How do platforms, data, and the internet of things come together create innovation in the enterprise? In this episode, Quentin Clark, Chief Business Officer at SAP shares his view on technologies that can drive transformation and business model innovation.
In addition to being SAP's Chief Business Officer, Quentin Clark is a member of the Global Managing Board of SAP SE. He is responsible for defining the direction for SAP and for advancing the company’s business strategy. In this role, he heads corporate strategy, corporate development, partner strategy and development, and portfolio strategy activities.
Prior to this role, he served as chief technology officer and was responsible for driving SAP's technology vision and leading the company in its efforts to build and innovate world-class products that positively impact people, organizations, and customers. He was also the head of the platform division responsible for the development and product management of the SAP HANA platform, SAP HANA Cloud Platform, as well as the technology and analytics portfolios. With more than 20 years of enterprise experience, Quentin is instrumental in developing and driving product strategy, including the definition, planning, and engineering of software and technology. He also led successful industry-disruptive product launches across organizations. Since joining SAP in November 2014, Clark has contributed extensively to positioning SAP as a cloud platform leader.
Prior to joining SAP, Clark was at Microsoft Corporation where he held various leadership roles. In his last role, he was corporate vice president of data systems and platforms, responsible for design and delivery of all of Microsoft’s data products.
Clark holds a bachelor of science degree in computer science and physics from the University of Massachusetts, Amherst, in the United States.
Video Transcript: Innovating Platforms, Data, and Internet of Things, with Quentin Clark, Chief Business Officer, SAP
(00:20) Welcome to episode number 166 of CXOTalk. I’m Michael Krigsman and we’re going to have a great show today. I’m speaking with Quentin Clark, who is the Chief Business Officer of SAP, one of the largest software companies in the world. Quentin, how are you today?
(00:45) Great thanks Michael in speaking with you and your audience.
(00:44) Well I am thrilled that you’re here and let’s start by just tell us briefly, what does the Chief Business Officer role at SAP mean and do
(01:03) The role I play for the company is effectively overseeing build by partner. So what we mean by that is I manage a team that runs a portfolio process where we look at our internal investment levels. I run a team that does corp dev and M&A. I manage a team that does strategic partnerships and overlaid this of course is strategy function for the whole company. The way to think about this is I was hired to help the company turn course in terms of what’s next and where we’re going and have enough execution muscle to help the company get there.
(01:39) and previously you were the Chief Technology Officer, so maybe draw the distinction between Chief Technology Officer and Chief Business Officer.
(01:48) Yeah it’s a good question and in fact it turns out that having done that job is super helpful to the current role I’m in. so I was hired by Bill McDermott; recruited by him, hired by him to help SAP like I say turn the course and figure out kind of what’s next for the industry, what’s next for SAP and how we participate in helping drive.
(02:14) What we know talk about is digitization across different industries. And my first role as a CTO was a way for me to get in the company, learn the people and learn the technology. Learn our customer base you know, learn how the company works in a way that I was able to contribute that back as well right. So in that role I was able to contribute to our cloud strategy and our work in analytics and getting certain things off the ground. And then Bill asked me back in the fall to shift focus to the whole companies strategically, and really expand my curve view of really to help drive the whole company.
(02:49) And being CTO for a year, my part in technology inherently really gave me that grounding, but I think having that product bed is really helping in this role because ultimately it’s products where our customers you know adopt and it is innovation that’s ultimately wanted long-term by your industry.
(03:09) So you mention digitization and the term that comes to mind is digital transformation and I know that is a central part of your strategy and what you’re thinking about. So maybe can you describe for us your perspective what are the components of digital transformation and what are you seeing at your customers.
(03:30) Yeah, that’s a great question and in fact if I can back up a couple a couple of thousand feet and talk a little bit of what we see industry wide in the technology landscape and with our customers would probably be pretty helpful. So let’s just start with the technology landscape that we currently live in.
(03:51) We’re at a moment in time where there has converged together a set of technology shifts that are enabling a whole new era of innovation, unlike anything we’ve really ever seen before. And this is one of these kind of epic kind of generational changes in software. We’re talking about cloud computing, mobility, and mobility is not just smart devices, but it’s also ubiquity of connectivity and the bandwidth that’s available there.
(04:17) We’re talking about the advent of you know machine learning, deep learning, and AI technology coming out of the research labs and now just being part of practical engineering. And we’re talking about big data and the techniques that have emerged around that. And there’s other pieces of this, but my point is that at this moment where there’s this incredible crucible that’s being created by the technology evolution and landscape.
