By Fred Isbell, senior director and head of Thought Leadership – Digital Business Services Marketing, SAP

I am amazed that the term “digital economy” is now the same age as my youngest kid – 21 years old. It was 1995 when Don Tapscott first coined the term in his landmark book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence.” In that same year, Nicholas Negroponte from the Massachusetts Institute of Technology (MIT) examined the fundamental shift of digital transformation in his landmark book “Being Digital,”  from the physical movement and transfer of goods and services to digital bits shared over a network. From both of these men’s perspectives, this digital economy was destined to create new forms of communication, collaboration, and commerce.

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Fast-forward to 2016, we’re no longer debating any of these ideas and predictions. In fact, we’re living it now as disruptive technology and business models emerge on a seemingly daily basis.  No one wants to be “ubered” and rendered obsolete in a blink of an eye.  Customers and entire industries expect a new way of doing business as the consumerization of IT and mainstream innovation technology enable seamless, transparent, and non-invasive experiences.  And one of the biggest changes is the notion of “everything as a service” – shifting the world towards a consumption paradigm and away from traditional product and purchase models.

In our most recent SAP Digital Business Services Webcast, “Unlocking the Potential from the Internet of Things,” we focused on one of today’s hottest of topics: how to foster the Internet of Things (IoT) to bring innovation to fruition.


The five pillars of digital transformation

My friend and colleague David Sweetman, senior director of the IoT – Digital Business Services Marketing, SAP, kicked off the discussion by unveiling the five pillars of the digital transformation framework. Recognizing that ever-changing requirements present significant challenges for businesses, this approach offers a structured model for developing digital transformation road map to reimagine business models, processes, and customer interactions.

In this structure, four components come together to address the workforce, customers, and suppliers across an extended supply chain, business networks, and assets of all kinds including machine-to-machine communication and the Internet of Things (IoT). At the center sits the digital core, which is the technology that powers it all without limits. If you’re an SAP customer, you probably know it as SAP S/4HANA.

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By incorporating this framework into the business’ DNA and digital evolution, companies can breathe life into the digital enterprise to compete – and win – in the digital economy.  Then, they can bring innovation and new technology to deliver real, tangible business value. Finally, they can define a digital core and transition to cloud-based solutions with a mix that best fits the company, whether it’s a combination or a pure instance of cloud, hybrid, and on-premise technology.

Besides the IoT, there’s a need to address business networks, hyperconnectivity, line-of-business application, new front-office solutions for seamless customer engagement and commerce, integration to back-offices software, and increasingly large amounts of data. And when you gather them together, there’s increased complexity – which is the enemy of innovation.

Complexity drives up costs, cutting into any budget available to innovate. Businesses must provide simplification and implement only what’s necessary. At the same time, they still need to deliver outcomes-based solutions that realize business value quickly and reduce overall costs – akin to the age-old discussion of total cost of ownership and total cost of implementation as the secret sauce to a successful IT infrastructure.

Bonus: Check out this white paper from SAP Digital Business Services that takes a closer look at these critical issues and solutions.

The live business: Taking digital transformation to the next level

A key part of the digital transformation story is the “how,” which is predicated on experience and expertise of service, support, and, of course, people. The role of these change agents and experts is what I love to call the Sherpa. The more digital businesses become, the more they are needed to guide the digital transformation journey.

Personally, I can attest to this reality. At SAP, we created a new organization called SAP Digital Business Services. Ever since the first day, the need for these digital Sherpas hasn’t decreased one iota – rather, it’s increased significantly.

SAP DBS SANOW Thought Leadership @ SANOW 2016 4-25-16.jpgWant to learn where all our digital world is heading? SAPPHIRE NOW is the place to be in mid-May. Not because of the sun, warm temperatures, and mixed drinks – but for specific, actionable, and valuable information on digital transformation that you cannot get anywhere else.

Visit the Digital Business Services (DBS) campus on the show floor to meet with specific experts. We’ll  focus discussions on three main areas:

  • Business reimagination: Find out what it takes to achieve a true digital experience, leverage innovation for new-found business agility, and discover the full benefits of a live business.
  • Digital business framework: Get a deep-dive tour into the key aspects of this approach – from a successful digital core with SAP S/4HANA and a mix of public and private cloud to co-innovation and maximized human capital.
  • Solutions lifecycle: Discover how a true solutions approach can help you make specific recommendations across the complete solutions lifecycle across planning/advising, building/launching a solution, and the run/optimization phase that is essential for operational excellence. Reflect on the new normal to see why proactive, end-to-end support is critical for the entire digital transformation journey and must be considered up front – not just post-implementation.

You can find more information by visiting the overview of SAP Digital Business Services presence at SAPPHIRE NOW. Awaiting you will be insightful customer presentations, sessions featuring subject-matter experts, and workshops. Take a look at the great content including keynotes, breakout sessions, specific expertise, and much more by visiting our agenda builder.


Fred is the senior director and head of Thought Leadership for Digital Business Services Marketing at SAP.


Join Fred online:
Twitter, Facebook, LinkedIn, sap.com, SAP Services Hub


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