As senior vice pres­i­dent of SAP Busi­ness One and Busi­ness ByDe­sign Group, Rain­er Zinow over­sees prod­uct man­age­ment for SAP in its small- and mid-sized busi­ness­es world­wide. Zinow, who pre­vi­ous­ly led devel­op­ment teams, edu­ca­tion, and alliance man­age­ment, acknowl­edges the high-growth poten­tial for SAP in the small- and mid-sized busi­ness sectors. 

In a recent inter­view with ASUG, Zinow said orga­ni­za­tions in this sec­tor need to shift to the cloud — if they haven’t already done so — and must embrace a robust e‑commerce strat­e­gy and engines. 

This is an edit­ed ver­sion of the interview.

Ques­tion: Giv­en that the cross-indus­try, mid-mar­ket sec­tor is impor­tant for SAP and ASUG to grow, what have you seen recent­ly, in terms of the busi­ness chal­lenges, for com­pa­nies in this sector?

Answer: Num­ber one, they had to sur­vive the COVID-19 glob­al pan­dem­ic. I know a lot of com­pa­nies that went out of busi­ness sim­ply because they were not able to keep their busi­ness run­ning. They had only been able to run their busi­ness­es from offices. Also, I’ve had quite a few con­ver­sa­tions with cus­tomers who said, ​“We are so lucky that we adopt­ed a cloud strat­e­gy a year ago or two years ago. With­out that, we would be toast now.” Com­pa­nies that sur­vived, all say, ​“We need to be able to run our busi­ness­es from home.” So, that’s the first thing. 

The sec­ond thing they tell me is, ​“Before the cri­sis we thought that hav­ing a web­page where we adver­tise what we are doing was good enough. Com­ing out of the cri­sis, we know that we need a robust e‑commerce and omni-chan­nel, and we need that now.” These are the two key things I hear from com­pa­nies that sur­vived the last two years. When I ask them, ​“Where do you want to put your pri­or­i­ties?” Those that are still on on-premise solu­tions, say, ​“We need to accel­er­ate our effort to get off the solu­tion that we man­age on our own. We start­ed to under­stand that the risk to have the box in-house is unac­cept­ably high.”

Com­pa­nies are real­ly scared of ran­somware attacks. There have been a num­ber of quite vis­i­ble attacks in the U.S. And the num­ber in the back­ground — that we don’t see — is prob­a­bly sky­rock­et­ing. It’s a ran­somware indus­try that is grow­ing very fast. As a small- to mid-size com­pa­ny, you can try to hire some­body who can hard­en out your net­works. If you find that per­son, the salary will be high­er than the CEO, but you most like­ly won’t even find them. So that’s the moti­va­tion why com­pa­nies say, ​“I need to address that risk. I’d rather switch over to a cloud ser­vice, some­body who can con­vince me that they can man­age a robust environment.”

The next wave is all about a point where com­pa­nies say, ​“For secu­ri­ty rea­sons and for sus­tain­abil­i­ty rea­sons, we can’t afford long sup­ply chains any­more.” So, I fore­see for the U.S., basi­cal­ly a re-indus­tri­al­iza­tion. I’m watch­ing a cou­ple of indi­ca­tors in indus­tri­al areas, also in the Mid­west. They are grow­ing. I think even cities like Detroit or oth­ers, 10 years from now, may look com­plete­ly dif­fer­ent than today. 

The whole sto­ry around sup­ply chain man­age­ment: how do I orga­nize a resilient sup­ply chain so that I have mul­ti­ple sup­pli­ers for crit­i­cal sup­plies, and so that I can switch between them? These are top­ics on every­body’s agen­da mov­ing forward.

Q: Are there spe­cif­ic tech­nol­o­gy themes that you’re hear­ing from customers?

A: Cus­tomers, for exam­ple, ask me, ​“What have you done regard­ing arti­fi­cial intel­li­gence and machine learn­ing with Busi­ness One and Busi­ness ByDe­sign?” I rat­tle down a long list of amaz­ing things we’ve done. And they say, ​“That’s very com­fort­ing.” And I ask, ​“When will you start to imple­ment these capa­bil­i­ties?” And they say, ​“Not now.” So, for them, it is impor­tant to know that basi­cal­ly when they feel ready to adopt these capa­bil­i­ties, we have them avail­able for them.

The sec­ond part is more that I try to bake these new tech­nolo­gies into the appli­ca­tions in ways the com­pa­nies don’t even see it. I’ll give you an exam­ple. In Busi­ness ByDe­sign and Busi­ness One, with your cell phone, you can take a pic­ture of a sup­pli­er’s invoice and the sys­tem will process it for you. In the back­ground, there’s a huge AI engine run­ning, which looks at the pic­ture, iden­ti­fies the con­tent, takes the con­tent, calls the web ser­vices of Busi­ness One, and sends the rec­og­nized sup­pli­er invoice for final approval into the Busi­ness One sys­tem. When the cus­tomers see it, they don’t rec­og­nize it as AI. They say, ​“Yeah. That’s nor­mal. That’s how we are work­ing today. We take a pic­ture of some­thing and then we process it.” So, I try to make sure that we are using all these tech­nolo­gies, but put a busi­ness pur­pose to it, because oth­er­wise, my cus­tomers would­n’t be interested.