(04:40) That is now touching into traditional business and creating this tremendous pressure for change and opportunity. If you think about it, the largest transportation company on the planet the transportation company now is Uber; they don’t own any vehicles, right. There’s the largest vacation and car rental company on the planet is Airbnb; they don’t own any vacation properties right. And why is that the case? Well, it’s the case because of everything I was just talking about, the digital transformation and the ability to create and connectivity and direct wiring between the consumers and the producers. And this created a change in those industries and opportunities for a business model change.
(05:21) And that is what this digital transformation ultimately is really all about. But it’s not limited to one industry. It is going to impact every industry that’s out there and create new ones to.
(05:35) One of our favorite examples at SAP is at our company called Kaeser Kompressoren. That’s a German company that makes heavy industry compressor equipment, so like in factories use compressed air to run machinery and tooling etc. and they shifted from an on-prem traditional like selling a compressor time model into basically selling liters of compressed air at some pressure over some landscape inside a factory as a subscription. And so everything they then do on terms of efficiency and everything else and their equipment, they then reap the benefit of and they are no longer having annual quotes on sale cycles on transporting their equipment. They have a much more continuous and predictable business model, and it’s only been possible because of all this stuff we’ve been talking about; IoT, big data, cloud computing, mobility, all of this stuff.
(06:23) And so that is going to impact every industry, and our customers certainly come to us in how they developed the agility and what they need to start doing technology wise and in their landscapes, they get prepared for that and to start to explore different business models.
(06:40) Everybody who’s watching be aware that you can join this conversation on Twitter with the hashtag, #cxotalk so please join the conversation and you can even ask questions directly of Quentin as we have this conversation. So Quentin what you’re describing is digital transformation that deeply profoundly effects as you said the business model of the company and that goes far beyond marketing but deep into the operations, the supply chain, the core processes of the company. Maybe you can talk about that dimension of it.
(07:26) Yeah, so one of the ways we think about this in terms of a framework, a taxonomy is digitization across the workplace, across assets, and across customer engagement right. And so if you think about that you know, what we’re talking about is you know at a detailed level, if you look at a logistics management, the ability to basically pretty unique identifiers and everything in building materials and understand everything that’s happened to its entire lifecycle, right.
(07:58) We have companies that we work with in the retail goods space that you know sell a billion products in a year. Those billion products, if you actually traced the manufacturing lineage and trace it through every part of its supply chain all the way to and delivery to a customer and its generating terabytes of data a day potentially right. So how do you go and take advantage of that, not just in terms of maximization and operational efficiency, certainly a worthy pursuit. But also in terms of being able to anticipate changes with suppliers and anticipate trends and these kinds of things to be in front of your business on behalf of doing your best for your customers.
(08:38) If you look at the workplace, the advent of things like employee central and recruiting that’s not happening you know online and understanding in metrics, around interactions between customers and employees. And in between employees and the engineering work that the product they produce, there’s a huge opportunity there to have much more metric based ways of engaging your own workforce right. And making sure you are tuned into the signals to maximize the employee experience, and reduce the kind of work that they do that is not really value producing work and you want to get things focused. And ensure that they are having a really great experience with the company right.
(09:26) And then you know if you think about customers, we’re now in a world where we’re far beyond CRM right. We are now looking at a 306 view of the customer; what are we doing to market to them, what are we doing to sell to them. What if then the comm interacts with them online, retail, physically whatever, and what are we doing to support them right, support and service them.
(09:50) And if you look at all of that together, all of that information, plus the information that’s out there that they’re participating in social data and that kind of stuff, gives you a tremendous opportunity to tune every experience of every customer in a very individualized way. But all of that’s not possible without this notion of digitizing everything that we’re talking about.
(10:11) And so you’ve mentioned metrics, you mentioned Internet Of Things, all of this has the common thread of data. And so maybe can you now link this concept of data into this and the connection to innovation and the business change that you’ve bee describing.
(10:34) Yeah, so let’s work it backwards and one way to do this that’s interesting is work it backwards. Let’s start with just a very simple scenario. A employee, a retail store manager working at a you know large retail company right, has to open the store that day and to maximize her opportunity for that business to be successful. One of the things that is always done at the beginning of the day is to think about what is at the front of the glass of the store, because that’s going to draw people walking by and into the store naturally. So what do you chose? How does that process work? Well, the very experienced store manager develops a framework and an intuition and picks up on all the little signals, and knows what research to do and social media, and what advertising was done and whatever else to know what to put a the front of the store to maximize the opportunity.
