Sameer Patel, Senior Vice President, SAP

Michael:         

(00:02) Hello, welcome to episode number 86 of CXOTalk. I am Michael Krigsman and I am here with my fabulous glorious co-host, Vala Afshar. Vala Afshar. Actually, Vala’s not here today. It’s just me and I’m here with my guest – our guest, Sameer Patel, who is the senior Vice President for Collaboration and Networks at SAP. Sameer, how are you?

Sameer:          

(00:40) Fabulous, fabulous. Happy Friday.

Michael:         

(00:43) And a happy Friday to you to, and on behalf of my absent co-host and myself, we give a strong CXOTalk welcome.

Sameer:          

(00:51) Thank you. It’s a lot of – that’s a lot of big shoes to fill with Vala missing but we’ll try.

Michael:         

(00:58) I know, I know. Let’s tease Vala in absentia. It’s the perfect time because he can’t respond.

Sameer:          

(01:06) That’s right.

Michael:         

(01:07) Now Sameer, You’re Senior Vice President of Collaboration and Networks. I believe I have that correct?

Sameer:          

(01:14) Yes, specifically products

Michael:         

(01:18) So Collaboration Networks and Products.

Sameer:          

(01:21) Right, so I run our products at SAP which really includes both what we do from a collaboration standpoint, which is our collection of products called SAP Jam, and we can talk a little about that.

(01:38) Then the larger topic of how SAP is really driving and connecting employees, customers, and partners outside of our transactional application.

Michael:         

(01:49) So Sameer, when we talk about collaboration and networks. What is exactly does that mean?

Sameer:          

(01:57) How long do we have? I’m kidding.

(02:01) So here’s the deal, let’s put the customer in the center of this.  Forget the software, and the vendors and all of that. You know, we spent the last 40 years at the organization spending, investing heavily in what I call Systems of Record , which are the systems that close our books. It keeps the government authorities happy, you get to report how much you made or how much you lost. And at a managerial level you get a sense of how your business is running. I know that isn’t entirely the full service to the investment we make as companies. But those are the systems that we’ve invested in for the last 40 years primarily.

(02:40) There’s a big piece missing in there right. The piece that gets us connected as employees, customers and partners. You know connecting us actually do the work outside of the reporting function. You know, day in and day out when we work with our customers, our employees our partners we get into team rooms and collaborate, we come up with new ideas.

(03:00) You know there is an entire sort of white space if you will, that needs to be filled in. and collaboration technology, when done in the context of the business process allows you to fill those white spaces so you can really get the best out of the brains that are hidden inside physicals, right.

(03:16) So that’s sort of the high level.

Michael:         

(03:24) So, systems of record. We hear these terms systems of record and systems of engagement. So systems of record are our core – where we store our corporate information.

Sameer:          

(03:40) That’s right.

Michael:         

(03:42) So what’s’ so special about systems of engagement and why is it becoming this hot term. You hear lots of companies and people talking about systems of engagement. So what’s the deal with systems of engagement? 

Sameer:          

(03:57) Well I mean, let’s again put the end user in the middle of this process. And I think systems of record, you know everybody is familiar with.These are actually have invested in organizations. Your CRM systems, your ERP applications applications, supply chain on and on.

(04:14 )But if you put in an individual in the middle of the process, so someone who sells.Someone in marketing, someone who does recruiting, product management, on and on.

(04:23) And you ask them try to model what do they do 9 to 5, you’ll realize quickly that except for a few people inside the companies, very little time is actually spent in these systems of record.

(04:36) You know, take a sales rep for example. Ask any sales rep how much time do they spend in CRM, it’s going to be 5%, 10% at best. The rest of it is finding ways to interact with customers, working with their colleagues to respond to anRSP, or figuring out how they learn and get smarter by the company’s products, on and on and on.

(04:58) These are white spaces not filled by your transactional systems. So the idea that we need to get much more fluid systems in place that allow us to A, find experts that can help us with what we do. In the context of the job or activity that we’re trying to accomplish, to be able to have those wrap around those solutions. And be able to drive the solutionsand make and drive performance in our organization is something really largely that has been ignored. And collectively that wraps up into systems of engagement.

