Demystifying ERP: Building the Connected Enterprise

00:00:00: We will deliver the end-to-end transformation from one hand.

00:00:06: That means that we transform our customer via the CX Portfolio, via the SAP Public Cloud AI Portfolios and data & AI requirements which we'll have at this

00:00:19: point.

00:00:20: Basically, always the customer has to translate and coordinate different service providers.

00:00:25: We believe as an economy that there is a huge improvement we can bring when we take more responsibility for this end-to-end story.

00:00:34: SAP provides end-To-End best practices.

00:00:38: I use only in total if i use the whole platform.

00:00:53: So Patrick, finally we are here.

00:00:55: I'm super glad that you joined us to build the ERP practice within NetConomy.

00:01:03: Let's briefly start with a little bit of your history and view on the entire ERP business And why you decided to join as?

00:01:11: It is still early so You're unbiased and can give us Your perspective without being influenced by our views on this topic.

00:01:23: Yeah,

00:01:24: hi Martin it's a pleasure for me that I had the opportunity to join Tune economy and i'm very proud That today we are sitting here together.

00:01:34: Yes my name is Patrick.

00:01:35: I am working in the area of SAP Consulting For about sixteen years.

00:01:40: In the past um...I Had the chance To grow up some teams Um..in The area Of retail consulting implemented several services of the SAP Public Cloud portfolio.

00:01:54: So I'm very familiar with the new SAP products and i decided to join Netconomy because it's a great company, which was a fundamental base for growing up a new ERPU practice.

00:02:18: When I look at ERB projects, we see that with a lot of our customers.

00:02:25: What jumped into my eye first is the customer have to donate substantial amount of resources... ...to just more or less keep alive their ERB basis.

00:02:36: and there's a lot traditional thinking in this ERB space not only on the SAP side.

00:02:42: I think SAP is in a huge transition there and they already way ahead, it's more of service provider-side than also customer site where you have this center of excellence... And we obviously need to focus on stability but that at a certain extent hinders them modernize and improve how they work.

00:03:05: And what I always found refreshing is, How you look at all this?

00:03:33: working on stabilizing and improving the ERP platform.

00:03:37: If you look at our customers, often it is so that the operations of this system are very expensive.

00:03:47: And if we look at transformation projects The classical ERP backbone Is always the slowest component in such a transformation.

00:03:58: In the past every customer build up several specific functionality in the backbone.

00:04:06: So that means, that the EAP system is often very customized.

00:04:11: There's no standard process... The standard process of this only on paper or on a PowerPoint slide but not in a system.

00:04:21: I think now at moment it there that customers realized It is good to establish standardized processes for being agility because the revenue machine, it's not your backbone.

00:04:36: You make a revenue by the customer at the POS or in the web shop and there you have to invest your business uniqueness and not in the backbone.

00:04:51: All right When we look topics that customers currently face, supporting what you just said.

00:05:01: We also see they have a lot of complexity in the way consume services from service providers where basically the customer always has to chug it between those aspects or those points in infrastructure, whether revenue is being generated into an EAP system.

00:05:20: So basically all of us as a customer have to translate and coordinate different service providers.

00:05:25: we believe that there's this huge improvement that we can bring to the table when we take more responsibility for this end-to-end story, and I guess there's also one aspect of motivation made you join us.

00:05:40: So perhaps you can elaborate a little bit on this topic?

00:05:44: Yes!

00:05:44: You're absolutely right.

00:05:45: so if has to coordinate Render A and Vendor B, I'm bringing them together on the table.

00:05:57: And taking personally over their responsibility that processes working end-to-end together.

00:06:05: our approach will be That we'll be a transformation advisor for customers so they can ensure that the end-by-end transformation is going in right way.

00:06:20: customer experience, the public cloud ERP answer data and AI capability because we are thinking that should be or speedy.

00:06:32: The main reason via transformation would be on a good way by combining these end-to-end sync thinking.

00:06:43: What is your view?

00:06:47: We see that with larger customers.

00:06:50: The ERP, you already mentioned it a little bit is somewhat development platform for a lot of stuff within the company and they devolved into some kind of Frankenstein monster with a lot different stuff where becomes difficult to upgrade.

