relevance to SAP to create something new and sexy for customers to get excited.

There is no evidence from SAP that its Intelligent Enterprise is anything.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

Search Our Other Digital Transformation Content

References

https://www.asug.com/insights/what-makes-an-intelligent-enterprise

How Executives and Companies Now Make Up Transformations That Never Occurred

Executive Summary

  • Executives have begun referring to transformations that never occurred as resume builders.
  • Using the term transformation is now a way to take credit for a hazy accomplishment.

Introduction

Digital transformation is a common term used in the IT space and, in particular, in the SAP space. It is a recent term and also a highly problematic term. I now come across the statement that some SAP application was implemented for digital transformation or part of a digital transformation program.

Transformations Became a “Thing”

The term is now often shortened to just “transformation.” Increasingly any corporate initiative is being labeled a transformation to give that initiative extra cache. Many executives desire to enhance their resume by being thought to have lead transformations at their companies. We noticed this in the analysis of the description by former Infosys CEO, Vishal Sikka as we cover in the article How Much of Vishal Sikka’s Explanations on Artificial Intelligence is Complete BS?

From this article, we noticed a rewriting of history to fit his background into participating in the transformations category.

Rewriting History

Vishal has a curious explanation for why he is so uniquely qualified to lead an AI startup, and at least of the reasons he listed was his participation in transformations.

I have a Ph.D. in AI and have had the opportunity to work in large companies in enterprise software and services. I understand transformation in a way that few people do because I have lived through two large-scale, successful transformations. I thought it was time to take advantage of the unique gifts I have been given. That’s how I ended up here.

Also, what transformation is Vishal referring to?

Did SAP Transform When Vishal Sikka Was CTO?

SAP degraded as an organization while Vishal worked there, with more employees and work being done in India. This led to terrible support, and then Vishal getting tied up in what Teradata asserts is IP theft from building HANA as we cover in the article How True is SAP’s Motion to Dismiss the Teradata Suit. (And Teradata further says in court documents that Vishal Sikka was entirely on board with the IP theft.) I have been following SAP since 1997, and I don’t know what transformation Vishal is referring to.

Vishal then left SAP unexpectantly and under unusual circumstances.

Did Infosys Transform When Vishal Sikka Was CTO?

Next, he took the top position at the horrible Infosys — a firm which does nothing but US worker displacement and rigs the H1-B visa program for which they were found to have defrauded as we cover in the article Who Got the $34 Million Fine from the Infosys H1-B Fraud Case?

When Vishal started working for Infosys, they were an H1-B mill that engages in H1-B fraud and is known for nothing except low priced, low skilled IT bodies. And after Vishal left, Infosys is known…..for the same thing.

What is the transformation again?

Conclusion

The term “digital transformation” is a throwback to an age when digital technologies transformed processes. Still, at this point, it makes little sense to use it as a term as what is currently happening is that new hardware and software are merely replacing older hardware and software.

The term “transformation” is an outgrowth of the term digital transformation. It is nearly untestable in that just about any executive is prone to state that their involvement in a company leads to a significant improvement. However, in the examples provided above, the companies used in the case presented by Vishal Sikka work about the same as they did before Vishal Sikka’s addition, as they did after Vishal Sikka moved on. This term will most likely be continued to be used in this fashion until it ceases to have the same impact it once did, and then at that point, a new term will be created that carries a further appeal by its novelty.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

Search Our Other Digital Transformation Content

References

How a New Startup Aims to Use AI to ‘Amplify Humanity’

The Problem with the Term Digital Transformation

Executive Summary

  • Digital transformation is a misapplied term that has been popularized by SAP, but which makes no sense. There is a significant problem using the term to describe IT implementations.
  • This is an excellent example of how SAP adopts misleading terms to control the narrative.

This chameleon can transform itself. And it can do so without the benefit of any digital technologies.

Introduction

Digital transformation is a common term used in the IT space and, in particular, in the SAP space. It is a recent term and also a highly problematic term. I now come across the statement that some SAP application was implemented for digital transformation or part of a digital transformation program.

So what is digital transformation?

The Definition of Digital Transformation

It that turns out to be a much more interesting question than before I looked up the definition. It is essential to see the different aspects of the meaning of digital transformation so we can determine how the term is presently used.

