The Cloud Powers Innovation For Industry Leaders – From Automotive To Retail

Pat Bakey

The need for speed has trumped the need for a picture-perfect IT environment; iterative design is now a premium. As a result of this shift, the cloud has soared and become the centerpiece for digital transformation. Businesses across industries have recognized its immediate and long-term benefits, which include accessibility, scalability, security, reliability and, most importantly, agility.

This transition naturally began in industries operating closer to customers, such as retail and financial services, that recognized an immediate need for these benefits. It also typically focused on discrete application and business areas like customer- and people-centric processes. However, the impact of the digital core is now being felt in machinery-intensive sectors where the cloud’s benefits were not immediately obvious; think manufacturing and automotive. The impact of cloud is also being felt in core end-to-end business processes spanning the entire internal and external enterprise.

What is driving this expansion? The insatiable appetite for business innovation, of course, and the foundation it sets for true digital transformation. Businesses need to adopt and scale high-value use-case scenarios involving artificial intelligence, machine learning, and a wealth of other advanced technologies. These are now considered competitive necessities to simultaneously meet Industry 4.0 standards and maintain a customer-centric focus. Agility and innovation must span the entire value chain, across the entire enterprise.

Industry-specific cloud optimization (which SAP Leonardo is built on) has fueled new business models, product classes, and industries altogether, delivering new value to customers and shaping the future marketplace – all considered major benefits. The tech and automotive industries alone – once separate entities entirely – have merged to give rise to the connected car industry that thrives on the Internet of Things (IoT) and machine learning. Through unique combinations of the latest advancements in artificial intelligence (AI), analytics, machine learning, IoT, and blockchain, industry players have never had a greater opportunity to reimagine their offerings and reinvent their fields.

Here are a few industry examples of this phenomenon taking place today:


Broadening the limits of travel distance and speed is an intensive area of focus in the transportation industry. High-speed rails are one solution, but carry unique challenges that service providers must address. Trenitalia is an excellent example of an industry leader adopting new-age technology to address a deep-rooted problem in its line of work and lead the field. Transporting 2 million passengers a day across 250 million kilometers a year places a significant strain on infrastructure. Operating a fleet of over 30,000 locomotives – a maintenance nightmare waiting to happen – Trenitalia embraced the Internet of Things, analyzing data from thousands of sensors linked to equipment to monitor key performance indicators like usage wear.

Trenitalia’s efforts capture the balance and response that transportation companies of the future will have to strike to continue pushing the logistics needle. Greater feats of speed and distance will require innovative uses of the IoT and, more importantly, a digital core capable of handling this type of workload. While the immediate benefits focus on greater asset optimization and overall efficiency, the ultimate benefit is a greater customer experience and sustained loyalty of the business and recreational traveler.


Automotive sales once took a single form: visiting a car lot, speaking with a salesperson, test driving, and, if the product met the customer’s expectations, making a sale. Digital technology has disrupted this single-point-of-entry system, enabling an end-to-end omnichannel experience that allows customers to have greater participation in the process, starting with the car’s design. As one of the world’s largest auto manufacturers, Nissan Motor recognized this shift and developed a digital innovation platform by combining the power of the cloud, Big Data, IoT, and enterprise mobility. As a result, Nissan has connected the end-to-end supply chain – from suppliers to consumers’ homes – and created new opportunities for retail without inventory and with better demand-supply matching and customer-centricity using data analytics.

This investment in a cloud customized for automotive translated to increased sales and enhanced quality for customers and curated a stronger brand power – all metrics that automotive manufacturers must flawlessly address to succeed moving forward. Big Data is now the best car sales rep on the lot.


Similarly, the retail industry supply chain is now omnichannel in form, and success is based on serving the “segment of one.” Customer point of view must lie at the center of every business decision, and technology has helped redefine the boundaries of what was possible in retail years ago and meet this customer-centricity standard. In-store beacons, augmented reality, and similar technologies allow retailers to bring new meaning to personalization and customer service, value-added servicing, and differentiation – all competitive standards in retailing made possible today by smart technology powered by the cloud.

Lidl, a global discount supermarket chain, has responded to the changing grocery marketplace characterized and measured by offline and online convergence, customer-centric marketing, shopping experience, and data-backed personalization. Using a digital core scaled to meet these industry standards, Lidl has point-of-sale insights that help its business reach shoppers across any channel – social media, in-person, and online – and create enhanced points of brand interactions for loyal and future customers. The days of putting printed coupons by the door to attract customers are over. The future of retail starts and ends with getting to know and interacting with customers using data.

Connecting the dots

With all of this innovation in mind, one misconception I often see from CIOs and other IT decision makers is that they mistakenly believe that digital transformation and cloud adoption must be an all-or-nothing process. Regardless of where your business is on the digital maturity curve, it is important to invest in technology that expands your organization’s digital IQ, capabilities, and skills. The cloud is an invaluable tool for reaching this state, and it is never too late to begin your digital transformation journey. Join me in exploring ways the cloud can be adapted and used to shape the future of your industry!

Follow #SAPIABC on Thursday, June 22, 2017, and @SAPIndustries on Twitter to hear what industry analysts think of SAP industry solutions.

Pat Bakey

About Pat Bakey

Pat Bakey is the president of Industry Cloud for SAP. He is responsible for the industry cloud footprint, which covers 25 industries globally, the finance and extended supply chain lines of business and the go-to-market execution of SAP Business Suite 4 SAP HANA (SAP S/4HANA). By offering prescriptive cloud road maps by industry and lines of business, the Industry Cloud organization serves every customer in every cloud model (private, public, and hybrid), for any business size, anywhere in the world, enabling SAP’s customers to approach their digital transformation through an industry lens.