The same thing is hap­pen­ing on the big data and data sci­ence side. If I say, ​“Hey, let’s talk about pre­dic­tive ana­lyt­ics capa­bil­i­ties,” my cus­tomers fall asleep after 20 sec­onds. If I say, ​“I can give you a capa­bil­i­ty that shows you — for all of your oppor­tu­ni­ties— which ones you will win and which ones you bet­ter stop imme­di­ate­ly,” they say, ​“Now we are talk­ing.” Yes, I’m using the big pre­dic­tive ana­lyt­ics library of the HANA data­base in the back­ground, but hon­est­ly, my cus­tomers don’t care.

Q: They just want to under­stand what it will deliv­er to their business?

A: Yes. They say, ​“The thing about the oppor­tu­ni­ties, that tells me which oppor­tu­ni­ties to dou­ble down on, that’s what I’m inter­est­ed in.” And they don’t always see that it’s two sides of the same coin. I think on the tech­nol­o­gy side, as much as we at SAP love to talk about tech­nol­o­gy, in the mid-mar­ket most of my cus­tomers don’t have a CIO. That’s my world. The large enter­prise world is com­plete­ly different.

Q: What else might you bring to the Mid­mar­ket conversation?

A: So the top­ic I will bring to the con­ver­sa­tion is SAP HANA pub­lic cloud. I want to basi­cal­ly say, ​“On whichev­er SAP solu­tion you are on now, you can­not out­grow our port­fo­lio. We will show you if you grow beyond the capa­bil­i­ties of Busi­ness One and Busi­ness ByDe­sign — be it because you need new busi­ness capa­bil­i­ties, which are not includ­ed in the prod­ucts, or you sim­ply process data vol­umes that go beyond what the two solu­tions can do — the way for­ward is S/4HANA pub­lic cloud.” For the years to come, S/4HANA pub­lic cloud, like in the large enter­prise mar­ket, will be our flag­ship prod­uct — at least for the upper mid-market.

The oth­er thing I will men­tion is the SAP Busi­ness Tech­nol­o­gy Plat­form (BTP). That should be rel­e­vant, espe­cial­ly to the part­ners. They start ask­ing me, ​“Hey, If I build an exten­sion and if I buy into your idea that SAP has Busi­ness One, Busi­ness ByDe­sign, and S/4HANA, does this mean I have to build every­thing three times?” And my answer is, ​“In the past, yes, but since we have the BTP, you can build appli­ca­tions now once and use them with any ERP back end that SAP brings to the table.”

Q: Do you think there’s aware­ness on that? Is it understood?

A: No. We are in the ear­ly days, but if I learned some­thing about the mid-mar­ket, it’s that I need to say every­thing three times in a row and I need to say it three years in a row. And then in the fourth year, they will claim that they’ve nev­er heard it before, but then it will start. And I don’t want any of my cus­tomers to be caught by sur­prise. So, I high­ly appre­ci­ate that ASUG is orga­niz­ing events with a mid-mar­ket spin. I under­stand that not every mes­sage that res­onates with a large SAP enter­prise nec­es­sar­i­ly adds val­ue to a mid-mar­ket company.

Q: As you look for­ward, can you share insights as to what the mid-mar­ket audi­ence can expect from SAP in 2023 – 2024?

A: What I’ve also done this year at the inno­va­tions sum­mits was most­ly talk about capa­bil­i­ties that are avail­able in the cur­rent releas­es. So instead of spec­u­lat­ing what might come in 2023 and espe­cial­ly in the cur­rent eco­nom­ic envi­ron­ment with the cyber threats, my pre­dic­tions on the roadmap may not be reli­able. For exam­ple, in the Busi­ness One world, I want­ed to focus only on the top­ic of web client but had to re-allo­cate resources to work on secu­ri­ty top­ics to hard­en out Busi­ness One even more. I can talk about the roadmap and where we are tak­ing the solu­tions, but I will also spend time on the capa­bil­i­ties avail­able. I want to tell my cus­tomers, ​“And how about for a change, you adopt these and get the val­ue? Because this is some­thing that you are pay­ing for and you have it, so how about using it?”

Q: That sounds like the mis­sion at ASUG, to help our mem­bers gain opti­mum val­ue from their SAP investments.

A: I’ve been work­ing with ASUG for many, many years now. I try to ampli­fy that mes­sage. I say, ​“Look, the future will be great. Don’t wor­ry about that. SAP will always have amaz­ing tech­nol­o­gy. Don’t wor­ry about that either. But let’s talk about the real busi­ness chal­lenges at the moment, and what you can do with the tools that you have at hand right now.”

Q: Can your sum­ma­rize what you want to share with cus­tomers in this sector?

A: Num­ber one, you can’t out­grow the SAP port­fo­lio. If you want, you are with us for the rest of your life. Num­ber two, you will always need exten­sions. SAP is always incom­plete. Con­sid­er the BTP as your instru­ment of choice to build these exten­sions. And num­ber three, sim­ply stay engaged with us. Scream. Shout. Yell at us. Show us what we need to do to make you suc­cess­ful. It is some­thing dif­fer­ent if a cus­tomer tells me, ​“Look, I’m try­ing to do this and this with my busi­ness and I can’t do it,” because then I can shape that input. So stay con­nect­ed. Stay engaged via ASUG and via the dif­fer­ent chan­nels that we have.