25 May 2012

SAP co-CEO on social networking and the future of business

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Facebook’s IPO demonstrates the power of networks for innovation, growth and jobs, says Jim Hagemann Snabe, SAP’s co-chief executive.

“A fully networked business environment means better access to customer profiles and preferences, resulting in a stronger ability to deliver individualised products that consumers want. Broader knowledge of health data and energy consumption patterns will lead directly to more efficient use of scarce resources. Direct access to all of the suppliers in a product category will lead to stronger supply chain and supplier relationship management. That in turn will result in more competitive pricing, greater flexibility and less capital tied up in inventory.

When data generated at the level of an individual – whether they are shopping preferences, energy consumption patterns, social relationships or health data – can be captured and analysed along with other relevant datasets in real-time, existing value chains are turned on their head. It benefits the consumer, because the consumer gets more directed, more personal, more economical offerings.”

In an incisive reflection, Stowe Boyd thinks that “aside from the oblique mention to network effects in Facebook use, and some almost self-congratulatory mentions of existing SAP products, [he doesn’t] hear a compelling vision of the socialization of business processes.”

Boyd thinks the central “nub” is “how to create a social environment that runs above the entrained business processes of the enterprise, as opposed to creating a social sidebar to an enterprise model dominated by inflexible and mechanical business processes.”

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