Integrating SAP and other System of Records with Jon Gilman

[Mark Smith]: 0:49
Today's guest is from Indiana in the United States. We're gonna be talking about integrating SAP and the Power Platform. And my guest today, he's a director of the Power Platform Enterprise Solutions and he was also the founder of Clare Software. So keen to unpack that with him today. You can find links to his bio, socials, et cetera,in the show notes for this episode. Welcome to the show Jon.

[Jon Gilman]: 1:14
Hey, thanks for having me.

[Mark Smith]: 1:17
Mate, it's been a while. It seems like you've been in Microsoft a very long time now.

[Jon Gilman]: 1:23
Yeah, it's been a little over18 months since the acquisition. So we've finally settled in. We've got most of our product incorporated into the Power Platform.And now we're really focused on how do we take the Power Platform and create exciting content for enterprises to get up and running more quickly than they can in the traditional sense of the DIY nature of the Power Platform.

[Mark Smith]: 1:46
Nice, nice. I'm looking forward to unpacking that with you. Before we go there though, just tell us a bit about you and what you do when you're not working.Food, family, fun, any of those that kind of jump out to you. What do you get up to when you're not at Microsoft?

[Jon Gilman]: 2:01
Well, I've got three young kids,so I don't really get up to much of anything other than feed them, put them to bed, drive them to their sporting events.So I've got a 10-year-old son,8-year-old daughter, and 5-year-old son.But I recently left them behind,and my wife and I and her family went to Italy for two weeks. Had a great time.You know, went to Venice, Florence, kind of remote parts of Tuscany. drank a lot of red wine and ate a lot of good food.So I like good food, good music.I like to watch a lot of concerts with my wife and kids. So, you know, a lot of classic rock. Sometimes we get into heavy metal, but, you know, there aren't many people in the tech space that don't like that stuff.

[Mark Smith]: 2:46
So true. Italy has to be my favorite country in the world. All those places just took me back there. Did you go to Lake Como at all while you're in the northern part of Italy there?

[Jon Gilman]: 2:57
We flew over it.So I think I spotted George Clooney's compound, but I couldn't make it out amongst all the other compounds that are on Lake Como.But I would agree, especially in terms of food,every European country has got their different foods that they're known for.But I mean, every meal we had in Italy was excellent. We didn't have a single bad meal. So it was just really impressed with no matter where we went, the food was amazing.

[Mark Smith]: 3:26
Yeah, so true, so true. Fantastic.Well, let's talk about Microsoft. And before we unpack what you do now, and really the latest announcements that have happened,tell us about Clear Software.What led you to found that company? What was your journey ultimately to your exit into Microsoft?

[Jon Gilman]: 3:49
Yeah, sure. So coming out of college,I was an industrial engineering major. I was working at General Motors, but I was very bored. Didn't really like, you know,doing what I studied in the real world, which I think a lot of people can relate to that. You know, you study something thinking you want to do it, then you start doing it. You're like, oh, man,this is pretty boring. So that's kind of how I felt about, you know, what I studied for four years. And then one of my managers at the time, this was a long time ago, like 20 years ago, she was Mary Barra, who is now the CEO,but she was head of North American engineering.And she said, I can see that you're very bored. Why don't you work on this little software project that we have going where, you know, they're building their own little custom manufacturing software and not using SAP or Oracle E Business Suite or a lot of the other manufacturing ERPs out there. But I got it. hooked on that and then decided after GM to work at Accenture. So we were implementing SAP at the largest companies of the world,even building some custom software here and there. And what I kept discovering over and over and over again was that we would spend years and hundreds of millions of dollars implementing these ERP systems.And they would bring a lot of operational efficiency on the back end. But in terms of day to day for front end users, like sales reps, customer service reps, people in the procurement department, their lives actually got worse.They're having to jump through way more screens, process that used to take them five minutes was suddenly taking them 25 minutes once they went live on their ERP. And that really started to bother me because they would say,hey, what did you do to us? It's like, well, don't kill the messenger. We delivered this, but you are right. It is taking you five times as long as it used to take. So, I started building these little productivity tools while I was at Accenture.So little Excel uploads into SAP to create journal entries or customer master records, vendor master records.And I started just playing around with this quite a bit. My customers loved it. They loved being able to automate processes through Excel. But then around2010, the whole idea of rich internet applications was, that was the big buzzword,RIA. So being able to create applications inside a browser, it sounds trivial today because basically every application runs in a browser, but back then it was a big deal. I mean, you had to install plugins like Silverlight and Adobe Flex to get that to work. So I had an idea to say,how can I take all these automations that I'm building for my customers that they love, and how can I get them into the web? So I experimented with all of that.So... Silverlight, Adobe Flex,native HTML5, which was very, very new back then and didn't really do anything.And finally, I got something to work. So, you know, I got my very first customer in 2012, but was still really focused on, you know, digitizing and automating,you know, processes that may span 25 or 35screens in an ERP and consolidate that down to one web page with all of the integration behind the scenes, but abstracted from the business user. So they're not having to spend 25 minutes creating a purchase order, they're only spending two or three minutes creating a PO. So we built that. We were very heavily focused on SAP, but we also had Oracle Business Suite customers and a handful of PeopleSoft customers. And then in October of 2021, Microsoft ended up acquiring us. But We had been talking to them for quite a while from a partnership front, and then it just, it made sense. It was a natural marriage because, you know, there are a lot of cool features that we had embedded in our platform that were perfectly complimentary to the Power Platform.And it just, you know, from both sides, it totally made sense.

