The New Financials Engine for the 21st century

As we go through the positioning and messaging process for SAP Financials OnDemand (our latest addition to the SAP Cloud portfolio), I am reminded of the big innovation wave of the 90’s when Michael Hammer’s Business Process Engineering book took the industry by storm, and created a huge wave of demand around transformation projects as well as Enterprise Resource Planning (ERP) software, which made SAP the market leader we are today.

I think we are just at the beginning of a new, huge, very similar innovation wave for financial software (the perfect storm of innovation if you will), because of the convergence of a lot of concurrent technology trends, including In-Memory, Analytics, Big Data, Cloud, Mobile and Social. 

"Yeah, Yeah", you're thinking, "here we go again with a marketeer yakking away about innovation .. we've heard it all before ..."

Really? Let me lay out my thought process here ...

• The ERP systems of the 90’s were built around transactions, not decision-making or analyticsà leading to lot of pain of transformation and integration
• They were built for transparency and governance/compliance, not for collaboration and instant action à leading to frustration and delays
• They were built for finance experts, not for everyone in your company à leading to duplication and losses in translation

The world has moved on. Business processes have moved on. People’s work style has moved on. Enterprises still need all of the foundational capabilities listed above in their trusted financial backbone (Transactions, Transparency, Governance/Compliance, Financial Excellence) but, more than ever, need to add support for the 21st century style of work as well. Finance has to move out of the boring but essential back-office paradigm of operations and reporting and move into a key position for driving growth and change in enterprises. But how? 

In comes SAP Financials OnDemand, which is already shipping in its first iteration, and will hit its first refresh in November of 2012. Here is a short overview of the system characteristics which I personally think offer a very interesting case for taking a closer look. 

• Single Source of Truth
• Reconciled data (true data) along multiple dimensions reflecting the real world in real time
• Real Real time
• Based on In-Memory technology, designed for analytics, and doing away with the separation between transactional and analytical data stores
• Intuitive
• Designed to be easy to use for anyone in your business, not just the financial experts
• Mobile
• Native support for mobile devices including iPad and Windows8, getting the informaton to the people whereever they may be
• Collaborative
• Built-in workflows and community support so people can take immediate action
• Open
• Embedded process library with open integration links to processes beyond the the scope of the built-in order-to-cash and procure-to-pay scenarios
• Extensible architecture based on Web-Standards
• Software Development Kit
• Extensible
• Other SAP Cloud Applications easy to "clip on" (SAP Travel OnDemand, SAP Sales OnDemand, etc.)
• Available Application Connectors for non SAP applications, Payroll, Sourcing, etc.
• Easy business-driven configuration (Click-to-Adapt technology)
• Global Compliance
• Global Accounting Standards (IFRS, US-GAAP, ..)
• Internal controls built into the processes
• Localization for multiple languages, currencies, ...
• Trusted Cloud
• Cloud Certifications in Germany, US ..
• Trusted Data Centers around the world
• SAP Ecosystem
• 40 years of business process excellence
• 1000's of partners in global ecosystem

I think if I were a CIO, I'd take a serious look at this right now. A system built by SAP, that can DRASTICALLY simplify my general ledger landscape and EXPONENTIALLY  increase my speed and flexibility in terms of reporting for everyone in my business?

Does that mean people will throw away their existing financial systems and upgrade to SAP Financials OnDemand over night? Heck no! Of course not. Trillions of € are invested in these systems and they form the backbone of the global economy. That would be like trying to do a heart transplant on a marathon runner  WHILE HE IS IN THE RACE. Impossible. But. What IS possible, is to kick-start a new wave of process engineering, or financials re-engineering, if you will. In a an approach of open co-innovation, where we'd look at your specific business situation, identify the opportunities together, focus on the fast moving areas that need accelerated innovation more than others ... and get it done. I am personally excited to be part of this new wave. I missed the fun and excitement when this happened in the 90's (I was playing with databases and middleware then). But I am not going to miss this one .. actually, I am the Launch Captain for the November refresh. 

The Launch is coming. Get on board, you don't want to miss this one ...

CHHO, Walldorf, Oct 2, 2012

The road to HAL is paved with good inventions

Hello folks

Maybe this article caught your attention too

Artificially Intelligent Game Bots Pass the Turing Test On Turing's Centenary

It seems like we are slowly but surely making progress towards the creation of an Artificial Intelligence (AI). But I think the  HAL 9000, as envisioned by Arthur C. Clarke in his screen play for Kubrik's "A Space Odyssey" is probably still as far away from realization as ever. And that's a good thing. We don't want HAL around, trust me.

"Wait"! .. you shout. "What about the article above? What about all the other progress? The Petabyte InMemory engine that will simulate an entire universe? What about the Siri app on my iPhone which is so cool?" ... etc.

