The competitive edge of digital solutions
Businesses are evolving, with current events and competition serving as the catalysts for technology adoption. Events from the pandemic to the ongoing war in Ukraine have exposed the fragility of global supply chains. The topic of sustainability is now on every board room agenda. Industries from manufacturing to retail and everything in between are exploring the latest innovations like process automation, machine learning and AI to identify potential safeguards against future disruption. But according to a recent survey from Boston Consulting Group, while 80% of companies are adopting digital solutions to navigate existing business challenges or opportunities like the ones mentioned, only about 30% successfully digitally transform their business.
For the last 50 years, SAP has worked closely with our customers to solve some of the world’s most intricate problems. We have also seen, and have been a part of, rapid accelerations in technology in response. Across industries, certain paths have emerged to help businesses manage the unexpected challenges over the last few years.
The Secret to Success in Transformation
In the face of increasing competition and shifting customer demands, digital transformations are the key to help support businesses streamline operations. Business process, culture, and how receptive an organization is to change all help ensure success. Any plan should focus on these three areas:
- Business process transformation: By changing and adapting core processes and workflows, an organization can better manage shifts in business goals, customer demands and the competition. Updating the process offers a business the framework it needs to support larger organizational changes.
- Business model transformation: Business model transformation digs deeper to understand the needs and opportunities in a specific industry. In the auto industry, for example, there are clear customer demands for centralized and automated subscription-based business models and billing processes. This is a complete deviation from traditional car buying as many of us know it.
- Organizational and cultural transformation: For digital transformation to be successful, it must align itself with the culture and values of an organization. In a recent interview with Protocol, Patrick Dineen, CIO of Nielsen, spoke of the different ways employees were engaged to ensure they were both comfortable with the impending changes and understood the business benefits of Nielsen’s transformation. If the internal support is not there, it could affect productivity and negatively impact morale leading to a loss of revenue, competitiveness, and brand value.
A fireside chat with Nielsen youtu.be
A Resilient Reimagined Supply Chain
For the past several months, supply chains have been a topic of conversation at the dinner table. Most commonly the cause of bare shelves or shipping delays, what was once a “behind-the-scenes” organizational function is now a huge differentiator amongst companies. Trade challenges, single source dependencies and an increase in consumer demand for personalized products have highlighted inherent weakness in current supply chain models. Through innovations that improve supply efficiency and transparency, companies are able to deglobalize and break down their supply chain into smaller, more independently run entities. By making the investments in supply chain technology now, companies will be better equipped to predict and respond to disruption in the future.
But the benefits don’t end there. By leveraging digital technologies and digitized data, companies can also adjust how they engage and interact with customers and empower employees with intuitive tools. For example, SAP partnered with Apple to launch six iOS apps this year, two of which are out now, that made warehouse employees more efficient and productive. Warehouse operators can now read bar codes from a distance and in low light using their built-in iPhone cameras. The technology can even make sense of damaged, blurry, irregular, or small bar codes. Having access to accurate data in real time allows smart decisions to be made quickly.
Move Industries from Talk to Action on Sustainability
Between shifts in consumer behavior and federal sustainability requirements and guidelines, sustainable innovations will dramatically reshape entire industries. The transformation taking place in automotive manufacturing companies right now is a great example. General Motors has committed to manufacturing only electric cars, vans, and SUVs by 2035. Meanwhile, German automaker Volkswagen has committed to convert more than 30 models to electric power within the next four years. In a recent SAP Insights global survey of business professionals who are knowledgeable about their organization’s sustainability goals, reporting methods and actions, respondents said most of their companies are taking at least some steps toward greater environmental sustainability. While companies understand the need to prioritize sustainability to avoid being left behind, many still struggle with how to put their vision into action.
When we consider some of the biggest challenges our own customers are facing in this space, often times it comes down to the methods they are using to capture the relevant data. Sustainability is about transparency and accountability. But many companies are still using spreadsheets to manage their sustainability practices. Without auditable data, integrated with financials, sustainability efforts run the risk of remaining a PR exercise. When companies invest in maintaining their “green ledger” with the same commitment they have to their financial ledgers, they will be able to connect their environmental, social, and financial data holistically so they can steer their business towards sustainability.
At the end of the day, what gets measured, gets managed.