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Simplicity in a Digital Economy

How Cloud Qualities Enable Business Transformation in Any Industry

by Sven Denecken | SAPinsider, Volume 16, Issue 2

April 1, 2015

Learn from SAP’s Sven Denecken about how cloud technology is enabling business transformation on an unprecedented scale. Based on SAP’s “run simple” strategy, innovation through the cloud is the catalyst for digital transformation and the reimagination of business processes.

 

From the enterprise perspective, digital transformation has less to do with technology than you might think. Digital transformation is merely a conduit for a key business benefit: It allows the digital economy to present opportunities for business innovation. With the cloud, big data, mobility, and business networks disrupting every line of business in every industry at a rapid rate, organizations stay ahead of the curve by placing a renewed emphasis on branding, customization, and the unprecedented power of the consumer in today’s subscription-driven economy.

By understanding the transformative impact that the digital economy can have on an industry, an organization can then take steps to ensure it is agile enough to proactively influence change. In the past, a technology-first approach was often required, but it also required so much time and so many resources that it took focus away from the business benefits. Today, the focus is on technology that can help reimagine business processes that help drive innovation. And most often the pivotal technology that helps organizations achieve this is the cloud.

Innovation Starts with the Cloud

The cloud is a perfect vehicle to drive innovation in the digital economy. With mobility, big data, and business networks at its core, the cloud already has the main components that are helping businesses rethink how they need to reinvent themselves as service-first organizations. While innovation can of course exist outside of the cloud, recent history has shown that the spark of innovation is usually lit via the cloud first; the agility and speed to market that are indicative of a cloud environment are the main
factors in this dynamic.

SAP’s objective is to create an environment that helps organizations optimize how they capture innovative opportunities — cloud first, but not cloud only. Companies need and want to consume innovation at their pace, not at vendors’ desired speed. The partner ecosystem will be a key contributor to this change, which will happen beyond the technology and application layer, by adding tasks and opportunities for business process transformation.

This is what we mean when we say our goal is to help companies “run simple”: Cloud-based solutions help reduce complexity and redundancies that are the natural by-products of massive on-premise infrastructures and technology limitations that until recently have led to higher stacks and a murkier path to value. But reality is a hybrid environment, not a “rip-and-replace” approach with cloud-only options.

Our strategy is comprised of three main components that, taken together, provide organizations with a clear path toward the “run simple” methodology, as well as a way to experience the cloud how they want it and when they want it. Once an organization identifies the business processes that will most benefit from running in the cloud, a combination of deployment options ensures the most effective scenario.

To help organizations make this transition, SAP recognized three key needs. First and foremost, organizations need an open platform. Second, they require innovative applications that can flourish on this platform. Third, they must redefine business-to-business (B2B) as a business-to-consumer (B2C) concept in line with the service economy by including networks as an integral part of this open platform.

 

To help organizations make the transition to the cloud, SAP recognized three key needs: an open platform, innovative applications, and the inclusion of networks.

As Simple as 1, 2, 3

By now, most SAP customers know that SAP HANA is the default innovation platform for all SAP solutions moving forward. This is key to driving the simplicity that defines SAP’s strategy. From the technology side, SAP HANA, as the de facto standard in-memory platform for business, allows a new-generation architecture of enterprise software. With SAP S/4HANA, we now also offer our SAP Business Suite rearchitected for SAP HANA, leveraging not only the power of the platform, but all main elements of the digital transformation as well. But even more important is the innovation that can spring from technological breakthroughs and advancements such as multitenancy, smart data integration, dynamic tiering, a reduced hardware footprint, increased throughput, and full real-time flexibility — just to name a few.

Ensuring that SAP HANA remains an open, rich development platform is very important in driving continuous innovation, which is why SAP HANA (available for on-premise and as a platform as a service [PaaS] in the cloud) is an open, standards-based platform that provides customers with an avenue for integrating existing solutions, and gives partners and customers a unique PaaS vehicle to develop innovative applications, collaborate, and integrate with other technologies. Partners in particular can develop applications with their own intellectual property on this platform, enhancing the scope for clients and assisting in a smooth transition.

This is inseparable from the application layer as part of the overall strategy, which is about leveraging the platform to drive value through non-disruptive applications that enable easy migration, offer integration across a systems landscape regardless of deployment model, and have a consistent and intuitive user experience with SAP Fiori. This includes existing SAP public cloud assets such as SuccessFactors, Ariba, hybris, and Concur, reinforcing this 360-degree strategy that provides SAP customers solutions for specific business challenges in the deployment model of their choice.

Ariba and Concur, specifically, show the increased power of the network — which has evolved in large part because of the cloud. Whereas a marketplace was once defined in terms of a point-to-point B2B or B2C relationship, it now extends to a broader and more strategic networking concept. Networks are of course not a new idea, but technology is in place that is forcing the enterprise to think about its business processes beyond its four walls. The ability to integrate outside services with transactions in real time is one powerful example that shows why networks will continue to gain steam as a key business strategy.

SAP Simple Finance is one example of the SAP digital transformation strategy in play. While there is technology behind the simplification — such as a lack of aggregates and indexes that helps reduce complexity — the more important question for the customer is, “What does this simplification bring?” The user interacts with SAP Fiori as a seamless and intuitive interface on the front end, but not to be overlooked are the significantly reduced data footprint, higher throughput, and enhanced flexibility that the technology enables to open up innovative and transformative opportunities. And the outcome is even more impressive: Think about closing your books in real time or connecting a subsidiary or acquired company via SAP Simple Finance in weeks.

The established ecosystem from SAP, as well as the growth of a new one in the networked economy, are key to achieving this digital transformation. Co-innovation with customers and partners at every stage of this journey is crucial to set the right priorities. 

It has been said before, but “simple” is not a synonym for “easy.” SAP lives and breathes finding new ways to reduce complexity in our platform and offerings. And how SAP is currently helping customers embrace the digital transformation with an integrated platform, application, and network strategy in a cloud or on-premise environment is unique in the enterprise software realm. Innovation is not exclusive to the cloud, nor is it exclusive to SAP. However, both are good places to start.

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Sven Denecken
Sven Denecken

Sven Denecken is Senior Vice President, Product Management and Co-Innovation SAP S/4HANA at SAP SE. In this role, Sven assesses customer and market requirements and supports the SAP S/4HANA strategy. Via co-innovation projects, he discovers key trends and best practices in application of new technologies.



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