Progress Report – NGA Human Resources moves on - but in many directions

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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We had the chance to attend the NGA HR (NGA) analyst summit last week in New York. About two dozen analysts got briefed by NGA CEO Al-Saleh and his management team.

Here are my top 3 takeaways from the event:

• Positioning challenges remain – NGA keeps operating under the ‘IP lead Services’ positioning, meaning that it invests into IP (Intellectual Property) offerings for its services offerings (e.g. the BPaaS products) but at the same time has veritable IP in its own products (e.g. ResourceLink and Preceda). The unique positioning here is that on the one side NGA operates a very successful BPO business for large, international enterprises, offering its services on top of the euHReka platform (that again leverages SAP as its backbone) – on the other side operates like a software vendor on the SMB side with products like ResourceLink and Preceda. And it means good news and challenges at the same time that NGA wants to grow both businesses. The good news is the significant growth potential NGA can tap into, the challenges are short term that it needs to fund R&D investment across multiple products and longer term it may get on a collision course with its partners (Workday, SuccessFactors to name two) – as they will target more the SMB space. But it may not have to be competitive as NGA’s successful partnership with Workday around SMB services in the US shows, but that is an easier positioning as both are complimentary. NGA does not have a SMB product offering for the US market (yet) and Workday is looking for services to make its push to SMB happen. The scenario would be outright competitive if Workday would target the SMB market in the UK. But then who says that partners cannot have complex co-opetitive (cooperative & competitive) relationships depending on the markets they operate and compete in.

Slide from Presentation

• Payroll Exchange is the crown jewels – It looks like NGA has concluded its long R&D investment in making its different payrolls work together. The product tasked with this is the Payroll Exchange product that for now allows flexible pay across the euHReka, ResourceLink, and Preceda products, with HR Core data coming from the same three and additionally Workday and SuccessFactors. True to the positioning challenge mentioned before, NGA stresses that the Payroll Exchange (PEX) is not a product (or standalone offering), but IP that complements the NGA Gobal Payroll offering (not a product, either). Assuming PEX works, then NGA is missing out on a potential market opportunity to offer its PEX capabilities as a Software as a Service (SaaS). But then it is quite a leading offering by itself, being able to pay (with the help of partners) in 145 countries, the large majority of them being powered by NGA IP.

Slide from Presentation

• More to come – investment happening – The good news is that it looks like NGA will be able to come up with even more product and IP investment going forward. The vendor has ambitious plans to free up resources and to invest in net new opportunities both on the product and the services side of is offerings. It is also good to see that NGA has addressed longer term challenges in its services infrastructure around its networking and phone infrastructure, an important investment from which customers should see immediate benefits.

Slide from Presentation

MyPOV

NGA is unique in the vendor landscape with having a sole focus on HR, but then NGA pretty much offers every possible service (except RPO) for their customers. From general strategy, over implementation, hosting, payroll services, BPO and Product IP, NGA plays and wants to keep playing in all these markets. It will be key to watch how NGA will be able to grow the base of such a vast and diverse portfolio. All these different areas need management attention and financial investment to get off the ground and keep flying – not an easy task for a mainly services oriented vendor. The next 12 months will show if NGA can grow the base and invest in this portfolio or if it will have to streamline the offering. Sometimes doing less is more for your customers, but you cannot fault NGA for trying.

In the meantime there is only very few to no alternative to NGA ,when a multinational company is looking at outsourcing its global payroll work to someone, a position the company should capitalize on in the near future.

My takeaways from the analyst briefing from a year ago can be found here.

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Resources

Latest reports by Holger Mueller

How ARCA Re-Organized Sales and Put Revenue Growth into High Gear

Globalization, HR, and Business Model Success

Future of Work Tech Optimization Next-Generation Customer Experience Digital Safety, Privacy & Cybersecurity Data to Decisions ADP SuccessFactors workday Oracle AI Analytics Automation CX EX Employee Experience HCM Machine Learning ML SaaS PaaS Cloud Digital Transformation Enterprise Software Enterprise IT Leadership HR Chief Customer Officer Chief People Officer Chief Marketing Officer Chief Human Resources Officer Chief Technology Officer

Call for Applications: SuperNova Awards for leaders in disruptive technology

Deadline for applications August 1, 2014
 

The first awards to recognize pioneers, leaders, innovators who use technology to transform business

In its fourth year, the Constellation SuperNova Awards will recognize seven individuals who demonstrate true innovation through their application and adoption of new and emerging technologies. As always, we’re searching for leaders and teams who have overcome the odds to successfully apply emerging and disruptive technologies for their organizations. Special emphasis will be given to projects that seek to redefine how the enterprise uses technology on a large scale.

