SAP co-CEO Snabe: In business, eat (or be eaten)

May 15th, 2013

Peter Nolan

ORLANDO—It is difficult to stare at a massive photograph of a tiger and not imagine her snapping your neck in two.

That’s not quite the reason that SAP co-chief executive Jim Hagemann Snabe showed the photo, which depicts an Indochinese tigress named Busaba shaking herself dry after a swim, during his keynote presentation here at the company’s Sapphire Now conference. (His message: contrary to popular belief, tigers will go into water in pursuit of prey. They adapt to survive.)

But in a talk focused on applying the lessons of Charles Darwin and natural selection to business, it’s hard not to think about a bit of neck snapping. Crunch.

“Nowhere is the will to win stronger than in nature,” Snabe said. “Because the rules in nature are very, very simple: you are either at the table eating, or you are on the table.”

Snabe’s message—business is a fight to the death, and the best businesses win, survive and thrive, thanks to their adaptability and innovation—is hardly novel in the corporate world. (Former GE CEO Jack Welch once famously said, “If you don’t have a competitive advantage, don’t compete.” Well then.)

But Snabe was trying to tie the “unfair advantage” of the process of natural selection to his company’s touting of cloud, mobile and in-memory computing technologies. (He called Darwin’s animal specimen collection “big data in the 19th century,” with his brain serving as in-memory computing.) In an SAP world, the unfair advantage lies with data. More data, better data, and faster access to it? That’s the winning formula.

“To survive in nature, you need two capabilities,” Snabe said. “First of all, you just have to be better. More importantly, you have to be adaptable, because sometimes in nature evolution is not continuous.”

Appropriately, Snabe made his argument in an almost professorial manner, lecturing with steady pacing and the occasional wave of his arm toward a diagram behind him. That delivery stood in contrast to his co-chief executive Bill McDermott’s keynote the day before, a far more casual, personality-driven affair.

“Business is very much like nature,” Snabe said. “But in nature, evolution happens through mutations that happen over millions of years. In business, we call these innovations.”

And so the history lesson continued. Snabe took the audience back to the 1870s, when the Industrial Revolution took the economy away from its agrarian origins and into the factory. Suddenly, humans had to satisfy mass consumption through mass production.

“This change had some significant consequences”—higher incomes, higher populations, he said. “The model worked extremely well for roughly 150 years. But now we have seven billion people that are consuming a lot, and we have a scarce resource situation.”

Before, “technology was used for mass production to optimize labor productivity.” But humans were willing to create a lot of waste for that extra productivity. “I believe the running out of resources will be the biggest limit to growth and opportunity,” Snabe said.

Before, environmental impact was the product of the multiplication of population, affluence and technology.

Today, environmental impact needs to be the quotient of population multiplied by affluence, but divided by technology.

“It is clear that the rules of the game have changed,” Snabe said. “For the first time in history, we are in a situation where we can digitize products and services and relationships between billions of people.”

He stood on the stage and looked out into the crowd. “Is this really possible, or is it just a mathematical operation?”

One path of exploration is through what Snabe called the “connected, intelligent car.” In the future, the gas station, retailer, parking lot, vehicle and media companies that populate your car’s entertainment system will be linked to “create joyful experiences.”

Joy, as in finding a parking lot for your car (and paying for it) when you drive it into the city.

“The connected car turns wait time into great time,” Snabe said with a smile. “Imagine the impact on resources when you don’t have to spend 16 minutes looking for a parking lot. Imagine the impact on world peace if you don’t have to fight for it.”

Another path is through the retail sector, which is digitizing the shopping experience and anticipating customer needs before they walk through the door.

“Retailers are becoming digital enterprises,” Snabe said. “Supply chains become demand chains as consumers demand individual needs.”

A third path is healthcare, an industry in dire need of digital coordination.

“The most valuable asset in healthcare is the patient,” he said. “When you digitize the entire DNA of a person, you have a revolution. More than 3,500 diseases are caused by DNA changes. With this data in real time, you can start predicting diseases.

“The future in healthcare is not about curing diseases, it’s about preventing diseases. Imagine the impact in productivity in healthcare, and in people’s lives.”

A fourth is in financial services. If the margin cost of opening a new bank account is zero, retail banks can begin to address the unbanked population through their mobile phones, rather than through brick-and-mortar branches.

A fifth? Energy. “The cheapest ton of coal is the ton of coal you don’t use,” he said.

So it comes down to long-term survival. Snabe’s solution? The general availability of SAP Business Suite on HANA, its in-memory database technology.

“The digital era is driving quantum leaps in all industries,” Snabe said. “With technology, we offer a radical new opportunity.”

“In the digital era, fast kills slow. And you want to be fast.”

Crunch.

Source Article from http://www.zdnet.com/sap-co-ceo-snabe-in-business-eat-or-be-eaten-7000015427/