My point is that we might be severely misguided in our approach to creating an artificial intelligence by trying to model it on the human mind and then shoving that model into an evolved toaster aka. machine. To use the human mind as model, the human mind would have to be a good and useful thing to model in the first place! Something worth reverse engineering, copying and mass producing. But that's exactly what the human mind is not.

Human minds are fuzzy. Human minds are influenced by emotions (a.k.a. the chemical cocktail sloshing about in our water filled skin bags we refer to as our bodies). Human minds make lots of mistakes; as a matter of fact, we are practically stumbling through life relying on a set of half-baked assumptions, available data heuristics, wild guesses, and intuitive judgement calls we usually explain as "rational" only after the fact. Do we really want a machine with potentially million-fold speed, physical power to acquire Jeffrey Dahmer levels of thinking and acting? I hope you get my point.

Let me elaborate.

I think its about time we change the definition of the TLA (Two-letter acronym) A.I. from "Artificial Intelligence" to "Augmented Intelligence". If you redefine it that way, we have already achieved leaps and bounds in AI.

• Augmented Intelligence, Phase I (AI-1) was and still is basically the use of books, maps, and all manner of tools like compasses, abacuses, microscopes and clocks to make better sense of the word and augment our minds that way. Most of the world is still in that stage, and some have not even reached that level because they are unable to acquire reading skills or books or tools. As for the industrialized world, we might be proud of our Smart Phones, Portals, Siri's and Blogs, but its still essentially a Phase I model where these tools are simply helping us to get a job done, when we need the job done.
• AI, Phase II (AI-2)  kicks in when systems, programs, software, apps, whatever you may call them, start acting and making decisions on your behalf, based on rules and exceptions you have set for them. You might want to think of these rules and exceptions that allow systems to act for you as your "Avatar", your digital butler, your concierge. This goes beyond the automatic transfer into your kid's savings account at the end of the month, since that's repeated mindlessly until cancelled. It's more related to the automated trading and booking systems in the financial world. Part of the world is in AI, Phase II, and the advent of ubiquitous 3rd Generation Mobile Networks, affordable smart phones, cloud computing to simplify development and deployment of applications will ensure that AI Phase II will rapidly spread to the parts of the world with access to free internet and free speech.

So, you might wonder, what's next? Is AI, Phase III the HAL 9000 that thinks independently and eventually decides to destroy its redundant maker? I hope not. And I hope we stop trying to get there before it's actually too late. 

I think we are already in the middle of Phase III of Augmented Intelligence (AI-3), which is the phase where our minds are continually augmented and supported not only by technology in terms of systems and software, but by other humans as well. I think of AI-3 as the emergence of the global hive mind, a cloud of connected communities of like-minded individuals, retaining their individuality but benefiting from the real-time access to other opinions, expertise, creativity, networks and resources, even to financing available near real time, on-demand.

This is not science fiction. This is real. If you take the combination of social platforms like FaceBook and Twitter, combined with near ubiquitous and instant access to information via your smart phone, and combined with near-real time analysis of massive amounts of information (Big Data), the advent of augmented reality interfaces with tagging of objects, simple cloud applications that are easy to learn and use .... most if not all the infrastructure is already there. 

I think this is what most people are missing when thinking about AI. While some folks are still chasing the mirage of building HAL, Augmented Intelligence Phase III is already here. If you are reading this, you are part of it. Part of the emerging global hive mind.. the question is .. what are you doing to make it even better for all of us? 

I have decided that blogging is my 6 cents contribution. 

CHHO, Vierkirchen Sept 29, 2012

Summer's waning, time to blog again

September is rolling down the shutters. Summer has packed her suitcase and is headed south. Fall is parked outside the window and has begun to paint the landscape in his colors. It's dark when I leave office these days, longer evenings beckon.

So I think its blogging season again (blogging seems a seasonal thing for me)

The reason I have not updated my blog more often is not that I had nothing to say. Plenty of random thoughts on SaaS, Paas, Software and Services in general, and marketing in particular crossed my mind, and begged to be written up. But I never felt that these random musings were interesting enough for anyone to actually give a dang. Well, I changed my mind. What changed my mind? I just completed a live radio show with blogger celebrities Frank Scavo and Jon Reed, and it was a ton of fun to throw an opinion out there, and have it challenged in public. I had really missed that. And that's what I am going to use this platform for.

Its bait for debate.

Stay tuned, don't touch that dial

CHHO

Gaming is the only real game changer

After seeing Jane McGonigal's TED lecture regarding the emerging influence of gaming and gamers - (http://www.ted.com/talks/jane_mcgonigal_gaming_can_make_a_better_world.html)
I thought it worth while to write a short post on how this relates to enterprise software and cloud. I firmly believe that the gaming community is becoming a real game changer for enterprise software as well as consumer software, and it is driving adoption of the cloud even faster. The hype term of "gamification" does not begin to do justice to this trend, as it tends to focus on attributes of the software, not on the consumption attributes of the emerging gaming community.