We’re searching for the boldest, most transformative technology projects out there. If you or someone you know has what it takes to compete in the SuperNova Awards, fill out the application here: 

 

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How Delta Uses Microsoft Dynamics and Avanade to Create Next-Generation Customer Experiences

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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Delta Air Lines’ legacy in-flight point-of-sale system (POS) system could only provide very basic transaction data for items like meals, headphones and duty-free items. Declines in credit card purchases remained undetectable until the flight landed, leading to lost revenue. In addition, the in-flight POS system lacked the ability to communicate in real time with Delta’s CRM system, resulting in a disjointed customer experience.

Learn how Delta Air Lines enhanced customer experience and reduced lost revenue by implementing a mobile, in-flight POS system powered by Microsoft Dynamics and Avanade.

Table of Contents:

• The Company
• The Challenges
• Improving Efficiency and Effectiveness In-Flight for Beverage, Food and Duty-Free Purchase System 
• Time Data to Improve Customer Experience and Revenue
• The Solution
• The Technologies
• The Impact
• Enhanced, Real-Time Customer and Employee Interaction Data  
• Increased Enterprise Manageability
• Future Improvements
• The Takeaways
• The Recommendations

Download the report snapshot:

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Hotel database security

Steve Wilson

Former Vice President and Principal Analyst
Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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International hotels are a fantastic target for identity thieves. Hotel databases don't just hold credit card numbers and billing addresses (which are held for weeks in advance of a stay and for weeks afterwards to cover incidentals), but for many customers the hotel also has their home address, mobile phone number, driver licence number, airline memberships and arrival flight details. And even passport number is routinely collected by hotels in Asia. It's a complete cornucopia for criminals.

And the most dangerous, most difficult to control threat vector in the hotel industry won't be war-driving or SQL injection attacks or any of the other high tech hacking tools used by organised crime. It will be the inside job. Thousands of itinerant hotel workers in every corner of the world have the opportunity to access office systems after hours, and simply download the contents of central databases to a thumb drive.

The vulnerability of hotel databases to identity thieves has clear implications for national security. I trust that counter terrorism agencies are working on this problem? These databases reveal the forward travel plans for thousands of VIPs worldwide.

We should expect that organised criminals and terrorist organisations are tapped into hotel databases as we speak, and are mining them systematically.

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Latest Research by Steve Wilson

"Big Privacy Rises to the Challenges of Big Data"

Update on the FIDO Alliance

 

New C-Suite Digital Safety, Privacy & Cybersecurity Security Zero Trust Chief Customer Officer Chief Executive Officer Chief Information Officer Chief Information Security Officer Chief Privacy Officer

For SAP Customers The Future of Work Is Collaborative

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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At SAP, collaboration is more than a 3 letter word. (Jam)

In late May, SAP released the latest version of their collaboration platform, Jam. A week later at their annual SAP Sapphire event I had the opportunity to speak to several members of the Jam team. The three key themes I took away from those conversations are:

- Integration Is Essential
- SAP Understands How People Work
- It’s Time To Build An Ecosystem

MyPOV: These are excellent business focused areas that provide more substance than the highly overused "cloud, social, mobile and analytics" rhetoric I hear from so many companies.


Collaborate Where You Work

As “sharing” becomes an accepted, and even expected part of way people work, it’s important that software supports, not hinders collaboration. One of the ways to accomplish this it to integrate social/sharing features with the tools and processes that people already use to get their jobs done. SAP clearly understands this, and since the introduction of SAP Jam in 2012, the software giant has focused both product development and marketing on making sure SAP Jam is not just a stand-alone enterprise social network, but rather an integrated part of their vast software portfolio. (CRM, ERP, finance, HR, BI, learning)

One manifestation of this integration comes in the form of widgets which can now be added to a group’s home page to display content from other platforms. 

A second example of integration is the new add-in for Microsoft Office Outlook, which enables people to create status updates or blog/wiki/forum posts in Jam, right from their inbox. It’s wise of SAP to provide this integration, as email is still one of the primary tools of the business world.