“Digital transformation may be thought of as the third stage of embracing digital technologies: digital competence → digital usage → digital transformation, with usage and transformative ability informing digital literacy. The transformation stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods.[2] In a narrower sense, “digital transformation” may refer to the concept of “going paperless” and affects both individual businesses[3] and whole segments of the society, such as government,[4] mass communications,[5] art,[6] medicine,[7] and science.[8]” – Wikipedia

So in this quotation, we can see that digital transformation is supposed to lead to something new. Using digital technology allows one to “reimagine,” redesign, transform how something is done, or perhaps how something is used.

The Example of Digital Transformation with GPS and Google Maps

If we take a simple example, we can certainly see how GPS and mobile phones with Google Maps have transformed road navigation.

I recall getting around using maps and guidebooks, and I both missed out on exciting things to see, and the overall process of folding maps, organizing maps, buying new maps, spilling coffee on my maps, and so on was never all that efficient. GPS demonstrated the superiority of using this transformative technology.

I was an early adopter of GPS and began using a GPS unit with what must have been a 2 inch by 2-inch screen. However, even that primitive GPS unit, by today’s standards, was a significant upgrade over using paper maps. What always impressed me was the ability of the unit to recalculate the route always. Unlike a route on a map, which once you switched out a location had to be reviewed, even the earliest GPS units allowed you to change your trip regularly, and it would adjust. As someone always on the road, the GPS and now the Google Map enabled phone or tablet have indeed been transformative. It is also true that what was previously done by maps and human calculation was activated with digital technology (GPS in this case). Therefore this is a suitable example of digital transformation.

Digital Technology and True Transformation of Tasks

So digital technology can transform, but let us hold that thought for a moment because I want to use the example of the GPS, and the Google Maps enabled phone or tablet as a contrast to most IT implementations.

Let us move to the next quote on digital transformation, as this brings up the topic of how old the term digital transformation is.

“In 1703 Gottfried Wilhelm von Leibniz explained and envisioned the concept that would be known as “digitalization” in his publication Explication de l’Arithmétique Binaire.[9] Initially developed as a base-2 numerical system, representing two values: either a 1 or 0, the system was further developed and complemented by scholars such as Boole (1854),[10] Shannon (1938)[11] and George Stibitz during the 1940s.[12]”

Here we can see that the definition of digital transformation goes way back. 1703 is quite a way back, indeed.

Pre-computers, Gottfried Wilhelm von Leibniz, was proposing a concept of the binary system that is the foundation for how computers store and process data today.

But this cannot be the type of digital transformation that most companies are describing today when they explain that implementation is part of a digital transformation. Moving to a new system that stores and processes data in a binary system already happened decades previously.

The Broader Implications

Let us see another quote on digital transformation to understand the broadest implications of the term.

“Finally, digital transformation is described as “the total and overall societal effect of digitalization”.[14] Digitization has enabled the process of digitalization, which resulted in stronger opportunities to transform and change existing business models, socio-economic structures, legal and policy measures, organizational patterns, cultural barriers, etc.[16]

Digitization (the conversion), digitalization (the process) and the digital transformation (the effect) therefore accelerate and illuminate the already existing and ongoing horizontal and global processes of change in society.[14][15]”

Here the term is used to describe society’s general move towards using digital technologies.

If we think of the different dimensions of the definition of digital transformation listed above, only the first dimension can be said to be specific to IT implementations. However, there is a problem with digital transformation, and I want to get into that next.

Digital Transformation in Word Processing

I am currently typing this article on a 7-year-old MacBook Pro. If I were to purchase a 2017 MacBook Pros and use it, would it be digitally transformative compared to what I am currently doing?

No.

My workflow would stay about the same, the data would be stored the same way, but I would probably benefit from using a faster computer. But would it make sense to describe replacing an old computer with a new computer?

I recently visited Hemingway’s’ house in Key West. And at the center of his work studio were over nine years, he wrote books that are now considered classics in literature. At the center of the room was a tiny Royal Quiet de Luxe manual typewriter. As a writer who often uses three screens and two computers at once, I am amazed by what Hemingway accomplished with that small machine. All of that great work came out of that single, tiny little typewriter. If Hemingway had lived longer, he would have typed on an electric typewriter. Electric typewriters had many advantages over manual typewriters, but they are only electronic, not digital, in any way.

