June 5, 2014
By Sarah Sluis,

Sapphire Now: Combining Technology and Strategy to Achieve Simplicity

ORLANDO, FL—Four years after the launch of SAP HANA, the in-memory computing system has attracted more than 1,000 customers. But according to Hasso Plattner, chairman of SAP's supervisory board, the very nature of SAP HANA is so disruptive to existing business processes that companies have to reimagine the way they do business. With HANA, there is no longer need for indices and "redundant data structures," Plattner told the audience at the Sapphire Now and ASUG Annual Conference Wednesday.

"The data footprint collapses" as companies can carry out processes faster while using less memory. Companies are able to analyze their businesses in more holistic ways with HANA, but it can take time and thought for companies to realize that barriers no longer exist.

ConAgra Foods was able to use SAP HANA to create a"What If" analysis platform that would "bring innovation from the back office to the front office" describes Mindy Simon, vice president of information technology for ConAgra. The packaged foods company uses SAP and SAS to do predictive modeling to determine how an advertising campaign might impact demand for a product. If the cost of goods goes up, someone in the front office can immediately see which item caused the change, something that took much more digging in the user interface and time before HANA. Creating that capability also required thinking about what could be done other than just replicating existing processes in the new platform.

HANA can also speed up CRM and enable large-scale projects such as the CRM initiative in the Asia-Pacific division of Luxottica. When a competitor entered the landscape, the eyewear provider behind Ray-Bans, Oakleys, as well as the Sunglass Hut and prescription sunglasses had to develop more effective, data-driven marketing. "For the last two-and-a-half years, we've put the customer at the center of everything we do. From an IT perspective, CRM has become the most important system in our landscape," Luxottica Chief Information Officer Stephen McKinnon said, noting that CRM and customer engagement comprise 80 percent of the IT budget. Luxottica wanted to be smarter about its marketing spend. In the past, the company would simply spend $100,000 on a marketing campaign. Now it spends more, but has a higher return on investment by tying spend to its customers' behavior instead of an arbitrary campaign. Next, Luxxotica focused on bringing its CRM further down to the store level, to enable sales associates with customer information that could create cross-sell or upsell opportunities.

Bangkok Airlines prides itself on delivering a great customer experience, serving meals on every flight and creating highly satisfied customers. The airline went on HANA, and uses the platform to do a profitability analysis on all of its routes, which helps keep customers happy while allowing it to remain profitable.

The emphasis on combining back-office efficiencies with gains for customers was also apparent in the case study for Medtronic. The medical supply company, which provides items such as insulin pumps to patients (B2C) as well as healthcare providers (B2B), heard from its customers that it was too hard to do business with them. So Medtronic created a better transactional experience with SAP Hybris. The company has more than 600 1-800 numbers used to order products, and the number-three reason people call is to be transferred to another line, Nancy Beiersdorf, head of global e-commerce and customer strategy, stated grimly. The phone was also expensive, costing more than $14.60 per sale compared to $1.50 for a Web transaction. Using SAP Hybris, the company was able to create a "win-win for Medtronic and its customers," Beiersdorf explained, noting that it was important to emphasize the efficiencies for employees and the bottom line in order to build support for the project. While the healthcare professionals and patients buy through different portals, the experience has to be easy for both groups. "All B2B buyers are consumers, and we need to think about that in the experience we need to craft for customers," she explained, adding that "we thought [the] healthcare industry wasn't ready for self-service, but we're seeing the opposite, which is refreshing."

The gap between how customers want to be treated and what companies can actually deliver is a challenge many forward-looking companies are addressing. How consumers make their purchases "is far more dynamic and iterative than a linear progression through a sales funnel," said Andrew Pickersgill, a director at McKinsey. "The sun is setting on the [campaign] calendar and funnel." Consumers are moving in and out of evaluation stages, subtracting and adding companies as they consider their purchases. That makes traditional campaigns, such as the ones Luxottica moved away from, something that will become part of the past.