Companies operating older monolithic SAP solutions are, at best, lagging behind their more nimble digital competitors. At worst, they are losing the race to secure their post-corona future.
Even for an experienced SAP professional like me, these are very strange times. Just a few weeks ago, I was talking to Danish and Nordic companies about using modern technology to futureproof their business. Today, these exact same companies are adapting to a completely new reality, which materially impacts and threatens their business models, global supply chains and business continuity. What we all thought was going to happen in the future actually turned out to be happening right now.
What intrigues me, working with some of Deloitte’s largest client in this difficult time, is that those who have prioritised unlocking data in their core business systems in or near real-time, appear to be able to respond very differently to the crisis than those who have not.
It is evident that companies who implemented SAP to run their businesses in the 90s and 00s, to a large extent, built SAP solutions covering a sizeable portion of their business processes in one large platform. Although this was the mantra and recognised good practice for ERP solutions in this period, it means that these companies, today, are less flexible and less responsive when adapting these solutions to changing market conditions and changing customer priorities like we are experiencing in these times of crisis.
I see this all the time: So many companies still have important data locked up in old applications and inaccessible data structures, essentially preventing them from effectively responding to changing market conditions. At best, they are lagging behind their more nimble digital competitors. At worst, they are losing the race to secure their post-corona future.
At the other end of the spectrum, those companies that are running more flexible solutions such as S/4 HANA are now in a position to harvest the benefits of having raw business operations data made available for consumption across platforms in real time. HANA, as a data platform, opens up for structured and non-structured data to be processed and combined in ways that were not possible before, allowing product, market, customer and employee data to be used more actively and flexibly within the business with additional functionality to ensure that GDPR regulations are upheld. The upside potential is becoming clear for many companies running S/4 HANA in harnessing this new availability of data, especially in these times of crisis where real-time data can be the key to financial transparency and business risk mitigation.
In other words: when data is made active and can be exposed flexibly and consumed in real time, we see much more intelligent responses to a crisis. Real-time data access enables data-driven scenario planning, efficient transitions to alternative products and channels as well as freeing up precious workforce time using intelligent digital tools.
At the same time, front-runners running S/4 HANA can develop solutions, adopt niche cloud applications and develop digital products to give them competitive advantage towards building customer loyalty and securing market penetration as well as significantly reducing costs in finance, supply chain and support functions.
What it all boils down to is that executives can no longer close their eyes to the fact that digital technology on the whole has taken a massive leap over the last few years, not only in the front office, and that any large company today must embrace digital multi-layer and multi-pace development in order to remain competitive in the long run.
The COVID-19 crisis will hopefully pass, but there will be other events impacting companies in the future, some of them perhaps even as turbulent and chaotic as this current crisis. If and when that happens, hopefully they will have unlocked their data to a level that the consequences of decisions across global value chains can be immediately translated into financial effects – and where financial, digital and organisational agility are at the core of every business.
Ask me about: SAP, S / 4 HANA, Digital transformation, IT strategy, Program management, Digital Finance function, Cloud David is a partner in Deloitte and the Nordic manager of our SAP business. David has worked with SAP since 1997 and thus has more than 20 years of experience with transformation programs, where the underlying theme is SAP and financial optimization. David helps and advises Danish as well as Nordic companies with digital transformations and implementation of SAP.