Episode Forty: Driving The Digital Agenda

Feeding The Machine

If you're not digitally connected to your suppliers or to your buyers, then you're not able to respond and so I think the digitization trend is simply getting accelerated.
 

Sean Thompson, Executive Vice President for Network and Ecosystems at SAP Ariba joins us to discuss the impact of COVID-19 on globalisation, supply chains and the digital agenda. Plus, how data can be used to understand a business’ sustainability footprint and to feed Artificial Intelligence.

(Please note that this podcast was recorded remotely.)

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The Power of Data Podcast

Episode 40: Driving The Digital Agenda

Guest: Sean Thompson, Executive Vice President of Business Network and Ecosystem at SAP Procurement Solutions
Interviewer: Mike Conlon, Head of Global Partner Sales at Dun & Bradstreet

Mike 00:00
Good morning. My name is Mike Conlon and I'm the head of global partner sales here at Dun and Bradstreet. Joining us today is a long-standing partner of ours Sean Thompson, who is executive vice president for network and ecosystems at SAP Ariba. Sean you've had an extensive and colorful career ranging from some of the world's largest consultancies and technology firms to technology startups and co-founding your own company before you join SAP Ariba a few years ago. It would be great to start off our podcast by giving our listeners some insight into your journey today.

Sean 00:31
Thanks, Mike. I'm excited to be here. And let me just start off by saying thank you to not only yourself for being a good friend, but also to Dun and Bradstreet for being a great partner of ours at SAP. You know, he asked me where I started my journey here at my place in Montana. I'm originally from Montana and I'm looking at the great Rocky Mountains in this COVID timeframe. And in some ways, I've gotten back to where it all began. And it's a beautiful time of year here in Montana and it's great to be in the Rocky Mountains. COVID has not impacted us as much. But it certainly impacted our lives in terms of I'm here, self-quarantining, if you will, and that the amount of change. And I know we're going to get into that as we talk further, but it is fascinating times we live in. From a professional perspective, as you said, I've been at three large companies. And I've been at three startups. But in many ways, my career started off at Deloitte for the first 10 years. And halfway through that, I got to know this thing called SAP in the first major wave of consumption of enterprise resource planning. I was a business process reengineering consultant, and in the mid-90s, the big wave of the future real true adoption of VRP was driven around the y2k. And that really transformed my life because I loved the whole concept of companies adopting software to improve what they do. And ERP and SAP became a big part of that. And in many ways, it's also been a consistent part of my journey, whether it was as a systems integrator, helping companies adopt SAP. I then spent a decade at Microsoft and I was in the platform and tools area of Microsoft, where SAP was an important partner of ours as an application sitting on top of things like Windows Server, now as your SQL Server as a database layer, and then the whole orchestration around SAP as part of the dot net experience. I started my own company after Microsoft oft in a very interesting area of natural language processing. We wanted to bring voice to the CRM application, if you will, or to the business application experience at Microsoft. While I was at SQL Server, we were early pioneers in natural language processing, simply allowing end users to type a question into a database and get an answer, not have to know how to do SQL statements, etc. And we wanted to bring that, my partner and I, to the world of enterprise application software experience like the consumer guys and Apple and Google, and now Amazon with Alexa and now Microsoft with Cortana. We were early days and saying, there's a future that is going to exist not only in the consumer space, but also in the enterprise space, the way in which we interact with software. We should be able to talk to computers, and have those computers respond to us. And so my entrepreneurial journey as a startup co-founding CEO was really impactful to me. We were able to innovate early days in order to Artificial intelligence in natural language processing and that whole experience was yet another to me example of what this whole Podcast Series is the power of data. Using data to inform how you can speak to machines and very much led me to where I'm at today with SAP. After selling our natural language company, a board member of mine and a very good friend was a longtime Concur employee in SAP bought Concur. As part of SAP journey to the cloud SAP is the enterprise resource planning company made its way into the cloud, partly by a buying companies like concur like Ariba and many others in the cloud portfolio, but it also was an early innovator in bringing ERP enterprise resource planning to the cloud. And my first chapter at SAP was helping bring the product called business by design. It was SAP's first SRP application that built cloud native and our first chapter at SAP was to bring that cloud native software to the middle market. And I enjoyed that very much for the first two years of my career at SAP. And the last two years have been part of this procurement world. And Ariba is where it started, and all about how do we bring a cloud experience for procurement? And how do we bring that cloud experience not only at the application layer, if you will, from source to settle source to pay as we call it for the buyer? But how do we bring a network experience between the buyers and suppliers? One of the main reasons why SAP bought Ariba was because of that network. It's the world's largest network, in that we have little over 4 million companies that are part of that network. And it processes on an annual basis, almost three and a half trillion dollars in commerce. That is more than Amazon Alibaba and eBay combined, because of the power that we bring, if you will. To the enterprise space, large companies that are doing procurement across that network and all of the suppliers that they connect. And it's been a fantastic last chapter, if you will, at this current chapter at SAP to do that. We've also done something that is pretty significant as well within SAP is that in the last decade, the acquisitions of these cloud properties that I mentioned before and these cloud businesses, we've now gone through a fairly major restructuring within SAP where we're getting out of our product silos, we're no longer thinking just as Ariba, we're no longer thinking just to say Fieldglass for instance, or S4 on the ERP side, we've now brought all of those procurement applications together into the procurement solution area. So you'll find now going forward all of what we do within S4 our ERP product, as well as Ariba and Fieldglass, eventually Concur. All of that will be on a common roadmap, helping companies be able to manage their spend better. And the network is going to become increasingly important for SAP as SAP thinks about not only building a portfolio that allows companies to leverage the intelligent enterprise experience within their four walls but how can the network provide a connectivity between companies so that that enterprise experience that intelligent experience can extend beyond the four walls. So it's been a fascinating journey, Mike for the last four years within SAP, but also over the last 25 years of being part of the SAP ecosystem. So it's been a very interesting journey. So thanks for having me.