Michael:         

(05:31) So these systems of engagement then are mechanisms that for communication, people working together. It’s very difficult to actually describe in a simple and concise way.

Sameer:          

(05:49) Well I mean look there has been an over emphasis on the word management when it comes to application software, right, customer relationship management, supply chain management. And those systems are incredibly good at recording activities that you’ve done, but they don’t help you drive the actual activity.

(06:07) So if I had to sit down and Askew for example, do your performance management applications help you perform better or do they record the performance you actually did. I think you would agree that it’s the latter, and don’t get me wrong you can’t live without them, you need them.

(06:23) But where are the systems that enable me to perform better. Right, and if you ask a CEO about organisational performance, I don’t think they are going to say I’ve got the most incredible gold documentation system in place and I’m not worried about how we perform. What keeps the CEO up at night is you know, and I truly getting the best out of the brains that I’ve hired, right.

Michael:         

(06:45) Okay, so systems of record are the documentation that sits on the shelf in a sense. Even although that data is ultimately used and systems of engagement, would be correct to say it helps support the glue, the interactive glue that by which people do their job, and then make use of that documentation or of that data to accomplish whatever the goals might be.

Sameer:          

(07:17) Absolutely, I think the systems of record either drive the context of why you might collaborate. So for example, an opportunity shows up in your CRM system, that is the event around which you will assemble a team to respond to that opportunity. Right, so that’s one.

(07:33) And the second is when you finish performing, you’re going to report back up into that system of record as well, right. Meaning I know I completed some work. I won the opportunity, I now have to do update the system of record, to say that I just got the work done.

(07:48) 97% of the mind share for the last 40 years has been around the recording of what I did, not the help me do my job better, in a simple way, right. And that is to your point, which I think is you know you elegantly put it. It is the glue that sits across all of these touch points where I might work. Be that in email or in a business application where I might need the power of my network to come together to help me do what I’m doing in a much more effective way, right.

(08:15) And so, you know, this is really I believe this is the early early phase of that next frontier of enterprise.

Michael:         

(08:24) Okay, so we have systems of record and then we have systems of engagement that are essentially the glue helping people connect the business processes of the work, right? Now, let’s go to the next step and you have blogged, you are a prolific blogger, and you have blogged about networks of record. So now, take us through that.

Sameer:          

(08:55) Well so I think you know, we’ve had this tussle in the space we we talk about the again, the successive discourse between systems of record and systems of engagement, where I work, how I work. And I still believe that in the larger context of how we work as a society, be that how we engage with businesses where we want to trans-act, or we engage with each other. It is still only an evolutionary re-step towards where we are headed.

(09:26)And where we’re headed is this idea that we will engage and transact in focus driven networks in different products.

(09:36) That network might be a place where I am consuming information about a restaurant that I might go to, or and network where I am finding the right you know, individuals I want to transact with because I need to get a cab right across town. Or it is a network of individuals who might have a bedroom that I want to rent, or when I’m visiting New York the next time.

(10:00) And you start to move away from you know, these artificial barriers between the systems that dock information, and the systems that actually let me find the right experts.

(10:12) So when you start to look at this in why did we need this, why is this important. You know, I believe the early research that started to come in that shows when – from the standpoint of me being a business. Right, I am a business, I’m an insurance company, or I am a taxi company, or I am you know, someone trying to rent out a room.

(10:36) You know the fact that I have tools and networks where I can actually engage these individuals who might be buyers around the certain context in a more effective way. It gives me first right, in pole position if you will, to transact with them. So I’ll throw some examples at you.

(10:50) If you look at what’s happening today in some industry examples right. Consumer electronics, you know I have all of the citations of the stuff, but I’ve done some research to the post that you are referring Michael.

(11:08) You know, fully engaged shoppers make 44% more business per year to their preferred retailer than do active disengaged shoppers. Insurance. Fully engaged policy owners, will purchase 22% more types of insurance products than actively disengaged policy owners. I’ve got some similar ones banking, on and on and on.

(11:26) The point being that if we start to look at a way to engage our customers in a very contextual way, with the right kind of information and the data that they are looking for. You start to really rethink what customer relationship management truly should mean. Because it’s not about recording stuff about me, it’s about getting out of the way and taking all of the latency out of the way, and letting me respond to a certain business problem much faster than I could have ever done.

