December 18, 2013
SAP Services offers consulting, education, custom development, and support services to customers worldwide. At Technology Services World (TSW) Service Transformations held in Las Vegas this past October, Anand Eswaran, head of SAP Global Services, led a powerful keynote discussion that outlined the success factors in today’s economy, the impact of evolving Millennials’ (“Gen Y”) buying behavior, and what game-changing technologies such as cloud, big data, and mobile mean for SAP’s customers and SAP Services. Read on for some key highlights from his discussion.
Market disruption has been occurring for some time, and it’s undeniably not isolated to tech. Take the film industry as an example. Platform wars have evolved from the earlier days of the industry (VHS vs. Beta, Blue-ray vs. HD). Think about the disruption that these platform wars had on how people consumed movies. Businesses like Blockbuster were built based on these disruptions, changing the way we gained access to movies. And Blockbuster was very successful for a long time, but they didn’t plan for the looming market disruption that happened as a result of changes in consumption.
In business, “change is the only constant,” Eswaran emphasizes. “But sometimes it feels that in services, we have not been fast enough to adapt to change, and we’ve not been fast enough to lead change.” For a long time, the business model has largely been stagnant. The ’90s saw some efficiency gains from the offshoring phenomenon. But in today’s tech industry, we are at an inflection point. Eswaran notes that we do the core role of services really well, but the opportunity for us is considerably more substantial.
There are many inflections that we historically haven’t seen before in the history of tech. Customers are talking about consumption very differently. “The consumption model―the buying behavior―is dramatically different,” explains Eswaran. “And there are a lot of other trends coming that are going to [increase the speed of customer consumption].”
All of these inflections―Millenials, social, mobile, cloud, big data―are creating different customer needs, and so consequently, our services will need to adapt in order to meet our customers’ evolving requirements.
“Seventy-five percent of the workforce will be [made up of] Millenials by 2025,” explains Eswaran. “They talk differently, they engage with you differently, they work differently. The inputs are different; the outputs are different.” Services will need to evolve to enable this continuing shift.
From a personal standpoint, social has had a major impact on individuals of all ages. Enterprises have been affected as well by social, but not to the same extent. However with the imminent Millenial shift, it’s going to increase social’s effect on our businesses.
It’s predicted that by the end of this year, 7.4 billion devices will be in use―greater than the world population. By 2020, it’s expected to surge to an astounding 50 billion―six times the current world population. This will change the game not only in how we personally use our devices, but also in how we work. And so we’re going to have to leverage mobile for both our businesses and our customers.
The industry is seriously abuzz about cloud―it’s actually been in existence for some time, but it’s rapidly gaining a lot of traction. It’s predicted that more and more CIOs, as well as world governments, will come to embrace a “cloud first” strategy as we move forward. “Imagine the spend and addressable market that’s created when 35 percent of the governments today have announced their approach,” stresses Eswaran.
Figure 2 is a snapshot Eswaran came across showing the amount of data that’s been created every minute over the past six months. And it’s both fascinating and eye-opening at the same time. “Just last year, 2.5 quintillion bytes of data were created―that’s 2.5 into 18 zeros,” Eswaran points out. “And what’s more scary is that every 1.2 years, over the last five years, the amount of data created is doubling. So what we’re seeing as gobs of data [now] is nothing compared to what we’ll see in the next year.”
What this means for us in services, is that we have a great opportunity. An opportunity to add value to our customers in the form of real-time insights, which will allow them to better run their organizations.
The key to our future success is to focus on outcomes, value, and impact for our customers. And to bring this focus to life, we need to change the way we engage with our customers. We will need to differentiate, and this differentiation will be a central factor in determining our success moving forward. “Technology is just table stakes,” says Eswaran. “How we engage with [our customers] is going to be the most important thing [as we go forward].”
Business and process consulting is another factor that will determine our success. When we think consulting, we think it’s got to be left to the McKinsey’s of the world. Not so, says Eswaran. “When you talk about end-to-end outcomes for the customer, that can only happen when you bring in process, and business, and technology together. If you do not bring all of them in, it doesn’t work. It doesn’t happen.” This all comes together and creates end-to-end experience for the customer.
Another key factor Eswaran talked about is learning. Learning and training are two different things, and understanding the difference between the two is crucial. While many companies have a training business, SAP has a learning business, which employs all of the inflections discussed above (mobile, social, etc.), and it’s changing the way in which people can learn.
SAP defines a portfolio that is based on outcomes via a very consumer-grade user experience. Eswaran says it’s key to every portfolio the company offers, with services playing a central role in a few different aspects.
To find out how SAP has taken a different approach to services in response to the trends largely discussed in TSIA’s latest book, B4B, watch Eswaran’s compelling keynote in its entirety. “It’s time to seize the day. Whether we do it or not is up to us. But this is [the service team’s] opportunity … to be the people who create a difference for our customer, and for our customer’s customer.”
To learn more about the SAP journey, go here to watch Eswaran’s keynote in its entirety. To learn more about B4B, TSIA’s recently launched book that’s profoundly reshaping the way tech services is being run, be sure to also view TSW Service Transformations keynotes by B4Bcoauthors J.B. Wood and Thomas Lah.
TSIA is here to help you navigate in the B4B era. Visit TSIA’s research listings to read specialized reports on how the B4B model will impact the key discipline areas of technology services, and visit TSIA’s B4B Essential Resources page―your connection to “all things B4B.” Coauthors are now taking bookings for speaking engagements so you can get your organization ready for the exciting, new B4B era. TSIA is here to help you evolve into this new era―and it’s going to be going to be a great ride.
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