Mike 08:52
Sean, how has your role changed over that four-year period of time? And what are your current priorities as a company today?

Sean 09:12
You know, I always say to people, I've been at SAP as an employee for four years, but I've been a member of the ecosystem for 25 years. Deloitte was one of the early consulting companies that embraced SAP and now has a multi-billion-dollar practice around helping other companies adopt SAP. As I mentioned, I was part of the ecosystem at Microsoft, where I was a platform provider, providing platform capabilities at the database layer in the operating system layer for applications like SAP. And since I've been inside of SAP, I've really had kind of a common theme to my role, which is enabling and helping SAP think about growing this concept of ecosystem. I think it's a very powerful concept, especially as the technology industry has evolved into the cloud. And the cloud really has brought more modern ways of thinking about architecting solutions with open API's. And those open API's enable not only your customers to use our applications in a more integrated and flexible way, but it also unleashes a very powerful concept, if you will, inside of a business model of the concept of the ecosystem. You know, the likes of the partnership that we have is an example of that. The concept of being able to be open and embrace the ingenuity, the innovation, that our ecosystem can drive not only helps us innovate faster, because we get to leverage the power of many, many, many other developers that are extending our solutions or the power of data provider, if you will, in terms of the data and intelligence that had Dun and Bradstreet brings to our solutions. The consulting side. That's why very much have had an ecosystem first approach to my roles at SAP that hasn't changed. What has changed though, is that most recently, I took on a responsibility for what we refer to as the network that I mentioned before and the network is really one of the key reasons why SAP bought Ariba. Ariba had done a fantastic job of winning buyers with a value proposition of use the Ariba software to drive how you spend what you source in suppliers. And then how do you drive compliance spanned once you contract with those suppliers, etc. The old classic source to pay value proposition for a buyer. But Ariba did something brilliant along the way – is all those buyers in being able to drive compliant spend, if you will, on the buyer side. They needed to be electronically integrated with suppliers so you can have an end to end experience and so that's the network was born and Ariba did a fantastic job of winning large buyers and those large buyers invited the suppliers into that network, thus creating the world's largest network that SAP bought. And now that it has that asset, I've been involved now in helping elevate what the network could mean for the whole of SAP. We recently had a change in our CEO, Christian Klein is now our new CEO, and you're going to be hearing a lot more from Christian and the executive board at SAP about the future. What does it mean? And you'll hear at Sapphire in a virtual setting now that we're all going virtual with these events, you'll hear a lot at Sapphire about network. And what's a thrill for me is that the role that I have today, in advancing this concept of network, it's very much an ecosystem. It's just a different way of you know, it's a different word. But it's all about connecting companies in a global infrastructure, if you will, that is in the cloud. That enables companies to digitize how they go about operating. And you know, from the taste that I did it, replacing mainframe systems in the mid-90s. To now leveraging cloud technology and cloud architecture. It is an amazing time to be in the world that we live in, and the world that we operate in this evolution of my role had a common theme, but now it's an amazing time because of the opportunity that we have to leverage the concept of cloud and you know, the power of data. And I, you know, go on and on, but the power of data and how we think about data in the future is going to fuel a lot of the innovation. So it's a really fascinating time and it's great to be alive, my friend.

