The SAP Intelligent Enterprise and the Experience Economy

Last year, SAP unveiled its strategy to deliver the Intelligent Enterprise. At the core of our strategy was SAP’s strong belief that every company needs to address three key challenge in today’s economy:

1. Intelligent Suite
An integrated, yet modular suite of line-of-business (LoB) applications that enables SAP customers to share insights across functions to better manage stakeholders and their day-to-day operations.

2. Digital Platforms
Data management and cloud platform technologies to dynamically orchestrate the growing volume of data and business processes across an intelligent enterprise, so that customers can make sense of their data in real-time. The digital platform forms the foundation of all intelligent activities.

3. Intelligent Technology
Tools and technologies that turn intelligence into business outcome such as analytics, machine learning (ML), artificial intelligence (AI), the Internet of Things (IoT), and blockchain. They are delivered through the digital platform, embedded within intelligent suite applications, and applied to processes that integrate both SAP and third-party data and applications.

Enter 2019 - The Experience Company powered by the Intelligent Enterprise
In an era in which data plays a vital role in all decision-making and in every business process, having the ability to manage big X-data and O-data, gaining new levels of business insights, and turning them into impactful actions is an absolute key to customer success. As business data volume grows exponentially, and as enterprises have access to an abundance of new intelligent technologies, customers have countless opportunities to influence experiences and reimagine their business processes through data-driven innovation.

The following outlines two examples for the opportunities in reimagining business processes:

1. Drive a step-change in productivity: a global clothes retailer collects big and diverse data from SAP C/4HANA including X-data from Qualtrics software and from third-party sources such as comments on social media.

This data is streamed into a data lake integrated with SAP HANA and dedicated to a customer behavior analysis project where intelligence is applied by building ML models to predict changes in customers’ buying preferences. The results are streamed in real-time to SAP C/4HANA marketing campaigns, where a new campaign is automatically triggered via SAP Intelligent Robotic Process Automation whenever a change in customer preference is identified, significantly increasing marketing productivity leading to additional revenue.

2. Build new business models: a lighting hardware company uses SAP Leonardo IoT, SAP Analytics and SAP Cloud Platform Integration to deliver a light-as-a-service business model. By connecting the lighting hardware to sensors, and orchestrating and analyzing its data streams, customers can receive a variable bill based on usage instead of paying for lighting upfront. In addition, customers can gain insight into costs and usage with an intelligent solution that is able to predict future costs. This solution helps users to make better informed and confident decisions drives operational efficiency and saves energy.

Technology & Innovation Overview and Outlook
The role of technology and innovation in the evolving Experience Economy has never been more important for the success of our customers. As customers’ and employees’ demand for better experiences increases, enterprises must focus on their businesses and adapt to change, rather than concentrating on technical building blocks. SAP believes that these needs can be addressed with a “business technology platform that provides the required platform services combined with the business semantics, content and context which are key to turn data into meaningful business outcomes. The winners will be intelligent enterprises that utilize this platform to get the most out of their experience and operational data and processes. This is the goal of SAP’s digital platform where the business-centric technologies of SAP HANA, SAP Analytics, and SAP Leonardo power the intelligent suite, enable new data-driven innovation scenarios and together with Qualtrics help SAP customers to turn into Experience Companies.

Therefore, SAP’s vision for the digital platform is to be the business technology platform that provides the required technologies for intelligent enterprises to power the intelligent suite, deliver the next-generation experience management, and offer the necessary technologies standalone to our customers and partners for unlocking new types data-driven innovation.

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How can the Intelligent Enterprise impact Industrial Manufacturers

The digitalization of businesses across all industries is happening rapidly, and there is no turning back. Companies are looking for new ways to deliver value to their customers using digital channels and creating personalized, digitally-enabled products across all sectors, from consumer products to heavy equipment and machinery.

The industrial machinery and components (IM&C) industry is at the heart of this shift, providing the intelligent machines and equipment needed for this transformation, as well as spearheading innovative processes such as connected manufacturing and predictive maintenance and service.

Strategic Priorities in a Digital Economy
In this situation, where the opportunity is huge but at the same time new market entrants are threatening traditional IM&C companies, it is essential to focus on the right strategic priorities to drive digitalization across the business

Customer centricity
Putting the end customer’s point of view at the center of every decision is a key prerequisite for success in the digital age. This does not stop in the sales department but also applies to what products are built and what services are offered.

Serving the “segment of one”
Providing solutions that precisely fit the needs of one single customer has been commonplace in traditional engineer-to-order environments. Now, the ability to capture customer requirements effectively and drive mass customization is the key to giving customers exactly what they want.

Digital smart products
Differentiation and specificity in products stems from digital capabilities and value-added services that are bundled with physical products. Using digital capabilities such as self-awareness of technical health and operational status or business system connectivity helps industrial manufacturers differentiate.

Digital supply chain and smart factory
Digital technology on the shop floor and in the supply chain is not new. What is new is the way production and logistics are intelligently connected to the rest of the business and are able to deal with external impulses such as short-term demand and supply fluctuations or changes in the configuration of a customer order that require different materials, parts, and machining operations.