MyPOV: I’ve written extensively about #PurposefulCollaboration, where social features are no longer something people need to think about, as they seamlessly become part of the standard way of working. SAP is a leader in this area, enabling SAP Jam conversations to be embedded inside other SAP applications as well as letting SAP applications be embedded inside Jam. As you’ll read below, they are also now extending this to 3rd party applications. 


SAP Understands Business Workflows

Very few people have “being social” in their business titles. Most people work in Sales, Marketing, Engineering, HR, etc. Knowing this, SAP has studied several of the most common business areas and created templates for SAP Jam to match the workflow of each. They call these SAP Jam Patterns, and first introduced them in Nov of 2013. With the May 2014 release they have added a few new work patterns (Service Requests and Event Planning) which also included the introduction of new features such as integrated calendars and subgroups.

MyPOV: In order to get people to change the way they work, it’s essential that the new tool/process provide value above and beyond what’s already in place. As customers start to use SAP Jam, it’s critical that the barrier to entry be low. Having templates that pre-populate with workflow specific content and connections to other systems makes it much easier for people to get started and find value in their new SAP Jam groups. SAP is not unique in this area, nor are templates a new concept. Lotus Notes had these in the 90s, Microsoft SharePoint followed with them in the 2000s, and Jive Software delivers them today with what they call Purposeful Places. Still, it’s good to see SAP providing them for their platform. 


A Platform Not A Product

Perhaps the most important announcement at SAP Sapphire (wrt to Jam) was that 3rd party developers will now be able to build their own add-ons and customizations to Jam.  That means business partners with specific domain expertise will be able to build their own Work Patterns, or add features to Jam that SAP is not delivering themselves. Similarly, customers with their own in-house developers will be able to extend Jam to meet their specific needs. Documentation, code samples and other information about the SAP Jam Developer Community can be found here.

MyPOV: A vibrant ecosystem is critical for long term success. The new OData and REST APIs could help SAP compete with the collaboration platforms from vendors such as IBM, Microsoft and Salesforce, each of whom already have robust partner communities developing on their platforms. SAP will need to educate and financially motivate their existing partners on the value of adding collaborative features to their applications.
 

Top Down Messaging

Even though the key theme of SAPphire was "Simplify", the importance of collaboration was still weaved throughout the show. While SAP Hana Cloud Platform may have gotten the most attention, SAP Jam was mentioned in the keynote and was prominant in both the sessions and showcase floor. SAP Jam has a complex history, evolvling from products like Cubetree and StreamWork. The SAP Jam team should leverage the new Simplify theme to help customers understand that the Future of Work is collaborative, and SAP Jam provides simple deployment and simple user expereince, but at the same time has a deep intergation with the business patterns people use to get work done.

Have a disruptive technology implementation story? Get recognized for your leadership. Apply for the 2014 SuperNova Awards for leaders in disruptive technology.

 

Resources

Latest research by Alan Lepofsky

•  Segmenting Audiences by Digital Proficiency 

• A Guide to the New Objects and Actions of the Digital Workplace

 

Future of Work

Going Viral for all the Wrong Reasons

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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Unfortunately, the concept of “virality” has positive and negative connotations. And while the highs that come with a viral “hit” can be dwarfed by the lows that come with a viral “miss”. Where once we held that there was no such thing as bad PR, we now know that there IS such a thing as bad social media – and there are very real impacts on our reputation (personal and corporate) and even downsides for our corporation’s share price.

For those who have one eye on the audience and another on your corporate reputation, Sprinklr’s recent whitepaper on crisis management will be a must-read. Covering the five essentials for crisis preparation, it includes a handy score card to help you assess when a crisis is likely to move from medium to critical, and even includes a sample flowchart which you can adapt to your own organisation.

The whitepaper by Rick Reed (Intel), Melissa Agnes (Agnes + Day) and Sprinklr’s Ali Ardalan and Uyen Nguyen is a handy document to model your own crisis plan on. And it might just be your saviour should you find yourself “going viral” for all the wrong reasons. Download your copy here (registration required).

Have a disruptive technology implementation story? Get recognized for your leadership. Apply for the 2014 SuperNova Awards for leaders in disruptive technology.

