From the perspective of digital transformation, the combination of next-generation ERP solutions and cloud platforms provides an opportunity to focus on core operations and essential business processes while at the same time addressing with agility the need to be innovative and reactive to changing business needs. However, this approach is not achieved with a single solution that you can plug, play, and walk away. Instead, it requires a level of strategic planning that is realistic and considers relevant areas of the business.
Some businesses, such as the Colgate-Palmolive Company, are co-innovating many breakthrough, win-win solutions by identifying the intersections between their technology road map and critical business needs. Prioritizing innovation efforts allows organizations to accelerate their projects and transform operations more efficiently – all while staying ahead of the competition.
How do they do it? It’s all about extending the digital core by addressing four fundamental principles.
1. Leverage existing investments as building blocks
By now, most companies rely on a legacy landscape of multiple applications, which may include analytics, data management, enterprise resource management (ERP), and customer relationship management (CRM). While it’s easy to lose these digital tools in a wave of IT transformation and innovation, using every investment as a building block helps move the business closer to its full potential and strategic vision.
For example, if customers demand 24×7 access to support services that are automated, personalized, and human-like, all ERP and CRM information must be connected enterprise-wide. Plus, the systems need to capture and process data instantly to guide a chatbot or machine-learning algorithm to help ensure the right actions are triggered to resolve issues quickly.
The best approach to accomplishing these capabilities is through a two-tier IT model, or digital twin, of the digital core in a cloud environment. Doing so energizes the rapid development of new business models or processes, while steadily evolving core systems to maintain stability and high-quality data management.
2. Fine-tune enterprise information management practices
The need for integration is not just about pulling together disparate data scattered across the business; it’s also about keeping that intelligence secure, high in quality, and fully governed. Attentively addressing these elements of enterprise information management is vital – more now than ever before – to root out pockets of redundant data siloed in multiple resources, prevent access abuse, and ensure users leverage the same source of truth.
By creating a trusted data foundation, companies can support next-generation application extensions. They can innovate and apply the full potential of their data assets at a much faster pace to deliver immediate, targeted insight; act in the moment; and make decisions that are complete, timely, and accurate. Processes are also streamlined with cloud platforms, mobile devices, and the Internet of Things, making operations more efficient and effective from the inner core of the business to the outer edges of the global network.
3. Optimize the use of a trusted data platform
For every business that runs an ERP system with either one or a series of databases, information access is becoming a highly complex matter. Data volumes are increasing, analytics skills are becoming more mature, and more applications are being integrated. There are also cases when companies just want to dump large data sets and push it downstream to another system, such as a third-party data warehouse.
For years, process integration and orchestration technologies have been the de facto practice to address these realities. But this is beginning to change as trusted data platforms prove to be a more practical solution. Users can access real-time data with ease and speed – anytime, anywhere, and on any device. And when distribution rights are granted to users, every employee gains the standard space and skillset to collaborate, innovate, and solve problems together.
4. Extend with a cloud platform
Gone are the days when purchasing a license, activating modules, and building customizations were the norm. Deploying new functionalities requires considerably more rigor. When managing a landscape that is connected across multiple environments and applications, any additional modifications can bring tremendous complexity – making the implementation of future innovations challenging.
All applications – legacy and new – are undergoing a fast-paced development cycle with a lot of movement in how capabilities are developed, delivered, implemented, and leveraged. The degree of change is so massive that the full benefit of these technologies is best realized with the adoption of a fit-to-standard digital core. This means that businesses should galvanize and extend functionalities and applications through a cloud platform and with little customization as part of a company-wide, intelligent ERP suite.
Expanding the digital core is an investment in future growth
As the average lifespan of established companies continues to slope downward from 60 years to just 18 years within a generation, 57% of CEOs worldwide are under considerable pressure to achieve transformational change, according to IDC. And for many of them, the best tactics include using the latest technologies to redefine business models, mitigate risks, comply with stricter and more punitive regulations, and take on opportunities in real time.
But let’s face it: isolated approaches to acquiring and adopting technology only lead to significant delays (or worse, failure) to realize transformational outcomes.
By extending the digital core, organizations can accomplish the secret to remaining competitive: thinking far beyond the four walls of traditional enterprises. Daily operations are optimized and stabilized. The entire business works together in full alignment. But more importantly, companies can quickly deliver flexible applications that meet the ever-changing needs of their employees, customers, and partners – setting the stage for continuous growth.
Discover how your business can achieve operational agility and stability with SAP S/4HANA and the multiple cloud services of SAP Cloud Platform. Read the brief “The Perfect Marriage of Agility and Stability for Today’s Demanding Digital Landscape” or visit our website to learn more.
Tune into our on-demand webinar “Extend the Digital Core” to meet business needs featuring SAP experts.