Without Maturity, You Could Disappear in the Digital Economy
No business will be untouched by the Digital Economy. It affects the way organizations interact with customers, suppliers, and employees; and, as we know, it even stimulates alliances with competitors. As we move deeper into our digital adaptation journeys, the skills and expertise needed to overcome obstacles and recoup from setbacks are essential. To manage the digital adaptation process, corporations need ‘digital maturity.’ It is dramatic to say that we are in an ‘adapt or die’ scenario, but there is much truth to that claim. Perhaps a more accurate statement is this: it takes digital maturity to lead an organization through the adaptation process. As we have discussed before; digital adaptation enables an organization to predict or perceive quickly evolving business needs, and adjust through new combinations of technology, process and workforce management. What is digital maturity? The term comes from the field of psychology. It means that ‘maturity’ is a learned ability to respond appropriately in a particular environment. Digital maturity is about adapting an organization, so it competes effectively in a digital environment. For comparison, it might be useful for readers to see how 3500 business executives lined up on a digital maturity scale, from 1 to 10: An international maturity study conducted in 2017 by MIT Sloan Management Review, in collaboration with Deloitte University Press, reports that: 34% (1190) of the executives were in the early stages of digital maturity; 41% (1435) were developing, and 25% (875) were further along in the maturing process. If those statistics are reliable indicators of digital evolution, the maturation process is well underway. According to the MIT Sloan Management Review article referenced above – Achieving Digital Maturity; the leaders who exhibited the highest degree of digital maturity were able to implement systemic changes within their organization, focus on the long-term, start with small projects and evolve them into enterprise-wide projects, and secure the talent to implement the company’s digital vision. To accomplish all that, those leaders had help. Digital Maturity and SAP Based on many SAP projects over the years, we divided digital maturity into four dimensions: Leadership Maturity and Capability Data Accessibility and Accuracy SAP Technology Systems and Processes Workforce Readiness and Culture Leadership The digital economy is focused on meeting the unique needs of each customer. For that reason, digital adaptation is about tailoring business operations to be more human. Consequently, mature leaders work from the premise that digital adaptation is about building relationships, not about technology. As a result, seasoned leaders construct business models that cater to the needs of people first and avoid getting hung up on the limitations of their in-house systems. SAP announced that it collaborated with the European Research Center for Information Systems (ERCIS) to create a maturity model that enables leaders to assess, track and develop the digital skills their in-house systems need to function in the digital economy. The maturity model helps the leaders prepare for a digital future by defining a skills development strategy and reinforcing the technical environments needed to keep pace with the new economy. The model is based on a survey of 116 business and IT decision makers from 18 countries, as well as a series of in-depth interviews with 24 global companies. Data Turning data into action is the cornerstone of digital adaptation. While a true statement, turning data into action is not a linear process. It requires building a sophisticated infrastructure that lets people store, protect, and analyze information. Primarily, the infrastructure enables people to access information when they want and how they want. For this reason, the mere existence of mountains of data is not enough to indicate maturity. The term data has evolved; it is now often called Big Data. However, the mystique surrounding Big Data is fading, yet it remains the primary force pushing wave after wave of digital transformation. These waves include artificial intelligence, customer experience, in-memory processing, machine learning, and the Internet of Things (IoT). SAP has been developing advanced Data Management solutions for decades, and they recently released SAP VORA (formerly known as SAP HANA VORA), which provides enriched interactive analytics on Big Data stored in Hadoop. VORA is a query engine with in-memory capabilities, and it plugs into the Apache Spark execution framework and helps to combine Big Data with enterprise data in an efficient manner. SAP Technology Like the new world economy, SAP is maturing. For the thousands of companies that leverage SAP, virtually all of them focus on business capabilities to react in real-time, forecast changes before they happen, and enable self-learning systems. In response, SAP is developing powerful new technologies that support Big Data, Cloud Computing, and Blockchain. However, maturing companies must use these new tools and adapt them to their needs to be considered mature. We mentioned VORA, but there are other technologies that SAP has to integrate HANA and Hadoop. SAP has the following tools to integrate data between those two components and choosing the right one depends on the use case being followed. ETL tools – such as SAP BODS Smart Data Access – such as SAP HANA Smart Data Access (SDA) SAP BusinessObjects Universe SAP Lumira Workforce When it comes to the workforce and talent, nothing has changed! Nothing has changed because skills, expertise, and experience have ALWAYS been highly valued and necessary in the workplace. That said, the new digital economy has many unique and complex skills that didn’t exist a few years ago, which makes it challenging to have the right people – in the right place – at the right time. The mature business knows how to find the right people and ensure that they work on the right project and how and when to partner. Within the SAP ecosystem, hundreds of skill sets are required, but which ones are most in demand now? According to Red SAP Solutions, the following skills are the hottest and will continue to be hot well into the future: SAP FI/CO (Financials) SAP S/4HANA Finance which is part of the new SAP S/4 HANA solution SAP SD (Sales and Distribution) SAP Hybris SAP Fiori SAP NetWeaver and SAP BI skills A Time for Change We are living through the Digital Economy’s version of Darwinism. The challenge for most of us is that technology and society are evolving so fast it is hard to keep up. In response, savvy business leaders, young and old, recognize the need for a proactive change and innovation mindset. With maturity comes wisdom and, in our new economy, wisdom is the best guide into the digital world. To drive the evolving economy forward, mature leaders rely on capable partners to help. It makes no sense to go it alone. SAP systems are often at the core of Digital Adaptation programs, and technical partners have been helping clients resolve complex challenges for decades. Throughout the transformation process and beyond, a partner should support the entire organization, leveraging skilled consultants when and where they are needed. Domestic, or rural sourcing, is a solution for companies that need an IT partner but want to keep the work closer to home. To learn how we can help you with your SAP challenges contact us at SAPinquiry@ruralsourcing.com.