(11:56) And along that journey as I engage and I ultimately transact, you begin to implicitly record a lot of information about me and about my preferences. Right, so you know every time I take a cab using Uber, the amount of data that Uber gets on me – the location, the preferences, what kind of cab I wanted.

(12:22) I mean, just think about how expensive it is for companies together demographic data about you and me. It is so expensive and it is so – it’s just right for inaccuracies. But if they have data about my actual actions, you know, the dataset that has been built by me is incredibly accurate.

(12:47) So I think when you start to look at the value of these networks that are very purpose-built around core activities that you and I perform, you know, this distinction of buildings separate systems where I record data and where I engage is just completely artificial.

(13:05) Because can you imagine how rich Uber’s CRM system is on you and me, without anyone lifting a finger, right.

Michael:         

(13:14) So okay, so we have now layered onto networks of record, notion of engagement, and very strongly connected with that is that the data that is being actually captured so that we can understand customer behaviour and interaction, based on real data as opposed to inference or location.

Sameer:          

(13:44) Right, and so taking at further and going back to your original question, so that’s great and that just talks about the power of networks. So what are the essence behind my comments around networks of record?

(13:57) What I mean there is that systems of record were the holy Grail data stores on a supplier, customer, or an employee. Your HR data, your CRM data, your supply chain data.

(14:09) I’m saying that as these contextual networks start to evolve, you start to build definitive marketplaces around each of these activities that you and I perform. Be that hailing a cab, getting a room, what kind of hotels and restaurants I’m interested in – on and on and on.

(14:26) And you start to build out these definitive marketplaces, where I believe ultimately you and I would much rather transact, right. You and I would much rather transact because it is an ease of transacting there. So in other words and I’m going to be thoroughly dramatic here.

(14:45)  You know, after Uber has done collecting all of this fabulous data about me and makes it dead simple for me to hail a taxi. You know, say Uber’s cars started to suck, just as an example. You know, I’m still going to be hard pressed not to use them because it is just so damn convenient.

(15:00) And so they have the ability to start to move my buying purchase power. Not just because how good the service is, but because of the pure analytics underneath it, and frankly it is the respect that it gives me by knowing me as well as it does or not, you know in so to me by throwing stuff that just doesn’t matter to me.

(15:16) So when you start to do this in a very effective way, I believe you start to collect networks of records, meaning you know it conceivably gives Uber a lift to become that network of record for taxis, just because of the convenience built around it.

Michael:         

(15:33) Now Sameer, we have a question from Twitter and at CXOTalk we defer to our Twitter audience, especially when they ask good questions. This is from Mary Abraham, and she is asking, is this the insight that is driving Amazon’s new Echo product – are you familiar with that, it’s essentially a – as I understand it I haven’t looked that closely at it. It’s a speaker that has built in a sere like capability, so obviously behind-the-scenes is connected back to some type of network and very broad base of data. So how do you link back to this?

Sameer:          

(16:16) I’ll be honest, I saw the headlines passed by me this morning and I didn’t read it. So I don’t have details on Echo. I do think thatAmazon is a great example and let’s just guess here. Yeah, let’s go and have some fun with it and then we can go and read about Echo and see how wrong we were, that’s fun too.

(16:38) I think you’re right, Amazon is a great example. You know, someone I work with, Lars Dalgaard, the call found of successfactor, very astutely said to me while ago, he said, look 10 years ago if you looked at the shopping cart button on Amazon, it was this big button right in the middle of the page.

(17:03) If you look at where it is now, it’s this hidden button right in the corner somewhere. And why, because Amazon has basically figured out that the review network is more important possibly than anything else on their website. And to the degrees that they put right in front of you, the likelihood you will find the buy button no question. If you want to buy the product you will look around on their website and find the buy button, right.

(17:28) But it’s the review network that sets them apart, that’s one. Second is, it is considerably cheaper for Amazon if you don’t buy stuff that you don’t like, in that returns and refunds are very expensive. So please read all of the reviews, and if you don’t like the product please don’t buy in a way, right.