00:07:05: but still there's substantial investment which has gone in this platform Which is difficult to replace because on one hand side its about people who invented that process, who knew it perfectly well.

00:07:17: And some of them might not even be in the company anymore.

00:07:20: so you have software where... It's difficult to figure out why is working but its' working and difficult to change.

00:07:27: On the other hand it also substantial investment which companies think are hard to replace with a greenfield approach.

00:07:38: So what your view on an end-to-end?

00:07:44: perspective, building it cleanly up from scratch versus always taking the history with you but at the benefit of having that history and all the benefits that went into that.

00:07:58: Perhaps we can also talk a little bit about this?

00:08:00: Yes, my personal opinion is that now the time is that the market will be realized.

00:08:13: The basis for innovation will be not only taking the history always with you and focusing on taking this story alive.

00:08:26: How can I be ready as company, for my transformation at market requirements next year?

00:08:34: After several discussions with our customers If you look at the companies from our customers, now it is so.

00:08:45: You can talk about these things yes and not in every conversation or people will be happy if you say okay we are going to take the historical crown up functionality of the system.

00:09:04: but the point for this discussion

00:09:10: innovation because you made that pitch.

00:09:12: So let me jump on this, we see a lot of customers feeling impacted by AI so they know they have to invest into AI.

00:09:22: the benefits from AI are not there yet.

00:09:26: SAP has initiatives in that field where I think after taking several wrong avenues they are now on the right track.

00:09:35: but you don't only have SAP.

00:09:38: In your infrastructure, do you also other systems?

00:09:42: What is your view of this end-to-end story from an architecture and technology perspective were we're in a reality where SAP takes some important space.

00:09:57: Do you see this?

00:09:58: My personal view is on that, that SAP will be the basis for data foundation and a process foundation of AI.

00:10:09: But the real AI game won't play every specialized SAP functionality played by Google because the Google agent framework for my personal view, leading in this area.

00:10:30: So

00:10:30: how would you shape that from a customer perspective?

00:10:34: Where would see the turf of SAP?

00:10:37: what could be do with Google is not by accident I guess because we made the decisions to enter into strategic partnership also with Google and especially in field consumer related industries Google's very strong player assign substantial resources from a marketing perspective.

00:11:01: But how would you recommend customers to look at this?

00:11:04: What can I do with SAP, what should I do?

00:11:06: other stuff and give perhaps some orientation on how they strategically separate the resources the strategic focus for these different vendor ecosystems, yet managing different vendor ecosystem is always a challenge to customers.

00:11:30: I think if you look at typical SAP architecture it should be so that the process core should be public cloud ERP and then you have flexibility in SAP standard practices For example, if your company grows up.

00:11:47: If you make a mergers and acquisition or decide as customer that want to be present at the market with another brand.

00:11:56: this should always taken in SAP Public Cloud ERP.

00:12:01: Combining with this SAP Business Data Cloud, the BDC should be a data foundation for our customers so that you have at one point standardize your own data.

00:12:16: Your own data enriched to process things and use the SAP agent to optimize processes in your backbone.

00:12:28: but does it mean that you can optimize and increase the time for closing up your financial privilege at this time, to increase the number of optimization.

00:12:42: This will be where I think the agentic functionality that SAP provides should be applied.

00:12:51: every additional more business specific use cases I personally think

00:13:01: with

00:13:02: other agentic frameworks like Google, but based always on the processes and data that digital core of SAP provides at this point.

00:13:14: And also a good hook for me now is how do you see digital platform where this backend, so basically CX plus SAP topic.

00:13:28: I mean there are strong players out here on the market like Salesforce and others.

00:13:33: they're niche players that have specific areas of this CX space Like for example Adobe.

00:13:40: There are new players who come as a best-of-breed scenario.

00:13:46: What's your opinion?

00:13:47: the relevance of having this combined and intertwined out of basically one hand versus some kind best-of-breed or decoupled approach.

00:13:59: I think by combining SAP CX Portfolio and Public Cloud ERP, that will be a real enabler for our customer transformation.

00:14:12: Why?

00:14:13: SAP provides end-to-end best practices and I can use as customer, end to end only in total.

00:14:21: If i used the whole platform at this point that means um...I end up my customers via the CX frameworks ,i take always the communications through my customer uh..to the Cx or via the cx platform.

