The importance of having an SAP BTP strategy has increased in recent years as organizations face rapidly changing technologies and digital transformation requirements. These challenges necessitate having a different strategy to inject innovation into their transformation journey, as opposed to their Business as Usual (BAU) IT.
The broad goals of SAP BTP are to enable Innovation which fuels the “Digital First” approach, and is required for organizations to differentiate from their competition constantly. Secondly, it provides the necessary technologies to improve their products and services. Finally, it offers insights from existing processes, suggests improvements using the latest technologies with agility and adaptability, good examples being Business AI, Generative AI & Automation services.
What parameters drive innovation ?
Customers need to consider several parameters that require them to approach innovation differently. Here are a few ways how organizations can introduce innovation into their businesses:
· Nimble and agile approach
One needs to be creative and think on their feet to survive. Embracing a startup mindset and finding new ways to grow allows an organization to pivot and make changes quickly.
· Willingness to accept failure of an idea
Taking risks and trying new things can push the organization out of its comfort zone. Encouraging trial of new ideas in an agile way is important, but if an idea fails, the team should be motivated to move on to the next one.
· Timeliness in decision making
Rapid decision-making is crucial, and individuals within the organization need to think like entrepreneurs and act quickly. This gives the organization an advantage when changes occur and decisions need to be made promptly.
· Encouraging creative ideas
Encouraging creative ideas Every innovative strategy springs from the constraints of resources. Smaller teams often find creative solutions to problems, leading to new products and processes. Employing innovative techniques like design thinking can solve even complex problems using creative ideas.
· Embracing Collaboration
The collective talents and skills of the team play a crucial role in innovation as each team member has unique ideas. By creating a culture of trust, respect, and collaboration within the team, an environment friendly to innovative ideas can be nurtured.
In addition, the choice of platform, opting for best-of-suite vs best-of-breed approach, best practices and methodology, governance models or lack thereof, availability of skills including reskilling, engagement models with business, agile development, etc., need to be considered.
BTP Usage Archetypes
SAP BTP is used in various ways. Primarily, it is used to keep the “Core Clean” for SAP ERP, which means most of the customizations should be done in SAP BTP. SAP BTP is also used as an extension platform along with each SAP Application (for example: Success factors, Ariba, etc.), and thirdly, SAP BTP is used to bring in new technologies like AI & Generative AI, Automation, SAP Build to introduce new capabilities within the organization's business processes
Three ways of using SAP BTP are categorized as archetypes in Figure 1:
1. Application Modernization
2. Data with Value
Application Modernization
The first part of the solution involves evaluating and remediating custom code objects that are part of older ERP systems. The goal is to identify which code is obsolete and which code needs to be updated or redesigned. Some of the custom code can be easily migrated to SAP BTP (Business Technology Platform) with minimal effort, especially if it is written in ABAP. However, some code may require a more thorough rethinking and redesign to be integrated as side-by-side extensions on SAP BTP.
The second part of the solution involves developing custom standalone applications that may require re-platforming. This could include building portals for vendors, suppliers, or customers, as well as developing mobile applications for various purposes such as approvals, inspections, warehouse management, logistics, and sales. These applications need to integrate with SAP Applications for accessing and updating master data. In some cases, integration with non-SAP applications may also be required. Overall, the goal is to extend the functionality of SAP ERP while keeping the core system clean and leveraging the capabilities of SAP BTP for side-by-side extensions and integration with other applications.
Data with Value
Managing and leveraging data in today's age can be quite challenging. The increasing demand for enterprise-wide data and the presence of fragmented data sources and catalogs make it difficult to have a comprehensive view of data and its lineage.
The diverse nature of data sources, including applications, cloud, and on-premises systems, often results in the need for accessing data from different technology stacks. This constant challenge of accessing and integrating data from various sources can impact data management costs and efficiency, especially when dealing with multi-petabyte data lakes where replicating data becomes impractical.
Once the data challenge is addressed, organizations can focus on extracting valuable insights from their data. This involves performing data transformations, analysis, and deriving meaningful information to drive decision-making and gain a competitive advantage.
AI, Generative AI & Automation
Artificial intelligence (AI) and Generative AI have indeed gained significant attention and are no longer just hype. They have become a reality and are being applied in various industries. One crucial aspect of leveraging AI effectively is combining it with business-specific data. By integrating AI or Generative AI with business data, organizations can address complex data that often resides in multiple systems. Failing to include business data in AI processes can lead to the loss of valuable insights that could be extracted and combined.
