SAP’s Atzberger vaunts front to back office capability

Alex Atzberger is president, SAP Customer Experience, a term that encompasses the supplier’s CRM offerings, which include the technology that came with the firm’s 2013 acquisition of Hybris.

Atzberger “owns” the strategy for the “customer experience” initiative at SAP. He was president of SAP’s business-to-business procurement network business Ariba from 2015 to 2018.

He also has a hinterland in the form of a connoisseur collector’s interest in comic graphic art that goes back many years to his childhood in Hong Kong and Malaysia, and is informed by a formative internship at Marvel, as a Harvard Business School MBA student. He is also a former McKinsey strategy consultant.

At SAP’s Customer Experience Live event in Barcelona, Atzberger gave an interview to Computer Weekly. What follows is an edited version of that.

SAP says its value proposition with respect to customer experience lies in its ability to connect the front office with the back office: C/4 Hana and S/4 Hana, together. But why is this an advantage? Another supplier – let’s say Salesforce or Adobe – could say their advantage is that they are not weighed down by the back office, by the legacy of ERP.

Atzberger: The advantage of the front and back is from the perspective of our customers’ customers. If you think about when you yourself engage as a customer, you care about fulfilment and paying how you want to pay. For companies to deliver these outcomes, they need the flexibility and they need the integration into their supply chains.

A good example would be a shoe company, where the customer wants to customise a pair of sneakers – and doesn't want to wait too long for them to be delivered. So it’s not just about going back into information about the product, but into the very product itself.

Or take a white goods manufacturer that we are working with, which previously only connected with the customer through the loyalty process. But now there is an internet of things play, with sensors on the goods.

Wave one [in customer experience] is setting up a website to sell goods, creating a good experience online, and understanding omni-channel. But now it has to go much deeper into the organisation in all its complexity, in order to make external outcomes happen. How can every person in your company become more customer-focused?

Every company I talk to want things to be simpler and more effective, more focused on customer outcomes. How do you do that? End-to-end integrated processes have to be the way.

From your keynote at this conference, I took it that you see a relentless customer focus as the ground on which businesses can get beyond a divide, a binary opposition, between “digital natives” and older incumbent companies?

Atzberger: There are some companies that are much more asset-focused, but for the 80% that are customer-focused, there is no new competitive ground, other than the customer. You see a convergence between digital native companies and incumbents. For incumbents to succeed requires using technology to transform the customer experience. Their supply chains should be real assets.

And then there are companies that only have data, that do not have a supply chain in the same way. And for the incumbents, the GDPR [General Data Protection Regulation] appears as a blessing in disguise, buying them time to create a level playing field and catch up with the digital natives.

In developing SAP’s capability to offer its customers more capability to be customer-centric, you have gone on the acquisition trail with Gigya and Callidus Software. I remember McDermott saying about two and half years ago [May 2016] that the company was focused less on fresh acquisitions and more on bedding in the previous acquisitions it had made. These were mostly in the cloud: Ariba, SuccessFactors, Concur, FieldGlass; but also Hybris, which was an on-premise omni-channel commerce. And he said we could expect to see SAP being more an “organic innovation machine”. What has caused this ostensible change in strategy, in building up what is now the C/4 Hana suite?

Atzberger: I worked on the acquisition strategy with Bill in 2010. It was always about having a clear sense of where you want to go, and then going faster, with acquisitions being the way to do that. Now, when we developed the CRM strategy in 2017, we started to lay out what we thought were the differentiating factors. Callidus Software fitted into that, with [expediting] the lead to cash process.

And our customers see that it is a clear and simple strategy: the front to the back office integration, the connected experience – marketing, sales and commerce; and providing an open platform that allows our customers to extend their solutions. And so we have C/4 Hana. We completely embrace SAP on the one hand, but at the same time we also bring openness. It's so much more intelligent than salesforce automation.

Why do you think customer experience and e-commerce software has assumed the importance it has? It is a hot space for acquisition activity – for example, Adobe with Magento and Marketo. Or Salesforce and Demandware.

Atzberger: My sense is that it is the topic in the minds of CEOs. They are asking themselves: how do they stay relevant? Maybe not every company uses the term “customer experience”, but it is really about growth. And there is the emergence of digital native competitors for incumbents.

A big topic of conversation is Amazon. Back in the day, it would have been GE or Enron that was the company everyone spoke about. But now it is Amazon, and it’s because of its fulfilment capability. And so every board is focused on that.

From our point of view, as SAP, it is a market opportunity. If you look at where the budgets are going, you’ll see that what is spent on IT for keeping the lights on versus innovation, you’ll find that with the asset-intensive companies it is on supply chain, but with the others, 70-80% of it [the innovation spend] is going on the customer experience.

And it changes the business case for IT spend when you see the chief marketing officer or the head of sales pushing an initiative. Then they are driving – not solely – but they are driving, and decisions get made faster when they are involved.

Do you think it is easy for any company to underestimate what it takes to treat a customer well? IT people have also not, traditionally, had to focus on that, in terms a company’s external customers.

Atzberger: True, but I think that that comes back to the complexity a company’s internal processes being felt by customers externally. Take airlines, for instance. A lot people’s unhappiness with their experience with airlines stems from internal complexity being experienced externally.

And I think the importance of empathy for the consumer aspect gets underestimated, too. Customer experience is not just a matter of technology. It’s more about having a customer culture, and applying the technology in such a way that it does not get creepy.

That’s why we talk about trusted relationships, and why I am happy that we have published our memorandum on what artificial intelligence should be about, and that we have our council on the ethics AI.

Talk me through the open data initiative that you’ve announced with Microsoft and Adobe. How did that come about?

Atzberger: [McDermott, CEO, SAP] made the call to Satya [Nadella, CEO, Microsoft] and Shantanu [Narayen, CEO, Adobe] to say it is time for us to partner. Unilever and Walmart are good examples of companies where we are all active as vendors. It’s about gauging what is the benefit of partnering compared with that of competing.

This [arrangement] is also special because it is based on a that ownership and control data should lie with the customers themselves. Right now, because the silos within a large corporation, data might sit within an Adobe Experience system, a Microsoft Dynamics system, or an SAP C/4 Hana system. So, we have agreed to set common standards for customer data.

Many existing SAP customers – on ECC6, say – will look at S/4 Hana and its being tied, now, with C/4 Hana and think: “The technology looks great, but implementing it means we’re going to be paying systems integrators through the nose all over again.” What would you say to a CIO with that concern?

Atzberger: The seminal shift, for me, is the cloud, and it always comes back to the customer value equation. What’s the value, what’s the cost? Our role, as SAP, is to convey to our customers why the path to S/4 is valuable to them. And from a C/4 Hana perspective, the business case of taking a customer experience investment to a board is a positive. That’s why this market is hot – it gets you entry to a boardroom discussion.

A lot of customers, especially CIOs, come to me and say: “I get S/4 Hana, I understand that. But now I’m excited that you are providing the front office technology as well [with C/4 Hana].” And that’s partly because we are taking out the complexity in their enterprises.