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Author's profile photo Pat Bakey

How 3 Industry Leaders Embrace Cloud Optimization

The need for speed has trumped the need for a picture-perfect IT environment; iterative design is now a premium. As a result of this shift, the cloud has soared and become the centerpiece for digital transformation. Businesses across industries have recognized its immediate and long-term benefits, which include accessibility, scalability, security, reliability and, most importantly, agility.

This transition naturally began in industries operating closer to customers, such as retail and financial services, that recognized an immediate need for these benefits. It also typically focused on discrete application and business areas like customer and people centric processes. However, the impact of the digital core is now being felt in machinery-intensive sectors where the cloud’s benefits were not immediately obvious – think: manufacturing and automotive. The impact of cloud is also being felt in core end to end business processes spanning the entire internal and external enterprise. What is driving this expansion? The insatiable appetite for business innovation of course, and the foundation it sets for true digital transformation. Businesses need to adopt and scale high value use case scenarios involving artificial intelligence, machine learning and a wealth of other advanced technologies. These are now considered competitive necessities to simultaneously meet Industry 4.0 standards and maintain a customer-centric focus. Agility and innovation must span the entire value chain and across the entire enterprise.

Industry-specific cloud optimization (which SAP Leonardo is built on) has fueled new business models, product classes and industries altogether, delivering new value to customers and shaping the future marketplace – all considered major benefits. The tech and automotive industries alone – once separate entities entirely – have merged to give rise to the connected car industry that thrives on IoT and machine learning. Through unique combinations of the latest advancements in AI, analytics, machine learning, IoT and blockchain, industry players have never had a greater opportunity to reimagine their offerings and reinvent their fields.

Here are a few industry examples of this phenomenon taking place today:


Broadening the limits of travel distance and speed is an intensive area of focus in the transportation industry. High-speed rails are one solution but carry unique challenges that service providers must address. Trenitalia is an excellent example of an industry leader adopting new-age technology to address a deep-rooted problem in its line of work and lead the field. Transporting 2 million passengers a day across 250,000,000 kilometers a year places a significant strain on infrastructure. Operating a fleet of over 30,000 locomotives – a maintenance nightmare waiting to happen – Trenitalia embraced the Internet of Things, analyzing sensor data from thousands of sensors linked to equipment to monitor key performance indicators like usage wear.

Trenitalia’s efforts capture the balance and response that transportation companies of the future will have to strike to continue pushing the logistics needle. Greater feats of speed and distance will require innovative uses of the Internet of Things and, more importantly, a digital core capable of handling this type of workload. While the immediate benefits focus on greater asset optimization and overall efficiency, the ultimate benefit is a greater customer experience and sustained loyalty of the business and recreational traveler.


Automotive sales once took a single form: visiting a car lot, speaking with a salesman, test driving and, if the product meets the customer’s expectations, making a sale. Digital technology has disrupted this single point-of-entry system, enabling an end-to-end omnichannel experience for customers that allows them to have greater participation in the process, starting with the car’s design itself. As one of the world’s largest auto manufacturers, Nissan Motor recognized this shift and developed a Digital Innovation Platform by combining the power of the cloud, big data, IoT and mobility. As a result, they have connected the end-to-end supply chain – from suppliers to consumers’ homes – and created new opportunities for retail without inventory, better demand-supply matching, and customer centricity using data analytics.

This investment in a cloud customized for automotive translated to increased sales, enhanced quality for customers, and curated a stronger brand power – all metrics that automotive manufacturers must flawlessly address to succeed moving forward. Big data is now the best car salesman on the lot.


Similarly, the retail industry supply chain is now omnichannel in form and success is based on serving the “segment of one.” Customer point of view must lie at the center of every business decision and technology has helped redefine the boundaries of what was possible in retail years ago and meet this customer centricity standard. In-store technologies such as beacon or augmented reality allow retailers to bring new meaning to personalization and customer service, value-added servicing, and differentiation – all competitive standards in retailing today made possible by smart technology powered by the cloud.

Lidl, a global discount supermarket chain, has responded to the changing grocery marketplace characterized and measured by offline and online convergence, customer-centric marketing, shopping experience, and data-backed personalization. Using a digital core scaled to meet these industry standards, Lidl has point-of-sale insights that help their business reach shoppers across any channel – social media, in-person and online – and create enhanced points of brand interactions for their loyal and future customers. The days of putting printed coupons by the door to attract customers are over – the future of retail starts and ends with getting to know and interacting with your customers using data.

Connecting the Dots

With all of this innovation in mind, one misconception I often see from CIOs and other IT decision-makers is that they mistakenly believe that digital transformation and cloud adoption must be an all-or-nothing process. Regardless of where your business is on the digital maturity curve, it is important to invest in technology that expands your organization’s digital IQ, capabilities and skills. The cloud is an invaluable tool for reaching this state and it is never too late to begin your digital transformation journey. Join me in exploring ways the cloud can be adapted to and used to shape the future of your industry!


Follow #SAPIABC on June 22, 2017 and @SAPIndustries on Twitter to learn what Industry Analysts think of SAP Industry Solutions

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