At the SAP Influencers Summit in Boston (December 13, 2011) co-CEO Jim Habemann Snabe proposed Olympic Sailing as a sports analogy for business, explaining that if all competitors’ boats are the same, winning comes down to two things: predicting conditions better and faster, and executing better.

It’s a useful analogy for SAP. While it’s obviously true that not all businesses have the same high level of operational optimization (the same boat sailing in the analogy), SAP believes that to the extent that technology enables that kind of efficiency, they ought to strive for it. The software giant is clearly determined to provide the standardized technology frameworks to enable systems of record — those operational processes and systems that businesses run on. But SAP also believes that innovation is enabled by people and businesses collaborating and making better decisions faster — just like an Olympic sailing team. And so the company also seeks to add value to its customers with systems of engagement. For SAP, that means that there’s a big focus on three product thrusts: Mobile technologies, in-memory data (HANA), and Cloud-based offerings.

But back to the sports analogy. Sailing is vastly preferable to what has to be the most overused business-as-sports analogy, the 4th and goal football reference. That one has long been a favorite of retailers and other seasonally driven companies, as in “it’s 4th and goal, so what are we going to do to get the ball (the quarter) into the endzone and SCORE? ” And it panders to executives’ most short-sighted behavior, that of believing that no matter how badly the company has performed so far or how lousy the fundamentals of the business are, one transcendent moment will erase all of that and elevate it to victory.

Habemann Snabe’s proposition that all companies should compete with the same boat also flies in the face of how most retailers think of their business processes and supporting systems. Retailers are infamous for altering best practices beyond recognition, even if in fact their businesses are only tactically advantaged if a particular process or system works optimally, and strategically disadvantaged if it doesn’t. Pricing is a perfect example: prices are so transparent to mobile-empowered consumers nowadays that retailers are only tactically advantaged if they competitively price their products — and they are punished by consumers if they don’t. Surely, solutions providers that propose best practices have logic on their side — why waste precious resources being different in things that consumers won’t give you any credit for? Alas, the retail business isn’t always logical.

But even if logic was to prevail, the question that comes to mind is, what if magically every business on the planet had the same processes and systems – who wins then? The answer would be no one (or maybe, the company that did it first). Winning should be the result of some combination of a level playing field, relentless execution of the basics over time, and a unique ability to see and exploit opportunities. That’s where better decisions faster becomes important, and in today’s world that means real-time always-on information technology.

A Baseball Analogy

I think that baseball is a better analogy for business than either sailing or football. I had the opportunity to get to interact with Tony LaRussa during his time as manager of the Oakland Athletics baseball team. When Tony went on to St. Louis to manage the Cardinals in the mid-1990’s, one of the things that he did was to insist on a grass playing field instead of the “turf ” rug that St. Louis had at the time. This was to help address the level playing field part of competitive baseball (literally). The Cardinals also brought on some key talent, including homerun hitter Mark McGwire.

I ran into LaRussa at a charitable event he was sponsoring after all of this had happened. I remember saying, “Gee, it must be good to have Mark on the team. ” To paraphrase his response, Tony said, “Yes, it’s good to have him in the lineup. But baseball is a 162-game season, and the object is to win more than you lose so that you can get into the post-season. You do that by executing the basics really well — like getting to 1st, stealing 2nd to avoid the double play, and scoring from 2nd on the fly ball… and then if you’re lucky, in a key playoff game ‘Big Mac’ will crush one and win the game, and that’s all that anyone remembers. But it’s relentless execution of the basics that made it possible. “

As St. Louis Cardinal fans undoubtedly know, LaRussa is also (in)famous for treating baseball like a science experiment, relying on statistics to play the percentages on opposing players. It was LaRussa who perfected the practice of situational pitching — bringing in one pitcher to face one batter (my uncle, a true Boston Red Sox fan, rails against this modernization of the game every time I mention LaRussa). But it’s pretty hard to dispute that LaRussa demonstrated the value of making better decisions faster in the 2011 World Series — and using up-to-the-moment information undoubtedly helped.

Not an Either/Or Proposition

Exclusive focus on relentless execution of the basics isn’t a winning strategy all by itself. Stretching the baseball analogy a bit further, consider the Moneyball Oakland A’s (post-LaRussa). The team was an early adopter of new metrics for everyday player performance. The result has been that no Oakland A’s team has gotten past the first round of the post-season playoffs since its adoption of the new metrics. Why? When a competitive organization establishes new levels of efficiency, any strategic advantage is short term since good ideas get copied (the Boston Red Sox copied Oakland’s adoption of the new metrics within a year). The same is true in every competitive environment — including retail.

The challenge for software companies like SAP really is that to a great extent what they offer businesses is the ability to successfully copy someone else. The best possible case for running as efficiently as possible is that it may create opportunities that can then be exploited — if you have that better decisions faster ability too.

What’s the Right Approach?

So the question for SAP and its competitors is, how should their customers approach both the need to address fundamental operational processes and create enough differentiating value? A panel of customers at the SAP event all agreed: implement BI & Analytics first. The reason was implied, but obvious: you don’t know what you don’t know. BI & Analytics have a discoverable ROI — the more analytics are used to understand how the business is performing, the more focused the business becomes in addressing here and now challenges — which in turns begets more questions. The questions that get asked relate to both operational performance and value adding activities.

SAP is pressing the value of its in-memory HANA technology and SAP BI 4.0 to vastly reduce the lag time to action. Habemann Snabe talked about BI moving closer to transaction systems — reporting in almost the same moment that transactions take place to enable faster decision making. Revisiting the sports analogy one more time: professional baseball has always been driven by statistics. What has changed is that the sport now uses technology for stats that are as recent as the last at-bat — but they are used to support good management, not to replace it. So too with retail: In the final analysis, it’s people who make better decisions faster, not technology. But to SAP’s point: at least don’t un-enable your people with inadequate technology!