00:14:40: If the customer coming to the backbone for example, I always know it's the same customer.

00:14:46: at this point.

00:14:48: Every best of preach approach based on my personal experience has always been a challenge that you as company have the point that you must orchestrate.

00:15:02: Salesforce works with public cloud ERP, how integration works.

00:15:09: Salesforce has its own database.

00:15:12: by combining the whole portfolio from SAP at this point we can really transform our customers and really apply the end-to-end best practices.

00:15:24: When I look at the ERB ecosystem, I see a lot of companies especially in the German speaking region.

00:15:32: I have to admit because i think that's not always the case uh...in every country which ...to me feel and we can say this here because our personal view on it is a bit saturated.

00:15:46: so they basically try get a lot complexity from customers at least short-term, that's the case and allows them to build a lot of complex stuff which requires the private cloud edition of SAP because there I can do more than let say with the public cloud addition.

00:16:13: Which is following the SaaS clean core lockdown version.

00:16:18: my observation There needs to be an open and transparent, conscious conversation about what really the ERP must have as a differentiating factor when you customize stuff.

00:16:37: And where do we use standard processes?

00:16:41: My observation is that there's a tendency When you're a small business, You can do that with the public cloud.

00:16:49: But when your large businesses that's impossible because they are so special and there are tons of arguments why Public Cloud doesn't work?

00:16:58: What is your view or opinion on this?

00:17:01: My viewpoint at this point is that Public Cloud now it ready for smaller and user companies.

00:17:11: Why?

00:17:12: One of the main aspects of public cloud is standardization and flexibility, including scalability.

00:17:20: Standardization.

00:17:22: in every huge company you need standardization so that means your invoicing process or financial processes should be standardized to increase efficiency for these processes process requirements and the points you are, or the functionality that is your USP.

00:17:49: That you could always integrate by clean core side-by-side extensibility.

00:17:56: at this point if we look at user customers I think personally The role of the consultant in past wars, you stated Martin taking all requirements from the customer designing it typing into a system coding and be happy at end of year that your revenue increased.

00:18:27: By introducing public cloud the consultant should process evangelist.

00:18:34: what does this mean?

00:18:36: The SAP standard process.

00:18:39: go into the company and fight a process to the organization.

00:18:46: Not where you're not will be hear their requirements of the customer, it's necessary why the standard best practice offers you the flexibility at this point.

00:19:02: so if we look In total, it's usable for smaller and for usual customer because the base is for transformation where you have standardization.

00:19:16: You also have scalability.

00:19:18: so that means if you open a retailer

00:19:22: e.g.,

00:19:22: much more stores your system is scalable.

00:19:27: If you decrease number of stores or close channels.

00:19:32: It always scales and scale down at this point.

00:19:36: One one perspective on this I think is also that it's not only the consultants, they have to change.

00:19:44: It's also the way service providers as such need To do that.

00:19:49: i think That was a one important aspect.

00:19:52: We very thoroughly thought through how to deal with where you Have to challenge The customer organization.

00:19:59: so its Not about taking your requirements like a waiter in the restaurant and build something about it, but really look at their entire company.

00:20:10: And come up with a hypothesis how it works close to the standard or even without customization?

00:20:17: I think one important aspect is also get full buying from top management because when you end looking into some of our customers there's this on-the-one hand side substantial amount IT spent going into just keeping the EAP system alive, and a lot of pushback for things we can't change.

00:20:37: But on the other hand there's clear need from top management that more agile, faster slimmer in terms of seven permutations.

00:20:50: Of the same process are super important and we have to keep it like that.

00:20:54: so I believe is a mixture of governance with top management on customer side mindset shift where you have to proactively convince people probably even clear framework justify a business case for modifications that need to be implemented.

00:21:14: And also, much more guided project approach where we focus on the benefit of customers and not just take every requirement as this is how it must be.

00:21:28: I guess AI can help with that process.

00:21:32: so perhaps you could share your view.

00:21:36: I mean, we have a lot of AI tooling within the economy.

00:21:42: And that was always important not to be just locked into a box by one vendor but see really where their market is going and then mirror it back.

00:21:51: so how are you envisioning using AI in building up our integrated practice?

00:21:59: My personal vision is... We will share some insights next week's months.

