SAP and HBR on Enterprise Software, Economic Crisis and Cloud Computing (Charlie Rose)

by Erin McCune on January 12, 2009

in Credit Crisis, Enterprise 2.0, Technology

A conversation with Léo Apotheker, co-CEO and a member of the Executive Board of SAP AG and Andrew Mcafee of the Technology and Operations Management Unit at Harvard Business School on Charlie Rose (aired Jan 6th)


On IT within the Financial Services industry:

And you know, what you said about financial institutions is absolutely
correct.  They have disparate information systems.  And from a banking
point of view, it’s actually really interesting, because a bank is nothing
else than a gigantic data processing machine.  So you would expect these
people to have IT, and they have actually IT all over the place.  The
problem is, it’s not integrated.  They don’t really work together. 

And the gap between what’s happening in the front office, the people
who actually push the products, all of these three-letter acronyms that
we’ve been reading about recently in the press, and what is happening in
the back office, i.e. the machine that actually treats the information,
puts it into information that the manager and executive or board can
actually understand.  That gap has been growing.  It hasn’t been shrinking. 

So you have these two speeds in this company, where information is
going at light speed, and global trade and securities is at light speed,
and inside the company it was going at industrial speed.

On cloud computing:

The argument for is that you have to employ fewer
people who know a lot about technology, because they are not maintaining
servers, they are not doing as much work on your particular pieces of
software, because you don’t own the software anymore.  The argument against
primarily is that there’s some stuff that’s just so fiendishly complex that
it’s not appropriate for the cloud, and that when you put stuff in the
cloud, you lose some measure of control over it.  So that’s kind of the war
that’s taking place right now. 

So what’s going to happen going forward is we’re going to try to
rethink the boundary between very tight discipline and dictating things
up front versus throwing open the gates and letting a lot of people do
whatever they want to, and watching what emerges. 

Now, historically, Leo’s company has been fantastic at writing
software that helps us with the first of those two modes of organizing. 
One of their big opportunities and challenges going forward is helping
enterprises with that second mode as well. 

Video and transcript here.

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