SAP on Data-Driven Innovation: ‘60% of Manual Processes Automated by 2025’

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Carl Lewis:

Welcome to the Connected Enterprise Podcast. I’m Carl Lewis, your host from Vision33, and my guest is Matthew Sinclair. Matt, tell us about yourself, your home, your location, and your work at SAP.

Matt Sinclair:

Thank you, Carl. It's a pleasure to be here. I work for SAP in the UK. Our head office is 10 minutes away from Heathrow Airport in London, and I live 30 miles outside of London in a small town called Reading. I've been at SAP for 9.5 years. I’ve always worked in the small to midsized enterprise (SME) space with SME customers, partners, and resellers.

Matt Sinclair:

I worked in a channel operations role for a few years, then became a partner account manager, managing S4, SuccessFactors, and cross-product partners of all sizes. Five years ago, I joined the Business One team, which is now Business One and Business ByDesign. I’ve enjoyed my time at SAP.

Carl Lewis:

Thanks, Matt. As you work with customers, which industry trends – like automation, machine learning, and AI – are people discussing?

Matt Sinclair:

I hear about three things: automation, resilience, and the intelligent enterprise. SAP’s focus is the intelligent enterprise, which is increasing efficiencies, enhancing productivity, minimizing costs, and maximizing innovation – much of which is accomplished via automation. But other intelligent technologies, like machine learning, AI, analytics, and predictive analytics, are also part of the intelligent enterprise messaging. For SAP, it's about making our products work across the entire business. We want the intelligent enterprises to use the latest technologies, so we turn insight into action so they can make informed business decisions across multiple business lines using real-time data.

Matt Sinclair:

Automating the matter-of-fact processes – creating invoices/delivery notes, the whole finance cycle, etc. – accelerates data-driven innovation and process automation and helps businesses launch new business models. It helps businesses diversify and expand into new markets. Delivering an exceptional customer experience is a huge focus at SAP. Customer experience is everything. It should be every business’s prime focus. Not just their experience with your product/service, but also their experience of interacting with you.

Matt Sinclair:

Businesses must invest in technology to integrate processes and automate tasks. That’s a trending topic right now because automation improves operational efficiency and allows companies to predict market trends/developing business innovations and build new business models to get into different markets.

Matt Sinclair:

We hear of many businesses, even SMEs, expanding into Asia because their economy is booming – even with COVID-19. Automation and operational efficiency allow a natural progression into different markets. That’s the nature of our fast-paced world. That's what it takes to compete and succeed. We've seen many casualties throughout the pandemic where businesses couldn’t be agile. We have examples of companies that went from brewing beer to creating hand sanitizer. However, as goods and services become increasingly commoditized, operational excellence isn’t enough to maintain a business, much less grow it. The businesses that are pulling ahead in their industry are consistently delivering exceptional experiences for their customers and employees.

Matt Sinclair:

Gartner says 60% of today’s manual processes will be automated by 2025. How we do business will be completely different in a matter of a few years. I use manufacturing as an example. Intelligent enterprises can design, manufacture, and deliver to meet customer demand. Experienced management provides insights on customer and product experiences for a connected customer-centric process. That allows them to run optimized digital supply chains.

Matt Sinclair:

Here’s another example. In Dubai, construction is ongoing at a phenomenal rate. By 2025, 25% of all the buildings they put up will be based on 3D-printed imagery. That’s a massive change. Automation is imperative, but what's arguably more important is what automation gives you: operational efficiency, diversifying into new markets, and growing a more resilient business.

Carl Lewis:

I think you're right. Matt, you've mentioned COVID. I think it’s acted as an accelerant to many people to try automation, AI, integration, etc. Do you also see that?

Matt Sinclair:

Absolutely. The UK market was perhaps slower than other regions in moving to cloud software, which COVID has also accelerated. But in terms of the intelligence technologies, the pandemic has been a time of reflection for individuals and businesses. A change of the guard. We can let go of how we used to do things and start to be creative and consider how we operate as a business and engage with customers. COVID has caused a load of new business models.

Matt Sinclair:

When I present about the intelligent enterprise, I have a slide that shows the rate of change of technology over the past 30 years, from the internet to the social media boom to 3D printers, 3D chips, and artificial intelligence. As these technologies become more consumer-grade, they’re easier to implement and use to improve customer and employee experiences. Some businesses haven't been lucky in the pandemic, so those that have been must really pay attention to what’s working, what they can improve, etc. Those technologies help, so yes, I think COVID has been an accelerant.

