SAP Leonardo: The dawn of intelligent applications

At SapphrieNow a few weeks ago, SAP’s Hasso Plattner painted the vision of “Intelligent Applications” to include

  • Intelligent Transactions – automate high-frequency repetitive tasks
  • Analytics – make data-driven insights available to everybody
  • Collaboration – tap into the collective intelligence of knowledge workers
  • Digital Assistant – provide the right answer at the right time

SAP also expanded its Leonardo innovation toolkit beyond just an IoT stack to allow for more innovation technologies as a way for customers to built their own version of intelligent apps.

SAP Leonardo vision

I was pleased to see that. Brian Sommer and I have been surveying Digital Transformation at a number of companies and we find rethought processes bound together by a coalition of automation, mobile, analytical, social technologies is allowing them much better options that waiting for vendors to deliver updated, packaged processes.

At an Industries update, SAP showcased how Leonardo would be its toolkit for such innovation. One way is through a series of “accelerators” with projects lasting between 2 and 6 weeks

SAP Leonardo Accelerators

The other path is more customer-specific and more open-ended using their Design Thinking services and the Leonardo toolkit. This could take 12+ weeks. My immediate reaction was this may be a bit too services heavy.

But that concern dwarfs compared to another one when I saw this slide (click on image to expand)

SAP cycle of innovation

Look at the systems of record in the slide. There is no industry functionality – no utility billing, no retail merchandising, no electronic health records. They mostly cover the back office, and horizontal processes at that. S/4 at present is mostly finance, the others cover hr, te, procurement and eCommerce. Most impactful Digital Transformation projects are developing next-gen smart products and services and rethinking business models.

I think SAP is at a crossroads – it needs to get serious about modernizing its industry solutions (think of what in-memory computing can do to turbocharge many of those transaction intensive solutions and how much the processes need to be updated for the new world of AI, robotics and other automation) and it needs to focus Leonardo and its ecosystem on product and revenue-centric processes at its customers.

I am not convinced when and if it will do the first (in fairness Oracle, Infor, Epic and others have not modernized their vertical solutions either). The second will require collaboration with a new batch of design firms, contract manufacturers, IP attorneys etc.  who live and breathe the world of product engineering and business models. SAP keeps going back to its “old, faithful” stable of Big 4 firms, IBM and Indian heritage firms. It will need to expand that club.

The concept of Intelligent Apps is hugely exciting. But with a huge percentage of revenues coming from traditional transaction systems, can SAP make that transition and lead customers there? It will be interesting to watch.

(Cross-posted @ Deal Architect)

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