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Author's profile photo Hemanth Garg

Key to Success for Digital Transformation (1 of 4)

We have come long way in the digitization of the processes in industries.  The way, we are going, expectations of business and consumers has increased to automate anything to everything and have the autonomous decision making at the point of action.

The first wave of digitization focused on driving efficiencies in the internal business process of the organizations (e.g. capturing data into the system, workflow for approval, integrating data between departments to give holistic view of the companies) that achieve huge savings.

The second wave was brought external players like partners, suppliers (e.g. supplier collaboration, point of sales report by channel partner, travel expensing) and automated lot of manual processes to drive additional business benefits.

The third wave of digitization – internet of things is driving new business models and also enabling business to offer service based models (e.g. uptime of the asset, pay per use models) that offers differentiator in the market.


What is causing this big wave?

With innovation in the technology (e.g. wireless communication, sensor technologies, mobile, big data, cloud and real-time computing & analysis) and the significantly cheap technology cost (e.g. price of fastest supercomputer in 1975 was $5M vs $649 with higher performance), we are at the inflection point that is enabling organizations to connect things like devices, machines, cars etc. This is allowing organization to differentiate themselves from competitors by delivering instant business value and driving down the cost of ownership for their customers.


Case Study:

In a study conducted by MIT Sloan Management and Capgemini Consulting, more than three quarters of executives stated they needed to invest in technology in the near term, but face a host of challenges associated with doing so successfully. While we all concede that working with paper processes is, in today’s world, an archaic way of running your business, how do you surmount technology that was cutting edge 12 months ago (or even less). More importantly, what do you do if your business is, quite literally, paper based? Lexmark International, provider of printing, imaging, software and solutions services in more than 170 countries, has done it successfully.

Lexmark’s digital transformation, according to Forbes, was hinged on the company’s ability to transform its business model from manufacturing hardware into becoming a provider of business solutions. While optimized customer service is certainly key to any transformative effort, Lexmark had to think about how its machines (and the processes they delivered) would automate and talk to one another. To be successful, they implemented a three-pronged strategy to drive innovation:

  • Getting rid of manual processes. Receiving more than 1,000 invoices daily, Lexmark knew that simplifying this process was key to moving their business ahead. In a case study sponsored by SAP, “Lexmark began using a data-extraction engine that uses optical character recognition to capture and compare new information to existing data. They were able to eliminate more than 75% of the manual effort.” Talk about automation.
  • Making unstructured content available whenever it’s needed simply by reimagining the workflow process. Lexmark found a way to optimize this process to capture pre-transactional data and pushing it through their system to accelerate their approval process.
  • Saying farewell to printing (everything). Lexmark made a dramatic move – they made paper output something available only if it is absolutely necessary. Creating a global print driver, all print jobs are held in queue until an authorized person prints them. By printing only what needs to be printed, Lexmark has saved millions in printing costs.

Read details on the Lexmark’s Digital Transformation.

Key to success:

Rethink the business process

You have chance to work through the business process that makes sense in the new world and eliminate redundancy & enable automation, decision making wherever possible. Imagine future state without any constraints for each process can effectively shorten the process from days to minutes (if not seconds).

Check out the Digital Transformation – Rethink the Business Process blog to get some perspective on how customers are rethinking their business processes and how SAP is helping them through the journey.

Customer Experience

Critical to involve every function of the organization touching the business process including end customer/partners to deliver the truly seamless customer experience.  The cross-functional team including IT needs to closely collaborate and if needed co-locate to ensure improved communication and true team efforts to achieve the ultimate customer experience.

Check out the Digital Transformation – Customer Experience blog to get some perspective on how customers are addressing the customer experience and how SAP is helping them through the journey.

Simplification of Infrastructure

Complexity built up over decades hampers the ability to innovate; radical simplification is needed to unlock the potential.  According to McKinsey 2013 study, 72% of IT budget spent is to keep the lights on and 40% of executives’ surveyed worry that their organization will not be able to keep pace with the technology advances. Companies need to carefully navigate through their complexity of infrastructure to more sustainable ones that allows them to innovate making use of big data, social networks, deliver it on cloud or on premise, consumed on any device. All the innovations delivered from the same platform, much needed for the today’s business environment!

Check out the Digital Transformation – Simplification of Infrastructure blog to get some perspective on how customers are simplifying their infrastructure and how SAP is helping them through the journey.

Please do share digital transformation story and how you are managing at your enterprise.

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