A Front-Row Seat At The Digital Big Bang

Christian Horak

Futurologist Kevin Ashton, father of the Internet of Things, says predicting the future is easy. What’s hard is believing it. For example, Ashton says, we will discover extraterrestrial life in this century, and within the next 100 years, a human being will be born on another planet. By the 22nd century, most people will be vegetarian, and by the 23rd century, most people will be vegan – largely because meat can’t scale in line with population growth.

When you look around today, the seismic changes of tomorrow are not so hard to believe. Cars, trains, and planes operate without drivers or pilots. Airbnb runs a hotel business with no hotels. Uber runs a taxi service with no taxis. In fact, there are signs almost everywhere that the corporate function is shrinking, business models are morphing, and C-suite skill sets are becoming “thinner” and more strategically focused as automation increases.

Twenty years from now (maybe less), it’s entirely feasible that a CEO could run a $100 billion company with zero employees, no R&D department, and no finance department. Full-time employees will be replaced by a network of connected businesses, consultants, and experts that are used on demand. It’s not science fiction. It’s a sign of the times as we stand on the brink of the Fourth Industrial Revolution. And you have a front-row seat for the digital big bang.

The decisions you make today will determine how well-placed you are to capitalize on these opportunities. And trust me, they are everywhere.  Production is shifting away from factories. Capital is moving away from being centralized under one brand. And the inevitable rise of 3D printing and molecular production is creating a new economy where anyone can produce anything.

As globalization, “servitization,” and a “prosumer” society converge, disrupt, and collide with traditional enterprise business models, the pace and tempo of our day-to-day business economy will run on a faster cycle. This acceleration has huge implications on just about every area of the business – labor systems, accounting systems, corporate business models, and growth strategies, to name but a few.

And in the same way that the corporate function is shrinking, so too will timeframes condense for mergers and acquisitions. The accelerating pace of today’s M&As is already indicative that we are moving in this direction. Instant, real-time insight, agility, and predictive capabilities are now baseline requirements. Successful enterprises have a new resting pulse rate.

Companies without an in-house infrastructure that’s agile and flexible will simply not be able to keep pace. Every business that aims to survive and thrive in this new world order will need to become a technology business at its core. That means providing a digital experience to customers, partners, stakeholders, and employees.

A digital core empowers companies with real-time visibility into all mission-critical business processes and systems around customers, suppliers, workforce, Big Data, and the Internet of Things to operate at this new level. These types of integrated systems enable business leaders to predict, simulate, plan, and even anticipate future business outcomes. But you must first shake off the legacy, complexity, and closed mindset that’s bogging you down.

For example, automotive manufacturers with a digital core can provide a digital experience across the entire value chain:

  • Personalizing the driving experience via connected cars, including services and offers such as fueling and parking options based on real-time contextual information
  • Capturing data for predictive analysis, hidden trends, insights, and driver behaviors and preferences
  • Optimizing manufacturing, moving from batch orders to real-time manufacturing resource planning to always meet demand
  • Leveraging data collected by assets and the Internet of Things to synchronize and increase efficiency and asset utilization on assembly lines
  • Supporting the move to predictive maintenance, using sensor data to assess the condition of equipment, predict breakdowns, and proactively perform maintenance, lowering service costs

I appreciate that most readers of this blog will have some sort of physical product or service that’s based on a traditional sales-margin model, orchestrated by a series of siloed processes and systems. But those days are numbered. Your entire business model will change at some point, in a way that can’t be supported in that scenario. The role of the executive suite is to have a clear plan for when it does, what it will look like, and how the company delivers on its vision. That means innovation must be “baked into” your thinking today, rather than divorced from it.

This shaking of the corporate tree may be the most important decision you make in your professional career. It determines the line in the sand between traditional 20th-century business models and mindset, and the new digital fluency. It’s a once-in-a-generation opportunity to redefine, reimagine, and reexamine how you drive revenue. In an era where your grandchildren and great-grandchildren will have a three-digit life expectancy, these types of decisions will become our own professional legacy.

To learn how other business leaders are using a digital core to achieve measurable, high-impact business value, check out these business cases.

Christian Horak

About Christian Horak

Christian Horak is a Global VP at SAP responsible for the positioning, messaging and thought leadership, awareness and demand generation content for SAP S/4HANA Finance Line of Business Solutions (Accounting & Financial Close, Treasury & Financial Risk Management, Collaborative Finance Operations, etc.), as well as SAP JAM Collaboration & Communities.