Servitization and new business models
As traditional products are commoditized, IM&C companies are shifting from selling physical products to providing complete solutions. Generating more than 50% of revenue from services is a common goal for manufacturers who are looking for higher profit margins and increased customer intimacy. The “digital twin for business” is a key requirement, representing the physical product over the entire lifecycle, including changing data points during manufacturing and installation as well as operational performance issues, the financial value created, and costs incurred up until the final phase of decommissioning.

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How can the Intelligent Enterprise impact the hospitality industry?

Hospitality is changing rapidly. With evolving guest expectations and an unrelenting flood of data, hospitality’s digital horizon is disrupting classic distribution and guest stay models. Technology has become so interwoven with business strategies that the two are hardly distinguishable.

Technologies such as mobile devices and the Internet of Things (IoT) are
fundamentally redefining the way customers live, work, and play. Other innovations such as artificial intelligence (AI), blockchain, and in-memory computing are opening up new playing fields and replacing traditional processes. For example, AI and machine learning are modernizing reservations, guest services, and operations. Meanwhile, consumer wearables, smart devices, virtual reality headsets, and online games are becoming points for brand interaction. It’s all happening at a breakneck pace.

Hospitality needs to act fast to stay ahead of the disruption curve. For example,
using the power of predictive analytics, hoteliers can now identify high-value guests, uncover profitable items and services to promote, anticipate demand, and manage inventory more effectively.

The Future: Priorities for Hospitality
Faced with a huge opportunity along with new market entrants, today’s hotel companies must focus on the right strategic priorities to drive digitalization across the business. By successfully embracing the opportunities offered by new technologies and addressing the following six strategic priorities, companies can lay the foundation for successful digitalization and stay ahead of the innovation curve.

• Own the Guest Journey with Enhanced Distribution and Shopping Models
• Transform the Guest Experience
• Digitalize the Workforce
• Unlock Business Value Across All Data Sources
• Enable Smart and Connected Hotels and Ships
• Drive Global Growth and Accelerate Brand Strategies with the Cloud 

Reimagine Hospitality
The digital economy offers infinite new opportunities.
In a connected world where every company is becoming a technology company, smarter products and services will refocus commerce on business outcomes and blur industry lines.

Own the Customer Journey

LOYAL CUSTOMERS WILL SHOP DIRECT - A digital and mobile world changes the way customers book travel. Based on changing behaviors, hoteliers are learning from retailers and adopting similar approaches with guests. Hotel companies that don’t adapt to digitalization risk being simply a supplier in the travel chain, leaving others, such as the Internet giants or new players entering this industry, to control the traveler conversation.

TRANSFORM THE SHOPPING EXPERIENCE - Offers have to be personal, contextual, relevant, and seamless, regardless of the touch point or device.
Hoteliers need to know their travelers and capture as much information as is available from internal interactions and social media data. They must use this data to create useful offers at the moment and location where they are most relevant. This retail approach is vital to have direct access to the traveler, expand reach in the guest journey, and increase revenues with ancillary products, partner products, and merchandising. Technological capabilities
enable this process.

BROADEN DISTRIBUTION MODELS - Distribution models are changing as the digital world requires new ways of selling. Powerful new digital players
are entering the travel market. Hoteliers want more control of the products and services they offer, whether they sell directly or indirectly. But mostly they want to own the guest journey and attract more travelers to buy directly from them. The ideal approach is to have a single view of available room inventory, amenities, promotions, descriptions, and rate plans across channels and third
parties while refining inventory to drive higher sales. This allows hotels to up-sell noninventory room items, meeting rooms, activities, and amenities. It’s a bit like supersizing a meal in a more personal way.

Drive Global Growth and accelerate brand strategy 

INCREASE BRAND VALUE - Build brand extensions by combining omnichannel commerce and digital technologies to move into new segment offerings. Configure and deploy new promotions and rate plans rapidly, and push distressed inventory to the direct channel of choice.

Unlock business value across all data sources 

ACCELERATE AND SIMPLIFY PROPERTY ACQUISITIONS -  To achieve a real-time view of data and system interoperability, your company needs a comprehensive platform approach. Cloud-based, standardized solutions enable hotel companies to innovate faster, manage master-data complexity efficiently, adhere to country regulations, and deliver quickly in the global economy. SAP can help you lead your organization’s digital journey and
address the challenges of data proliferation from enterprise data, Big Data, the IoT, and beyond. We can also help you transform all data – the foundation of a digital enterprise – into insight to drive innovation and create business value.

TRANSFORM ASSET MANAGEMENT - The platform approach enables real-time visibility into the condition of assets by measuring, predicting, and alerting when incidents occur. To do so, the platform links asset data to an intelligent asset network that provides performance benchmarking, up-to-date service documentation, and real-time visibility of spare-part replacements. The platform also connects asset data from OEMs, operations, and service providers – creating a collaborative solution for sharing asset information with business partners.

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Innovation powered by the intelligent enterprise

An intelligent enterprise is a smart, best-run business. It is an organization that capitalizes on intelligent technologies to automate complex business processes, anticipates new customer needs and invents new business models.

