We are often asked the question just how does an organization achieve Digital Transformation? My first response is that Digital transformation is a journey and not something that just happens overnight. After all, did your demand for immediate access happen overnight when you bought your first smart phone? The answer would be no. It was a learned trait that has been perfected one app at a time.
Similarly, the journey of digital transformation starts with a foundation or access and builds upon that technology over time. If we understand the goal, or end vision, of what we are trying to achieve we can then back into what it is that will get us to our desired state. Let’s start with the vision of building a system and implementing processes that better support Augmented Intelligence (AI). Please note that in this case augmented intelligence is not replacing humans, it is purely building internal systems that gain efficacy and support better decision making. You are enabling your business to focus more on what matters and less on the routine tasks.
There are three main building blocks, outlined below, to achieving this augmented intelligence.
Building Block 1: Digital Core
It will be very challenging to transform the way you do business without a solid foundation of the digital core. Given that this is the base or the core of all interactions, it is critical that you provide a solid foundation that you can continue to build off and expand as you continue your journey. Without a solid foundation, the rest will be more costly to maintain and worse case may start to crumble as you place more emphasis on surrounding systems.
Building Block 2: Platform
The cloud platform is where the game is currently being played. Although they have to be part of the digital core, it’s not about applications, it’s about the platform for agile growth. This platform not only allows you to take advantage of cloud based products, but it provides an area for both in-house and external development. This is a kind of an app store, if you will, where you now have the capabilities to build and grab best in case applications with the click of a button.
Building Block 3: Big Data
Once you have a digital core and a proper platform around it, you can now start to store and leverage the “Big Data” that is now at your fingertips. Once you have that big data, you can use it to write applications and programs to augment your intelligence.
What is the value to you?
So what? Why should you care? At a macro level the advantage of this digital transformation journey is all about what we call RICE (Revenue, Innovation, Cost, and Experience).
Revenue increases through new revenue streams like eCommerce (Hybris) and new ways of going to market with order entry, product diversification, and overall simplification.
The goal in any digital transformation should be to drive incremental and new revenue channels through these building blocks.
We’ll come back to Innovation in a moment. For now, I want to talk about lowering Costs. For example, with applications such as Ariba or Ariba Snap, you get better procurement and better aggregation of your spend. It will take your costs down by not only leveraging new products but gaining efficiencies with the core.
The cloud platform and the digital core should drive down the cost of doing business.
New technology, such as Fiori (with its better user interface), gives employees a better user experience. This native, self-guided functionality inherited as part of this product suite now provides a better experience for your employees/internal customers as well as reduces the overall learning curve and user acceptance. Then, adding applications like vendor portal, customer portal, and external facing eCommerce give your external customers and vendors a better user experience.
S/4HANA increases acceptance, adaptability, and overall user experience for both internal and external customers.
Innovation increases throughout this entire journey and should be recognized as incremental improvements are made. Each building block brings about more and new opportunities for innovation.
This journey of digital transformation is generally not something that happens overnight. To increase revenue, to decrease costs, and to increase user experience, it’s all about continuous improvement and innovation through leveraging the digital core and digital platform.
Why jump now?
As indicated, digital transformation is a journey. It is not something that can be realized overnight. For those that are choosing to make the jump now, they will be more agile to respond to market conditions and will quickly reap the benefits of digital transformation. The challenge will not be placed on those that choose to jump now, the challenge will be moved to those who waited and are not able to catch up to those that already made the jump. Are you ready?
Take the first step in the journey by migrating to the digital core. If you would like help mapping your journey, we have multiple S/4HANA workshop options available to you. It will be easy. Let’s make the jump together.