(17:48) So my sense is Echo to me is a little bit what like Google is doing with the shopping express for example. Well you know, with me living in silicon valley and you living right next to. You know it’s very easy for us to just live in this la-la land of online, but the truth is that there is a ton of your purchase references in your interests and my interests that are not gleaned from our online activity today, right. Where you shop, going by at the grocery store and on and on and on.

(18:23) You know, for Google to get their hands on that data or for Amazon via Echo to get that data on your non-online gestures and be able to add that to your preference profile, the cost of Google shopping carts and cars driving down the street is a drop in the bucket for them to get that kind of data on you first hand, if you think about it.

Michael:         

(18:42) There are certainly no doubt that Google and Amazon, their future, and more accurate data you have got – and the more that you can get consumers to happily, willingly give up as much personal, intimate, private data as possible, the more they can adapt their systems to tailor and personalize that experience

Sameer:          

(19:11) Yeah I guess so, I mean I think you’re right. I don’t want to get into the whole philosophical discussion of is privacy good or bad. I mean there is issues on both sides, but I think that within some degree and in reason and being respectful of it, I think you and I would be increasingly willing to give some of that up if the value was exponential in return.

(19:35) We measure carefully and we make those decisions every day. But I think this whole notion again on of being able to drive behaviour and drive action based on – or to be able to drive recommendations based on explicit action is something that we are just getting started with, right.

(19:57) So another example, you know I mentioned it earlier in the call the SAP Jam is a selection of collaboration product. You know, when we were putting the plan in place you know two years ago, again the idea was not just about how do you sort of drive contextual behaviour between users. But how do you have the system drive smart, because if I am a call centre rep and I can use some of the implicit data in the call centre application, that can tell me the products that I’m good at, how well I do, what kind of customers I support, what’s my rating.

(20:29) How do I drive that data you know into the larger ecosystems, so that the rest of the company and the supply chain or whatever else gets that data and can actually act on it, right.

(20:41) There’s this ability – explicitly Michael explicit is just expensive, right. Explicit is expensive. If you meet – no matter how hard I tried to convince you to go through the profile page, it’s painful.

(20:51) So how do we get the system to be able to drive this kind of data. You know, we have had incredible success with that. We have just passed 15 million subscribers and you know, customers don’t look at it this as a just nice to have, and you start to understand what’s in it for me really really quickly, right across each of these processes.

(21:12) So this is what I was saying earlier on that like a lot of what we see in systems of engagement and systems of record are evolutionary, to what we are going to see at scale with these purposeful networks. And earlier examples that you and I and many are familiar with what we are seeing with Lift and Uber and (B and B?) Are just the earlier examples, but I think there will be more and more of these network for business models.

Michael:         

(21:38) Okay, we’re going to come back in a moment to business processes and the connection to all of that. but in the mean time we have a question from Frank Scavo, who is a great enterprise analyst that we both know. He’s asking specifically that the question that we’ve just glossed over, so let’s talk about this briefly then we’ll go on.

(22:00) He asks, are there concerns about employers collecting too much info on employees behavior of their use of systems of engagement.

Sameer:          

(22:12) That’s a great question. I mean, yes it’s a legitimate question, but the way we deal with it and you can imagine that I work at SAP and we’re held to a very high standard in that our customers are quite conservative as you know.

(22:34) You know we have between the proverbial Rocky’s and the Mississippi, we have those kinds of customers, not just the early adopters, right. I think our concern is a legitimate concern. The way we deal with it is a cultural thing ultimately for an organization.

(22:49) So there is two things. One is how do you drive most of that decision making through the administrative consoles down to the organisation, so they can turn levels up and down based on how much is shared. You know to conform not to just cultural reality, but alsoyour graphic, right. So I think that’s the first thing.

(23:09) I think the second thing that we have found though is that it does come back to the amount that you give to me better be 10x of what you are asking of me. And that stage through for as much as employers as it does for consumers. So, the question becomes, how much are you pushing back into the organisation and you are giving me as an individual value. For me to say, the fact that I just let you share a little more information than I did before, give me back so much that I am actually willing to do this in the context of my job, right.

Michael: 

(23:45) There’s always a tradeoff.

Sameer:          

(23:47) There’s a tradeoff, but I think the lesson learning in the enterprise setting though is that we have invested incredible amounts of development time on driving that decision-making down to the administrators.