[Mark Smith]: 7:51
Wow, that is amazing. Did part of that process then of coming into Microsoft,was it a case of taking your code base and moving it across to the Microsoft solutions? Or what I often notice Microsoft does is when they extract IP, they actually rebuild it on their platform.Hence why I see when we compete against other products in the market like Salesforce,et cetera, often there's just a lift and shift and a bolt onto their existing.So... anybody that uses that new and built tech to the platform has got to,they've got to understand what that, how that new system works, not in context necessary or just from an, you know, a bolted on perspective. Has all your stuff been re-platformed into the Power Platform and therefore, you know, if you like recoded to be part of the, the Power Platform.

[Jon Gilman]: 8:44
So it was a mix of both. So after the acquisition, we were all in Redmond, sitting down with the engineering team and figuring out, OK, what's our plan of action to get this integrated into the Power Platform? And we kind of had two different secret sauces within our platform.One was all of the technical integration capabilities we had into ERP systems, like SAP and Oracle E-Business Suite. That was kind of one side, the technical connectivity and being able to string together API calls.That was one set of secret sauce.But from our customers' perspective, the more valuable secret sauce we had were pre-built app templates for processes like order to cash and procure to pay and record to report and make to stock. And those were natural candidates to just migrate over as power apps, pre-built power apps. Um, so we, we kind of looked at it and said, okay, there's going to be some, uh, data migration,so to speak of our platform into, uh, into power apps. Uh, but there are also some technical gaps we need to address,um, with some of these ERP systems and the connectivity there. So we did that gap analysis and decided. you know, it was going to probably be more complicated to wedge our IPAS into Power Automate and overall the power platforms. So at that point we decided we were going to recode those connectors and those integrations into the different ERP systems. Once we were done with that, we GA'd that in December of last year of 2022.Then we turned our focus to, okay,now that we've got the technical connectivity and the ability to actually transact against these systems of record, now how do we take all that exciting content that we had built on the Clear Software platform and get it into Power Apps as templates for these end-to-end processes that can really drive huge value for enterprise customers in a short period of time.So that's... essentially what we've been focused on this year. So we had an announcement last week, Ryan Cunningham posted the blog and a couple, you know, there's a couple of links on LinkedIn that I'm sure we can add to this at the end.Announcing our initial set of templates. So we're calling them Power Platform Enterprise Templates. And the first one was for SAP Procurements. So, you know, eventually we want to abstract the concept of what ERP system we're integrating with, a huge, huge percentage of our customer base runs SAP. So it makes sense to start with a high value business process like Precure2Pay and do it on top of SAP because that's a massive percentage of our customer base. But over time, we'll add SAP order to cache and then abstract it further and say,OK, let's do this for Oracle E-Business Suite. Let's do this for PeopleSoft. Let's do this for Bond. So the vision is let's.Let's create pre-built content that will work on top of any enterprise business process and be completely agnostic of what it's integrating with from a backend system perspective.

[Mark Smith]: 11:59
And so I take it what that is doing is as you mentioned earlier on, you're taking what potentially could be a 25-30 minute process and by using the pre-built template, it allows you to reduce it down to minutes to get the same type of functionality or the job done.