(11:29) Well what if instead of relying in 10 years of experience you could make you know everyone efficient and productive on that topic right. And so you take a very simple thing an analytics model that helps an employee or helps the store manager understand what to bring at the front of the glass. And you trace that piece of analysis all the way back to what’s required and that’s the data story.
(11:54) So for her the experience might be really simple right. Maybe she’s interacting with an intelligence agent that’s helping her understand that. Or maybe she is looking at a report on her mobile device and she sees this analysis and these conclusions and she makes decisions. But underneath is things like an understanding of what kinds of customers will be there that day. And understand of what has potentially caught a social meme, and it’s based on analysis of you know the Facebook, Twitter, or LinkedIn data or whatever is out there that is being analyzed not just in a global way but really in a regional way as well.
(12:33) It also is holding on things like what are the items that need to get through at a certain sales cycle in that week or that month or that quarter and to optimize for that. Who is going to be in the store working and we’re they good at selling, right. So maximizing the opportunity for them.
(12:49) So this actually is a very complex model that we’re talking about. And some of it really is big data. It’s coming out of social data, it’s taking into account the analytics across all of the points of sale, across all the stores. Things work from one place won’t work in another, are they really alike. And all of that data that’s very diverse set and a fairly complex processing that, ultimately has to be made simple.
(13:16) And the data management challenge is how do you make simple, actionable, human understandable artifacts and insights out of this all new information processing. So that is really the opportunity for companies like SAP right, for to come and help engineer those systems and engineer the applications and make it simple for those users.
(13:38) Now you mentioned the term innovation, and you mentioned the term efficiency. So now can you overlay onto all of this, this notion of going beyond efficiency into the realm of innovation, and how does all of this support innovation that goes beyond ‘merely’ efficiency.
(14:10) That’s a good question. Actually as I approach talking about that let me give an example right. Cloud computing, if you take enterprise cloud computing as a topic you have both of these axis that you speak about. The first initial on ramp of enterprise products and computing generally speaking into the cloud was about operational efficiency. It was about running things more cheaply and being able to scale them more easily etc.
(14:43) But the real opportunity, the disruptive opportunity is about taking them to the cloud to do things that simply weren’t possible before. And leveraging the activity and the scale power of the cloud just to simply approach new challenges, new problems.
(14:58) You know HANA has been a little bit like this for us, where we’ve been retooling with S4 HANA, the ERP suite, we’ve been retooling to take advantage of HANA’s performance and it’s integrated transactional and analytics side, and that’s opened up whole new opportunities. So yes, we’re taking 100 terabyte landscapes and we’re squeezing it down into a terabyte system; incredible efficiency gain. But actually what’s more important and more impactful is the notion of a real-time digital dashboard. Right, a digital boardroom where the access to information, the detail to information, and the real-time nature of information is actually a transformational operational experience that changes what the business was able to do and provides new agility.
(15:39) And so this is true and you can look at these major system architecture changes and it’s no different in this digitization journey right, where the first hacked ROI is going to be, hey, is there something that we can do with it that helps us pay for the investment right, and return something tangibly and neatly back to the business. But the next step would inevitably be is what new is possible?
(16:06) And this is even true for SAP because we have digitized certain things; Digitized travel and entertainment. We’ve digitized procurement management. You know, yes it is a massive operational efficiency opportunity for our customers. But then we look at that and we look at the data inside the system and say, well we know a lot about the world right. We know a lot about how the world gets around. We know a lot about what things cost. We know a lot about procurement, and we can predict what’ going to happen, and that is new value for us to innovate on. So I think for a lot of these major shifts in computing you see this two-step process and I think it’s an insightful observation made.
(16:45) We have a comment or a question from Arsalan Khan on Twitter who begins to elude to the culture of dimensions. We’ve spoken about the technology underpinnings under all of this but when you’re talking about innovation, you’re talking about change and if you’re doing that pervasively through a company that’s culture. So maybe talk about the people dimension of all of this obviously it’s very important.
(17:13) It is, the cultural journey here I mean you can look at every C change you know that a company across any industry has taken and you see as much of the story is about culture and about people as it is about anything else right. Now the technology tends to more of an enabler. It’s really what people do with it that ultimately matters.