00:22:07: We as an economy will use AI for do a faster transformation of our customer.

00:22:13: That means that we will provide automated processes, that we'll provide automated deployments off the end-to-end processes across... whole SAP and not SAP portfolio at this point.

00:22:31: for example by playing the organizational data, by applying best practices processes.

00:22:42: By applying change management in the organization we will provide some templates to our customers.

00:22:53: transformations not only in the project and on end, in the whole organization of the customer.

00:23:00: When we look at challenges customers are facing their digital journey We see there is interesting research that basically shows that revenues top-down In most industries accumulating or balancing out around the notion of thirds, so one third is basically digitally direct.

00:23:26: One-third is around digitally influenced but across different channels and one third traditional revenue.

00:23:33: So if that's the case your end to end process landscape becomes super important And in the past I often experienced there are things you can do Basically on a frontend layer where we have touch points create digital revenue and there are other things which have to be in the back end.

00:23:53: I believe that we will also be able find a right spot for our solution, not locked into either backend or frontend when doing it.

00:24:03: so we can reduce overall complexity because we take responsibility of entering landscape but for the problem, which sometimes leads to things that I would normally have done in the backhand.

00:24:24: I can solve from the front and at a much cheaper cost because i'm for example you know interaction with the customer.

00:24:31: it can simply erase something and surface it to the customer ask him before I have to exception handle that somewhere on there in the backend.

00:24:39: what's your view of this?

00:24:40: No Martin I totally agree.

00:24:45: the core word end-to-end consultant.

00:24:47: see me and you take uh, in a process.

00:24:51: You take a look where what's the problem?

00:24:55: Where does the problem or course... And then you identify what is best place to solve this.

00:25:02: not only making quick fix at these points you bringing it to a very stable process by applying the fundamental change that the customer will be ready for doing better in future.

00:25:18: Since we are starting this new, and I think fits into what you just mentioned... We're starting this integrated service.

00:25:28: Let's take an outside-in view.

00:25:32: Customers of course have different options on the market.

00:25:37: There is a huge landscape of service providers, some are super specialists and some are rather broad.

00:25:42: so what will we make different?

00:25:45: And does that mean seen through the eyes of customer for them?

00:25:53: I could also go to Accenture say you can do my seeks or back-end data.

00:26:03: Why would we better for the customers.

00:26:07: What we will bring always on a table is the net economy mindset, what does this mean?

00:26:13: We will deliver to end-to-end transformation.

00:26:17: from one hand that means We are the CX Portfolio, we're the SAP Public Cloud AI Portfolios and data and AI requirements that will have at this point.

00:26:33: The second thing is to combine specialization with scalability – what does it mean?

00:26:41: We always have consultants who are very familiar in their area always can scale at this point.

00:26:53: What does that mean if the customer says, I have another problem and need a more specialized consultant?

00:26:59: At these points we are able to deliver but don't often say okay... We only have two guys who solve your problems where they combine scalability and specialization here

00:27:12: And will do it from within one holistic setup.

00:27:15: so customers I think we will also be able to reduce a lot of complexity, so the customer doesn't have to deal with basically making two teams on the supplier side talk and understand each other because we inherently embed that into our organization.

00:27:33: So when customers are talking about this specific topic... ...we can make sure that the team working for that customer holistically looks at it.

00:27:47: which sub-team do I address?

00:27:48: and then that's already shaping the solution, we will come up with an end to end solution for this.

00:27:57: So let's speak a little bit about the myth of lift & shift!

00:28:01: i take my crap and just put it into the cloud.

00:28:04: what's your view on that?

00:28:06: I personally think lift&shift is not transformation, lift&shift is bringing old shit onto new platform.

00:28:16: I think a real transformation should be that you come from the process perspective, take a look at what other processes are relevant for us and in which processes we should differentiate.

00:28:38: This is really important for this transformation.

00:28:41: Another topic comes to my mind.

00:28:45: Every now and then I have conversations with customers that say, well will need an ERB in the future because i assume the AI will wipe out it somehow for me.

00:28:57: And can save a lot of money.

00:28:58: so what's your view on this strategic importance?

00:29:03: I personally think you should use AI to building up your own USP faster but you shouldn't for building up, for example your own ERP system because AI will not provide you out of the box.