[Jon Gilman]: 12:19
Yep, absolutely. So like in the classic case, something that everyone's familiar with, which is, you know, the procurement process, um, setting up a vendor can be pretty, pretty laborious for, you know, typically an organization will have a, a master data management team that's responsible for, they get a request from someone to say, Hey, we need to create this new vendor. They check, make sure it doesn't exist. Then they go through the very laborious process of traversing through 20 or 30 screens to get that vendor set up and attach W9s or whatever tax forms are necessary for that vendor. That process can take hours,depending on how many people are involved. We've streamlined that down to 10to 15 minutes. With Outlook integration, with Teams integration,there's a lot of exciting stuff in there. And then we think about, you know,purchase order entry itself. in a large enterprise, there's a few thousand people that have the ability to create a purchase order and request, you know,not just raw materials if you're manufacturing something, but just like, hey,we're out of paper towels, you know, and on the third floor of the office building can, you know, you order some more. That process can take 10 to 15 minutes in an ERP system just to type in all the data. So we're trying to automate as much of that data entry as possible, streamline the screens down.So a person instead of spending10 or 15 minutes saying I need paper towels on 447, I can do it in about three minutes, save it, and then my manager can get an adaptive card in Teams that says, hey, so-and-so just sent you this purchase order, it needs to be approved.They click on it in Teams and approve it, and it gets released. So we're trying to take all of the different components in the Microsoft Stack and bring them together into these really common business processes so that we can automate as much as possible and keep people. out of the drudgery that they have to go through today when they're having to execute this process quote unquote manually.

[Mark Smith]: 14:15
Yeah, I like it. I like it. What's you? I just want to jump to the connector for a second that you know, that connected,they got released talent last year. It was a quantum leap different than the pre its predecessor and what it can do.We, you know, we've been deploying it to our customers and it's getting a lot of positive feedback. What are you seeing on your side? What a customer, particularly customers that might have either do custom integrations in the past. use the old connector or now using the new one what's the feedback you're getting on it?

[Jon Gilman]: 14:50
I think the biggest piece of feedback is we had a lot of existing Microsoft customers that were not yet using the Power Platform on top of SAP because there were some technical features missing that were preventing them from starting. So now we see them actually finally starting their digital transformation journey on the Power Platform because of things like, you know, the previous version of the connector did not support what SAP calls message servers or what... in common terms, would be load balance connections in SAP. So we didn't support that before. And that was preventing a lot of organizations. I mean, that was a game stop right there. Like, we cannot proceed until you support load balance connections. So we added that in. Single sign-on was very complicated before.So we've streamlined that pretty significantly.We've added in Kerberos delegation into the on-premises data gateway When Mark Smith logs into a Power App to create a purchase order, it flows through,it goes to Active Directory, requests a Kerberos ticket, and that flows into SAP.And then you have that full audit trail end to end without having to do the complicated setup we had to do before.So those are two very big things.And then a lot of nice to haves for folks like me who are nerds who like to tinker and mess around with SAP data. We added some new functions within Logic Apps,which is the right now currently the expression language within Power Automate.But we added some cool functions to do things like remove leading zeros from material codes, vendor codes, customer codes,add them back before you need to update that data within SAP. So we have a lot of cool specialized functions that are built specifically for SAP customers that allow them to manipulate data. more efficiently than they could before.So a lot of cool stuff that's been added in the last 18 months.

[Mark Smith]: 16:45
It was it, you know, I find that it's quite interesting at the moment is that I'm hearing a lot from the SAP side of the house, this concept of clean core as they're migrating to, you know,to the cloud, the SAP systems, this need to move to a clean core. I'm pretty sure it's driven by SAP themselves. And then,and then the idea of, you know,doing this, these different workloads all extracted away through APIs, you know, they've got BTP and Is it just a perfect time that this is really ascending from a Microsoft perspective? The whole SAP Power Platform Azure story?

[Jon Gilman]: 17:26
Yeah, the timing couldn't be better.I mean, I've been telling people forever, no one ever listened to me, but maybe now they're finally starting to listen. But,you know, don't write your business logic inside your system of record. You know, write it inside an IPass layer or, you know, whatever your integration hub is. But the minute you start writing your business logic in custom code inside your ERP,you're going down a very, very bad road. Unfortunately, that's the road that most of the Fortune Global 1000went down. during the 1990s and 2000s. So they've just got tens of thousands of lines of custom ABAP code within the SAP world that needs to be remediated when you're migrating from ECC to S4. And a lot of organizations are saying, you know what, let's leave behind what we did in ECC. Let's do a clean extract of the data. Let's go Greenfield with S4 HANA and just load our data in. And that gives you an opportunity. not only to kind of move away from a lot of the custom code that was embedded within ECC, but it allows you to clean up your data at the same time too. You can naturally deduplicate a lot of customers and vendors and there's no organization in the world that can say they have perfect master data. I mean, there's always issues. So this kind of gives a great opportunity to even use the Power Platform and to use Power Automate to...migrate from ECC to S4 because you're going to need an ETL tool to extract that data,cleanse it, dedupe it, and feed it into S4. So it's a great opportunity for Power Automate to flex its muscles there. But to your original point, this is a perfect opportunity for the Power Platform to kind of become the de facto integration hub and presentation layer for any system or record, not just SAP.