(24:08)We’ve grown almost 10x on our subscribers base in just nine quarters up to 15,000,000. You know, we would have never been able to do it – let me put it this way. We would had never been able to do this in the SAP base, having not been extremely sensitive to these concepts.

Michael:         

(24:26) Congratulations.

Sameer:          

(24:30) Frank is a tough customer.

Michael:         

(24:32) I know, Frank is a tough customer

Sameer:          

(24:34) Frank used to get on Twitter and say fantastic…

Michael:         

(24:38) Frank, we are now waiting for you. Frank, the ball’s in your court. So Sameer, we’ve been talking about collaboration and these various systems of engagement and networks of record and so forth. But now, there is this notion of this vague notion of digital transformation. So let’s make the leap. How did we get from the things that we were just discussing – these various systems of record and transactions and so forth. How do we make that leap to digital transformation, and what is digital transformation anyways?

Sameer:          

(25:22) I’ll just answer the what is digital transformation and then before we talk about how you make it, let’s first of all what are the things you shouldn’t do. Because I think we are starting to see some of it, and I’ve not really talked about openly. I write about it, and we have this show and it’s probably a good place to begin talking about it.

(25:42) So I think when you think about digital transformation – I again, so we are on the air right now so we can make some dramatic statements.

Michael:         

(25:53) Well is just between you and us. And of course all of the people listening and on Twitter, but go ahead.

Sameer:          

(26:00) So if you look back over the last 40 years, you know there was pockets of innovation that we have seen over the last 40 years – transformation, not innovation. We have saw lots of innovation. But from the time that we went from putting paper-based processes online and trying to mimic – not mimic but emulate paper-based processes.

(26:26) Back you know, 40 years ago when four of our engineers left IBM and started this company called SAP, is to create the RP in the MRP systems, and you look from that point all the way through to where we have right now. There is an argument being made that we saw tons and tons of digitalization, right, but did we truly truly transform business processes.

(26:47) Because there are statistics that show that when it comes to selling for example, 65 of the average time of the sales rep is still not selling. With all of the advancements in call centre technology, and how we support customers online, you know, only 7% of customers actually said that they had a pleasurable experience through all of those new ways of communicating. Be that through social media or social CRM and on and on and on.

(27:17) You know learning, right. We moved learning online and it still costs almost $1400 to create one hour of learning content. So my hypothesis then or at least the one that I went down about seven months ago to silicon Valley and investigate. And have we truly truly transformed or have been mostly been spending it in digitizing. Right, very different.

Michael:         

(27:41) Maybe make that distinction for us.

Sameer:          

(27:42) Yeah, so we have gone and turned paper into digital. We’ve put it online and it’s not as analog as it used to be. It’s in findable searchable format ,you know be that in an in memory database or something else.

(28:00) But even through some of the innovation on cloud and SaaS, did we truly truly just copy paste with what we were doing on premise or did we fundamentally said when you forklift on premise technology for cloud, is it truly transforming how I actually drive business.

(28:17) Again, there is definitely pockets where it is true that we have transformed, but I don’t believe we did. I don’t believe we have.

Michael:         

(28:23) Right of course, by and large we have simply taken what we already do and exposed it online.

Sameer:          

(28:32) Exactly, that’s my point right. And then with cloud we said to get online and not on your dime. You know, as an operating cost versus the cap, right. And of course, with other advances like mobile and stuff, yes it has gotten far easier to use systems. I’m not denying that.

(28:48) But I still respectively would debate whether there has been large-scale transfer of information in the last 40 years.

Michael:         

(28:58) No, and very few people – except in certain industries in pockets as you said and you know I don’t think anybody is going to disagree with that.

Sameer:          

(29:06) So you know I don’t know Michael. I think people, like you and the ones that you are including that if they think deeply about it they would agree with it. But I think we sometimes confuse digitalization with transformation.

(29:18) And I think we need to be careful about that and I think organizations and buyers when they are looking at making a change – sure, a certain percentage of them will do it because off-ex is better than cap-ex and they are just tired of the old looking systems – I get it, right.

(29:34) But I don’t know whether they are saying, oh wow everything that changes is going forward. Right, so anyway I think that’s one thing.

