Franck Cohen, one of SAP’s symbols in Europe for 10 years, had retired. But the pull of the ERP and his friend Chano Fernandez – Co-CEO of Workday – will have been strongest. Franck Cohen fell again. The opportunity for us – and for all CIOs – to take advantage of his analysis, which is both detailed and synthetic.
Continuation of the article below
In the first part of this exclusive exchange with LeMagIT, he came back to the deep reasons why historical publishers, including SAP, may have problems tarnishing themselves. In the second part, Franck Cohen deciphered the strategy that led SAP to create HANA and the evolution of the ERP market for very large groups (including the rise of the ERP cloud).
In this third part, he explains to us that the cloud has an important advantage up its sleeve that should ensure its victory: Artificial Intelligence (AI) and Machine Learning (ML).
LeMagIT: What exactly are your tasks and goals on the working day?
Franck Cohen: My goal is to help Workday, especially in the ERP finance area, which is more like my “cup of tea”. In all honesty, on the HR side, they didn’t need me. You are already an undisputed leader. On the financial side, we have to recognize that there is still a challenge.
“I really enjoyed my time at SAP. It’s a great company […] But I think it’s more complicated than you can imagine wiping out the past. “Franck Cohen Workday
I participate in the considerations for the market launch – i.e. the on-site implementation part (sales, marketing, consulting) on a global level – via business strategy, prices, the development of models or geographic development.
I’m also trying to help what my last “hobby” was at SAP: machine learning. I think there is a lot to be done in this area.
And then I try to help the sales teams in Europe work on the right approaches, especially customer files and discussions with them. We don’t do new things (smile).
LeMagIT: For you, does Workday have the potential to become a new SAP, the undisputed future market leader in ERP?
Franck Cohen: I’m not going to spit in the soup. I really enjoyed my time at SAP. It’s a great company with great products and a depth in some industries that is still unmatched. So I’m not going to tell you the opposite today. I just think that from a technology point of view, solutions like Workday – or Salesforce, it’s a bit of the same thing – have a superiority in terms of agility, potential, development capabilities, and cost of development. And all of this is related to their creation.
But again, I think it’s extremely complicated – a lot more than you can imagine – to erase the past. It is almost impossible.
The competitive advantage of the cloud
LeMagIT: For you, does “Cloud Native” play a central role in this story?
Franck Cohen: I want to explain to you why I think that the cloud, the “real” cloud solutions, have the advantage. Everyone is talking about TCO, ease of use, installation. There are no more upgrades that cost businesses tens of millions. It is all very true. In my opinion, however, the most important thing is not there: the decisive factor is the speed of innovation in the cloud.
“Everyone is talking about total cost of ownership, ease of use and installation. More important, however, is the speed of innovation offered by the cloud, which is critical. “Franck Cohen Workday
Let me explain. Not much has changed in the old fashioned LES. Basically, if you were six or seven years behind the last version, it wasn’t a problem. It wouldn’t significantly affect your competitiveness. The processes were the same, and so were the problems and good practices. As a result, many customers at SAP and Oracle have developed excessive customizations and lagged behind for up to 10 years. There are even customers who have their ERP frozen at time T in the past.
This is no longer possible today because there is artificial intelligence.
AI helps create competitive advantage through new algorithms that learn and get better over time. All the calculations that you had in an ERP that were static things become dynamic and improve over time.
Results, your prognosis is better. Your safety stock is better. Your pricing will get better. However, if this improves quarterly with new algorithms – which Workday does today – it becomes absolutely impossible to stay on a version that was seven years old. There will be a real void.
I’ll give you another example. When I was at SAP, we developed a machine learning-based tool that does bank reconciliation. For some companies it was 80,000 hours a year. We managed to automate this 99%.
When this type of tool becomes more democratic, you cannot resign. AI is a “game changer” in the industry. This will fundamentally change the way that ERP systems are designed, developed and used. And the best way to adapt to new algorithms is in the cloud.
LeMagIT: So for you it is the AI that pulls the cloud?
“AI will fundamentally change the way that ERPs are designed, developed and used. “Franck Cohen Workday
Franck Cohen: It’s there, I think there is a real difference. Especially with SAP, since most of the SAP systems that are sold in ERP for large companies today are still “on site”. You can’t permanently upgrade to take advantage of all of this. This will affect their ability to innovate.
For me, this will make the difference between cloud solutions and on-prem solutions, which are difficult for me to maintain today.
This already applied to CRM, HR and procurement. The financial part was a little behind. But I think that’s the next feature to move to the cloud. And now it happens.
In the fourth part of this interview, Franck Cohen will explain how machine learning can adapt to exceptional situations without necessarily having to learn a lot of history thanks to algorithms of the “new generation”.