Charting Hemingway’s Potential Digital Transformations

  • If Hemingway had lived into the 1960s, we could have used the IBM Selectric, and that would have been an “electrical transformation” of his writing.
  • If Hemingway had lived into the 1970s, he could have used a Wang computer with some of the first-word processing software that used a CRT screen.

Word processing did go through a digital transformation, as the following quotations attest.

“The labor and cost savings of this device were immediate, and remarkable: pages of text no longer had to be retyped to correct simple errors, and projects could be worked on, stored, and then retrieved for use later on.”Wikipedia

The Degree of Transformation

The effect illustrates the degree of transformation that word processing had on secretarial work as well as management work.

“In 1971, a third of all working women in the United States were secretaries, and they could see that word processing would affect their careers. Some manufacturers, according to a Times article, urged that “the concept of ‘word processing’ could be the answer to Women’s Lib advocates’ prayers. Word processing will replace the ‘traditional’ secretary and give women new administrative roles in business and industry.”

A 1971 article said that “Some [secretaries] see W/P as a career ladder into management; others see it as a dead-end into the automated ghetto; others predict it will lead straight to the picket line.” The National Secretaries Association, which defined secretaries as people who “can assume responsibility without direct supervision,” feared that W/P would transform secretaries into “space-age typing pools.””

Digital word processing was so transformative that it was difficult to predict how it would change what was a specialized task of typing and remove it from specialists (secretaries) and distribute it to everyone.

“The article considered only the organizational changes resulting from secretaries operating word processors rather than typewriters; the possibility that word processors might result in managers creating documents without the intervention of secretaries was not considered—not surprising in an era when few managers, but most secretaries, possessed keyboarding skills.” – Wikipedia

But when did the digital transformation of writing occur?

Well, decades ago.

After the 1970s, the distribution of word processing widened quite significantly. But we are now at the point where most of the population has little experience using a typewriter, and they are now museum pieces.

Why Use the Term Digital Transformation Decades After it Would Apply?

A problematic feature of the term digital transformation relates to when this term has begun to be used. The enterprise software space is mature.

Why has this term surfaced at this time? What about previous IT implementations, if they were successful, were they not also “digital transformation?” If it is the case that nothing dramatic has changed other than hardware becoming faster (which is part of a long-term trend that is always occurring) and software seeing a slight improvement. Then why, at this point, are we using the term digital transformation to describe system implementation?

Does, for instance, the increase in the use of SaaS/cloud as a software delivery mechanism mean that software is becoming “more digital” that it was before? No. Whether software is hosted on the customer’s premises, hosted by the vendor as part of a private cloud, or is true multitenant cloud delivery in each case, it is the same amount of digital.

If we look back at the transition from manual computation to using mainframes back in the 1970s, wouldn’t that stage of computer history be more digitally transformative than moving to a slightly faster ERP system or implementing a new CRM system?

Conclusion

The term digital transformation is a throwback to an age when digital technologies transformed processes. Still, at this point, it makes little sense to use it as a term as what is currently happening is that new hardware and software are merely replacing older hardware and software.

The term digital transformation, as it is presently used, is a term of propaganda. The term does not carry any information but is an attempt to place a spin on an initiative. For example, as soon as a company states it is implementing software, it is already understood that the software will be digital. It is unnecessary to add the flourish that it is part of a “digital transformation.” Therefore, users of the term are not describing something as much as they are promoting something through the use of a term, which is an undeniable redundancy in language.

If you intend to purchase an automobile, it is well understood that you want to use it for transportation. One does not announce to one’s friends and family that one intends to purchase an automobile for “transportation transformation.” That term may have made sense back in 1910 if you were buying a Model T, and when you were replacing your horse. But over 100 years later, it is unlikely that your previous vehicle of transportation was a horse, and that this new car you are purchasing is your first experience with something that uses wheels to get around.

So what will happen with the term digital transformation?

My prediction for the term is that its usage will continue until it gradually runs out of steam, and it will be replaced by another term that seems sexy and topical. A big part of attending the best schools, going to conferences, and participating in business meetings is merely learning the terminology to use. Using the term digital transformation is an excellent way to show that you are part of the “in-crowd.”

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

Search Our Other Digital Transformation Content

References

https://en.wikipedia.org/wiki/Analog_signal

https://en.wikipedia.org/wiki/Digital_transformation

https://en.wikipedia.org/wiki/Word_processor