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3 Suggestions to Unlock Your Good Ideas

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Have a disruptive technology implementation story? Get recognized for your leadership. Apply for the 2014 SuperNova Awards for leaders in disruptive technology.

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News Analysis: Infosys Lands SAP's Former CTO, Vishal Sikka, As New CEO

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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With contributions from Sachin Gosavi, Vice President of South Asia

Infosys’ First Outsider CEO Lands From Silicon Valley

On June 12th, 2014, Infosys announced that Dr. Vishal Sikka as the Chief Executive Officer and Managing Director (CEO & MD) of the company effective August 1, 2014.  Dr. Sikka will be inducted as a whole-time director of the Board and CEO & MD (Designate) on June 14, 2014 (see Figure 1).  The Global IT services firm also announced the following organizational changes:

• Departure of N.R. Narayana Murthy. The current Executive Chairman will step down on June 14th 2014.  Murthy will be designated as Chairman Emeritus with effect from October 11, 2014
  
  Point of View (POV): The devolution of the Executive Chairman’s office on June 14, 2014 signals that a new era will emerge in leadership.  Any thoughts of family dynasty have been demystified as Dr. Rohan Murty, whose appointment was co-terminus with the Executive Chairman, will leave the company on June 14, 2014.

• Departure of Mr. S. D. Shibulal. The current CEO & MD will leave on July 31, 2014.  He will also step down from the Board on July 31, 2014.
  
  (POV): Shibu has completed his mission in stabilizing revenues at Infosys while providing time to identify a successor.  He transitions the company at a critical chapter in Infosys’ history.  Elevating 12 leaders to Executive Vice President makes sense as Sikka will need a deep bench and develop a future A-team.

• Announcement of U.B. Pravin Rao as COO. As of June 14, 2014, Rao will take on the role as Chief Operating Officer.  Pravin was formerly the President and whole-time director.
  
  (POV): Rao is a 25 year veteran that will provide continuity for Infosys.  Constellation believes that Rao will be important in helping Sikka bridge the future models for services companies in an IP world.

Figure 1. The Tweet Stream Between Vishal and NRN

 

What does it mean for Infosys and its clients?
Most notably, The move signifies Infosys’ commitment to something new, and a heavier focus on higher margin IP products and non-linear services. It also shows that the firm is not afraid to try something different. Considering other changes at the top order, Infosys board has clearly given Dr. Sikka a free-hand and a very longer term mandate. Constellation expects Dr. Sikka’s selection to re-invigorate Infosys’ focus on Products, Platforms, IP and Innovation. His Silicon Valley background and network would also infuse the much-needed acquisition zeal into Infosys growth strategy.

However, when Infosys begins to gear up for a higher margin IP products model, the firm will have to educate and carefully address the stakeholders concerns with respect to financial performance in the shorter term. Building IP, Products, Platforms is not only a longer term game, but also calls for sustained sizable investments. Once rolled out and if accepted by the market, these products, platforms become cash cows, and companies find it easy to fund their research and development of future products. Maneuvering services business to fund this IP quest for future growth is the biggest challenge Dr. Sikka faces. Add to it the pre-requisite change of mindset and re-skilling from services delivery to software development.

Clients of Infosys and other IT Services vendors are today looking for partners to help design and build new products and services, as in most cases, their research and development budgets are slashed and yet they need to access innovation and scale. As more and more clients have begun treading the co-innovation path with vendors, a technology visionary of Dr. Sikka’s credentials at the helm of Infosys augurs well for them.

Shifting Blocks of the Industry
As most Indian IT services firms have maxed out their current business models, we see the key players transitioning from services to building IP to remain ahead in the game (see Figure 2). These firms have proven their ability to operate and execute on infrastructure and delivery. The next battle is to offer trusted advice to clients on the path to innovation and IP creation. Dr. Sikka was successful in re-elevating SAP’s relevance as an innovator, and his most notable accomplishments at SAP include a design thinking approach to software development, the SAP HANA platform, and the push to cloud and mobile for SAP. Infosys could not have figured a better strategist than him if they were to tap the sizable, but equally tricky from a partner perspective, opportunity in the Third Party Maintenance (TPM) area.

