SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries. 77% of the world’s transaction revenue touches an SAP system, helping more than 437,000 organizations to gain deep business insights and to operate profitably and adapt continuously without disruption.
Florian Roth is the Chief Information Officer of SAP SE and reports directly to Christian Klein, Co-Chief Executive Officer and member of the Executive Board. In his role as Chief Information Officer, he represents SAP IT Services internally and externally as a trusted advisor and is responsible for the SAP IT strategy and its execution.
Under the umbrella of SAP Runs SAP, Florian’s attention as CIO is on leading IT Services as a critical component of the SAP value proposition and is at the core of enabling and delivering operational efficiency, therefore safeguarding SAP’s transformation of becoming the best Intelligent Enterprise. Essential programs initiated by Florian and his team drive the harmonization, standardization and automation of standard processes, systems and data, resulting in the reduction of corporate-wide complexities.
What are the challenges your business faces in 2020?
I like to think about challenges more in terms of strategic focus and objectives. In 2020, our focus will be to continue with our strategy of delivering the Intelligent Enterprise for SAP, with an emphasis on growth and operational efficiency. Especially with regards to operational efficiency, we have set up targeted measures on several fronts including eliminating product overlaps and simplifying the SAP portfolio for our customers.
And that also leads me to a large number of successful acquisitions SAP has gone through in the last few years. Product and process integration continues to be high on the list for 2020. For instance, delivering the Intelligent Enterprise to our customers requires the seamless integration of business processes between all major cloud acquisitions and SAP S/4HANA, as product innovation will primarily be based on SAP HANA and the SAP Cloud Platform.
So, we are looking at all aspects of end-to-end business process integration. That also includes plans to infuse experience data across every business process. An example of that would be the Lead-to-Cash process integration of C/4HANA, Supply Chain and S/4, so that SAP customers can predict what their customers are looking for and build and deliver products accordingly.
We are also aiming for a high degree of product integration and consistency across our end-to-end solutions. Going forward, it is essential to provide a unified experience across SAP’s LoB solutions, SAP S/4HANA as the Digital Core, and the Business Technology Platform as the underlying technology foundation. Our clear objective is to offer a truly integrated suite for our customers.
Our cloud offerings also remain to be a strategic topic for 2020. With integrating SAP’s cloud offerings more closely along with our cloud infrastructure, our attention will be on our partner IaaS offerings such as Alibaba, AWS, GCP, Mi- Microsoft, and we will converge our own cloud offerings.
What technology are you most excited about right now?
I see a lot of cool technology innovations around Artificial Intelligence (AI). But in my opinion Machine Learning (ML) is most exciting in the area we are operating in as it fits perfectly into our core business and strategic plans of today. In that context, the possibilities for business software to leverage Machine Learning, specifically around speech recognition and natural language processing.
I expect that user interaction will increasingly move to natural language-based interfaces. SAP offers already the SAP Conversational AI platform which we are leveraging heavily for internal use cases. Most text-based information such as support tickets, knowledge articles or contracts, are being processed with Natural Language Understand- ing techniques. It not only accelerates our goals on efficiency, but the future prospects of both Artificial Intelligence and Machine Learning for SAP and its customers are enormous.
How has your job as CIO changed and evolved?
The role of IT at large and with also that of the CIO has changed a lot in recent years, and it continues to evolve. Cloud Solutions are growing significantly, IT has become part of the product solution and it has transformed our business model. Moreover, IT connects the entire value chains.
Today, enabling technologies, data-driven applications, and the underlying IT landscape is the centrepiece of innovative products and services, and create a new kind of experience for customers and end-users. Important is that all these innovations need to seamlessly work together, and that is where IT provides a lot of value. As an integral part of the SAP Value Chain, the IT organization has become a transformer and business driver.
Are there any innovations your company is working on you can briefly outline?
First and foremost, SAP has the responsibility to drive organic innovation because our customers depend on our systems as their foundation for transformation and growth. To future-proof both our businesses, we need to execute against to- day’s requirements. At the same time, we also keep our perspective and have dedicated teams to work with innovation and products of tomorrow.
To understand how we invest in the future, we differentiate between three different types of innovation. We identify continuous innovation that involves incremental improvements to existing products. Followed by adjacent innovation that includes enhancing the existing portfolio using new technologies or applying existing knowledge to new markets to gain new customers.