(17:35) And you know I’ve lived through this a couple of times in my career where you know we have undergone you know paradigm changes and focus changes and you need to bring an organization through that. And you can write books, infact books have been written about this very topic. And you have to start with the people understanding where their interests are naturally aligned and really driving towards outcomes that improve that they’re able to do their jobs.
(18:05) Ultimately people want to contribute. And so when this are understood in the context of bettering their experience and bettering their experience to contribute they’ll get it. If it’s only understood in the context of working through change with no better outcome, this is where the resistance happens right.
(18:22) So you can never sort of forget you know, when we work with our customers one of the questions is, is the leadership team championing this? Who is going to be at the forefront every day? Who is the visible leader inside the company that’s helping champion that? Who’s going to be spending their time with the key influencers inside the company that are helping you know, precipitating these kinds of changes? Because it is as important as a technical journey itself.
(18:51) So in effect the question becomes how do you overcome the resistance inside your large organizations by their nature are typically focused on the status quo. So is that the question, how do you overcome resistance or are there other core questions around the people transformation aspect of it.
(19:14) Well I think it’s twofold right, there’s both the elimination and the understanding about opportunity and many people will run to opportunity when they see it. And I think that one of the best approaches to this kind of thing is starting small; success begets success. And you know you start something small. You prove its value. You let people see it, and you show you demonstrate that the people involved, that the journey they went through was a viable one, and that tends to build.
(19:48) I’ve been through like I say a couple of cultural transformations in my career and they all almost start like this. They allmost begin with you know, taking on a championship of a small thing and seeing it through, and not worrying as much about you know how are you going to get 1000 people through this knothole or 200 people through this knothole. Let’s start with 10. Let’s start with two groups of 15 right, and let’s build on that because people are inherently social animals and they will start to see where the herd is going so to say. And the wisdom of the crowd is powerful. But that does mean it starts with small groups around the campfire.
(20:26) This digital transformation involves so many pieces, so what are the implications and you spoke about the technology aspects before. What are the implications for departments such as marketing, so the implications for the CMO or the CEO and even for the CIO, the Chief Information Officer in all of this.
(20:53) So I think if you look at the business unit right, the functional units like marketing or you know the (signal dropped 21:04) or the executive bet, joining HR right and you really separate that from the conversation with IT for a moment right.
(21:13) The opportunities for the lines of business I mean they are really there. Products and procurement for finance, the success factors for finance and HR, we’ve seen this pattern play out where the people who are responsible for these businesses see these units within the business. They see the opportunity to improve their entire remit right, by embracing these changes.
(21:44) And they’ll drive that right. Infact a lot of the adoption that we see in things like travel and expense or in HR management start departmentally. Even outside of those departments, even start with smaller groups, and then we see that the sort of functional leaders see that opportunity and get after it.
(22:03) IT, there’s a tremendous opportunity for IT to reassert its role in the business and in the enterprise. I think there’s been a period of time where IT got very focused or got their reputation basically for operating the systems; keeping things running as opposed to innovating, and I think those days have to be over. I think you know there was a point in time for IT, everything they did was like magic right. I mean the first time email showed up. The first time file sharing showed up, these are magical productivity transformations in the enterprise and for businesses and for how people work.
(22:42) And then we made it a big exercise to run these systems right, and in part of what HANA has been about, and part of what SAP is really driving towards is this notion of run simple. We’re trying to make it so that IT can focus back on innovation. Whether that innovation is at an auto maker that’s having to go through transitions, it’s driverless cars and different business models with you know ride sharing and these kinds of things. Or that digitization at this compressor company that has to change its own business model.
(23:15) IT is going to be at the heart of this because every company is going to end up being a software company. Any company that believes that it is not at the forefront of leading it’s industry through this transformation and embracing new model and leveraging software to get there needs to rethink its strategy.
(23:37) What about the role of platforms in all of this.
(23:43) Platforms, well Michael, that is a big word right. I mean in some ways if you think about Ariba, it’s a platform for procurement management because there are suppliers who plug into that platform and because that platform is open it opens up an ecosystem for them to participate in.
(24:05) So a platform really lives at many layers of the stack, and in terms of digitization there are parts of the platform that I think are very well understood in industry-wide as being a critical component. The cloud and its scale as a whole, the ability to deal with big data and SAP of course has made investments in HANA and VORA to get after that big data equation. Analytics is an important part of this. We’re talking more and more about intelligence and the need for platforms around machine learning and deep learning and naturally there are interactions.