Figure 2: Creators and Innovators Trump “Trusted Advisor” in Next-gen IT services

The Bottom Line: Sikka’s Arrival To re-invigorate Infosys

Constellation believes that Vishal can play a significant role in transforming the aging time and materials, body shop model into a more modern one focused on Products, Platforms, IP and Innovation.  Vishal’s background in identifying, building, developing, and selling new products and services from his SAP experience will hopefully serve as a catalyst to reinvent new business models within Infosys.  In addition, the hive off of wholly-owned subsidiary, Edgeverve Systems Ltd could play a role in elevating a new Infosys 3.0 strategy or provide the nexus for innovation across Infosys.  For now, customers and prospects can expect Infosys to move from services to building IP.

As noted earlier at the time of Mr. N R Narayana Murthy’s Return To Infosys As Executive Chairman of the Board, Constellation believes Infosys has taken a good shot at transformational innovation with Dr. Sikka’s selection. For Dr. Sikka, transforming Infosys into an IP-led powerhouse in the next 3 to 5 years will be the real litmus test.

The arrival of a product innovation advocate such as Dr. Sikka to lead the change is an deftly done decision.  Now comes the hard part, transforming the culture.

Have a disruptive technology implementation story? Get recognized for your leadership. Apply for the 2014 SuperNova Awards for leaders in disruptive technology.

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SapphireNow - SAP finds its path to a (unique) cloud

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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We had the opportunity to participate at SAP’s SapphireNow conference in Orlando. The conference was well attended with significantly over 20k participants.

 

 

But first - the showfloor. Even 3 events later analysts and vendors still talk about it. No longer the traditional separation of keynote hall and food hall – but have all together, keynotes, food, show floor, briefing area, theaters etc. lead to a very good conference experience. Design aspects were clearly considered, colors were great and the keynote area was deliberately too small to hold all attendees, but with screens all over the hall everyone who wanted to follow the keynotes was able to follow them. And kudos to SAP also for making events open, e.g. the press conferences were in the public area, where general attendees could watch and listen in first hand.

SapphireNow showfloor

 

Top 3 Positive Takeaways

It was hard to pick the top 3 – but for the sake of time here they are:

HANA is the platform, Suite on HANA is the application

About a year ago we found that HANA was technically there, the 2014 takeaway is that the Suite on HANA has certainly arrived, with abundant proof points of customers actively using the Suite in production. And references and proof points validate the customers move explicitly as their decision and with the SAP’s strategy around building more on HANA as well implicitly. SAP and its customers are now reaching the point where technology is no longer restricting the speed of their business, but thanks to HANA technological advances exceed human processing capabilities and with that current business practices. The validation point to look for – and we found it multiple times at different customers – is enterprises needing to take a pause and figure out how to conduct business going forward. This is a good place for SAP and customers to be – but SAP now needs to listen attentively and find the right practices to productize these new best practices in its next generation product. And as we know finding the right balance here is what the art of enterprise software applications is. Getting this formula right is the base of long term vendor and customer success.

Equally important is that SAP has delivered most (SAP claims all) of its vertical code in the different industry solutions. This is again an amazing engineering achievement, given the different levels of invasiveness of industry code into the suite. Never shy, SAP declared to have the first Industry Cloud – but in our view let’s get more customer proof points and some technical details, first - before we pop the champagne bottles open. 

 

Leukert's "Diamond" with HANA at the core

Simplified Financials

SAP presented its first larger next generation product with Simplified Financials. It was demoed by SAP CIO Helen Arnold, along with demos of Suite on HANA customers Conagra and John Deere. Later designated CFO Mucic was on stage talking about the benefits (SAP is live since late April) – and they are tangible. As aggregation can be run on the fly, drill downs from on-the-fly- aggregates can go down to the single records, business practices in Finance will change. It may have been too early even for SAP to talk about these – 5 weeks is a short time frame. Let’s hope we see and hear more on how best practices in Finance running on HANA (or other in memory databases) should look like. And the impacts and opportunities to rethink Finance are massive. But it's good to see SAP renovating (and innovating) at the core of ERP, in Finance. 

 

Screenshot of Simplified Financials

HANA Energizes SAP

It’s good to see how HANA is the power that energizes and galvanizes SAP. Not even four years ago Sapphire had a hint of inertia and statics on all sides – customers, partners and SAP employees. That is mostly gone now and it is good for the whole ecosystem – as well as the market. SAP now needs to keep the momentum going, and from our meetings with the go to market side with McDermott and Enslin there is little doubt that will happen.