[Mark Smith]: 19:16
Yeah. One of the comments back I get a lot when I'm talking, particularly to SAP folks around the Power Platform and low code app development automation,et cetera, is, oh, we can do that in Fiori. Or, you know, we have low code now.You know, SAP, in the last about six to 12 months, have announced they've got a low code tool. How do you handle those type of questions that kind of brings people on the journey?

[Jon Gilman]: 19:55
Yeah, I think, you know, we're,Microsoft and SAP, we're partners, we're customers of each other, but then we're also competitors. So it's a unique relationship.But you know, I would say with regards to the Fiori argument, I don't think SAP would have acquired AppGyver if they hadn't realized that long term, you know, creating custom Fiori apps just isn't very sustainable. I mean, they recognize that. And that's why they... the acquired AppGyver, their push to BTP validates what we were just talking about,which is you want to abstract your business logic outside of your system of record and keep the system of record clean.In terms of going head to head against AppGyver and BTP versus Power Apps and Power Automate, I will say that Power Automate has already over a thousand connectors in the different systems of record. And there's really no IPaaS or integration platform in the market that has that many robust connectors,not just SAP, but we talk about anyone out there that's competing with ERP system integration. We've just got so many different connectors out there.We've got so much pre-built content.And what we're really telling our customers is, anytime you have to start writing custom code anywhere, you should stop.That's a great opportunity to bring in the Power Platform because Power Apps,I like to say is essentially no code. You do have if statements and logical statements in there for when to hide a button or when to show a button, but you're not writing custom JavaScript.You're not writing literally any code. It's more like I'm working in Excel with macros and that sort of thing.So it's truly no code. And then on the back end, being able to abstract a lot of the complex integrations in the ERP systems and expose these templates to makers, power automate flow makers in a way that sort of demystifies how those systems work is huge for them because you know in a common integration scenario today, you know say you bought an ipass of some sort and you're trying to figure out okay how do I create a customer master record in SAP,you know you're going to go onto Google and then that'll send you to support.sap.com and then you're looking through all these different blog posts about how to... how to actually get that customer master record into SAP, what are the appropriate APIs to call, what are the things to look out for, that can take months. Now we're giving you a pre-built power automate flow that does that and saying, here you go, we just saved you three months and if you want to tweak it, you can, but we've already mapped all the data fields from, Power Apps or whatever your system or record is going to be from a front end perspective to SAP. And then it's really up to you to modify those data mappings if you want to, but you're not having to. figure that stuff out from scratch.

[Mark Smith]: 22:49
Yeah. The security question, another thing from SAP architects, you know, they get worried about letting people in the organization update in another application data sitting back in SAP. They're worried about privilege access, corruption of data. How do you handle the architects that are particularly the security conscious side of things that are that feel and when I say feel generally I say that because it's a lack of education, not explored power. And the other thing is that when they hear low code, they think, oh my gosh, this is just for, you know, this is just for really simple things, right? Not complex business processes.

[Jon Gilman]: 23:41
Twitter feeds and things like that.

[Mark Smith]: 23:43
Yeah, yeah, really, you know,you know, we're having a luncheon this Friday and we just need to send out a thing asking Who's interested in a little form survey or something like that?Right? How do you handle that security question?

[Jon Gilman]: 23:58
Yeah, so the way we've architected the SAP connector within Power Automate is if you can't see and do it in SAP, you can't see and do it within Power Automate.So when we have our single sign on and Kerberos is saying, this person is Mark Smith at gmail.com,actually translate to M Smith in SAP, that's then checking to see whether you actually have authorization to create a purchase order, for example. The connector we've built respects all the authorization objects and profiles that you've already built for all your RRSP users. And it actually kind of gives you a leg up on the Fiori side because today in the Fiori world, you've actually got to create a separate authorization profile that maps to an authorization profile within SAP. We're just reading it directly within Power Apps and Power Automate. So we can show and hide buttons within Power Apps based on an auth object within SAP. So that we can ensure that even before SAP does their check, we're not even going to let them do it. We're not going to have them waste their time and find out that they can't create a purchase order in such and such company code or such and such purchasing organization unless they actually have that auth object within SAP.