(24:43) So it is just as I started with, because of the technology landscape, opening up the crucible for innovation and change, the platforms for that are of course incredibly important, and I think you’re going to find that everyone who is serious about helping enterprises work through these transitions is making investments in the platform in pretty substantial way.
(25:05) And maybe again, I keep asking you to overlay these various new pieces, but you mentioned earlier IOT; Internet Of Things and that’s another very very important part of this landscape of transformation. So please, share your thoughts on that
(25:28) So IOT is one of the components if you will of a new equation around information that feeds in a lot of these transformations. And so you know, people don’t think about the analytics behind for example social data as an IOT problem because it’s not. It’s characterized as a big data problem. But just as much as that information is critical for customers and sentiments and understands how you parked your fairing, IOT is just as instrumental in things such as supply management, manufacturing, and retail, and retail management etc. So these are all just facets of the same generalized challenge around information.
(26:14) Remember when I talked about you know the end user experience of that store manager, well the example I gave was actually fed by IoT data, by social data, by the systems of record information, like the point of sale and the history and all that. So IoT fits in that way and IoT and my belief is IoT is going to end up being a mesh of information. So the creators of IoT information, a piece of machinery on a factory floor, a sensor at a warehouse right, these sorts of pieces, that information is going to flow. They’ll be certain services that those product suppliers, system suppliers offer around that information and creating a flow into other systems, and they’re all creating a flow into these systems and applications and end users are seeing and using. And they’re changing the information they have access to and how they understand that information.
(27:09) And so IoT is really going to fit in with this mesh f many different sources and many different uses of that information. And it’s an important part of this digitization as any other piece.
(27:21) And so again that leads us back to this platform question because in order to do this we need both the technology foundation as well as the business model foundation as well as all the other tentacles, implications of where the business changes go, ripple through the company that’s undertaking this digital transformation.
(27:49) Yeah absolutely. I mean at SAP this is one of the things that of course we’re quite focused on is as we’ve been retooling around SAP HANA, and as we’ve been taking HANA and leveraging in our cloud line of business applications, the question is how is it that the overall data flow supports the end user insights and experiences that are going to help the business differentiate and really sort of run in this digital journey. So there’s a core piece of data infrastructure that needs to be worked through and evolved over time as these apps mature and these systems mature. But there also is other elements of platform right.
(28:33) And if you think about things like what we’ve done with Hybrid Yaz or tax capitalization as a service, or the APIs into something like Ariba. It’s this new opportunity to more rapidly build new value on top of these other systems that kind of never really existed before. So there’s a thing that’s emerging which is a little bit of this cloud/API economy, where the ability to interface this system, automate things, build new value rapidly is also something that’s emerging and it’s going to be part of this digital transformation.
(29:07) As you observe your customers, are there specific industry segments or types of customers that are undertaking or embracing these transformations particularly.
(29:23) Well I would say nothing by industry really stands out in terms of one industry versus another you know where we’re seeing more interests in the kinds of transformation and into the kinds of business model disruption that we know there is potential for.
(29:41) What’s more true is at an individual customer by customer basis, right. How far along are they in terms of intellectually understanding that? And they go through this interesting cycle of exploring and learning right. Where you know, first they’re curious and in the end they get a little wide eyed around cloud, ‘This could potentially and hugely impactful, how do we begin?’ And then they start to get their sleeves rolled up and dig into it and realize that there is an approach they can make. Again culturally you build, you start small, you build, you explore, you create agility. So there’s all these different aspects of this, but they can breakdown the problem.
(30:23) And so I’ve had experiences where you know customers come in to our conference here in Palo Alto and you know immediately open with, our industry is changing and we think it’s changing because of the following reasons. And you know we’re here to talk about how we can work together to help us right, this enterprise, being prepared for exploring how to take advantages of those changes.
(30:47) An example that is I had one of the German automobile makers come into our conference room just a few weeks ago and said look, between ridesharing and driverless automobiles, we know our business model’s going to change. We want to have a conversation around what does that mean in terms of IoT, coming on and off the vehicles, that kind of flexibility you need to have in our customer engagement systems. The kinds of flexibility you need to have in terms of the back end, in terms of manufacturing and even supply management. How are we going to embrace creating agility for ourselves so we can go explore all these potential business models? And it’s just this incredible conversation to be part of and really a humbling experience to be involved in us to help a company go through that.