It is also key to notice that SAP is doing the necessary steps to make the cloud DNA obsolete – in the direction that everything is cloud. Organization decisions like to have the Head of Product of SuccessFactors, Krakovsky run all of HCM development (including the ECC aka R/3 parts), have an executive from SuccessFactors run the HANA Enterprise Cloud (HEC) are good moves to propagate cloud DNA across SAP.

 

Top 3 Concerns

Cloud View

Not surprisingly, but now with validation and probing with Plattner and Leukert, SAP has a very database centric view of cloud computing. If you take a look at the key 3 computing resources, storage, networking and compute, storage is the least dynamic. While you need to scale network and compute load as needed, storage is not really scalable. Information just has to be there, and SAP decided with HANA to keep that information in memory. Consequently the view on code and compute is of a more static nature than other enterprise vendor’s view of cloud. If you have all your data in memory, a few double digit Gigabit of code are only a rounding error when sizing a (dedicated) HANA system for a customer. There are benefits with the dedication like security concerns, tangibility etc. but it is not the elastic cloud interpretation we see from SAP’s competitors. For them you do not ‘size’ a system – it’s all about not even being able to size the load. Take the showcase of Google Cloud with the British Royal Wedding last year, or the Azure showcase around the Sochi Olympics. Granted, these are not enterprise applications, but shouldn’t the load of enterprise applications be equally elastic? Especially when considering that no one knows the best practices for the digital economy and running an enterprise on in memory technology.

All this leads to SAP’s view that customers run dedicated systems in SAP’s HANA Enterprise Cloud. And SAP certainly has the deep pockets to keep costs attractive and competitive – but savvy customers and observers will remain concerned here.

But then – let’s not forget that a unique interpretation of technology gave SAP a leg up on its foes back in the 90ies. The SAPGUi client never knew the primary keys of records displayed, but was a display terminal server, very much a browser, contrary to the common client server definition of the client knowing the primary keys of data records displayed. The irony is, that this design uniqueness made R/3 2-3 times more scalable than mainstream client server architectures of the competition. The tragedy is that SAP never realized that it had a thin client solution with R/3 already – the ‘browser’ fit on a floppy disc. So SAP may take a unique path to cloud and may get rewarded for standing out – once more. Speaking with Yoda – Risky it remains.

 

The McDermott management team

Renovating in flight

There are two fundamental ways to write new software - isolate the team and build the next generation (SAP tried with byDesign, sending teams even off to another location in St. Leon-Roth) or you trickle innovation in with the same product teams while they maintain previous versions. And you innovate step by step. Given the byDesign outcome – SAP is going down the latter path. 

The good news is – this is pretty much the SaaS path. But SAP has its ECC releases to maintain – so it will be interesting how development under Leukert will be organized and be able to ship quality releases.

 

McDermott with Cloud for Service Applications

Financial Prospects

With the popular move to make Fiori, Personas and even Simplified Finance free of charge to maintenance paying customers, SAP has certainly done the right thing to keep customers happy and additionally has delivered a proof point for the value of being a maintenance paying customer. The vendors competing on the 3rd party support market will not be able to deliver similar innovation – to be fair their customers may also not expect them to deliver anything similar.

The concern is that the move reduces the bulk of the future SAP revenue stream to the HANA database licenses and other technology licenses, like e.g. Lumira. That is certainly a viable path, but usually does not yield similar revenue growth potential than selling business applications. SAP certainly has not given up building business applications, .but given the breadth of its offering in regards of automating the enterprise, and it will have to work hard to explain to its customers why a new license for a new product is warranted. This and other explanations will be key for making the overall simplification message credible. 

Leukert, Plattner and Becher in a Q&A Session

 

With the team around Leukert being busy with simplification, aggregate busting and re-factoring, we should expect SAP not to be shy on the acquisition front, as major chunks of license revenue from applications will likely only come from acquired revenue in the next years.

MyPOV

Overall a good Sapphire for SAP. HANA is working, the Suite is on HANA, the Verticals are coming and making things simpler is a welcome message for CEOs trying to tame complexity… But doing things simply is complex in itself – as McDermott pointed out in his keynote. On the flipside SAP needs to explain to investors where the license revenue of the future will come from and tame the challenges of renovating its software in flight. If SAP’s dedicated system, database centric view of cloud, which is unique in the marketplace will be a pro or a con remains to be seen. SAP and its customers got away with a unique architecture last century once before and nobody really cared back then. If 201x is different than 199x – only the future can tell.

