SAP Outlook 2016: Digital Transformation
Emerging technologies is changing the complete outlook of business models in 2016. Digitalisation is driving force behind transforming the way businesses operate and compete. It aims in making economies more efficient and contributing towards better lives. SAP has identified the essence of digital transformation and its significance in achieving success in new economy.
According to Bill McDermott – CEO, SAP can be at core of digital transformation [i]. Digital transformation [DT] is indeed bringing value to the enterprises and radically improving performance, however it is challenging the core competency of every organisation while opening new opportunities.
Intensification of digitalisation is creating a pressure within the companies to speed up their digital transformation. Companies are adopting to social media, redesigning their websites, creating range of mobile and cloud apps as an initiative towards digital transformation. This appears easy and exciting. But, is it working in reality? Successful digital transformation is not about implementing new technologies but about transforming the businesses to derive most value and benefits from the substantial investment on new technologies. Companies must rethink business processes, delivery mechanisms, HR strategies and leadership to adapt to the new digital era.
Leadership, digital proficiency, legacy systems, security concerns are the main challenges involved in Digital Transformation. These challenges are the key blocks in initiation, execution and governance of digital transformation. DT projects are complex in nature and must be driven from the top. Leaders must identify the digital proficiency at various levels within the user community because not every employee is easily going to adapt to change, some might resist it. Hence, it is important to empower employees in right direction by clearly communicating the benefits of DT and providing required training. Leaders must support the changes and ensure the transformation is a success. Legacy systems are less efficient and cannot be integrated easily with new technologies [ii]. Security challenges can be strategically managed by leaders by weighing trade-offs between functionality and security. Organisation must also have right digital assets in place to execute the transformation.
DT will disrupt the old methodologies and the business processes. To avoid this disruption, SAP believes that businesses need to digitally transform immediately. SAP is coming up with new strategies and supporting their partners and customers to overcome these challenges for successful DT. SAP is continuously educating their partners to change their business model and delivery mechanism with reduce lead time in order to increase the ROI and run faster and simpler as per their mantra [iii]. SAP is even thinking of charging less for the certifications on new technologies where more consultants are required to do the job [iii].
Businesses can capitalise on new opportunities by embracing DT with use of new SAP technologies like cloud, mobile, Big Data and Social Networks while optimising existing operations and increasing business performance [ii]. DT is creating significant competitive advantage for the enterprises by transforming customer experience, operational processes and business models. SAP applications is enabling the businesses to improve the customer experience by personalisation and customisation; to promote their brands more effectively through digital media; to enhance in-person sales conversations through digital interaction; to develop in-depth analytics reports; to make business process more efficient and scalable etc. SAP’s digital transformation is not only making businesses run simpler but also supporting them to expand and grow globally while maximising their ROI. In order to accelerate DT, SAP offers consideration around Experience, Agility, Industry differentiation and the network effect [ii].
This is also a great opportunity for SAP Partners as DT is a need but it is important for them to realise the sensitivity around the price and lead time. Partners can increase their profitability through the volume [iii].
Thus, SAP seems to be focused on Digital Transformation in 2016 for facilitating the successful DT through its new technologies and strategies leaving no reasons for the businesses to wait to start their transformation journey.
[i] Digan (2016) ‘SAP can be at core of digital transformation, cloud, IoT, says CEO McDermott’, ZDNet.
[ii] SAP AG (2014) ‘Conquering Disruption Through Digital Transformation’.
[iii]McKenna (2015) ‘SAP executives on what digital transformation means for CIOs’, Computer Weekly.