Carl Lewis:

But as much as people want to use these technologies and improve the customer experience, there are still challenges. What are the biggest challenges SMEs face when deploying newer technologies?

Matt Sinclair:

A lot of it is getting people and businesses to think differently before deploying and adopting the technology. Words like ‘digital transformation,’ ‘automation,’ and ‘the intelligent enterprise’ can be daunting. But to compete and evolve in today's environment, it’s crucially important that we do things differently. We need to get creative.

Matt Sinclair:

At SAP, we suggest design thinking. It’s a fantastic way to understand problems businesses are facing now, including those they maybe didn’t know existed. It’s a tool to dream up the art of the possible with no restrictions. Then we filter it down into something tangible. But the biggest challenge is getting the message across that these technologies don't have to be daunting, massively expensive, or difficult to deploy.

Matt Sinclair:

SAP is in a great position in the SME space. We have fantastic partners working with us to create amazing solutions. Some are simple concepts, but they make a huge difference. Many of these solutions are driven by a customer requirement that evolves into something far greater.

Matt Sinclair:

For customers who don’t fully understand those technologies or how they’re relevant to them, my advice is: engage with SAP and our partners. Working together, we can make something that’s effective for them. We start simple and build on it. Simple concepts that are quick to deploy, etc. But it’s a mindset. It’s asking, "What are our goals? How are we going to get there? How can we use technology to take us on that journey?"

Carl Lewis:

So, one of the big challenges is that people overcomplicate things. I focus on what something delivers at the simplest level that gives me value quickly. But people seem overly concerned with getting more out of it immediately versus growing with it and morphing it into something bigger and better than what it was out of the box.

Matt Sinclair:

Right.

Carl Lewis:

What ideas do you have for listeners to make these projects work well consistently?

Matt Sinclair:

Start with a simple concept and build on it. I’ll share two examples of things we've done with our solutions and how our customers used them. One is a farming company. It has sensors in its soil that measure the pH and moisture and tell the farmer which areas of his fields need fertilizing or watering. That knowledge increases the yield of his crop significantly. And since a byproduct of fertilization is damage to lakes and rivers, the sensors also help the environment.

Matt Sinclair:

We advise customers to engage with an organization that’s on the cutting edge of innovation and well established in their industry. It doesn’t have to be SAP, although SAP is a good example. You need a partner who can help you understand where you go as a business, then use a tool to clearly map out where you want to be. Always ask, “How can technology help us take that journey?” That's where the partner is critical – they can advise about the intelligent enterprise, how things like automation, AI, big data, and predictive analytics are relevant to you, and create a clear plan. Once you have that, there’s no reason the project won't succeed.

Matt Sinclair:

Another example is in South America with a customer who sells mobile phones. Their partner is the robotic automation whereby they go out and scan all the phones in the country's marketplace. That gives them feedback about the median price and if companies are running promotions on it so they can mitigate revenue loss and continue to compete on a price point.

Matt Sinclair:

We have tons of examples around counting items in warehouses, too. It comes back to automating mundane tasks, like counting things on a pallet when they arrive. Facial recognition in retail is helpful because when you have a returning customer, you already have insight, so it’s easier to sell to them or make their experiences with you very, very personalized. There are loads of examples of things that are simple but effective. But how you make projects work well consistently is by engaging with someone who understands the technology and your industry and can help map out design thinking or some other plan to utilize technologies.

Carl Lewis:

One of the best illustrations of what technology has done in 20 years is communications. Some of us started when everything was written, and you had to send letters. Or, if you were lucky, you had a fax machine. Then there were mobile phones you had to haul around; I think my first one weighed 10 pounds. Now, we communicate virtually. We have video, audio, podcasts, webinars. I wonder where it's going and how easy it will become because it gets easier all the time. How have your communication habits and tools changed during your years with SAP?

Matt Sinclair:

They’ve changed significantly. I have a story from an old boss. Before he joined SAP, his company tried to sell products by writing letters and including the outline of all the core parts minus the engine in the first letter. Then they said, "Follow up with us, and we'll send you the engine." That was how a lot of the marketing collateral was. Then the technology boom happened, and if I look at how we communicate with customers, partners, analysts – everyone, really – it's all digital and on social platforms now. And although we use LinkedIn and Twitter a lot, we also use other platforms, like online business magazines.