To build an intelligent enterprise, you need to be equipped with the tools of the future.  Only SAP solutions have the depth of experience combined with the breadth of industry knowledge to offer innovative solutions that can effectively streamline your business from end to end. SAP solutions powered by Approyo are committed to delivering continuous innovations to our customers to ensure they continually have access to the latest innovations and best-of-breed technologies to deliver the visibility, focus and agility they need.

• Award-winning digital-age user experience (UI): SAP has delivered the world’s first hands-free ERP. It’s built on an award-winning UI including a context-aware, business-savvy digital assistant for the enterprise.
• AI-powered automation: Combining learning capabilities, predictive analytics, and real-time insight adds automation to key functions, notifies users when input is needed, and enables faster and smarter decisions.
• Next-generation business processes: SAP helps you rethink how business is done by reinventing and redefining processes with applied best practices built on the latest innovations. 

Get the most out of your data
To get the most out of your digital journey, you need to utilize data from multiple sources, including core data from your business processes, as well as external data sources such as connected sensors, weather information, satellite pictures, road conditions, market data, and social media.

Digitization is creating tons of data every day, much of which is unstructured, such as images and videos. This data by itself is of little use. Insights from data are essential for today ́s business, but they’re useless if you can’t make sense of them. Intelligent enterprises are driven by data and insights. It’s not just about having the right data at your fingertips but having the analytical insights from that data linked to your core business processes. This is where machine learning can help, as it unlocks knowledge from structured and unstructured
data to enable the intelligent enterprise.

Be intelligent – use machine learning
Machine learning lets you make sense of raw data and unlock new insights by learning from data, rather than programming explicit rules. Deploying machine learning capabilities across relevant business processes can help identify untapped opportunities, expose hidden risks, and automate repetitive tasks or knowledge-based work.

Unlock the value of IoT
Internet of Things (IoT) technology has been around for decades, but now it tops the agenda for many companies. That’s because the evolution of connectivity, Big Data management, analytics, and cloud technology are presenting new opportunities for IoT in business. Initially, IoT applications focused on operational activities on shop floors because downtime or system failure could result in significant losses. Aside from the benefit of uptime, the data collected from IoT technology wasn’t generally used. Now customers are using SAP powered by Approyo to leverage that data to shift from reactive maintenance practices to proactive endeavors to work smarter, get better insights, and provide new services to their customers based on IoT data.

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Migrating your company to the intelligent enterprise

We are entering the era of intelligent mega ­processes, which start by combining the right data sets and converting them into intelligent insights. These insights then trigger automated transactions across the process. Leading companies that are making digital transformation a reality are putting data and intelligence at the center of their future. They are building new capabilities, skills, and technology, and evolving their culture to transform into an 'Intelligent Enterprise' and achieve the aforementioned outcomes. These companies are not only delivering short-term value to shareholders, but are also positioned to thrive and transform their industry.

No company has the appetite to replace their systems, as every company has a very different landscape and a different level of focus based on their business priorities. Everyone has to also see the value. Moving to the Intelligent Enterprise is not just a technical upgrade. The real value comes when companies adopt a customer-first, purpose-driven mindset, leverage innovative approaches such as design thinking and agile methodologies to reimagine business processes and business models.

From SAP and Approyo's experience, there are the top three paths to migrating your company architecture to the intelligent enterprise. These paths have one thing in common - a lean enterprise architecture that is low cost and is data driven and ultimately provides you with the architectural agility in the new economy. The path that is right for you should be based on value and strategic alignment. There is no one way to get there, but early adopters are finding success based on the scenarios below:

REIMAGINE BUSINESS PROCESS: 
Many companies are focused on end-to-end business process transformation (such as supply chain, procurement), landscape simplification, and reduction in customization. The goal is to migrate core ERP processes to S/4HANA +Cloud/ LoB with full transformation in mind. These companies are looking to change the front office, supply chain, and more to truly address customer experience. They are looking to drive the next-generation of processes across the value chain. This requires a fresh greenfield approach, and a detailed review of which standard best practices in S/4HANA meet your business requirements. These companies are ready to move their ERP into private / public cloud environments. While a major effort across business processes, it is paying off with a TCO reduction of 20 - 30% and tremendous business value as next practices are adopted.

REIMAGINE BUSINESS MODEL: 
There are also companies that are looking at business model innovation or M&A and are taking advantage of the ability to have many industry solutions in one box. With industry lines blurring, the ability to take business capabilities from one industry and leverage them for a new business model in another industry is tremendous (for example, bringing retail to telco). This requires a fresh greenfield approach.

START WITH MIGRATING LOBS TO BEST-IN-CLASS CLOUD SOLUTIONS:
While some companies are planning and executing the move to S/4HANA they start in parallel to innovate on the edge. These companies are taking 1 LoB at a time - HR, Procurement, Supply Chain, Manufacturing and are focusing on driving value short-term with ECC + LoB cloud portfolio. Once moved to S/4HANA these companies will fully benefit from the latest innovative solutions end-to-end.

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