SAP and IBM Team Up to Help Customers Avoid Extinction

As the pace of change continues to soar and the timetable to transformation shrinks, SAP and IBM are rolling out a broad array of data-driven services to help customers innovate and thrive rather than stagnate and go away.

Building on a partnership launched half a century ago, IBM and SAP are calling this new initiative “the evolution partnership.”

But I think a more apt name is “the revolution partnership.”

Because the consumer-led digital revolution is here. It’s in full and frantic swing. And anyone who thinks that we’ll just ease back to “normal” later this year is simply denying the harsh reality.

I applaud the move by SAP and IBM to reinvigorate their 48-year-old alliance with these new offerings, designed to help customers make better decisions more quickly in order to be able to create better experiences for their customers.

And I’m willing to bet that of the various components making up this new Evolution Partnership, the biggest impact will come from the one centered on vertical industries. This excerpt from the IBM-SAP press release gives some nice context for the “to” destination in this from-to dynamic:

Announced last week, SAP’s industry cloud delivers innovative, vertical solutions to drive cost-effective transformation and sustainable growth. To further address market demand for industry-specific innovation, IBM and SAP have started to jointly define and have delivered cloud-based solutions with intelligent end-to-end industry workflows to enable clients to make business decisions based on data-driven insights.

The first offering will focus on lead-to-order and plan-to-manufacture business processes for the industrial machinery and components (IM&C) industry, to help industrial manufacturers reinvent workflow processes to increase productivity and customer satisfaction. IBM and SAP teamed up with leading IM&C companies to design and build out future capabilities.

As noted in the first line of that excerpt, SAP unveiled its “industry cloud” last week at Sapphire. I believe CEO Christian Klein intends to make it one of his top objectives for the coming 2-3 years. 

Because if SAP—the world leader in enterprise applications—doesn’t drive this next wave of industry-specific solutions, then some other great apps company surely will. And that incursion would be a massive blow for SAP because as the world becomes more data-driven and more digital and more dependent on ML and AI, businesses will need to refine their processes relentlessly to not only keep up with customers but also create world-class experiences for them.

To gain some additional perspectives on the types of business value IBM and SAP expect this new initiative to provide for clients, I had the following email exchange yesterday with Keith Costello, global general manager & SAP leader for IBM Services.

Question: Seen from the perspective of CEOs on the client side, which of their top priorities does this enhanced SAP-IBM partnership address?

• Answer from Costello: “Providing a trusted source of data and intelligence, infused with exponential technologies and innovations (like AI, automation), on the foundation of an operationally optimized business platform. CEOs in our surveys want their companies to be a trusted source, and seen as innovative in their space. IBM and SAP also intend to align our resources so that clients can re-imagine their customer and employees experiences, making the most of built-in industry-specific intelligent workflows. By doing this, they’ll be equipped to build out joint experience-management and customer-experience go-to-market strategies that target multiple industry verticals. Data is driving many of today’s new business models, and these offerings will help customers design data-to-value business models to increase customer satisfaction and overall profitability.”

Question: IBM works closely with a number of major enterprise-software companies. Is this a unique offering from IBM, or will IBM seek to align with other major SaaS vendors?

• Answer: “Most importantly, this partnership is designed to combine the very best of IBM and SAP technologies to provide our customers with offerings that help them make processes more efficient and build intelligent workflows as they look for ways to rapidly respond and adapt in a rapidly changing market… Our clients work with a number of major enterprise-software providers, and they expect us to provide them with a one-stop-shop for these capabilities. So, across the major processes that touch supply chain, manufacturing, billing, and customer service, for example, there could be a multitude of enterprise software providers. SAP is often the digital core, but our clients have long since taken the journey to SaaS providers for various elements of their business. For the record, we have tight relationships with SAP, Oracle, Workday, Microsoft and Salesforce, among others.” 

Question: SAP CEO Christian Klein has said that SAP needs to retain control over client relationships because SAP’s apps run the business processes for clients. Is that the case with the Evolution project? And if so, what is the role that IBM plays?

• Answer: “As SAP enables more of their products to be procured in a subscription commercial model, they must concern themselves with the consumption (i.e., deployment and use) of the software and customer satisfaction. I would argue that SAP has always been focused on customer satisfaction, but the SaaS mindset is relatively new to them. Unlike other enterprise software companies born in the cloud, SAP is transitioning on that journey. Partnering with IBM more closely, and investing in end-to-end intelligent industry clouds, will produce accelerated deployment and higher rates of customer consumption. Each of us has a part to play in the client relationship, and each of us put clients first.”

Question: Can clients in other industries expect to see SAP and IBM roll out similar initiatives for their industries? If so, any idea of the timetable?

• Answer: “We just announced our Evolution Partnership initiative on Tuesday, so we are in the early stages. However, we are already in discussions with SAP (as we have been for many years) about the future roadmap and additional industries in which to partner, including retail, defense, consumer packaged goods, life sciences and others. We expect to announce some of our initiatives in these industries later this year.”

Along with that major focus on industry-specific capabilities, the enhanced IBM-SAP partnership is also looking to help clients stay relevant by:

Using hybrid cloud more effectively

“Companies continue to rapidly evolve business models and reconfigure processes to better support their customers and meet new market demands,” SAP and IBM said in their announcement. And more and more customers believe that hybrid cloud is already or will soon be the optimal platform for those essential changes, according to a recent survey from the Americas’ SAP Users’ Group.”

Creating world-class experiences for customers and also for employees

“To help companies increase value from data, IBM and SAP plan to provide technology and services leveraging the SAP Customer Experience portfolio and Experience Management solutions from SAP (Qualtrics) to enable clients to deliver a next-generation omnichannel experience and measure and improve the effectiveness of stakeholder experiences,” the companies said.

Automating processes to accelerate transformation

Using preconfigured industry templates, this offering accelerates integration by optimizing the necessary technologies from SAP and from IBM. In the past, that’s been a nontrivial chore dumped on the customer to deal with.

Disclosure: at the time of this writing, SAP was among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.

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