In the second part of this two-part article, Stuart Dickinson examines how SAP is meeting customer needs in the emerging digital economy. You can read the first part of the article here.
Faced with new economic realities and digital drivers, what should CEOs focus on? I see a need to develop three core capabilities:
- Address new stakeholder networks and expectations: In a connected world, brands can live or die on consumer reputation. Customers are demanding that companies stay plugged into their communities and provide value beyond their immediate shareholders – CEOs are being asked to tackle important social and environmental issues as well as deliver financial results.
- Build talent, innovation and technology: Innovating successfully requires the ability to ramp up technology, access and retain expertise, and collaborate with like-minded organisations. CEOs are looking at ways to build better innovation and workforce capabilities to complement technology in an attempt to meet ever increasing customer expectations.
- Measure, analyse, act: Using technology to gain better qualitative measures across all aspects of the business will help companies meet fast changing customer demands, help launch new offerings and help define success beyond simple financial measures.
Developing those core capabilities requires CIOs to drive change to launch new business initiatives, while maintaining the best performing parts of the existing business model. One way to achieve this is through bimodal IT – the practice of managing two separate coherent modes of IT delivery, one focused on stability and the other on agility.
How is SAP delivering?
My reason for attending the SAPPHIRE and SAP Hybris events was to find out how SAP is delivering digital enablement for customers. As SAP transitions to new LOB cloud applications, how will these be integrated to enable businesses to deliver on these key economic and business imperatives?
SAP is telling customers that digital transformation is inevitable and believes S/4HANA is the way for organisations to leverage all the forces that typify the digital economy. SAP is promoting S/4HANA as the digital core – the steady state enabler, and LOB and HANA Cloud Platform as the agile, responsive platform-as-a-service for extending integration and building apps to meet new challenges, attract new customers and drive new business.
Unlike SAP Business Suite on HANA, S/4HANA has been re-architected to better exploit the in-memory computing capabilities of the Hana technology platform. SAP has also delivered new analytic capabilities, along with a range of SAP Fiori applications and capabilities, together with a range of on-premise and cloud deployment options. If offers many potential benefits in improved performance real time operational analytics, and the opportunity to improve some business processes.
Should customers listen?
According to Garner, more than 70 per cent of new SAP customers or customers re-implementing SAP are adopting S/4HANA. The digital journey story is starting to resonate. The decision is becoming not ‘if’ but ‘when’ is the right time to migrate.
At SAPPHIRE, SAP worked hard to provide greater clarity around when and what functionality would be available across each of the core business process areas, and spent considerable time talking to the integration issue between the S/4HANA digital core and the LOB applications. Across each of the solution areas SAP has now provided more details to enable customers and partners to better understand what native functionality will be available and when.
How can customers begin the journey?
The US and German SAP user groups recently combined to publish a significant paper on digital transformation. The key out-takes for customers include:
- Disrupt: Think of yourself as the next disruptor, versus reacting to those who get there first. Take some time to imagine how you can disrupt your competitors using digital transformation, rather than waiting until you have to resort to defensive moves.
- Get going: Get started as soon as possible, work in an agile manner, take calculated risks and accept that not every initiative spawns a unicorn. If you think you can wait and see what others are doing before making your own moves, you are likely to find yourself behind the pack and trying to play catch-up. Assemble some strategic approaches and then build buy-in with your peers.
- Nurture talent: Start identifying the people who can transform with you, and help them get the right training and knowledge to succeed. For those who can’t take this step, figure out if they can still contribute in different roles and, if not, work with them to transition to something else.
- Know where your competitive advantage lies: Begin to differentiate between strategic and non-strategic processes and assets. Customise where you need to for competitive advantage, but make those choices carefully.
- Actively manage change: Cultural change management and transformation are key enablers of success.
Change is scary and the fear of the unknown is real. While we all talk about the importance of creating a culture that encourages risk-taking, we know that in most member organisations the learned behaviour is vastly different.
I would add a final thought – find yourself a strong partner with a local focus and a global perspective. One that can help you sort the wheat from the chaff and who can help you deliver value quickly and efficiently.
Stuart Dickinson is CEO of UXC Oxygen.
Key sources
Mary Meeker’s Internet Trends 2016
The Economist
PWC NZ CEO Survey 2016
Digital Business Transformation – Disruption of Industry Logics – Ericsson
The 2015 Customer Experience Outlook – Joe Pine and James Gilmore
Personal Information Management Services: An analysis of an emerging market
SAP
SAP and ASUG SAPPHIRE
ASUG, DSAG White Paper Digital Transformation SAP
