My look forward to the top enterprise trends for 2017 is unusual this year. Enterprises are starting to reap the benefits of investments in cloud and process change they made over the last few years, so what customers are worrying about today isn’t as much technology as it is the payoffs of technology: specifically, reduced cycle time and increased ROI.
TREND ONE: A FOCUS ON OPERATING INCOME
OK, I hear the groans already—who wants to talk about financials when we have super powerful technologies like artificial intelligence coming down the line that will reshape how we do business. But the fact of the matter is our customers are increasingly focused on operating income every day.
Technology investments that they have made over the last few years in cloud and automation are starting to pay off, generating increasing amounts of operating income but also creating urgency in management and boards to generate more. Whether a project is a massive capital expenditure or smaller change initiative, if it doesn’t speak to quick returns, the appetite for it goes down.
If operating income is Theme 1, dealing with shrinking cycle times is 1B. Innovations have to go to market more quickly so they generate profit more quickly. Everything must speed up: decision making, prototyping, production, go-to-market, and business opportunities.
I don’t know if this operating income trend is part of a recurring cycle or the result of enterprises increasing their clock speed by adopting methodologies such as agile development, but I do know it’s real and it affects how large global companies are making business and technology decisions.
TREND TWO: INTERNET OF THINGS INTEGRATION
2017 will be the year that global enterprises stop talking about IoT and begin to integrate it into their business operations. In some cases, this is already happening. We recently performed a proof of concept with a company that runs a fleet of cutting machines. When they break down, which is frequently, the company suffers lost production. We are working with them to connect that machinery with IoT sensors and real-time analytics that proactively pinpoints when maintenance and repair are necessary.
The ROI is easy to understand: reduced downtime and extended equipment life. This is why predictive maintenance will be an early win for IoT.
The maturity curve of IoT is something like where we were with cloud or software automation a few years ago—a great concept in search of actual use cases. We will help users develop those scenarios. Most of our customers have several examples on the production-cost side where they struggle to efficiently maintain their assets, and they will begin looking at IoT as a potential answer.
The integration of IoT with existing technology infrastructures and business processes to produce cost savings will start to push IoT into the enterprise mainstream in 2017.
TREND THREE: FULL-ON ADOPTION OF SAP S/4HANA
The first two trends set the stage for the third.
SAP S/4HANA is now positioned to deliver gains to enterprise operating performance very quickly through both improving business processes (faster decision making, speedier processing) and through business simplification (more efficient operations, better user experience). It does so by providing users with active decision support in real time that is based on data from both internal and external sources.
Another exciting win for customers in 2017 will be the growing number of options available to them, similar to the recent announcements that Microsoft Azure and Amazon Web Services are adding new cloud instances for running SAP HANA databases. Expect more “cloudification” opportunities for the SAP installed base in the coming year, offering users impressive flexibility compared with other vendors.
I believe 2017 will be a year where our customers look to aggressively (and quickly!) push for ROI. They will start to prepare use cases to take advantage of the imminent arrival of IoT, especially on the production side of their businesses. The growing power and flexibility of SAP S/4HANA will help accomplish these goals and increase the performance and efficiency of their current operations.
I look forward to hearing from you and continuing this conversation. Happy New Year!