SAP on HANA: Real-TIme Enterprise is Looking More Real

SAP_Business_Suite_Powered_by_SAP_HANA_Events_2013_004_1Thursday’s news–that SAP announced the availability of SAP Business Suite powered by SAP HANA–could easily go unremarked by people outside the enterprise software world, but it’s an important milestone for those of us interested in big data, the real-time enterprise and, ultimately, predictive analytics. In a nutshell, the addition of HANA enables SAP’s business applications to capture and analyze transactional data in real time. (For a good summary of the announcement, read Rachel King’s post in ZDNet.)

What makes this announcement notable for those of us interested in big data, measurement and predictive analytics is the potential of an organization able to perform analysis on data and deliver relevant results at the moment of transaction. One particularly interesting example is BigPoint‘s Battlestar Galactica, a massively multiplayer game based on the immensely popular SyFy series of the same name.

Like many such games, Battlestar Galactica sells virtual assets as part of its monetization strategy. When a significant event occurs–i.e., you are shot–the system notes that and immediately tries to sell you virtual goods to prolong your gameplay (and, of course, deepen your emotional and financial investment in the game).  This is where we move into big data territory; in Battlestar Galactica, more than 15 million players are shot an aggregate of 5,000 times per second, so the game requires a propensity model to determine the appropriate offer based on the specifics of the event, the player’s gameplay skills, and other factors. To minimize gameplay disruption, all of this must occur–analysis to offer–within three seconds.

Another such example is the pre-paid phone card business.  What if companies could send a text message to the owners of pre-paid cards letting them know that their cards are about to expire, and offering the option of replenishing the card before it runs out? Pricing, promotions, decision support, supply chain: there are just a few examples of the countless applications for real-time (or, what some now call “right-time”) analytics.

SAP’s announcement also begins to reveal some of the massive changes in thinking that a so-called “real-time enterprise” will catalyze. For example:

  • Redefining the transaction. What is a transaction from a technical perspective? When you have the ability to do real-time transaction processing, it’s not just the outcome (buy a bigger spaceship) but the precipitating event (getting shot) that is important. This places much more emphasis (and yields more opportunity) throughout the entire customer journey, rather than the simple act of conversion.
  • The death of reporting. Rather than a culture based on reporting, this type of technology means that anyone in the organization could potentially query data, analyze it and make recommendations based upon it. Reporting then moves from an after-the-fact event to a continuous process, which could trigger some interesting cultural implications as accountability also becomes more “real time.”
  • The ability to predict. Alerting becomes more relevant. Algorithms can analyze massive amounts of similar situations based on historical data, run propensity models and provide weighted recommendations based on various scenarios.
  • Mobile becomes more strategic. Mobile devices would have the potential to query and act on unprecedented amounts of information, which requires more governance of, and potentially investment in, the mobile platform.
  • Design thinking becomes business critical. To ensure that customers get off on the right foot, SAP has included design thinking services for its initial customers to help them ideate and then select the business use cases that demonstrate the highest value and technical feasibility.  To make a real-time organization work, design thinking should become a core skill rather than a periodic event.
  • Developers design new apps based on real-time data. Said Amit Sinha, VP Database and Technology Marketing, “Our goal is to move the tool out of SAP’s hands and into the community.” The ability for developers to design apps for real-time event processing will open up new possibilities for business and consumer applications.

But before we get too carried away with rosy images of a real-time future, we must also look at the realities, many of which will follow my favorite law: the law of unintended consequences. While SAP executives stressed many times that SAP on HANA comes with minimal technology disruption, that doesn’t begin to account for the processes, people, policies, communication, decision making capability, culture and other factors that a truly real-time enterprise demands.  It’s not just different technology, but different thinking, different skills, potentially different cultural values that add up to a huge disruption in the way we value time and timeliness within an organization.  Of course, each company can control how quickly or slowly it moves toward this new model. Said Sinha, “It’s up to you to decide how much you want to adopt.”

That is certainly true today, when we are in the embryonic stage of real-time business. But, as social media harshly exposed organizations that underestimated the impact of an empowered public, real-time business will spotlight those companies and organizations whose processes are out of step with the availability and velocity of big data.

We will lose whatever patience we still have for experiences that neglect to incorporate the continuous streams of data that we create: restaurants who don’t “remember” that we’re regulars, retailers who consistently show us ads for items we’ve already purchased from them, hospitals who can’t let us go home for eight hours because their discharge process takes longer than our medical treatment. The fact that some organizations can behave in a more agile and customer-aware way will make those who can’t look sluggish and out of step by comparison.

Of course, this is a lot of “ifs.” If SAP is able to share successful use cases and prove market momentum early on, this will up the ante for organizations–end users and technology providers alike–to hasten the transition to a faster, more data-aware business infrastructure.  If customers adopt technologies that support real-time business and demand them from the the other vendors in their ecosystem, if the technology proves cost-efficient and reliable and transformative enough, well, you get the picture. But this announcement does throw down the gauntlet, for SAP as well as its competitors, to move past technology buzzwords and deliver real examples of real organizations creating and delivering real value.

To be sure, one thing we can rely on is that there will be disruption in both directions: for the laggards as well as the early adopters.

As always, I’d love your thoughts. Please share them in the comments, or elsewhere, and I’ll be sure to link to you.

About susanetlinger

Industry Analyst at Altimeter Group
This entry was posted in Analytics, Big Data, Predictive Analytics, Real-Time Enterprise and tagged , , , , , , , . Bookmark the permalink.

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