As we move forward, the field of business AI will continue to mature. It is expected that companies will increasingly utilize Large Language Models (LLMs) for a wide range of tasks. Organizations will likely work with trusted technology providers who employ the most suitable LLM for specific tasks, optimizing accuracy while considering the computational cost trade-off. These tasks may include content creation, code creation, question answering, or summarization.
Business leaders will seek AI solutions that go beyond industry buzz and deliver practical use cases in real-life scenarios. They will also recognize that the effectiveness of AI is heavily dependent on the quality and availability of data. With SAP systems processing a vast amount of data and transactions, SAP is uniquely positioned to assist organizations in accessing, visualizing, and taking decisive action based on this data, ultimately driving their success.
BTP COE Organizational model
Though innovation is usually perceived as IT-driven, what's truly needed is for business units within an organization to embrace and incorporate these latest technologies to enhance every business process.
Bridge to Innovation
To achieve this, organizations need a "bridge" between business and technology. Organizations require a "niche team" that differs from the traditional IT teams. This team provides both technological know-how and bridges business requirements through solutions driven by innovative services. They offer expertise, guidance, and best practices aimed at fostering innovation, standardization, and knowledge sharing across the organization. In simple terms, this team introduces an "Innovation Mind-set" to the organization. A representation of BTP COE's position is provided in Figure 2 below.
Some of the key elements that this team can introduce include a "CLOUD FIRST", "AGILE", and "ADAPTABLE" approach. Along with these, they can bring in best practices, an effective engagement model with the business, and essential technology skills, enabling them to respond swiftly to business needs.
The current technological trends include AI, Generative AI, and automation. This team not only understands these but can also translate business requirements to utilize these cutting-edge technologies within the cloud paradigm. Several advantages can be realized using the cloud (SAP BTP), such as reducing "time" by building quick prototypes to validate with the business before investing more time in building pilots. This approach also aligns with the concept of "Fail Fast"; if a technology does not meet the business requirements, they can quickly move on to the next solution.
Customer BTP COE
To assist our customers in bringing innovation into their business processes, SAP offers the opportunity to establish a Customer BTP Center of Excellence (Customer BTP COE). The Customer BTP COE is a core team of experts possessing BTP skills and knowledge and uses innovative services to build applications that enhance the capabilities of their SAP applications. It serves as the driver for continuous success to maximize return on investment.
Following a proven methodology, SAP employs the Customer BTP COE Management framework, which can serve as a guide for establishing your own Customer BTP COE.
Customer BTP COE Framework
The objective of the Customer BTP COE Framework is to assist organizations in establishing a BTP COE within their organization, taking into account certain pre-requisites. This section provides a holistic overview of the Customer BTP COE Management framework, elaborating on the interdependencies between the different layers, while offering insights into areas such as BTP Strategy, BTP Architecture & Services, BTP COE Governance and Organization, Processes & Tools, and People & Skills. With this framework, you'll gain a better understanding of the initial parameters required for the establishment of a successful Customer BTP COE.
The paragraph below guides customers through the Customer BTP COE framework (Figure 3) and its various sections:
· Customer BTP Strategy
· BTP Architecture & Services
· Organization and Governance
· Processes and Tools
· People and skills
The "BTP Strategy" section explains how innovation is implemented to improve business processes and generate tangible business value. The "BTP Architecture & Services" layer refers to building a BTP architecture based on archetype chosen.
The "Organization & Governance" section provides the necessary structure for introducing the latest technology to address gaps in business processes, improve these processes, and glean meaningful insights from data across the organization. "Processes and Tools" describes how the Customer BTP COE operates and delivers its services to the business.
Lastly, the "People and Skills" dimension refers to the design of the overall Customer COE organization and how the roles, skills, and staff are aligned to meet business objectives. For a business driven by innovation, it is crucial to establish and manage the entire Customer BTP COE structure holistically, as various functions are interconnected..
Conclusion
We conclude this section by elucidating the role of SAP BTP in an organization, and how the Customer BTP COE team can assist in achieving an organization's innovation goals. We also discussed the broad BTP usage archetypes based on customer needs. The Customer BTP COE framework is designed to incorporate critical elements through best practices.
In our next blog, we will delve deep into the BTP and BTP COE topics. See you soon!
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