To help identify and structure business innovation and transformation, many companies today are using a concept called Digital Capability Framework (DCF). At the core of this methodology is a real-time digital enterprise strategy and roadmap which can help drive business transformation and simplification.
Using this methodology, companies can better analyze the potential of leveraging technological innovations through improved digital capabilities. The methodology can lead to a significant simplification of systems, better extraction and replication of data, and a reduction in hardware capacity. And more importantly, the use of digital capabilities in this manner can drive business growth and a sustainable margin improvement.
DCF: Goals and enablers that drive transformation
Within DCF, there are goals and enablers that help companies design both a new business model and new business processes.
- The goals include customer centricity, effective knowledge workers, and operational excellence.
- The enablers include capabilities such as transformation and innovation, as well as IT excellence.
To see how this framework can bring forth business transformation, here are a few practical scenarios where it can be put to use.
- Turbo-charging finance. A good example here is how in-memory computing can change a month-end closing process from one that can take hours to one that can be completed in real time. This type of turbo-charging also produces faster reports, quicker identification of exceptions, and faster corrective actions. This is an example of both a DCF enabler (IT excellence) and a DCF goal (operational excellence). The result of this type of initiative is a shift in the focus of financial activities from simply validating numbers to interpreting and using the numbers to drive business growth.
- Empowering process excellence. Using in-memory computing within DCF, business processes can be designed differently, typically with fewer steps that can happen as quickly as in real time. Similar to the productivity gains above, processes that take hours can be completed in seconds. And like the example above, IT excellence and operational excellence can help drive a depth of analysis that is far greater than what was possible before, creating immense value.
- Improving performance management. In today’s highly volatile world, simulating market changes in the supply chain and proactively planning business activities is of key importance. Analyzing changes in demand and supply, and the impact they have on profitability and cash flows, can improve these processes and increase performance significantly. A key shift here is the use of actual data in business planning improvements, which helps drive better decisions. This type of DCF methodology is an example of customer centricity and operational excellence.
- Optimizing supply chain management. Companies today are striving to optimize their supply chain planning, production planning, and sourcing of products and raw materials. Using the DCF, they can analyze the demand for production, delivery and process times, and the priority of demand. The result is an opportunity for better customer service, production optimization, and more efficient inventory management. This once again is an example of customer centricity and operational excellence.
- Using a cloud platform for speed to value. One of the benefits of the cloud is a “design and develop once” approach that can help companies harmonize their IT landscape. A cloud platform using a DCF provides accelerators that help the design, development, and configuration to occur at unprecedented speed – such as in a few short months. And cloud platforms like these allow for faster scalability and the use of innovative business solutions at a speed never before experienced.
If you’d like to learn more about DCF and the tremendous benefits it can deliver, you’ll find an in-depth analysis in this “Unilever Case Study” article in 360° – the Business Transformation Journal. This informative case study shows how the use of DCF at Unilever may result in a margin benefit that could potentially reach of over US$300 million (€250 million).
360° – the Business Transformation Journal is produced by the Business Transformation Academy, a thought leadership network devoted to providing cutting-edge insights on innovation and business transformation. For more business transformation articles on the SAP Community Network, please visit the 360° – the Business Transformation Journal library.