(29:42) Now why is this so important now, and why are we talking about it as an industry and is there any proof points for the transformation that would finally be at our doorsteps, and I do believe that is true. So back to somebody who has overused examples, like we’ve talked about today in whether that is B and B or Telsla for example.

(30:05) The idea when you start to rethink our category in how the industry works. You know, what are some of the common aspects between say B and B, Telsla, Uber, and Lift. You know, there are four things that I know, and one is experience. You’re not starting off with how to build features,you are starting off with what is the intending experience at the end of this build if you will.

(30:32) and experience comes from, you know not just how good and the look and feel is, but you know how I using data and the fundamental level of analytics to be able to do everything from change the experience, experiment with new things and maybe a new pricing model. Pull it back if it doesn’t work in seconds. Right, put a new product out there, test it. Test the new category for your service.

(30:57) You know, Uber can do that. Just try search pricing and see what happens. If it sucks will take it off. Can you imagine a traditional business having that kind of fluidity?

(31:22) The second is – I guess I’ve covered question two, experience and agility which is tied to experience, because of this ability to make changes and time, right. You know, the example of where Telsla can change the acceleration sequence on the car, by sending a software update to the car. That to me is transformative.

(31:38) Industry differentiation, right and I think this is where again you know the power of platforms 2.0, and I hate using that, but you get what I mean, where we are going to have another shot at building our true software platform starting now. Where you know, you move not just being able to build a new application, but you look at the cloud investments that you might have made in technology today. Right, you have bought off-the-shelf cloud technology.

(32:05) But one of the things that you know happens with cloud technology – for all the benefits of what we are all aware of on this call I’m sure.

(32:12) One of the problems was that cloud technology is sort of one size fits all. So it’s then the assumption then or the assertion then when we are all done putting cloud technology in place, we are all going to look the same and there is no differentiation left to be had in the technology. You could argue that

Michael: 

(32:29) That’s one of the interesting questions, yes.

Sameer:

(32:30) That is an interesting question, and saw the power of platforms to me going forward, or they are one of the things that I personally have not been that interested in platforms up until now. Is that it is largely a technology infrastructure concession. But if I could go to that same meeting or sales who bought you know, CRM and the cloud. And say today, the expectation is that its core technology, undifferentiated for you and your competitors and you’re not going to use the same things – might as well find some other place to differentiate.

(33:00)But you could say to them, there are these four or five ways for you to drive the secret sauce in how you work into your cloud-based technology using platforms. Now, you are having a business conversation. So for example, if I’m Nike, my core competencies are in R&D, and how are my driving R&D and the thinking and the secret sauce into my business process.

(33:21) If I’m Zathos, it is customer service. How am I tweaking cloud-based technology to drive differentiation in my customer support processes?

(33:31) So you start to bring these things together, and you start to look at it holistically. Then the fourth one is network effects, which I think we have talked a lot about. But you know, the idea that today Uber rate - not just drivers, but also for you and me as consumers, it’s just completely changing the available data on both players in the marketplace.

(33:54) So when I look at these four forces if you will, and you look Hell transformative companies like the one that we have mentioned, have begun to employ these.

(34:04) you know, this is going to start becoming the baseline of the business, so as you look at your technology and vendors and look at the transformation, you just have to look beyond operational and even UX benefits and cloud technology, it’s just stuff that have been consuming and enterprise conversations

Michael:         

(34:23) So Sameer, if I can summarize in a sense what you have just said, is basically how can you bake the DNA, the core differentiation and the core benefit of a business into transformative digital processes, right. That’s the question, how do you maintain your unique suchness, the great thing about your business. How do you maintain that DNA, and yet at the same time change your business, those processes are fully incorporated online as in data as you were describing on platforms. Is that the basic question here?

Sameer:          

(35:03) I I think yeah, it is. To me its network and analytics are the core of everything right. Because you are going to drive experiences and you are going to create sticky market places like you never had before. That’s not how we have thought about business as industry has got created in the last round of the industries.

(35:25)The person who started forward mortar company wasn’t starting with – I love these discussions with people who talk Tesla’s differentiation is the battery. I’m like no it’s not actually. The battery, somebody could copy battery. It’s the software factory across SAP and part of that should also worry a car manufacturer more so than the assembly line.

