In the past few years, we’ve witnessed SAP deliver foundation innovations and have seen firsthand organizations transform their old ERPs into “Digital Core” and “Intelligent Enterprise”. I believe that within the next 2-5 years, the scope will not get deeper, but rather wider, moving towards an “Intelligent Ecosystem”.
Recent innovations ran deep
Over the last 5 years, innovations made available by SAP S/4HANA, SAP S/4HANA Cloud, and other solutions have revolutionized the core of the ERP by:
- Leveraging the performance of the HANA in-memory database
- Simplifying transaction data storage and optimizing throughput in Finance and Logistics
- Redesigning integration through the SAP Cloud Platform
- Embedding predictive and machine learning capabilities right within key processes
- Enhancing the user experience with Fiori and the SAP CoPilot
The limits of fast-pace innovation
While the breadth of innovations delivered in less than half a decade is impressive, it is limited by the rate at which organizations can adopt and adapt to this foundation change. Early adopters have an easier path to upgrade, yet all customers will need to redesign their business processes to get the most out the new features and functions. After deploying ERPs and managing change for 5-10 years, some organizations feel the “project fatigue”.
In addition, IT environments have reached incredible levels of complexity due to numerous mergers and acquisitions, customization, or changing business models. With so many systems to replace, there is less value to be found in a single system upgrade than in rethinking their integration. The real value lies in ERP networks.
From deep to wide
Many industries rely on a network of partners, either separate divisions, subsidiaries or independents, for their vertical and horizontal integration. For instance, the automotive and high-tech industries benefit from specialized suppliers to provide just-in-time parts and components. This competitive advantage is usually the result of a long history of partnership and painstaking integration efforts.
What if this network of real-life connections were recreated as server connections? What if these integrated ERPs could handle all regular transactions on their own and only rely on human intervention for exceptions? What if all SAP customers could easily benefit from such tight integration, out-of-the-box?
To achieve this goal, two characteristics need to be met: security and trust.
The good news is technology components are ready for the job. For instance, smart contracts can store, verify, and self-execute rules without intermediary. Relying on blockchain ensures decentralized execution, immutability, and fair information. Thanks to smart contracts and blockchain, organizations will soon be able to integrate even tighter with their trusted partners, beyond the boundaries of their existing landscape.
In short, we can predict that over the course of the next few years, we shall see a broader integration across systems through innovations like blockchain.