Effective Globalization with Standard Software

October 14, 2010 by Perry Manross

Yutaka Yasunaga, JSUG President (photo: SAP)

Yutaka Yasunaga, JSUG President, provides SAP with sound direction (photo: SAP)

A long line of cabs waiting for a fare has been a frequent sign of Japan’s economic difficulties. Consumers in the country are still cautions when it comes to spending, preferring less expensive means of transportation. Attention to cost extends to the business world as well. A strong yen and a struggling economy have put pressure on companies’ top lines, hampering growth and investment.

But as Garrett Ilg explained, SAP can support Japanese businesses in overcoming these challenges. The SAP Japan President addressed more than 900 customers and partners at SAP World Tour Tokyo, making the case for standardized IT solutions and how they can help Japanese companies capitalize on heightened globalization, the associated need to comply with local governance models, and reduce costs.

Globalization, governance, cost

“Globalization has been around for decades,” Ilg noted. “But now, everyone is globalizing.” This has meant competition not only from domestic businesses, but from an increasing number of foreign players as well. Japanese businesses, accustomed to custom solutions, are now struggling to scale their IT systems to exploit this heightened globalization. Solutions developed for their domestic needs are ill equipped to scale for expansion into new markets, Ilg said.

“Globalization is challenging, but it is the biggest opportunity that any of us have seen in a lifetime,” he added. The solution for scale, according to Ilg, is standard software. Providing the majority of process support a company needs, standard software frees up a business’s time and resources to focus on new opportunities.

Hand in hand with globalization, governance presents additional challenges as businesses cross borders. Not only International Financial Reporting Standards (IFRS), but various regulations, too, must be complied with. Additionally, as a company’s workforce moves with the business to new locations, companies need to be able to manage their human capital accordingly.

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SAP Japan President Garrett Ilg (photo: SAP)

SAP Japan President Garrett Ilg (photo: SAP)

Jim Hagemann Snabe

Jim Hagemann Snabe: social media and application development for platforms (photo: SAP)

Finally, businesses – whether established global players or domestic small companies – must hone their focus on cost. In Japan, the strong yen is pressuring all businesses along the value chain, and efficiency is paramount. “This forces the need for cost management. It forces the need for optimization. It forces the focus on strategy and quick decision-making,” Ilg said. Real-time, correct information enables businesses to make reliable decisions rapidly, the rewards of which, Ilg added, are tremendous. Business analytics and in-memory technology can enable this rapid response.

Before handing the stage over to Co-CEO Jim Snabe, Ilg took a moment to recognize the strong work of the Japan SAP Users’ Group (JSUG).  Presenting the award to JSUG President Yutaka Yasunaga, Ilg credited this organization as being the concentrated voice of the customer, providing SAP with sound direction.

Product strategy and managing the structured and unstructured worlds

More people with more needs. Fewer resources. Who better than the company that brought the first enterprise resource planning solution to the market to address this dilemma of the global economy? This was Jim Snabe’s appeal to attendees. Snabe detailed the technologies and solutions that will help business in both Japan and beyond to optimize efficiency.

By allowing businesses to share infrastructure, cloud computing will lower cost of ownership for IT solutions, virtualize hardware, and optimize business processes shared among businesses.

Particularly relevant to Japan, widely regarded as the world leader in mobile infrastructure, mobility will help put powerful applications in the hands of more professionals, giving them the means and information necessary to make decisions and execute from nearly any location at any time.

And reiterating Ilg’s previous remarks, Snabe extolled the promise of in-memory computing, which, making the most of main memory, can call information 10,000 times faster than from disc. This, together with new analytics solutions and appliances enable real-time risk management, for example. “These three opportunities – cloud computing, mobile solutions, and in-memory computing – will help us enable businesses to run better, and help solve the problem of more needs and fewer resources,” Jim said.

SAP has been proficient at supporting structured business processes since the company’s founding. Now, technology is being leveraged in an unstructured manner, as demonstrated by social media and application development for platforms such as Apple’s app store. The opportunity, Snabe argues, lies in leveraging this unstructured activity, not only for consumers, but for businesses as well. With its strategy of on premise, on device, on demand with orchestration, SAP will provide solutions that cover both the structured and unstructured sides of technology to help customers run their business.

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