Mike 13:48
Oh, I agree. And I love that overview, Sean, because he talked about the power of the network, the value that it delivers to your business partners, to suppliers to buyers and all kinds of companies and he touched a little bit On the digital transformation, I'd love to dive into a little bit further but more in the context of COVID-19. And Sean, you and I've been talking about this going back to even March where you guys did some real work we call Do Good in the marketplace where you opened up your applications and your network to help companies through these trying times. When you think about the breakout of COVID-19 and how it significantly impacted global supply chains, what has been yours and SAP Ariba’s view on the market? How it has coped? Have there been any standout trends? And do you see anything changing in the future as a result of the pandemic that we're going through?

Sean 14:35
Yeah, you know a fascinating topic. And not only, I guess, in my personal perspective, my personal life never have had anything this impactful happen to me, my family, to my friends, to my community, and to the world. Every other shock or every other downturn that we've seen, at least in my career has always been somewhat distant from me personally. Only this one has been real, this shutdown on a global basis has been real, not only because you know my kids, and how it's impacted their school impacted their daily life in terms of how they interact with their friends, it is really been across the globe. And it's amazing to me in my role, I have a global role and I talk to people virtually all over the world. And it's a similar situation that we're all in. One of the things that we think about a lot in terms of SAP is helping the business run better and improving people's lives. And the COVID-19 reaction that we were able to have with SAP and the assets that we have and the solutions that we have in helping the world run better during an amazingly shocking time, but also improving people's lives was really brought to bear soon after the COVID, soon after the lockdown and the impact of supply chains. One of the things that we were able to leverage is a service that we have within the network that is called the Discovery Service. So those four million suppliers that I mentioned, we did for the first time in a long time, SAP ran a full page product ad in the Wall Street Journal that featured a product, we're usually featuring our brand, keeping it at the brand level, like Porsche runs SAP better or like that level of branding. Now, we did a product level promotion and we showcase Discovery. And that Discovery Service we said is going to be free and be available to companies that are looking for alternative sources of supply because their supply chain has gone through a shock because of the lockdown. And especially in the personal protection equipment area, we were able to do some really interesting things and helping buyers that are setting up hospitals like for instance, in New York needed to find beds. And the sources of supply have simple things like beds to set up a temporary hospital, we were able to provide a discovery service for that particular buyer. And that's just one example of many that we've had the ability to do, which is be able to feature the fact that we've got a global network, we have a global database of suppliers, and we were able to help buyers find alternative sources of supply or we are able to leverage the likes of the Qualtrics acquisition that SAP did and being able to help buyers be able to send out a survey of their supply chain and get a more qualitative feel for their ability to continue to provide the sources of supply that those buyers depended on to run their business. And so it has been an amazing time for us at SAP to realise that we really do have on a global basis, the opportunity to help the world run better improve people's lives by helping the disruption that's happening in the supply chain.