How to Best Leverage SAP’s S/4Hana in Digital Adaptation
S/4HANA has been called the engine driving digital adaptation. That is a bold statement. However, is that statement marketing hype, or is it true? To begin to answer that question, we must understand what digital adaptation is, and what it is not. Digital adaptation is not just another wrinkle in the landscape of process re-engineering. Further, it is not a system or a piece of software that drives incremental change. Business leaders who cling to these outdated ideas soon will see an erosion of their customer-base and a loss of market position. Digital adaptation enables an organization to predict or perceive quickly evolving business needs, and make critical adjustments through a combination of technology, process and workforce management. At its most rudimentary level, digital adaptation takes an organization out of a process-defined world and into a data-driven world. Digital adaptation is based on continually delivering new value to every user, raising operational efficiency and accelerating the speed-of-business to levels never before experienced. Leaders who adapt their operations to the digital economy understand that digital adaptation requires a shift in how business is conducted, and how goods and services are delivered. SAP – Scaling UP and OUT with Digital Adaptation Before digital adaptation, concepts such as scaling up and out meant opening an overseas office, merging with another company to run more efficiently, or upgrading data storage/access infrastructure. Now, scaling up and out looks more like digitizing business processes and leveraging data to provide compelling online experiences for customers, employees, suppliers, partners, and the general public. SAP is facilitating the digital experience by helping business leaders see their entire organizations clearly and focus on operational details that help them to run efficiently. The results are improved agility and better positioning of resources to seize market opportunities. Three examples of how SAP is helping to drive the digital economy are: For manufacturing, the average dollar value of invoices is decreasing as the number of invoices is exploding In logistics, the average value inside shipping containers is going down while the number of containers transported is growing exponentially For new economy companies like UBER, AIRBNB, and NETFLIX, these businesses are based more on the user-experience rather than the product or service The digital economy is stretching the supply chain and challenging financial systems. SAP is evolving with the new economy and delivering advanced user-experience and functionality for Accounts Receivable, Inventory Management, Accounts Payable, and Available to Promise functions. To answer the question posed in the first paragraph of this blog – Yes, it is true, SAP technology is the engine that drives digital adaptation. S/4HANA, Fiori and Personas are proof! For companies currently using SAP systems or planning to acquire new SAP technology, an entirely new version of SAP ERP is available to support the transformation to digital. S/4HANA is designed to significantly streamline the adaptation process by enabling businesses to be immediate, intelligent and integrated. S/4HANA – SAP’s Digital Core: The next-gen of ERP supporting operational excellence, business process automation, and seamless integration with core business systems. S/4HANA is a complete rethinking and remediation of SAP code to leverage maximum performance of their in-memory HANA database. It is designed to simplify the underlying database that slowed down R3 and ECC and made it difficult to support the high-speed computing needs of the digital economy. S/4HANA eliminates the locking and latching problems and enables dramatically higher throughput. Moreover, aggregated indexes are gone, status tables and headers are gone, and the entire database collapses into a single digital record. Making S/4HANA easier to support, a single version of the facts, and offering three environment options: off-premises, on-premises or hybrid. Add to the significant changes in S/4HANA, SAP has replaced the old traditional GUI screens with new Fiori applications and Screen Persona UIs to improve user-experience and streamline business tasks. Fiori and Screen Personas: SAP’s reimage for a greater user-experience providing personalized and simplified UX of SAP applications. Fiori and Screen Personas deliver web and mobile applications and UIs that are role-based, consumer-grade user experience across all lines of business, tasks and devices. They simplify data access and streamlines tasks for improved business processing. An intricate system like S/4HANA requires sophisticated and complex skills to design, install, configure and manage. However, to compete in the digital economy, this level of computing power is not just helpful, it is essential. You Do Not Need to Go It Alone? To thrive in the digital economy, company leaders must acquire the tools, expertise, and workforce management skills to adapt. Whether these specialized tools and skills come from internal sources or outside the organization, no company can go it alone. Installing, configuring, and migrating complex systems like S/4HANA, Fiori, Screen Personas, Leonardo, or Business Objects Planning & Consolidation require an enormous amount of expertise. But…companies desiring to move forward with digital adaptation plans are faced with a shortage of technical resources, difficulties balancing the rigors of business transformation with their employees’ daily routines and managing the often-ignored step of QA & Testing. In a world where the Internet blurs competitive differences, finding a partner who ensures that digital adaptation technology yields real-time operational capabilities, and then supports measurable competitive advantages, is essential. To learn how we can help you with your SAP challenges contact us at SAPinquiry@ruralsourcing.com.