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IBM Watson and Genesys Partner to Power Smarter Customer Experiences

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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IBM and Genesys (www.genesys.com), a leading provider of customer experience and contact center solutions, today announced a partnership that will transform how organizations of all sizes differentiate their customer experience by tapping the power of IBM Watson to transform the way brands engage clients across customer service, marketing and sales through data-driven insights and automated actions.

 WHAT DOES THIS MEAN TO YOU?

The combination of the Watson Engagement Advisor with the Genesys Customer Experience Platform to is reportedly positioned to transform how organizations worldwide engage with their customers across customer experience touchpoints and channels of communication. This partnerships will allow Genesys to develop a learning system that can better serve consumers in their self-service applications and contact centers because The Watson Engagement Advisor enables natural language solution learning and adapts and understands market and organizational data quickly and easily, and gets progressively smarter with use, outcomes, and new pieces of information.

 WHAT IS A SPECIFIC EXAMPLE OF HOW THE WATSON ENGAGEMENT ADVISOR HELPS CUSTOMER SERVICE AGENTS?

The partnership will aid and assist a brand’s customer service agents to provide fast, data-driven answers, or simply sit directly in the hands of consumers via mobile device, chat session or online interaction. In one simple click, the solution’s “Ask Watson” feature can quickly help address customers’ questions, offer feedback to guide their purchase decisions, and troubleshoot their problems.

Because today’s consumers are a tweet, post, phone call, email or web chat away from reporting an issue or asking a question, and nearly half expect a response from businesses within a span of minutes, according to Edison Research, companies need to get a lot smarter about how they operationalize real-time customer service. Brand customer representatives who field these inquiries are often backlogged with time-consuming issues or questions that require detailed, accurate responses not often readily available to them – which can lead to an inconsistent customer experience. We’ve all been there – called a contact center and knew more about what we were asking than the company did. Perhaps this will help agents become closer to being able to provide real-time customer service.

DOES THIS MEAN KNOWLEDGE MANAGEMENT DATABASES ARE BEING REINVENTED? 

Contact center agents can gain access to a cloud-based Watson advisor that reads and uncover insights from millions of pages of data-driven content within seconds, from product guides to call transcripts. The result: cognitive computing that will augment a contact center agent’s knowledge and shift their time from searching for answers to discovering timely insights that solve problems, facilitate new opportunities, and improve the customer experience.  

WHAT IS A SPECIFIC EXAMPLE OF HOW THE WATSON ENGAGEMENT ADVISOR HELPS CUSTOMERS?

Genesys customers will gain the additional value of a Watson cloud-based advisor that thinks, learns and provides expert insights, while combing through millions of pages of data within seconds for customers and the contact center agents who serve them. As a result, Genesys customers can tap into the body of data that Watson understands and puts to work and use that knowledge to deliver more actionable and satisfying responses to customer inquiries in their self-service applications and contact centers.

HOW DOES THIS CONNECT A CUSTOMER AND A COMPANY TO PROVIDE BETTER SERVICE?

Imagine yourself as a bank customer, home from work and doing late night research on mortgage loans after your children are in bed. You may see a feature or rate that you like, but you have detailed questions that require expert advice. You can call, email or tweet the brand, but it’s after-hours. Many brands dont even pay attention to tweets much less have someone answering questions at night. Often that customer would not have access to a customer service agent until the next day.

Now envision the following experience: at any time of night, you can access a web chat advisor that has access to the bank’s data-driven content around mortgages, and through a natural language interface, understands your questions and history interacting with the bank. Not only will the application educate you on all things mortgage shopping, but it will also provide a formal offer that can be presented by a mortgage expert at a convenient time scheduled by you.

The idea is that with the Watson Ecosystem, Genesys customers will gain access to a cloud-based advisor that, within seconds, can read and uncover insights from millions of pages of data-driven content, from product guides to call transcripts to deliver exceptional customer experiences. The result: cognitive computing will augment agents’ knowledge and free their bandwidth from searching for answers, to creatively thinking of how they can further help a customer or even make a sale. This, in turn, will allow Genesys clients to deliver on their brand’s promise to the nearly 80 percent of consumers who say that the contact center is involved in defining the customer experience. SOURCE (IQPC)

 WHAT INDUSTRIES DOES THIS SOLUTION PROVIDE BETTER SERVICE FOR?