The one thing that I think from a business perspective COVID is accelerating some trends that we're seeing that are really about how will supply chains evolve out of COVID-19. Now that we're opening back up, and I think that, frankly, the shock, the globalization trend that we saw pre COVID is going to evolve differently in the future, I think the concept of supplier risk, and being able to have the digital heartbeat of where am I prepared to withstand another shock because we now the new normal is we're going to have the future shocks that we're going to understand based on COVID we should expect more and more. And I think companies now realize that they have to have an idea of where are they sourcing supply? How are they managing supplier risk? And I think also, what's going to start to happen is the diversification of supply chains is going to be real, no longer single sourcing out of a particular country or a particular supplier. How do we think about diversification? I think there's going to be an impact to more of a localization, if you will, in terms of the diversification trend will lead to more local supply sources than we've seen in the past. And so I think that the supply chain impact and how companies manage supply chains, post COVID has accelerated some very important trends that we see that will lead to not only that diversification, that localization, but also I think that companies realize that if you're not digitally connected to your suppliers or to your buyers, then you're not able to respond and so I think the digitization trend is simply getting accelerated. So I think there's some very positive things that are going to come out of COVID. And I'm excited because oftentimes, you know, they say, don't let a good shock go to waste. And I don't think that we will, not only within SAP, but also within the broader ecosystem, I think that we're going to see some acceleration of things that are going to be very important for us to drive productivity in the future and to see the economy grow much stronger as we come out of this.

Mike 21:28
Sean, I agree with you. I think the supply chain as a global supply chain has been changed forever, and it will become way more regional, more local, number one. Number two, I just love what you guys are doing to help other companies through this pandemic. And by opening up your services and your offerings to people that need help and running their business and helping others as well. I just love that story. And I'm so thankful that you guys have done that for others. And three, what I've learned personally about the pandemic is a mullet does not look good on me and I can can't wait to get a haircut and I've also learned that I wear about five outfits. And I have a closet full of clothes, because I just wear the same thing over and over. So I'm ready for this thing to be over, get back into the office and go see people like yourself in person again. And of course, you know, this series that we're doing here, Sean is focused on the power of data. And you know, we want to focus on the data aspect of this conversation. So I'd love to kind of pivot here and focus on within your b2b network, you know, SAP Ariba network provides a wealth of intelligence generated by like you said, millions of trading partners and $3.5 trillion worth of commerce that flows to the network itself, which has a tremendous amount of data. And there's a lot of insight to be gathered there. How are you guys managing the data and deriving insights that businesses need going forward, number one. And number two, what opportunities has the data unveiled to you guys so far?

Sean 22:51
You know, my days within SQL Server at Microsoft and thinking about data, we've just called business intelligence, my days at Deloitte helping companies do early days in terms of analytics. Data has been a common part of my journey and I think this COVID-19 has accelerated, like I said, the digitization, which means that we get to connect more systems, if you will, more companies get connected in driving digital agendas, not only within their four walls, but beyond, I think is a very powerful acceleration of a trend that will lead to much more productivity and much more business efficiency. And it's really in that concept of now that you're connected. Now you have data flowing. Now, how do we think about not just the flow, but also how do we leverage the power of that data? And I mentioned the fact that I spent some time in natural language processing, in artificial intelligence, and artificial intelligence in general is fed by data. That's the fuel is what makes machines smarter is the fact that you have data feeding the machine, the machines learn. And the machines then are able to understand things that frankly, over time humans won't be able to understand because of this concept of data being adjusted by the machine. And that's no different the way we think about it is the opportunity that we have to start with. And you and I have spent some time thinking about this, Mike, in terms of now that we have information about companies that are connected, and they're connected to their business applications in the area of procurement. For instance, the information that data about companies can power things like I mentioned before risk aware business processes because of the data about companies that are connected, and that data about companies and using that intelligence to then power, a business process like procurement in order to help a company understand where are those areas of risk from a supplier or a buyer perspective and being able to understand and leverage that data, and then intelligence that that data about companies can power in the area of things like risk is a very, very important concept now, a lot in part driven by COVID. But also, the other concept is, is that now that you've got information about companies and who you do business with things like sustainability, you'll hear a lot of the leadership that SAP talks about this concept of helping companies understand their sustainability footprint. And sustainability comes from not only the carbon say, footprint that you have in the business process in the way you would choose, for instance, a manufacturer understands the carbon footprint in terms of their Indian manufacturing processes, but from whom are they buying, and what is the sustainability footprint of the information that's coming about suppliers in terms of the sustainability goals that accompany you may have and that's all about leveraging the power of data about companies, or things like diversity, how diverse and a lot of what we're seeing is the trend in procurement is the procurement officer within our customers is no longer thought of as the person, if you will, that's helping the company save money per se, but it's helping the company manage the brand, make sure that the brand is not subject to risk based on from whom they're buying or adhering to a brand, you know, and the goals around sustainability or diversity. And those are all very powerful concepts that I think the power of data about companies can fuel and the network in the future for us is going to be how do we think about SAP together with our partners like Dun and Bradstreet? How do we have a concept over time that we are managing, if you will, the master data about companies in the cloud and have a concept of that supplier management if you will, if I'm thinking about it from a procurement position. Effective, how is that done at the network layer, as opposed to being siloed inside of applications inside the four walls? And that's a very powerful concept that I think we get to now realize because of cloud because of the concept of network. And how do we leverage the fact that we've got information about companies now that are driving business processes, because we've got that connectivity layer, and we've got that intelligence layer. So that's a whole area of intelligence that we can drive about, you know, information about companies and how it drives business processes.