(31:35) So is the common thread that’s driving these companies to undertake transformation, is it seeing the competitive environment or can you draw a common thread among these various companies?
(31:50) Well I think the common thread tends to be you see a combination of two things that are taking effect at the same time. One is there’s someone who gets it. Very often you end up meeting the person who’s championing that things are going to change, right. And so you see that and you see that mixed in with enough insight into something in their industry which is an opportunity by comparing to something that’s happened in a parallel industry, or something they’re seeing the beginnings of their own industry. And so you couple something specific with someone who has the vision of where to champion that change could provide great opportunity, and this is typically when these conversations really begin.
(32:39) And when a company is in this position, so there’s somebody who gets it and there’s some type of change that’s going on in the market how do they begin. So if there are business executives out there or technology executives who are watching this, and they’re seeing this, it seems like a daunting task, how do they begin?
(33:07) Yeah, again as we’ve watched and participated and been part with customers who have you know began to be on this journey, we do see that moment right, where their eyes get wide and realize wow, the scale of impact could be tremendous and how is it we get through this journey.
(33:27) And here you know, the thing that we tent to counsel our customers on is let’s start with a specific project. Let’s go identify you know, one or two opportunities where there’s a part of the organization that’s ready. Whether it’s a change in how to engage our workforce and part of HR on that, or whether it’s to start looking at we know we’re going to need instrument these products, whether it’s manufacturing thing or a consumer goods thing or whatever else between where they are in that chain. We know we’re going to instrument it differently because we know we’re going to need these insights. Great, let’s go and get a project going just to build and in architecture that gets you that instrumentation and starts to get the data signals you know flowing and all that stuff right.
(34:14) So it’s really getting down to these individual projects so that often we end up co-innovating on with them to help them explore that. But the point really being start small and build up. It’s like every other major project. You don’t approach building a house by standing there in front of a forest with an axe and saying by the end of the day I’m going to have a full house built with plumbing. You start small; okay here are the steps we’re going to go through and we need to build a plan. We need to you know get the lumber, or we need to you know validate that the wall we’re going to build are going to be robust enough. We need to do these different step in order to construct and erect the house and it’s going to take time, right.
(34:58) And you can start small and you can work your way through it. And by working with customers and identifying those small pieces that start to come together, you’re effecting the culture change right, so we’re back to that. And you’re starting to learn and make progress.
(35:13) But the number one thing that we can tell people is just maintain the curiosity right. Start to be curious, start to ask the questions and one of the things that I’ve often suggested to people is, go show up in a different conference right. Go outside your industry. Go and learn things that may be related, but very much parallel with a difference. And go learn how this is impacting other industries and other organizations. And it won’t be exactly how you’re going to apply it but it might catalyze some thinking about how it will affect you.
(35:51) We have only a few minutes left, as a company is looking at the problem and starting small and trying to get quick wins and break it down as they would in any other project. In this case with digital transformation it involves both technology pieces as well as business pieces. And that by its nature involves information and collaboration cross siloes, so who is the right people to get involved and what advice or recommendations do you have for making this initial process of coming together as seamless and as easy as possible.
(36:34) Well I think a lot depends on the business right, and certainly if you do not have a conversation at the senior leadership level with the CEO, the CIO, and the heads of finance and HR and the business lines, and the sales fields and core organization. If you do not have a conversation at that level, these things tend not to go very far right. And it won’t be these people who necessarily roll up their sleeves and implementing the new code, the new product line, or the new business approach but they have to be intellectually curious about the journey, and they have to help and support and setup teams to go after these things.
(37:18) One of the most valuable things that these people can do is walk back from those discussions and identify someone to help be that change agent for them in their departments, and set up a small effort right, that’s going on exploring. With exploration is what is the value of kind of a thing, like what is the value of adopting a cloud base solution for this or that other functionality. Or that exploration of we need to understand IoT better. Let’s just set up a small project that we can work with a partner, instrument this product, or instrument this factory, or instrument this warehouse or instrument whatever it is. So to get some information back and start to understand what the value might be and gain some experience. These are the things that have to happen.
(38:03) So it starts with a recognition that the world around you is changing and an open and honest conversation about that like you know every great company story, it starts with the leadership team who understands that they have to put one foot in front of another in terms of a journey. And you know this digital transformation it is a journey. It is not something that happens overnight. It doesn’t happen in industry overnight, it doesn’t happen in every single company overnight. But it starts with those small steps, and it starts with being curious. And you know, the more they can bring in outside people that are again from different industries, or come from a technology space that can help aluminate the potential changes and value, and how the business process might work or how the business model might work the better off they are right, and that curiosity is going to lead into opening up avenues to exploration.