And with an extended view into the future, we look at transformative innovation that occurs as a result of new trends, technologies, and business models, yielding revolutionary products and markets. I believe this three-prong approach ensures continuous stability and efficiency for our customers’ needs today but allows us to stretch a lot further towards understanding and leveraging all innovations long term.
All of them are massive technology advances. My view on 5G is that it is more than just 4G plus 1. It’s poised to recalibrate the world’s definitions of network speed and bandwidth, as it is about 100 times faster and reduces the latency in data transfer to milliseconds. 5G is definitely the enabler of IoT, real-time machine communication, and digital supply chains of the future. I believe 5G will transform businesses worldwide and impact our society significantly.
Artificial intelligence (AI) and Machine Learning (ML) technologies – I touched on this topic a little bit earlier but let me reiterate. Both technologies will continue to boost intelligent enterprise applications, allowing for more dynamic, flexible, and potentially autonomous systems.
Applied AI will enable us to embed intelligence in business applications, using customer data across distributed cloud environments. How- ever, it is important to recognize that the debate over the impact of AI on jobs will escalate in the near future. The impact on labour will require new approaches to education and lifelong learning. I am a firm believer that people and machines must work together to improve the outlook for humanity.
Machine Learning will automate certain areas and processes that were previously only possible to manage or processed by humans. By applying ML, I can see how it will increase business efficiency by a significant factor. I also think that a lot of potential lies in logistics optimization and production automation. And given the speed of ML technology development, I’m certain that ML-based innovation will significantly change our business.
From my point of view, Containerization will change the way we develop software by abstracting the software runtime from the underlying operating system. It offers higher flexibility to change the underlying hardware and enables the application to run smoothly in distributed cloud environments. I also think that Low code platforms will help involving business experts in certain areas of software-driven processes. For SAP I see the biggest potential for that in the areas of data management and pro- cess automation.
So, all in all, each one of those innovations and technologies will without a doubt impact our business and that of our customers. And it will dramatically change how we are navigating through our day to day environment. It already has when thinking about products such as Alexa or Google Home.
What resources do you use to inform your decision making?
Similar to growing our business today and driving future innovation, the decision-making process for me is organic and not based on specific tools or resources. Industry conferences, exchange and collaboration with business partners, and listening to our customers and employees first and foremost, are all cornerstones and the best resources for me with respect to my executive business decisions.
How has your business used technology to bring about structural and cultural change? Innovation and technology have always changed and revolutionized work environments and with that imposed cultural change. Especially when considering mobility, the digital transformation as well as AI, ML and 5G, cultural change is a must and should be considered an enormous opportunity for our employees. Let me give you some examples of how Mobile devices, Mobile Apps and applications such as Office 365 have already impacted our business, collaboration and teamwork today.
Mobile Apps have allowed our workforce to “work smart anywhere”. For example, the SAP “Deal Manager Mobile” app has a nearly 100% adoption rate among SAP’s Sales colleagues as it allows them to quickly access specific customer opportunities they are working on. And the account manager can quickly update the relevant information on the go so that our forecasts are accurate based on immediate up-to-date information.
Mobile Apps have also vastly improved and expedited our business processes, such as our “Approve IT” workflow approval app. Push notifications allow to approve a workflow basically in real-time and speeds up internal processes compared to the past where processes often had to wait until a colleague was back in the office.
And, Mobile Apps are saving money! “Easy Connect” is one of the most popular mobile apps at SAP. It allows a “one-tap” dial-in to any SAP internal conference call with “Least-Cost- Dialing”, which recognizes the location of the caller and chooses the cheapest dial-in number automatically. With the high number of SAP colleagues travelling, this app resulted in six-digit Euros savings annually.
Another big impact on our business and how employees are working could be registered through the freedom of choice on Windows/Mac and Android/ iOS devices. This policy has been fully embraced by our employees and contributes greatly to our work culture. Modern technology, mobility, easy connect, efficient applications and easy access to data and working tools, all increases productivity, changes how we work, and impacts our business on all levels.
I would also like to briefly touch on collaborative technologies as they have had a measurable impact as well. For example, we have made a strategic decision to leverage Office 365 as our standard work platform. With that our employees can work from anywhere, at any time and on any device, collaborating in real-time. By providing a single user experience through harmonized user interfaces on all platforms and having everything accessible within one environment has greatly boosted our productivity and changed the dynamics of our teamwork.
