Defining The Digital Core: From Traditional Processes To The Grassroots Digital Enterprise

Rudi Hois

By now, everyone has heard – if not experienced – the benefits of digital transformation in some form. Companies are selling directly to the consumer, even going as far as creating the ultimate personalized experience by selling single products directly to 1,000 customers directly instead of sending 1,000 of one product to a distribution channel. Even though the value of each individual transaction is decreasing, the brand’s perceived value goes up. Why? Because consumer needs are met in real time and this is worth a premium.

But what happens when this level of customer experience collides with the slow, cumbersome operational processes of a traditional business? Unfortunately, this is the reality of many companies. Still pushing data from the front office and eventually to the back office, they fail to meet increasing expectations and demand because complex operational processes interrupt what should be a seamless customer journey.

Technology is learned at the point of its inception, and after a short while, best practices emerge and become established doctrine. As we’ve learned, this approach stalls innovation and squashes fresh thinking. And when innovation leadership is left to the wayside, the business suffers until the time the technology is replaced by its successor. In application development, in-memory computing is that successor that allows fundamental rethinking of how applications can be architected.

It’s time to rethink business models and processes

In our pre-digital past, decision making was based on data preparation, analysis, and generation of paper-based reports – most likely in the form of spreadsheets and made from scratch. For every second that information aged, decisions became less accurate and responsive to real-time market dynamics.

Take the traditional warehouse model, for example. When a product leaves the warehouse, it’s reported in a local system. Since uploading through batched interfaces were typically generated during off-business hours to avoid conflicts with users, that information was delayed. If the product was shipped on time, no problem. However, if an order was never fulfilled or routed improperly, the problem couldn’t be resolved before the customer noticed.

Lost sales, frustrated customers, and poor inventory turns – this is not the customer experience we expect. Simply put, old technology cannot live up to the promise of the digital economy.

The solution: A digital core 

Clearly, digital transformation isn’t about just delivering a customer experience. Rather, it’s a cyclical dynamic where processes and capabilities are constantly changing based on customer behavior, inventory movements, and service loyalty. Making this happen requires a digital core.

With the latest innovation in in-memory computing, decision makers have the capacity to calculate their next set of information on the fly. With predictive analytics and visualizations, they can fully understand the insights before them and know how to act – without being a trained data scientist. No more precalculating of an arbitrary set of information; now everything is calculated at the moment of need.

The underlying concept of merged transactional and analytical processing is sustained by rethought data models that no longer need aggregates and indexes. It also liberates the system as data locking becomes minimal. This approach paves the way for instant connections that help resolve challenges such as the before-mentioned block in order fulfillment and process a large number of transactions required to build and deliver 1,000 versions of one product.

However, this is only the start of what the digital core delivers. With the pace of change accelerating around us, it can be hard to remember that the digital economy is still in its early days. There is so much to learn about the digital core – which means many more opportunities for you to disrupt your industry and leave your competitors completely baffled.

Examine the promises of a digital core with SAP S/4HANA. Visit us at www.sap.com/s4hana.

 

 

 

 


Rudi Hois

About Rudi Hois

Rudolf Hois is the chief product owner for SAP S/4HANA (on premise) at SAP. In his 18 years with the company, he has held various positions in development and product management, spanning from running industry development for oil and gas, chemicals, and mining industries to chief architecture roles in a variety of large-scale programs. Hois also serves as a trusted advisor for many of SAP’s largest clients on their route to adopting innovations and SAP S/4HANA.