Constellation Research held its February call with Business Transformation 150 and SAP's RISE program, process automation and AI were top-of-mind topics.
These gatherings, held under Chatham House rules, are a venue to share information and emerging trends. Here's a look at the topics from our February meetup.
Previously: BT150 CXO zeitgeist: AI trust, AI pilots to projects, VMware angst, projects ahead
SAP's RISE program
- One CIO asked the group for opinions on SAP's RISE program and being forced from on-premises to the cloud. The goal was to have a strategy for SAP in place by the end of the year.
- CXOs weren't thrilled about SAP RISE and items like licensing credits for legacy environments. A CIO wondered what would prevent a customer from moving away from SAP--especially since the enterprise operates in a space that doesn't garner investment from the enterprise software giant.
- One option could be to build a homegrown ERP system to replace SAP.
- SAP's RISE program is viewed as an exercise in financial engineering more than something that benefits customers.
- Being on-premises is actually a good thing because the customer isn't beholden to SAP and already paid for the asset. Rimini Street was frequently mentioned as an option for maintenance and support to preserve the initial SAP investment and keep options open down the road.
- For enterprises that don't want to migrate to SAP's cloud, there's an option to build an abstraction layer on top of the transactional system that's eating up budget without value.
Our BT150 CXOs aren't alone. SAP's German speaking user group takes aim at cloud contracts, BTP and more | SAP user group DSAG rips S/4HANA innovation plans, maintenance increases | SAP retools for generative AI, cuts 8,000 jobs, sets 2024, 2025 ambition
Process mining and automation
- Some CXOs were exploring proof of concept projects for process mining and modeling tools. The concerns revolved around process mining turning into more work than it needed to be unless the underlying systems were emitting real signals.
- Process mining was seen as an option to automate repetitive jobs. Celonis and SAP Signavio were mentioned as options.
- Process design is critical to making automation projects work.
- Enterprise automation needs processes that are designed by the bottoms up with employees on the front line. Enterprises should look to redesign processes completely and creatively destroy them to find new ways to work.
- Change management is a required art form to make automation work. In many cases, the objective for employees and departments is to maintain a process that has been running for decades. Resistance to change torpedoes automation projects and CXOs need to evangelize and bring in multiple stakeholders.
Celonis launches Process Intelligence Graph, makes case process enables automation, AI applications | SAP buys LeanIX, aims to couple it with Signavio, system transformation
Management tips
- Use regulatory and security requirements to move projects along and get stakeholders on the same page.
- Sell teams on projects that will last beyond today and influence the future.
- Enterprise change is more successful if it starts from the inside than outside.
- Plan projects assuming that the CEO has a tenure of 4 years and so does the team attached to that leader. Year one is likely to be about cost cutting. Year two is about innovation funded by the savings of year one. Years three and four are about delivering results that renew the CEO's contract. The goal is to implement technology that can span leadership teams.
Return on Transformation Investments (RTI)
AI risks
- CXOs on our panel all referenced Air Canada's rogue bot that gave a discount that was upheld in court. There are other examples of bots giving deals that no human would approve. CXOs noted that safeguards, process maturity and a kill switch are required to prevent bots from becoming headaches.
- Enterprises need to think through where a human goes into a process to establish trust.
- Enterprises also need to ponder legal liability with generative AI.
- AI applications are becoming a key theme as enterprises look to renew long-term deals with software vendors. Multi-year deals may smooth out costs and contract negotiations.
