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Inside SAP's digital transformation strategy

In this Q&A, Bertram Schulte, SAP's chief digital officer, discusses the how and why as the company goes through its own internal digital transformation.

SAP has been at the forefront of business digital transformation, primarily by selling technology and applications...

that enable companies to create new digital models and opportunities. But SAP itself is undergoing a similar process and has had to develop a digital transformation strategy.

In this Q&A, SAP Chief Digital Officer Bertram Schulte talks about SAP's digital transformation strategy and how the company is looking to develop new ways to deliver applications and services, new business opportunities, and new licensing models. Prior to becoming chief digital officer last year, Schulte held several executive roles at SAP, most recently as the chief of staff in the executive board office for products and innovation.

This interview has been lightly edited for clarity and brevity.

What is the role of the chief digital officer at SAP and how do you develop SAP's digital transformation strategy?

Bertram Schulte: There are many levers or parts in the organization where you can think about where digital transformation can make a change. At SAP, we believe that the customer engagement, especially the commercial experience would be the first field that would want to drive the [digital] transformation.

Bertram Schulte, SAP chief digital officerBertram Schulte

[Former SAP Chief Digital Officer Jonathan Becher] did a good job in the past few years to establish SAP's commercial capability so that we can now sell into 120 countries to customers and partners via the web and [automated processes].

This is a fairly radical departure from the traditional sales channel business model. How did SAP deal with conflicts with these channels?

Schulte: [Becher] focused on avoiding the channel conflict and commercializing products that were not being sold by the field. These were either products or packages that were specifically designed for the digital channel or products that the field didn't cover at all. This gave him the chance to be a bit isolated in building up all of these capabilities -- the back-end processes, the legal work, the credit card enablement.

We are increasingly onboarding all the products that the field sells to the [SAP Store], and we've amplified our scope a bit to not just sell SAP products, but also sell partner products.

What are some of the vehicles being used for SAP's digital transformation?

Schulte: There are currently multiple commercial properties in the SAP digital world -- the SAP Store for SAP applications, the App Center for partner applications, the education store for education offerings -- but it's very confusing for customers. So the second big point on the strategy is that we have to harmonize the customer experience.

Our research found that customers find it increasingly hard to manage their contracts, the license, the license compliance and renewals, so we are working on a My Account section on that does exactly that. It gives full transparency on what active contracts you have, what licenses, if you have subscriptions and if you have consumption-based models. You can renew your applications like you would expect in a business-to-consumer environment.

In addition to what we're doing with the SAP products, the partner products [and] direct sales to consumers, we're also working on the commercial experience for partners in order to make it much easier for partners to find the right partner program, to subscribe to the right partner program, to get value out of the partner program. This is also currently a cumbersome process, so we want to create a digital experience for partners that brings all of those things together and makes it directly accessible.

What are the signs of success for SAP's digital transformation strategy?

Schulte: It's a constant process, and there's still quite a ways to go, but I believe that when you get to the place where -- excluding the very complex and huge multimillion dollar deals -- the customer has the ability to do the exact same things online as you can do via the [account executive], and in a very quick and easy way so it's actually a better experience, that has reached a plateau that I think is satisfactory.

We're also focused ... on the existing processes and how we can digitize those and bring them into the digital experience. Beyond that, we will be working on enabling new business models and how we can generate new top-line revenue by enabling a better customer experience. This is very important for what we've been doing with the SAP Cloud Platform.

What are some of the biggest challenges for a company of SAP's size when it undergoes digital transformation?

Schulte: With the SAP Cloud Platform, we realized you can do these deals with the [top] CIOs, but what's much more decisive than the CIO relationship are the relationships with each of the 2 million developers that actually work with the Cloud Platform.

What's much more decisive than the CIO relationship are the relationships with each of the 2 million developers that actually work with the Cloud Platform.
Bertram Schultechief digital officer, SAP

That means there's the challenge of scale -- how can we engage effectively on an ongoing basis with each of the 2 million developers rather than the [top] 2,000 CIOs? This is a mission that has digital all over it ... but what we need to get better at is how to enable the developers. How do we inspire them with use cases about what they could be doing on the Cloud Platform? How can we educate them? How can we support them and their projects in a digital, fully scalable fashion?

We thought one of the first answers was that we might have to change the way our [account executives] engage with the developers, but we did some research, and a grand majority of the developers said, 'I don't want to have any person. I want to do that in a self-service fashion and I want to be in control because, at 10 at night, when I'm looking at how I can integrate a data streaming service into my IoT project, I'd rather look that up online or have a good webinar or FAQ so I can get my job done.'

This is what's on the agenda for the Cloud Platform going forward -- how we can make that much better, more guided and consumed in a more natural in way.

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