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Enabling the Real-Time, Customer-Driven Enterprise

by Dr. Peter Zencke | SAPinsider

October 1, 2000

by Dr. Peter Zencke, SAP AG SAPinsider - 2000 (Volume 1), October (Issue 2)

Dr. Peter Zencke shares his insights on the goals and challenges associated with transforming an organization into a real-time, customer-driven enterprise, where suppliers, partners, customers, and communities are linked via the Internet. He discusses solutions as a way to deliver the essential building blocks that enable a real-time enterprise to manage and service customer relationships, build faster and more efficient supply chains, and drive all this to the bottom line.

As the global Web-driven economy continues to expand, we are starting to witness a profound transformation in the relationships that enterprises maintain with their customers, suppliers, partners, and even their own employees. The old "functional organization" archetype of a decade ago - characterized by companies with inward-looking organizational structures and internal processes - is rapidly vanishing. Arising in its place is a new model of the outward-looking enterprise, characterized by a high focus on customer needs, much more flexible organizational and process structures, and a strong emphasis on establishing resilient networks across the supply chain.

SAP Insider asked Dr. Peter Zencke to share his insights on the goals and challenges associated with transforming an organization into a real-time, customer-driven enterprise.

Q. What key challenges stand in the way of a company's transformation into a real-time, customer-driven enterprise?

In the past, the IT organization - with help from business process engineers - was, for the most part, the party responsible for developing a company's commerce/communications solutions. That model is no longer valid. IT can no longer afford to be a closed club. IT departments must now share responsibility for the operation and success of customer-driven solutions with a variety of internal and external organizations. And yet, at the same time, IT is still responsible for tying everything together! You can't build a single isolated solution for Sales, another one for Manufacturing, another for Service, and so on.

In today's competitive climate, enterprises require fully integrated information systems. So in addition to understanding all the prerequisite technology, IT organizations now have to grasp sophisticated business concepts, organizational complexities, and the diverse roles of people inside and outside their company. Mastering business organization and its ecosystem is much harder than mastering mere technology!

Q. Are you suggesting that the technical components required for this transformation are easy to set in place?

Not at all. To operate and maintain a viable collaborative business process, two omnipresent imperatives must be achieved: real-time functionality and availability of service. Neither technology prerequisite is trivial. Real-time functionality appears to be the less elusive goal. This can be addressed with good engineering. But what's the key to achieving availability once the IT people don't "own the solution" end-to-end anymore? How can IT departments even attempt to guarantee high reliability across a collaborative e-business solution that, by definition, is not fully theirs? At first glance, it doesn't seem feasible.

In my opinion, it gets back to an IT organization's ability to understand the business of its customers and suppliers. This is why SAP is working so hard to help standardize business processes, whereby we're actually defining the semantics of an application, not merely interfaces to an application. Standard business processes forge the foundation that enables you to link internally and externally developed solutions with business practices that cut across your enterprise, as well as those of your suppliers and partners, so that you can deliver what your customers need and expect. In effect, you empower your partners to help you satisfy your customers' requirements. In this collaborative Internet age, we're well beyond the point where any one organization can accomplish this on its own.

Q. Are there concrete steps that an IT organization can take to help facilitate the transformation to a real-time, customer-driven enterprise?

A number of elements - both strategic and technical - must be in place: Of course, it takes end-to-end integration of both sales and service. It takes personalization and special offers for your customers so that you create strong "sticky forces" for their return. It requires you to have a very robust and efficient network of suppliers and systems. Most critically, you must maximize both the reliability and the speed of your processes - only then can you offer competitive pricing that stays competitive.

Q. Would you say that "customer focus" is the driving force behind

Absolutely. And it's one that really requires a mind change for many e-business developers. dispenses with the much-too-internalized focus of "this is my product, this is my solution" thinking. Responding to customer needs and customer values requires you to be flexible. Maintaining a keen, responsive customer focus requires agility, openness, and an interactive role for every employee in the company. delivers that flexibility.

Ultimately, SAP's vision is to enable the real-time enterprise, where suppliers, partners, customers, and their communities are transparently linked via the Internet in one-step business processes. To that end, solutions deliver the essential building blocks that enable a real-time enterprise to better manage and service customer relationships, build faster, more efficient supply chains, and drive all this value to the bottom line.

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