There is no doubt that digital transformation already impacts businesses and employees. The key for me is to leverage it as an opportunity for everyone. Cultural change, upskilling and workforce agility will be critical differentiators for successful businesses worldwide.
How do you communicate your vision in a way that can inspire your technical teams?
Communication is critical at SAP. Success is achieved in collaboration and as a team, and that requires that we share a common level of knowledge and it also requires inclusiveness. By that, I mean that employees realize the opportunity to have their voices heard and know that everyone has an impact on our business. We have a wide variety of communication channels and activities, depending on the topics and audience.
Face to face is still the most effective way to communicate. The entire IT organization meets quarterly in what we call the ‘All Hands Meeting”. Employees can participate in person and virtually. We also hold regular Coffee Corners sessions, where senior leaders provide the latest news and updates in a stand-up meeting. These meetings are well attended by IT employees as they provide a great platform for personal interaction, and they take place in all locations worldwide. In my role as CIO, I am frequently meeting with international business partners and customers. And it is important to me to ensure that it also always includes a visit to our major IT locations, to host local coffee corners and have that personal interaction.
We are also driving internal innovation events and hackathons, to foster an environment for employees to step out of their day to day activity to be creative. Innovation rarely takes place at the green table, and amazing things happen when you provide room to think outside the box.
In addition to our communication efforts inside IT, equally important is to stay connected and visible across the entire SAP organization. One way to reach employees across SAP is the IT Day, a one-day event that takes place across all major SAP locations. The idea behind the IT Day is to showcase our latest IT technologies, how we are impacting the SAP work environment in the best possible ways, and what we are advancing on. It is again all about the personal interaction and to provide our employees with easy access to information, that fosters a common understanding of what IT is all about.
Another critical audience for me is the SAP developer community. With an advanced pool of highly skilled developers, SAP is very proactive to continuously bring them together in internal conferences to talk about technology and innovation. These events are fantastic opportunities for IT to showcase our own development portfolio, to exchange ideas with our peers, and to bridge the gap for collaboration between product innovation and IT.
Product innovation also leads me to another important collaboration and communication topic.
The IT organization is the driver of SAP Runs SAP, and with that the first and best reference customer for SAP’s product development. We have developed a superior teamwork environment between product development and IT, that has positively contributed to SAP’s product innovation. We are very proud, that our direct and frequent communication and cross-team collaboration has had that enormous impact.
In your view, is data the ‘new oil’?
I prefer to use the analogy “data is like water” because it is the most essential resources we have and at the core of everything. Data, like water, needs to be perfectly clean to consume, and it requires constant checks and validations, and ongoing measures to keep its quality at the highest level. Once spoiled it is very effort-intensive and time-consuming to clean data and re-establish its purity.
I also believe that understanding data and the information in it is crucial. In today’s world, there is an overwhelming amount of data available, and more generated every day. Being able to extract relevant information is definitely a competitive advantage. Let’s also take a look at data privacy. With the activation of data protection and privacy laws worldwide, companies have already been sentenced to millions of Euro of fines, in addition to the negative reputation, particularly in the cloud world. Data security, privacy and availability at the right time, in the right place and with the highest possible quality is enormously crucial.
While data is often compared to oil in reference to earning money with data, I believe it is a lot more important to understand and appreciate what you can achieve with data.
How will the tech landscape evolve and transform over the next few years?
I can only touch on a few topics in this regard, but from my vantage point, here is how I perceive the tech landscape to evolve. In the Cloud business, the move toward cloud-based ERP software will continue to accelerate. That and the digitalization of the enterprise are being fueled by better use of enterprise data derived from operations and third-party Big Data. Architectures will evolve to become modular by design to increase agility and better adapt to the new ways in which software is flexibly combined. Cloud-native architectures and multi-cloud deployment capabilities are becoming the standards for new applications.
Virtual reality (VR) and Augmented Reality (AR) applications will begin appearing in enterprise applications. Also, in the coming years, the focus will be on mixed reality, whereby the user interacts with digital and real-world objects while residing in the physical world. I could envision that in many enterprise use-cases, conversational interfaces will become a preferred human-digital mode of interaction.