What a CEO needs to know about SAP HANA and in-memory technologies

John Appleby

Posted by John Appleby on March 25, 2013

Global Head Of DDM/HANA COEs

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If you are the CEO of a large company then it would be a surprise to me if your CIO, COO or other IT-focussed individual hasn’t had some discussion about SAP HANA, or in-memory technologies. I think there are three things that a CEO really needs to know about SAP HANA in order to have a useful discussion with the CIO about what to do.

1) SAP HANA is the first product in a new category of technology

New categories of technology only happen every generation or so. Think in terms of the punched card to the transistor, or the mainframe to the PC. Each time a new category of technology is introduced, the business world changes around that category and a generation of new companies is born. I believe that in-memory technology is one such inflection point that creates a new category of technology. I believe this is significant in itself.

2) SAP HANA is a platform on which you can create competitive advantage

I don’t know what your specific strategic objectives are – perhaps you are in the consumer products industry and you are worried about consolidating a global supply chain. Perhaps it is to become the most customer focussed organization in your industry. As a business leader it is your role to define those and most organizations I come in contact with have very clearly defined strategic objectives at the top levels.

What I can tell you is that SAP HANA is a platform that consumes, processes, transforms and delivers transactions, business information and analytics in real-time, and it’s a good bet that whatever your strategic objective is, HANA could differentiate your business offerings in your market.

3) SAP HANA has a place in business that require cost reduction, not just cost avoidance

Often I have a conversation early on with senior decision makers looking at use cases for SAP HANA in their business. “I hear HANA is expensive”, they say, “talk to me about the price”. Yes – with SAP HANA you store all your important information in-memory, and that’s many times faster and somewhat more expensive than traditional systems.

But there’s two important points: SAP HANA typically processes information an order of magnitude faster than a traditional system, but it is not an order of magnitude more expensive, which means it provides value for money. Second, HANA typically allows you to simplify your IT – and your business. Operational costs are reduced because there is less complexity, and this typically provides an excellent TCO.

What I have found – and watch out for this – is that if you run a confined vendor comparison process which puts SAP HANA in a box and doesn’t allow any of its benefits, then you will find that an in-memory database like SAP HANA will be more expensive than another vendor. Which is a bit like saying that air freight is more expensive than road to get a box of apples from Washington to New York, when you only needed them there in 5 days.

Final Words: The cost of doing nothing may be high

The businesses that I’m working with are typically in a highly competitive market, and the world is changing fast. Digital is replacing print, the global economy means that manufacturing needs change quickly and products have to come to market many times faster. They know that in order to beat their competitors,they need IT systems which can support the needs of the business.

What’s more, I have no doubt that those businesses that invest correctly in in-memory technologies will differentiate themselves from their competitors. I have seen this in several cases, for example where SAP HANA has helped a change program deliver several points of cost improvement on the bottom line, in a highly competitive distribution field, or where it played the center role in a customer satisfaction strategic initiative to assist employees to understand customers better and serve them better.

My advice – challenge your CIO on how SAP HANA (or other in-memory technologies for that matter) could help you achieve your #1 strategic objective, faster and better – and see what he or she comes up with.

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