Leveraging its experience and deep domain expertise across industries including banking, insurance, and retail, Genesys will integrate access to the cloud-based Watson to its Customer Experience Platform empowering their customers with the ability to interact through a natural dialog leveraging Watson’s understanding and intelligent natural language response. Now consumers can tap into Watson to gain insight and answers faster than possible with knowledge management solutions.

HOW WILL THIS IBM AND GENESYS PARTNERSHIP AFFECT SELF-SERVICE?

The desire for self-service is there – both from the company’s point of view (reduce call volume, etc…) and customers are tired of calling into a contact center only to be disappointed. But while self-service has been a leading “idea” it rarely delivers an experience that doesn’t garner the customer to try to get help in another channel, often the phone channel. This defeats the purpose of self-service and reduces the first contact resolution — one of the most important indicators of customer satisfaction and loyalty.

The IBM Watson and Genesys solution provides organizations with the ability to identify when a customer needs to speak with a customer experience representative, rather than continuing in a self-service application. For example, if a customer reaches a point in conversation during a self-service interaction that could prompt either customer churn or a timely sales opportunity, Watson’s knowledge of pre-defined business guidelines allows the solution to signal when it is time to transfer the conversation to an agent.

The customer is not arbitrarily transferred to just any agent among the potentially hundreds who work at a call center. The solution pinpoints the exact agent to handle a customer’s inquiry, based on specific factors such as an agent’s experience, channel used, training and even license to discuss or sell a given product and then transfers the customer with the accompanying detail of the self-service interaction. This could mean a shift to reducing call volume and increasing first contact resolution – if it works as indicated. Case studies will be interesting to hear how brands are actually putting it to use.

WHAT DOES THE CEO OF GENESYS THINK ABOUT THE NEW PARTNERSHIP?

Paul Segre, President and CEO, Genesys says, “This combined solution delivers sophisticated yet simple to manage knowledge capabilities to transform self-service systems and human interactions into positive brand impressions. With Watson, our new solution provides a transformational customer experience with a natural and informed transition from self service to agent assistance to yield better business outcomes.”

WHAT DOES THE MIKE RHODIN, SVP OF IBM WATSON GROUP THINK ABOUT THE NEW PARTNERSHIP?

Mike Rhodin, Senior Vice President, IBM Watson Group says, “By tapping into IBM Watson’s cognitive intelligence, Genesys is infusing a personalized assistant into every customer interaction. Customer engagement is a natural fit for Watson, empowering brands with information driven insights. This is a key example of how a new era of cognitive computing applications will transform industries and professions and revolutionize how decisions are made.”

About Genesys

Genesys is the market leader in multi-channel customer experience (CX) and contact center solutions in the cloud and on-premises. We help brands of all sizes make great CX great business. The Genesys Customer Experience Platform powers optimal customer journeys consistently across all touchpoints, channels and interactions to turn customers into brand advocates. Genesys is trusted by over 4,500 customers in 80 countries to orchestrate more than 100 million digital and voice interactions each day. Visit us at www.genesys.com or call us at +1.888.436.3797.

 

IBM Watson: Pioneering a New Era of Computing

Three years after its victory on the TV quiz show Jeopardy!, IBM Watson has evolved to represent a new era of computing, where by 2017 it is predicted that 10 percent of computers will be able to learn as Watson does. Today, Watson is no longer just the world’s most famous game-playing computer. IBM has put Watson to work in various industries. In healthcare, IBM is co-developing an application with Memorial Sloan-Kettering Cancer Center, and partnering with WellPoint, the University of Texas MD Anderson Cancer Center, and the Cleveland Clinic Lerner College of Medicine. Additionally, IBM has partnered with numerous colleges and universities across the country to teach Watson capabilities and cognitive computing technology to the next generation workforce. In 2013, IBM announced the introduction of the IBM Watson Engagement Advisor, the first Watson offering designed to improve customer experience, putting the power of Watson within reach of everyone.

IBM’s mission to spark a new generation of Watson-powered apps is just the latest milestone in developing cognitive system offerings that help its clients and partners succeed.

For more information on IBM Watson, please visit www.ibmwatson.com

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