Florian Roth, CIO and Head, IT Services, SAP SE(FWB: SAP)
“Change has never been this fast and it will never be this slow again.” Bill McDermott, CEO SAP SE
This quote is daunting and exciting at the same time. The speed at which technology is being developed and demanded by consumers imposes immense challenges as well as opportunities for companies and their CIOs. The transformation to the Intelligent Enterprise is no longer a choice, it is the backbone of today's’ corporate strategies.
CIOs are in the driver seat to propel companies towards the digital future.
What CIOs generally share is that the current IT reality still differs from the headlines and the technology buzz. We are managing some very common difficulties: broken business processes across the value chain, various platforms with unaligned data sources, multiple infrastructure layers with high TCO, just to name a few. So, what will accelerate IT towards the digital augmented future? It is the Intelligent Enterprise, flanked by Artificial Intelligence (AI), Machine Learning (ML), Virtual and Augmented Realities.
What does Intelligent Enterprise actually mean?
The purpose of IT organizations is to deliver and run the Intelligent Enterprise. What do I mean by that? Let me use a comparison that has been made before and that is the perfect metaphor: the autonomous car of the future. Over the last century, the core parts of a car have not changed. It is driving a lot faster today, but the essential functionality and operation remain the same: wheels, transition, motor, steering wheel, gas and break paddles, and a driver, all that is still required. For more than 100 years, cars have been fully dependent on humans to function. We were at the helm of every single operational decision, from maintenance, to speed, what route we take and checking the oil. The advances of technology have dramatically altered that dependency. Modern automobile technology now processes all internal and external data input such as weather, GPS, and maintenance without human intervention.
It can find and make decisions, it alarms the driver when needed, and it notifies the driver about necessary maintenance, such as tire pressure. The complete autonomous car of the future is just a matter of time.
How does this apply to the corporate enterprise?
When looking at the car industry in the context of the corporate enterprise, I can see a lot of parallels. In comparison to a century ago, today’s enterprise managing system is automated and connected to all data points of your business. It is at the pulse of your daily business activities and it impacts the central nervous system, your transactional data. Existing analytical data algorithms and applications provide the necessary insights into target markets, competitors, customers, change in business conditions and transactions. Technology has dramatically accelerated your time to react. The Intelligent Enterprise will take it one step further. Envision a managing system that was developed in ways to think and reason through most business scenarios. It connects and directs all aspects of your operational processes and transactions. It will analyze demand and supply, manage production and inventory, ship products and manage resource requirements. It monitors and processes external factors such as change of market conditions, customers, suppliers, stock market and regulatory requirements. It learns and adapts, it influences, it analyzes and mitigates risks factors in real time, and it makes recommendations through embedded AI and ML algorithms. It will be largely autonomous. Most companies are not there yet, but with digital assistances, chatbots, and ML based applications such as Resume or Invoice Matching, there are advanced solutions available in the market today, that will help companies to take a first step towards the Intelligent Enterprise. This transformation into an Intelligent Enterprise to enable growth and scale can be challenging, especially in today’s reality. As mentioned, we often face fragmented and silo-oriented business processes, highly customized systems, unaligned data sources with broken data architecture, and old legacy systems. Decisions are made retrospectively on incomplete, inaccurate and old data. They often lack the cross-business visibility needed to address core challenges.
How do we move to an Intelligent Enterprise?
It is similar to the mechanics of the modern car. We need to take care of the core components and build the foundation. That means building bridges to overcome organizational silos, reducing complexity, both in our business and system landscape. We need to build the foundation for injecting intelligent technologies. Once data is harmonized and flows in real- time between all business areas, algorithms can build on the understanding of end-to- end performances. Intelligent technologies will apply predictive analytics that find opportunities to optimize the financial and operational performance. The Intelligent Enterprise will leverage technology through harmonized, real-time, analytical end-to-end internal and external data points. It will be a cognitive and self- driven operational system that continues to learn and expand through its own experiences, evolving into a predictive, anticipatory system that will assist and complement business managers in fully optimized business operations. At SAP, we believe best-run businesses are data and process driven. The Intelligent Enterprise will maximize the value of your data assets and insights. It will empower your employees, benefit your customers, and enables you to operate with increased visibility, focus, and agility.