[Mark Smith]: 25:14
Yeah. So, so once that discussions had, of course, and going through that process,once there's that, uh, it's approved,if you like, there's, there's much more an openness to adoption. Just as a, as a, on the back of that question, how do you handle once again with customers because of the low code, no code story in market, the perception that the power platform apps that you can build.are, should we use it? Not enterprise scale. They're not something that you would put your critical business systems in play because, hey, it's low code, no code.No, a pro developer wasn't involved.How can it be enterprise? How do you handle that?

[Jon Gilman]: 26:06
Well, I mean, you're going to want to test it the same way you would test on the other enterprise app that you want to deploy to production. But we've already got some of the largest organizations in the world doing sales order entry and purchase order entry,which are the two most heavily used T codes and processes within SAP for millions and millions of transactions per year. So it definitely scales. But I think the... there's a misperception that because something is no code or low code that you don't need to test it as much as you would need to test a bespoke custom developed app, but the reality is your business logic always needs to be tested thoroughly whether it's residing in custom ABAP code or Whether it's residing in an IPass layer You need to do the same amount of testing you need to look at every permutation of a business case and test it thoroughly before it gets to production so I would from a testing perspective,never treat anything differently,whether it's custom dev versus low code node.

[Mark Smith]: 27:10
Yeah, good. If we were to grab a crystal ball and look at the future of SAP and where their platform is moving,what are your thoughts? And probably the impact on customers on where SAP is moving with that clean core strategy, with the migration to cloud. What are you seeing?What are you thinking about?

[Jon Gilman]: 27:35
I think there's going to be a lot. We already have a pretty tight collaboration with SAP. I know Christian meets with Satya and Scott quite a bit, but I think the collaboration is just going to continue to get tighter and tighter because we see more and more customers migrating their on-premise SAP workloads over to Azure. And then at the same time, once it's on Azure, digitally transforming their processes through power apps and integrating through power automate flows. And as that... Adoption occurs more and more and the market share grows.I think you're just going to see a much tighter collaboration between SAP and Microsoft. Not to say that we already don't have a very tight collaboration,but it's just going to grow stronger over time.

[Mark Smith]: 28:17
Yeah. AI and the impact going forward. I've seen SAP make lots of announcements around connectors with open AI and things like that. Its impact on low-code,no-code platforms. Do you think we're going to be at, forget low-code, but at no-code platforms within five years? In other words, AI will build all that app layer for us based on us making a request for a solution to be built.

[Jon Gilman]: 28:48
Yeah, so it's funny you mentioned that. We're doing a lot of work there right now. And I think what we're generally seeing is that, while chat GPT and a lot of other platforms out there can generate content quickly, it still needs to have a human being sort of review it and make sure it actually makes sense.It's never gonna be 100% perfect.So it's going to dramatically accelerate the development of a Power App. to the point where you can say, hey, I need a power app that goes into SAP that creates a goods receipt for a shipment that came in from one of our vendors.It can automatically generate all of the inputs that it thinks you need based on using our process mining capabilities to figure out, okay, what are the 15 attributes that they capture on a goods receipt for this organization and automatically propose.a functional app, but it still is going to need to be reviewed by a human being to make sure it actually makes sense. You still have to go through your data governance process and all of your testing. But what it is going to do is it's really going to make 10x developers. So when we talk about no code,low code, making a developer 10x what they used to be, well, now this is 10xing that as well. So someone who used to work with... you know, creating those 15data inputs on a power app, suddenly they're automatically created and all this person is doing is reviewing what chat GPT or whatever, you know, whatever artificial intelligence tool is being used to generate that app. So we're going to see a 10X impact of a no code, low code developer. So it's all good. I mean, this is all great stuff. I mean, this just means that business users are going to get these things in their hands much, much faster.

[Mark Smith]: 30:38
Totally. Last question before I let you go, John, tell me about what are you thinking in the next 12 months?What are your thoughts? And that's not just tell us anything that's on your NDA list, but what are you thinking about the market move, the impact that AI has had just on the first six months of this year? Let's play that forward another 12 months. What are you thinking about?

[Jon Gilman]: 31:08
Honestly, keeping up with the change, the pace of change is so dramatically accelerated since even December of last year that we're constantly looking at new ways to incorporate these technologies into the Power Platform to just make it faster for our customers to get what they want and to scale adoption.Keeping up with the pace of change could be a job in and of itself, but then figuring out what nuggets from... you know,the latest release of Chat GPT can we now embed into the Power Platform. So we're just constantly looking at that and figuring out ways to improve all the different components within the Power Platform using generative AI and all the exciting stuff that's coming out right now.