Matt Sinclair:

Here’s an example in the UK. We’re liaising with a company called Business Matters. It’s one of the largest online SME business magazines here. We're also working with Gartner. Not 100% focused on the SAP solution but rather about, “What are the key factors to be aware of for SMEs in these turbulent times? How can we help them become more resilient, more predictable, and more intelligent going forward?”

Matt Sinclair:

How we communicate has changed significantly. In the past four years, we attended several in-person events and did many presentations and keynotes at Microsoft events or the National Exhibition Center in London. We saw a significant decline in attendance during those four years. I think it’s because people don’t want to take a full day out of their busy schedules to learn about SAP or the new iPad or whatever. They jump online, check various social platforms, and have the information in 10 or 15 minutes. So not only how we communicate has changed, but how we do business. It’s gone very much toward digital and social platforms.

Carl Lewis:

Now the challenge is being good at these platforms. I'm amazed how often additional platforms are available for random niche purposes in the scheme of communications. It's fascinating.

Carl Lewis:

Matt, you said businesses should find a partner so they have someone they trust to lead them through the process and get the most out of the technology. But sometimes, those relationships are challenging. What are the biggest challenges when collaborating with a third-party outside your organization? You need their help desperately, but how do you create a trusting relationship, so the mutual endeavor goes well?

Matt Sinclair:

I'm not sure there's a simple answer. It’s probably about finding the right person within that organization and how you engage with them. Take SAP. Often, a customer or prospect who wants to engage with us struggles to find a person just to get information. So first, it's finding the right person.

Matt Sinclair:

Then it’s building a relationship and building trust. It’s harder now that everything is digital. I believe the best way to build trust is in face-to-face meetings. But now we're in a new era of engaging digitally, so how do we build trust digitally? There are several ways. First, demonstration. You need a partner who can demonstrate that they understand your needs and your industry. There also needs to be a wider conversation about where you want to be in three, five, and perhaps ten years because these engagements are typically long term, especially in the software industry. Finally, the partner needs the right tools. They need to understand your needs, understand where your business is going, and have the tools to help you.

Matt Sinclair:

But it's not easy. Sometimes, it’s about repetition. We push stuff out online and try to engage with the right people or businesses, and sometimes we do that two or three times before we get real engagement from the right person. We must persevere to find the right people, then demonstrate how we can help them with the tools we have.

Carl Lewis:

I agree. The need for communication skills won’t decline. Matt, do you have examples of automation positively affecting businesses, yours included?

Matt Sinclair:

Yes. Everything we do at SAP is customer centric. The customer is at the center of everything, which means providing a great customer experience. We have a lot of customers, too – in addition to our end customers, our partners are customers. It's imperative that we simplify their experience and make it easier for them to do business with us. We’ve tried hard to automate as many of the matter-of-fact processes as possible, like product quotes, so partners can create their own and get faster indicative pricing. We've automated the invoicing process. This is relevant in our products. The whole process is automated because that reduces errors and improves our DSO. We've also automated maintenance renewals, placing orders, and invoices through the single platform.

Matt Sinclair:

We constantly review things to improve them, including our partner program. We just finished a partner survey and are about to do a customer survey on areas we can improve. We try to put as much of that into practice as possible. We have an ‘influences portal’ where our customers can offer ideas about how to make the process less clicky or whatever. They post suggestions, we vote on them, and then they go to our development teams. Last year, we had 1,000 posts, and we took 208 and tried to implement them into our SME product.

Matt Sinclair:

We see this in the finance function, but we're also seeing good stuff in manufacturing and warehousing. There's a cool example where there's no warehouse personnel, and everything is done with automated forklifts that pick the product and get it ready for dispatch. We can automate simple things like invoicing and difficult things like warehouses.

Matt Sinclair:

There are loads of things we can automate. But the question is, why are we automating it? The answer needs to be, “Because it allows us to be more operationally efficient” versus “Because we want to automate things.” Automation must improve the experience customers and employees have with you. For me, those are the two major parts of automation: improving customer experience and retaining staff.

Carl Lewis:

I'm glad you talk about employees. When we talk about customers, we should include employees. They’re one of the biggest assets organizations have, but it’s easy to lose track of their experience regarding coming to work and performing their duties. The pandemic has helped people realize that, and finding and keeping talent will be very competitive going forward. It's critical to keep your people happy and give them a sense of fulfillment in their work.

Carl Lewis:

Well, Matt, I appreciate you joining us. You have great insight. I’ll try to check back with you in a year or so to see how things are going. For everyone else out there, we hope you'll stay connected and visit us on the Connected Enterprise Podcast again soon.