(35:52) And so you are absolutely right. I think it is it is starting to understand from the foundation what do analytics mean. How will it help me drive pricing, drive customer experience, right.My agile enough and then building products from the ground up. I think that is a fundamentally different approach to building.

(36:14) And here is the kicker, not just online products but physical products, Nest, Hesla on and on and on.

Michael:         

(36:20) Yeah, and I think we tend to think digital transformation is being about marketing, but actually it’s about marketing yes, but also about the operations of the company and what the company is actually doing and how does that produced things  that it’s creating.

(36:39) Sameer, we have 10 minutes left and I have a whole lot that I want to ask you. So let’s convert this into a little bit of like a lightning round because I have to get through some stuff, because while you are here I need to pick your brains. So we’ve been talking about digital transformation and what it is and what it’s not and so forth, and its attributes. Just quickly, how does an organisation start to do this, how do you undertake digital transformation, what are the obstacles and where do you even begin.

Sameer:          

(37:14) So I think let’s just start quickly with what you don’t do. First things first, I find that there is increasingly too much of – and I say this with respect, because I don’t think people are doing this intentionally but it’s happening. It’s almost carelessly equating social business and digital transformation.

(37:44) And what happens there is that you begin to handicap the opportunity from the get go because you are trying to make too many and analogies between the last round of innovation and the new one. So, you can’t start with okay, we are going to have these big cultural issues and it’s not technology, and it’s the people – these are all issues that you are going to have to overcome.

(38:14) But where you need to start is that I need you to draw this idea of digital thinking around my core applications. Right, this is not about bolting engagement on to your process app. Nor is this about embedding the data that your highly latent system of record application to be there in the premises or on the cloud, it doesn’t really matter.

(38:38) You know, you start to build digital stuff around it and the question becomes is that you start with an intended customer experience. Can you get in a room and start with an intended customer experience, and then work backwards to figure out what are the people, data processes and content that you need to wrap around that experience, for it to be something that truly adds to that. So that’s one.

(39:03) I think the second thing and if you look at one of the common threads across these successful transformative properties in the marketplace that are starting to exist. They have also gone after you know, areas of where you are finding – you know 50 years of creating just a plethora of middle men and women and people in the middle of these processes trying to get a cot along the way. And at some point you have this overloaded processes by the time it hits the end consumer. When nobody controls this any more.

(39:36) So I think where you get started here is again is the intended customer experience.

Michael:         

(39:42) You start with the end.

Sameer:          

(39:45) You start with the end, the intended customer experience and when you look at the advances in technology today that can feed into that. So, where are we with e-memory platforms today for example, that can allow me to have real-time data. At SAP we do that, it’s called HANA cloud platforms and there are others out there.

(40:02) But the idea is that your foundation is built off of an in memory base that can allow you to really react fast as we have seen some of these examples. You have that ability. Second is, there is no playbook at the start. There is no playbook. So the only thing that you can about bet on in any of these things and you can see what you will have is agility. Because there is no playbook, and the only thing you can have is agility, so you can turn left, turn right and you know, block and tackle right.

(40:37) We’re going to see some really spectacular dumb mistakes that will come through this thing, but the beauty of it is nothing is hardcoded. Does that make sense?

Michael:         

(40:46) It does make sense. But again, keeping with our time. We now have four minutes left and I still have a lot that I need to ask you. While we are talking with Sameer Patel from SAP, and while we have got him we have got to get into his brains.

(41:05) So very quickly, the role of IT with your chief digital officers, what is the role of IT and the CIO in this mix?

Sameer:          

(41:13) Huge role. A gigantic role. I believe we are going through a gigantic refit. In the last 10 years there has been a lot of mind power that has moved to the business. I think everybody has learned a lot since then, and the line of business needs the CIO because it all integrate back to the ERP and whatever else.

(41:29) I think the CIO wants to reach out to IT and the line of business and to be able to be a transformative partner. The solution to these problems that we have talked about is about bringing systems together. I think the CIO has a significant role to play in this.

Michael:         

(41:44) Okay, then let’s change gears and I apologize to everybody because we have got three minutes left and because we have got this much time left and we have got this much left to talk about.