(38:55) Again, we have only five minutes, and these are such huge topics and we could go on and on. But you mentioned earlier that this is a time of tremendous opportunity for IT and Chief Information Officers. Can you elaborate on that and also share your advice as you work with many different customers of SAP. How can CIOs take best advantage of this great opportunity that they have today.
(39:33) I think a lot of it’s really about leadership right, and I’ve met so many CIOs over the years that have really wanted to lead a phase change in the business and to contribute to how the business operates and looks for opportunities to seek and capitalize on. And I think the environment that we live in from a technology landscape standpoint gives them a platform so to say to do that unlike in any other time in history.
(40:05) It is yes, it’s about adopting you know cloud software and determine to put that in the cloud, that we need to take HR management and move that into the cloud and focus on the things that are going to move the needle and provide agility in the business. You know, when we talk to customers about p-process and leveraging something like SAP HANA and what we talk about is the agility they gained back out of it, which they then reapply back in the business.
(40:30) We have a great story for example with a major retail company – a luxury goods company, where they were able to digitize their entire supply management, able to digitize the customer experience in the retail stores, and have a major change to the end-to-end; manufacturing, demand signals, supply management, all the way to the retail experience into the digital you know marketing experiences that those customers also have.
(40:58) An end-to-end view driven by the CIO, because it wasn’t just one department at a time. It wasn’t just about the manufacturing. It wasn’t just about supply management. It wasn’t just about retail, and it wasn’t just about marketing. It was about driving and helping the company understand the end-to-end flow that this digital transformation was going to result in and the impact it would have across that entire lifecycle which ultimately is about the customer, right. And it took the IT remit, it took an IT visionary to help the company see the opportunity, embrace it, and it had tremendous impact on their business. And that’s the kind of thing that is the power now that a CIO has and the potential impact on the business.
(41:46) It’s really a challenge though in some companies because you’re describing a way of thinking that makes so much sense and especially the reference point back to what’s best for the customer, but it may not be in the DNA of the company.
(42:02) It may not and the reality is Michael if you look at the you know the logos at the top of any industry right over you know 10 year, 20 year spans, they change right. And a lot of that has to do with whether or not companies saw where the current C change in the industry was and was able to embrace that C change and take advantage of it. And it’s not true for new companies to arise and to take their place in the world. But it’s also as much of an opportunity for an incumbent organizations not to survive but to really thrive in the new era.
(42:46) We have worked with companies who were concerned about how they were going to navigate through this change. But got on the forefront of it and have been able to find a way to thrive. And yeah, it’s the mentality, it’s a culture, it’s a recognition of opportunity. It’s people with all of the vision. But the message is it can be done, and infact I don’t think it even takes necessarily rocket science. It takes recognition, and it takes conviction. And if you have those things, you can stand up, you can lead, and you can drive that change.
(43:23) So at the end of the day, recognition and conviction are the bottom line attributes.
(43:31) I would say so. I mean so much of and even as a parent right, I have a couple of boys that are 12 and 14 and you know helping them is about helping them recognize the opportunities for them and have the conviction that is the right thing to pursue. And I’m not comparing our engagements to customers having kids, but it is the human journey. Generally speaking, when we recognize, when we have this awareness to know what is going on around us and to develop a conviction for what we want our role to be in that. That’s true at a company level. It’s true in a company’s leadership and the boardroom right, with the CXOs, and it’s true at the individual level down at the CIO.
(44:18) So at all of those different points you know we need to develop that situation whereas that recognition of what’s going on and the conviction, and the conviction about where we want to be in that evolving world.
(44:30) I love that; digital transformation as the human journey. Thank you so much. We have been talking with Quentin Clark, who is the Chief Business Officer of SAP about digital transformation. Quentin, thank you so much for taking the time out of your really busy day and joining us today I really appreciate it.
(44:57) Thank you so much Michael. Great conversation and I really appreciate the opportunity to talk to you and your audience.
(45:03) And everybody thank you for taking time out of your day for watching to join us. This has been episode number 166 of CXOTalk with again my guest today was Quentin Clark the Chief Business Officer of SAP. Everybody, have a great week and we’ll see you next time bye bye.
Companies mentioned on today’s show
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