Prioritize Commodity Over Diversifying Processes: Top 5 Best Practices Of Best-in-Class Digitalists, Part 3

Alexander Greb

Part 3 of the “Top 5 Best Practices” series exploring the mindset and methods leading to a successful journey to the digital enterprise 

A few years ago, I was a member of the strategic initiatives council for a major German car manufacturer. At the end of each year, there was a conference in which board members of SAP and the manufacturer, as well as the council and representatives of several strategic programs, came together to discuss the progress, direction, and roadmap of these initiatives.

I remember a conference around five years ago where one group was having a hard time. The internal-customer working group, whose task was to build a strategy for the consumption of cloud services, was heavily challenged by the then-skeptical CIO who wanted to know an easy method for classifying processes that could be put into the cloud immediately.

Turning to me, he asked for my opinion. My answer was very simple: Any processes that are commodity are candidates to be put into the cloud immediately. It makes absolutely no sense to run processes for a car manufacturer, which works the same as a food supplier or a chemical company, in an on-premises environment where everything has to be started from scratch even though it has already been done somewhere else. It is much wiser to profit from the experience of others and take advantage of best practices offered through Process-as-a-Service. The most likely lines of businesses to qualify are human resources, travel, procurement, sales processes, and finance. Naturally, those are the areas where modern cloud solutions offerings are the strongest.

The areas where you set yourself apart from the competition, where you want to up the game and define yourself: those are the areas where you want to individualize. In many cases, you’ll do that best either in on-premises or single-tenant cloud ERP landscapes.

That this kind of separation is almost a natural law is clearly visible in the area of process support via artificial intelligence or machine learning. In commodity processes, the application providers invest heavily in automation of repetitive tasks, but in differentiation processes, the main focus is on gaining insight into action to enable process excellence.

Separating those two kinds of processes is the key to a fast and efficient digital transformation. Having done that, you can then concentrate on those processes that really matter for you, that set you apart from your competition – your differentiating processes.

Stay tuned for the next post in the “Top 5 Best Practices” series exploring the mindset and methods leading to a successful journey to the digital enterprise.

Alexander Greb

About Alexander Greb

Alexander Greb is customer advisory lead for ERP strategy in the Middle and Eastern European region at SAP and founder and host of the "SAP Experts Podcast," a leading global technology podcast. He has more than 15 years of processes and technology experience, serving as a consultant, program lead, and presales representative at various leading companies. Alexander is an expert in pitching and explaining the value of SAP S/4HANA and the concept of "Intelligent Enterprise" to SAP customers and partners in workshop and major events and conferences. As a passionate thought leader on sales strategies and methodologies, he not only shares his insights on his podcast, but also here on the Digitalist Magazine. Follow Alexander on LinkedIn.