We also have the transactions and that's a very interesting concept for us is that the three and a half trillion also is a very powerful set of data about, you know, at the commodity level, where are the sources of supply? What are the value of those transactions and how can we bring to members of this ecosystem? This concept of understanding spend patterns understanding spend indexes, helping companies understand not only the pricing data, that could be very interesting, but also where the spend is happening. And so the transactions that are flowing through the network also are a rich set of data that we are continuing to work on in terms of providing benchmarking, providing indexes. And that's going to be a very important concept going forward because it's all about leveraging the flow of the transactions between companies, and how can we take that flow and that data and be able to provide an intelligence layer and think of it as data as a service, if you will, so or insights as a service or intelligence as a service. And so it's a very important, you're going to hear a lot more about what we're doing in that area, and it's a big priority for the company. And we're uniquely positioned to be able to provide it and we're privileged to be in that position. And so it's an exciting time to be thinking about data because it's all getting connected.

Mike 28:57
It is Sean, and you know through our existing in growing partnership with you guys, we're learning more and more about how we can partner together. But more importantly, we're learning more and more about the value of your data and the insights that can be derived from that data. I think the opportunity here is then how do you extract that value, gather those insights and expose them to key partners. So I'd love for you to spend a little bit of time with our audience here to talk about, you know, SAP approach to open API's, making things available through your App Center, and being able to unlock the power of your data to key partners that people in the marketplace can take action on it and make it exposed or rather make it available to other companies out there. Can you spent a bit of time talking about your open API strategy and the App Center.

Sean 29:40
You bet. One of the companies that I have a lot of admiration for is Salesforce. It's personal, because in my startup, when originally bringing voice to CRM, I became an early member as an independent software vendor in the AppExchange of Salesforce. And, you know, I had two startups that I that I was a part of previous in the late 90s, early 2000s, between Deloitte and Microsoft. And about a decade later, I then started my own. And within that 10 year period, what's fascinating is that as a startup CEO, day one, I didn't have to buy machines and put them you know, in some closet in my office and hire people to build the servers that we were then going to build our software on top of. Day one, we were writing code, in this case in Amazon Web Services. And day one, we were interacting with API's that Salesforce had available to us to be able to extract and interact with the Salesforce systems and that was ours, right where we were able to create an account username, password and credit card. And we were cutting code in AWS and we were interacting with Salesforce API's. Day one. That just is mind blowing to someone who a decade before had to go out and raise one to $2 million just to get started coding. And so the whole notion is to say that we can't do all the innovation ourselves, nor should we ever want to because you then become closed, you're only able to innovate and based on the code that you develop, and the work that you do internally. If you think about being enabled open up API's and unleash the power of a third-party ecosystem. It starts with do you have relevance? In my case, when I was a startup CEO, Salesforce had a lot of relevance because they were the leader in CRM cloud, it was an obvious choice for me to make, because they had relevance, they had presence in the market that matter to me. And I was able to connect to them and be able to access millions of end users.

