Fedem hits the stage in front of 30,000 at SAPPHIRE

May 22, 2017 | Hot Topics

I was just at SAPPHIRE, SAP’s massive user conference. Quite a few very kind attendees explained to me how they couldn’t do their finance, HR or supply chain management jobs without SAP’s solutions — but I went to learn about Leonardo, SAP’s IoT platform, and especially about how SAP is looping its Fedem acquisition into IoT. More on that, below.

First, though: SAP isn’t at all what I thought it was. It’s way bigger than I realized. CEO Bill McDermott (whose slide is the title image, above, with him on stage) said that SAP manages 76% of the WORLD’s transaction revenue, $39 TRILLION of the global private sector GDP, 83% of business to business transaction revenue, $22 TRILLION in consumer purchases around the world –joking that Black Friday shopping couldn’t happen without SAP– and helping to manage $70 TRILLION in customers’ banking assets. SAP’s revenue was €22 billion in 2016, so its global impact has a serious multiplier effect.

Next, I thought SAP was a back-office-y, CEO/CFO-y set of technologies that are part of the price paid to carry out the real business of a company. Not so. The C-level and department heads attending SAPPHIRE told me that they use SAP to fine-tune their businesses, managing assets (including money but also real estate, inventory, people, supply chains, recipes/bills of material, and so on) to meet their strategic goals. Since I last tuned into SAP, it has gone from managing transactions like matching an invoice to a received item in inventory to using that information to create analytics: which suppliers deliver late? How can we optimize our inventory policies to reduce carrying costs but still meet availability goals?

Finally, I spoke to more business leaders at SAPPHIRE than IT department types. There were absolutely IT types at the event (and a solid chunk of the 30K attendees were implementation consultants) but SAP increasingly offers much more than tools. Mr. McDermott’s vision is to harness all of the data already warehoused in SAP systems plus analytics to reinvent many traditional corporate functions, like accounting. If a machine can learn how to match invoices and supplies, what could those accountants be doing? Another thing I hadn’t realized was how conservative this crowd is; thinking through how roles might change in the corporate back-office because of technologies like machine learning was both invigoration and frightening to this crowd. They’re excited about the possibilities but worried about how this will affect long-time employees. It seemed, almost, as if the wave of automation that hit manufacturing in the last 15 years is breaking over the business parts of the enterprise today — and that’s making people nervous.

That’s all fascinating but I went to SAPPHIRE hear about Leonardo, SAP’s offering for IoT. Leonardo debuted late last year as a platform to improve operations and maintenance via connected machines, doing proactive monitoring to improve asset utilization. The usual. Last Tuesday, SAP changed its game — and it was all over SAPPHIRE. Every wall, every SAP presentation, most of the signage in the enormous Orlando Convention Center urged attendees to check out Leonardo. So what is it? Not entirely clear, but here’s what I understand: Leonardo is machine learning, artificial intelligence, the data stored in SAP HANA (its database architecture) or other sources, sensor inputs, analytics, IoT and blockchain, some of all of which can be used to create intelligence and, if appropriate. automate a reaction. This could have been better articulated, but I expect the message to evolve.

To some extent, Leonardo is a set of tools looking for a problem to solve. What might those problems be, outside the predictive maintenance realm? To help answer this question, SAP connected me to Rafael Costa of Stara, a Brazilian company that manufactures of tractors, seed spreaders and other farm equipment for the local market and for export. Mr. Costa said that Stara saw the opportunity to help its customers, especially the large agricultural concerns that feed Brazil, run their farms more profitably. His team figured out how to use GPS to guide the equipment (not in itself, new) and sensors on the equipment to measure planting and spraying, how much overlap there is between passes — and tie this to the farm’s SAP to monitor efficiency and effectiveness (new). It ties the spot price of soy beans to the efficiency of a harvester. Or the exact amount of fertilizer that was spread on each plant in a field to the overall crop yield. Precision farming takes the tractor to the cloud. I’ll write more about this soon.

But back to the real reason I went to SAPPHIRE: Fedem. You may remember that Fedem was, in the 1990s and 2000s, a multibody dynamics product that tried to compete against MSC’s Adams — at that time, the 100-lb gorilla. it was tough, especially in North America; the company foundered, went through changes in ownership and management … Then, last year, it was snapped up by SAP as part of an overall vision for the digital twin. Fedem debuted this week on stage at SAPPHIRE, as a component of SAP Leonardo:

Today, Fedem (a product yet to be renamed in the SAPness of it all) is a part of a solution to monitor and analyze the real-time behavior of structures under dynamic load. The picture above is from the SAPPHIRE keynote, showing the presenter in a VR headset interacting with the digital twin of a wind turbine, Fedem’s first Leonardo application. It’s a combination of the CAD model of the asset, real-time sensor data from the pylon and Fedem’s super-fast finite element analysis. The idea is that this digital twin app can be used to monitor the asset, authorize in-person inspections, and decide whether it is more economic to run the turbine in a particular wind state or feather the blades to lessen wear. The secret sauce: since the FEA is based on sensor data, it can also imagine “virtual sensors” placed at points of stress, like the bolt in red on the lower part of the pylon. The response surface shows stress at the bolt under various wind conditions and can be used, along with other data in the SAP universe, to determine the location and availability of inspectors, spare parts, installers, energy demand and pricing, and so on. (I think the VR component was to up the coolness factor in the on-stage demo. I’ve never seen a demo from the SAP Fedem team that uses it; a regular browser is perfectly sufficient.)

SAP co-founder and current chairman of the board Hasso Plattner told attendees that “we’re still washing our data by hand. What could we do if we automate?” SAPPHIRE was all about that automation, whether in asset operation, predictive maintenance, precision farming or analyzing sick days trends. For the conservative attendees, it seemed to be like sitting at the top of a roller-coaster: you know you’re going, you’re a little bit afraid and more than a little excited. More soon.

Note: SAP graciously covered some of the expenses associated with my participation in the event but did not in any way influence the content of this post. The title image is a photo I took during Mr. McDermott’s keynote; the Leonaro/Fedem/IoT image is a screen grab of the replay of the keynote session. You can see replays here: http://events.sap.com/sapandasug/en/home