Think about its this way:

• Today, there are 500 million gamers out there playing more than one hour per day, mostly online and mostly networked with other gamers
• By 2020, there will be 1.5 billion gamers online (talk about a market segment)
• By reaching age 18, many of today's gaming kids will have spent 10000 hours or more online: Collaborating, solving complex problems, teaming up to achieve epic wins, etc.
  (a new set of skills is forming here around real-time online collaboration)
• The gamers' expectations on software, any software, consumer or enterprise, are rapidly and drastically changing (talk about instant gratification, dramatic simplification, etc.)

The enterprise software industry can only learn from this market in terms of:

• how to fully utilize online communities from the first idea to the final realization of the product
• how to make platforms that are easily extended by the people 
• how to make things intuitive and fun to keep people loyal to the product
• how to use visualization to make complex things look easy
• how to tie together communications media and consumption models (chat, voice, video streaming, platform and component download, communities, updates, etc) into a seamless fabric focused on the gaming experience
• how to create a fan-driven ecosystem around the product and brand

This list could go on and on. There is a sea change under way in software, and its not just about games. Its about an online, global community of highly intelligent, collaborative, fun-oriented people of an increasingly diverse age group that will shape the face of software more than any software maker ever has in the past. 


I am fortunate that I have an avid gamer in my family that is teaching me a lot about this business. 


If you are in enterprise software, and if you are interested on what the cloud can become, talk to a gamer, and get ready to be surprised

Walldorf, 10.09. 2011

Starting CIO2CIO

http://sapphirenow.blogs-sap.com/2010/05/19/sap-cio-starts-forum-with-cios-of-customers-and-partners/

It sounds like a simple enough idea. Let's connect the CIO of SAP (Oliver Bussmann) who is running one of the largest SAP landscapes in the world, with the CIO of our customers in a non-sales, non-marketing, open dialog conversation.

We kicked this off at this year's SAPPHIREnow show in Frankfurt. Customer CIO's responded very favorably to this idea and I think we will get a lot of super-valuable feedback from the process.

Why have we not done this before?

Well, I think there are a lot of changes happening at SAP that makes this possible, and one of these changes, is a change of culture and leadership style. Oliver is part of this change, and I am happy to help him frame the messages, and turn this into a value added experience for our clients.

If you'd like to meet Oliver and get his perspective CIO to CIO, comment on this blog or send me a mail and I'll see what we can do to set this up.

Best regards

CHHO

Process Orchestration ... another silver bullet?

I am writing this as I return from a very interesting internal discussion to prepare my moderation of an upcoming panel at SAP SAPPHIRE NOW called "Process Orchestration, Hype or Silver Bullet?"

Initially, this looked straight forward enough. Invite some customers and have an engaging chat about process orchestration. No problem. Well ...

The more people I speak with, the more interesting perspectives I get on Process Orchestration. It's like, you ask 9 people and come away with 11 opinions. And all of them seem valid.. what gives?

Here is what I have learned so far:

• In the most simple terms, process orchestration means the coordination of events in a process.
• In a slightly more complex definition, it is the tools and practices needed to ensure process integrity in a landscape of distributed process components
• In its most forward looking interpretation, it is the new mission statement of enterprise applications, as they transform from handling focused LOB level processes to an overall business process platform that is able to deliver process innovation and process integrity at the same time.

So far this is not much different from what we have been saying about SOA and BPM for the past decade or so. What's changed? Why is Process Orchestration all over sudden shifting into the lime light? Is this just another one of the "hype-de-jour" IT industry "flash-in-the-pan" movements or is there a serious shift happening?

As I usually say in these blogs, quoting sage Yogi Berra "predictions are hard, especially when they are about the future". But maybe we can learn something from the past, to make the future more easy to anticipate.

When BPR or Business Process Re-Engineering became "hot" in the beginning of the 1990's, the message to the enterprise was to get rid of functional silos and look at end to end processes. This, among other things, lead to the emergence of a new category of software we now refer to as ERP, and to the development of end-to-end suites, to replace the brittle landscape of best-of-breed applications.

Now, history seems to repeat itself. Functional silos seem to be having a renaissance. Why? Because of the rapid emergence of SaaS and On-Demand point applications that are easy to buy and easy to install, customers are lured in by the attractive prospect of rented software in a pay-as-you-go model to avoid lengthy and expensive implementations and to realize the value proposition of enterprise software more quickly. So you buy a bit of SFA here, a bit of HR talent management here, a bit of SRM there and there you go .. you have a completely functional on-demand suite ......