In the case of SAP, we have a lot of relevancy in the market. We are the leader in enterprise resource planning, or the market leader in procurement. And because of that leadership position, we have an opportunity to simply open up as we've been doing, and open up with API's that make it a delightful experience for third parties to be able to interact, to be able to cut code or to be able to contribute data and intelligence to that ecosystem, to be able to showcase their extensions if you will, value added solutions within an app set, so that our customers no longer just look to us SAP for what's on our roadmap, but they're able to go to the App Center and be able to pick from third party systems that they simply download and go and be able to extend the value of what we SAP can deliver. And that's been a very, very powerful concept. It'll continue to be a very powerful concept going forward. And frankly, that's what we get the opportunity to do as a leader in cloud and with an open architecture and an experience for third parties where we make it easy, and we make it a delightful experience for the end customer to be able to seamlessly integrate. An example that I often use is that when a third party customer buys our risk solution, well they're buying our risk solution when embedded in that risk solution is the power of the extension that Dun and Bradstreet provides, in terms of information about companies that powers our risk solution. We’ll never Do what Dun and Bradstreet does really well as a company. But together, we're much more powerful. And we offer more choice to the end customer, more value. And it becomes a value proposition that stands the test of time for us because the adoption that we get becomes stickier if you will, and the value becomes much greater for the end customer. And so I could spend a lot of time talking about that whole concept of ecosystem leverage. And the cloud provides us with an architecture and an open, if you will, API approach to that and so it's been an absolute incredible journey. And we're just beginning, frankly, I think, in terms of seeing the power of what that can bring to the market.

Mike 34:43
I agree, Sean, and we're very thankful to be a part of that journey with you guys. And I think that phrase of doing it together, you're better and you're stronger when you do it together is spot on. Unfortunately, Sean, we're running out of time here and I want to be mindful of the length of the podcast and I could go on probably with you for another hour. We'll probably do that anyway, next time we see each other, but we are drawing to the end of our time and do want to end with one final question. There are always people in our careers, in our lives that have provided guidance and even inspiration. Have you had someone over the course of your career, your journey, that has been a particular mentor to yourself?

Sean 35:18
My dad, I say this a lot. You know, my dad was in the mining business and he you know, growing up in Butte, Montana, 50 miles away from where I'm sitting today at my ranch. At the turn of the 20th century was producing half of the US coppers tremendous boom and Bute happened, that used to be Charlie Chaplin perform and Butte in San Francisco on his tour. And so believe it or not, this little town now in Montana, used to be a big deal. And that big deal is because of the rich copper deposit. Father was the first to break out and became a mining engineer and eventually became a leader a publicly traded mining companies. And here's always an inspiration because I grew up in a pretty much a blue-collar town. My dad got his degree at Montana School of Mines at a time when his friends were making a lot of money underground. And he decided to go to college and get his engineering degree and was able to enjoy becoming part of management, eventually ran the Butte operations of the Anaconda company. He then ran the western operations for the Anaconda company and then went on to Burlington Resources and ran their mining operations. And seeing my dad along the way and his success was always an inspiration for me. I always joke about this when I was a kid, being in his office sitting in his chair, I always said I wanted to, I wanted to be the boss someday. And so he was always an inspiration and in many parts of my journey, during college or during, you know, my early days in my career, I remember I had an opportunity what I was a senior in college in Spokane, Washington at Gonzaga. I was an accounting major. And I had an offer from a big eight at that time accounting firms. And one of them said to me, we'd give you an offer to any office in the United States, where do you want to go? And I called up my dad and I said, you know, one of these firms just said they would offer me anywhere, what do you think? And he said, why don't you go to New York, if you're given that opportunity, go somewhere where you otherwise wouldn't have the chance to, and so often New York I go, and that's just an example of my dad, providing not only the inspiration but also challenging me along the way. So I owe him a lot.

Mike 37:33
So on the subject, wonderful story, you can just hear the admiration you have for your father and when you describe the relationship you have with him both has been his son, but also, I'm sure he has extreme admiration for you and who you'd become as a man. So I'm sure it's mutual by love, love that story. So I'd like to go ahead and just kind of wrap this up here, Sean, just first of all, thank the audience for taking time to listen to the Power of Data podcasts by Dun and Bradstreet and number two, thank your team. As well as our side and putting this podcast together. I know a lot of work went into getting us ready for this. I want to thank each and every one of those team members. And to you Sean, personally, you've been a great friend to me for the last year and a half. It's been a great partnership. And I want to thank you for doing the podcast today with us.

Sean 38:15
Thanks, Mike. It's been a pleasure. Take care of my friend.

Mike 38:18
You too. Thanks, Sean.

Sean 38:19
Stay safe and sane.

Mike 38:21
Thanks.

Sean 38:22
Bye.