Sameer:          

(41:56) I just thought Frank’s question was outstanding and he wants to talk about the beef brisket. I love it, I love Frank

Michael:         

(42:01) The secret to beef brisket, we’re going to do that one next time. Okay, so I would like to actually shift gears because at CXOTalk, we love and we are supporters of start-ups. So are you doing anything with start-ups, really quick?

Sameer:

(42:18) Well I’m not personally, but we are at SAP. You know, we have a start-up program that is vibrant and I think it is well over 1300 start-ups now in the program, and we have a platform, HANA cloud platform that gives them the sandbox to build. And third is because we are ingrained into the line of business and industry applications. A lot of the work and the thinking that go to market that SAP brings has already kind of built that for you.

(42:47) You can bring the transformative application, we’ve got the distribution.

Michael: 

(42:50) So and how do you view a corporate start-up investment programs, accelerators and so forth?

Sameer:          

(42:58) I think they’re great. I think there are great and I’m just going to speak not as SAP but as myself. I think I would look at the what is the core competency of a particular corporate venture capitalist or whatever, that they bring. In SAP’s case we like I said, we are in every line of business, and if that matters to you come. If you want to build infrastructure technology, there are other vendors who know that space pretty well, and can guide you I think that is something that I would look at.

Michael:         

(43:31) And finally with this, let’s talk about innovation and start-ups. Can you imagine a time where through these corporate innovation start-up programs, companies like SAP or other technology providers can use start-up to complement, or potentially even replace their innovation efforts.

Sameer:          

(43:59) So I think not can, but I think we are. If you look at what we are doing with the HANA cloud platform, and the opportunities that we are offering IS needs. You know, the ability for them to – I’ll talk about my own product, where were attached to the HANA cloud platform and we had an ISV who built out an incredible engine that really puts social profiles on steroids. And do it better than we do out-of-the-box. We love it. We encourage it, right.

(44:30)So again, we will never be good at everything. And we will never be able to out genius and individual sitting there with a lot of passion. And every so often we like to embrace ourselves. We have got live examples of this. The keynote tech head last week was celebrating it.

Michael: 

(44:47) And I know I said it was last question. But how about one more, so that was the penultimate question. So this will be the real last question unless some other real real last question that comes immediately to mind. It’s the beef brisket question of course, that’s always at the end.

(45:12) Do you see differences between Silicon Valley from a corporate standpoint and working with start-ups and so forth.

Sameer:          

(45:25) Yes and no. I mean I’m not one of the people who thinks that innovation has to happen in Silicon Valley. We’ve seen amazing examples that have come out of Israel, Bangalore, and Dublin and were ever else. So I think that’s not a binary answer. You know, there is a probability of it being higher here in Silicon Valley, no question about it. It’s encourage, and failure is encouraged and you are not look down on for any reasons.

(45:47) At a corporate level, honestly you know I think on one hand yes, because there is a lot of intellectual brainpower and the Zeal around innovation in Silicon Valley. But by the same token I would say that you know, the experts who understand and make problems in specific industries, they are in the heartland. They are not here. Right if I want to go out and find the next life science company or disruption around agriculture and corn, you know you have got to go to the Midwest to understand how that works.

(46:17) So I get nervous when people get a bit too binary or flippant about this kind of stuff.

Michael: 

(46:22) Okay, and that’s a great answer. The industry expert’s are not in Silicon Valley

Sameer:          

(46:27) Not necessarily

Michael:         

(46:30) Okay, well our time is over unfortunately. It’s been a very fast 45 minutes and Sameer, here’s me looking down, you see me looking down because I’m talking, and you’re talking, I’m tweeting as Vala says your words of wisdom. So, we’ve been talking with Sameer Patel who is the senior vice president for collaboration and network products at SAP. Sameer, it’s been great talking with you and I hope you will come back another time.

Sameer:          

(47:05) I would love to, I appreciate it and I’m privileged. Thanks for having me.

Michael:         

(47:09) And to my fabulist co-host Vala Afshar, where ever you are out in the ether, I hope you’ll come back next week.

Sameer:          

(47:19) Thank you Michael.

Michael:         

(47:21) Thank you Sameer and thank you everybody for watching and we’ll see you next week most importantly. Bye bye.