AND THEN YOU WAKE UP ...

I think the topic of Business Process Orchestration is hot, and becoming hotter as we speak, because more and more customers are realizing that they need to watch out for the brittleness of these new best-of-breed "archipelagos" of SaaS applications. Who owns the master data? Who ensures process integrity? Who instruments the landscapes for insight and analytics? Who ensures updates to one app don't kill the integrity of an end to end process? Who maintains your identities? etc. etc. Problems are well defined and addressed in enterprise software suites are being created all over again. This does not make a lot of sense to me, but it is happening with a vengeance nonetheless.

Humans have short term memories when it comes to pain.

I believe customers should be looking to their enterprise application vendors for a holistic approach to process orchestration. Not just a few tools, but for a comprehensive approach including:

• ALM (Application Lifecycle Management) ... in other words: How do you manage the integrity of your landscape and keep things in synch?
• MDM (Master Data Management) ... in other words: How do you ensure the integrity of your data model including identities and meta data across potentially 100's of small applications running on-premise, on-demand and on-device?
• BPM (Business Process Management) ... in other words: How do you ensure process flexibility and integrity in a model driven approach that fully leverages what you already have?

Once you think this through, it becomes clear that multiple categories of software should converge to create this Process Orchestration Vision. This should lead to the coordinated delivery of a process orchestration suite that melds BPM, ALM and MDM as well as event-driven and rules-based analytics into a new concept that is still looking for a name.

aside: Maybe this is a move from classic Message Oriented Middleware (MOM) to Process Orchestration Platforms (POP) :=) ??

Once this happens and gets delivered, the classic separation between transactional, analytical and collaborative applications can blur, especially in an hybrid landscape where on-demand, on-premise and on-device applications will co-exist as the new architectural standard. Customers will come to expect collaboration, insight and integrity "Out of the box" ... without the need to glue things together after the fact with classic middleware.

With this, Business Process Orchestration becomes the secret sauce, the foundation of a new breed of enterprise software that combines the flexibility and ease of consumption of SaaS with the integrity and reliability of enterprise software.

It will be an interesting space to watch. I look forward to the SAPPHIRE NOW panel, and what our customers have to say about this, and what they're getting out of IT. Because in the end, that's the only thing that really matters.

My 5c for today

CHHO

The TOP-3 impactful IT trends -- or is it really just ONE?

Over the weekend I had to make up my mind which 3 IT trends are most impactful to prepare for a short editorial in a german magazine. The reason I say impactful is that this industry is usually so full of hyped up trends that it sometimes becomes difficult to sort the wheat from the chaff. Impactful means what is really making a dent in the way companies purchase and deploy IT products, as opposed to what are they all talking about. .

So, trying to avoid bias, and instead of wrecking my own brain, I decided to ask the crowd on twitter for some ideas, and within 24h I had a few responses, which are visible inthe comment section below. Although there are only 4 responses (admittedly not exactly a statistically significant sample), the one trend all seem to mention is cloud computing.

Notably absent is the trend around social computing, which I think is as significant as cloud computing.

The combination of these two key waves of change is significant because they have a common underlying cause. The sea change in IT away from scarcity (little of everything: memory, disk, users, locations) to abundance (masses of everything: memory, disk, users, locations). Of course not everything changes from scarcity to abundance. IT resources are continuing to shrink in terms of IT staffing and budget. This, in my personal opinion, is forcing the third mega trend: Simplification

So, what do we have now:

(1) Cloud computing (incl. virtualization, anything-as-a-service, on demand, etc.)

(2) Social computing (incl. social media, web and enterprise 2.0, collaboration, mobile, etc.)

(3) Simple computing (incl. any data everywhere all the time, better user interfaces, etc.)

If one had to combine these 3 trends into a single term one might chose CROWD COMPUTING,

defined as an approach that leverages the abundance of memory, disk, users and locations while keeping cost and compexity to a minimum to make this approach truly sustainable for the masses.

Can one make a prediction based on this? Probably not. But, if you have read Taleb's "Black Swan" you probably agree that our ability to predict things is invesely proportional to our desire to do so. So I will refrain from any predictions and keep with Yogi Berra who said:

"Predictions are hard, especially when they are about the future"

AND

"The future ain't what it used to be"

So, while I am not trying to make any predictions, I think one can safely assume that the speed of change will continue to increase and it will be ever more impossible to accurately predict what will happen in the world of IT. However, one thing seems to be clear. If the trends of Cloud, Social and Simple computing truly converge into a sea change around CROWD COMPUTING, any enterprise software that is not quickly moving in this direction right now is faced with a severe challenge.

What do you think about CROWD COMPUTING?

CHHO