00:29:22: The functionalities for auditing and for being compliance from a legal way I think in the role of an ERP.

00:29:32: there'll be another one in the future.

00:29:35: An ERP is going to have the basis for your transformation.

00:29:42: It will not be the place where you implement your USBs, it's going to read a backbone that makes and the KPIs integrated and that makes you able to build on top all of things which are used in building up specific requirements.

00:30:04: So would say then CX is layer?

00:30:09: a substantial part of this differentiating factors.

00:30:13: Yes, it's a portfolio because that is the point where I'm really near to my customers.

00:30:21: and second thing... The second point in future there will be placed functionality some processes at the POS Because you have customer directly an interaction with you And they should use these of your way.

00:30:38: So, would you say that given the fact at the moment there is a lot of... I'm not only talking about subscription and licenses but also efforts going into ESP space.

00:30:51: Would you say good transformation?

00:30:54: Is it also releasing resources so customers can invest in factors which really make difference for revenue-winning customers as well?

00:31:06: Yes, I totally agree that we will be one of the main thing for success at this point.

00:31:13: All right!

00:31:15: We are gifted with being allowed to serve a lot known and successful companies but also in our journey as a company on constant growth path.

00:31:31: what's your view still unbiased from outside?

00:31:36: I

00:31:38: think customers should talk to us because we are a real transformation partner.

00:31:44: We take the end-to-end responsibility for that transformation across all processes and across our products, do the transformation together with our customer.

00:31:57: We are not only another render that comes in into a project and we're solving this isolated problem, but will be the transformation partner of all

00:32:10: customers.".

00:32:11: So what is the key ingredient to make a difference for your customer?

00:32:18: What would be the promise that you see when talking to a customer?

00:32:23: I know what i'd say, but don't want my answer.

00:32:27: I rather benefit from your still being new with us.

00:32:33: With all of this you have seen so far and colleagues talk about it as an experienced company... ...that you can fully convince your customers.

00:32:48: I think we can give the promise to our customer that making a transformation together with us.

00:32:56: We are always partner for the whole transformation, but it means that the customers every time in their project knows net economy is a partner and not only vendor critical situations, for example.

00:33:15: We are always sitting together on the table and talking about how we can solve this issue.

00:33:23: or was you the reason?

00:33:25: For us it's always the point of how to resolve these problems in bringing our customers to success.

00:33:36: The first of our kind in the sense that we come from a seek space and now built an integrated EFB practice, which is I don't know if any other company has done it.

00:33:48: Most of them got acquired somehow assimilated with little left off what was good for the seek space.

00:33:57: when you look into what do see within economy?

00:34:01: What are your top three strength that we bring to the table.

00:34:07: That help us on a journey, that we discussed in our last hour more or less?

00:34:12: I think point one is about culture.

00:34:16: Culture at Netconomy is always being often in the discussion, bringing points on a table and spoke about all things that are relevant.

00:34:27: And this one of our DNRs we will bring to projects at this point.

00:34:32: The second thing identification of our consultants with the whole customer and just a whole project.

00:34:43: We are not only focusing on these specialized problem or issue at this point, we always bring focus to relevant topics in this point.

00:34:56: The third thing is that you will bring cool people into your projects combining with specialization and the power of flexibility at NetKonomi.

00:35:09: I'm super, super good to hear that And i think we also know That We are bringing together things which Are somewhat distant from each other because EAP and ZX Also when you look into today's EAP vault is not so close, but I'm pretty sure we are on a good track and i'm super happy that you joined us.

00:35:32: Also uh... We extended the management team to make sure all these new aspects really moving into the company And we have a couple of conversations around it yesterday.

00:35:50: One culture or the other, one perspective.

00:35:54: We need to create something completely new because that's the only way how we can trustfully consult our customers on their journey.

00:36:03: if they make it for ourselves How would be do that?

00:36:07: For the customer?

00:36:07: but I'm sure with you have the right brain and also there are getting people onboard And i am super curious what the future brings together and which joint customers we can serve.

00:36:24: Final word from your end?

00:36:26: Martin, I'm very happy that you're sitting here today to talk about our version of what we created together looking forward with our new customer where they could provide a good player for really end-to-end transformation.

00:36:47: Alright.