Iron is one of the most common elements on Earth. Alone, it is soft and malleable. When combined with carbon, however, iron becomes steel – a harder, stronger, yet flexible metal perfect for building skyscrapers, bridges, and ships. As the foundation for the Industrial Revolution and the technology innovations that followed, steel demonstrates how the whole can be greater than the sum of its parts.
So it is with modular IT. By decomposing monolithic IT systems and software, companies can reassemble the smaller pieces into flexible, customizable solutions. These IT chunks can be integrated and combined in unique ways to meet specific business challenges – offering greater value to businesses, their users, and customers than those individual “ingredients” ever could.
SAP has launched its new thought leadership journal Horizons by SAP, which brings together global tech leaders from various companies to share their perspective on the future of IT. In the coming weeks, one article from the journal will appear on the SAP News Center per week. Here, Sindhu Gangadharan, global vice president and head of Integration at SAP SE, discusses the impact of modularization on end-to-end business processes.
The principles of modular IT are already reflected in SAP solutions such as SAP Cloud Platform. Let’s look at what we mean by modularization, how it is enabled in the Intelligent Enterprise, and the impact it will have on end-to-end business processes.
Modularization in the Age of the Intelligent Enterprise
Technology teams have been breaking apart IT systems and software for decades, so modularization really isn’t new. What’s changed is how modular technologies are deployed today. At SAP, we see that companies are consciously moving away from large, monolithic, on-premise applications and opting instead for modular applications that run either in the cloud or using hybrid deployment models. These systems enhance flexibility and allow users to consume exactly the capabilities or pieces of technology they need when they need them.
Of course, deploying solutions in pieces can result in a high degree of integration complexity. That’s why companies must always build their IT infrastructures with an eye toward their end-to-end business processes. Most end-to-end processes require multiple applications, touch several lines of business, and are experienced by a multitude of users.
Ensuring that so many moving pieces work together requires a unifying structure. That’s what’s behind our concept of the Intelligent Enterprise. Our solutions for the Intelligent Enterprise include:
- An intelligent suite that delivers intelligence across value chains
- A digital platform, such as SAP Cloud Platform, that unlocks data-driven intelligence and innovation
- Intelligent technologies that can be incorporated into applications, delivering intelligence within core business processes
These solutions help enterprises become both data- and process-driven. They enable new capabilities to help bring value to entire end-to-end processes.
Now Available: Horizons by SAP
Horizons by SAP is a future-focused IT journal. Thought leaders from the global tech ecosystem share their thinking about how new technologies and major business trends will impact our customers’ landscapes in the fast-arriving future. The first issue, available at www.sap.com/horizons, revolves around the implications and opportunities of modular IT.
Design-to-Operate Process Integration
Consider how these layers of modularization play out in a standard business process. Design to operate is one of the five core processes in our intelligent enterprise approach. Building on a digital supply chain and manufacturing process, the design-to-operate process includes the following steps:
- Design – Reduce time to market and sustainably innovate to meet customer demands.
- Planning – Develop a holistic view of actual demand while balancing inventory and service issues and improving forecast accuracy.
- Manufacturing – Optimize production processes, minimize waste, and increase responsiveness to business partners.
- Deliver – Improve the speed of product delivery while optimizing warehousing and transportation activities.
- Operate – Manage the lifecycle of physical assets, predict and simulate asset behavior, and avoid unplanned downtime.
In the Intelligent Enterprise, tight integration of modules provides end-to-end visibility of manufacturing assets from the beginning to the end of the design-to-operate process. To help ensure that modules play well together, we have established well-defined integration standards that are applied consistently across the entire portfolio.
For identity and access management, for example, all applications must support single sign-on. We also support cross-product navigation by working to ensure integration techniques are consistently applied, so that users have a seamless experience as they work across multiple software modules. This experience is enhanced by the coherent use of our user interface (UI) technology, the SAP Fiori user experience.
In the traditional definition of a microservice architecture, developers design a software application as a suite of independently deployed services that communicate with each other using lightweight mechanisms, such as HTTP or RESTful APIs. The architecture of SAP Cloud Platform is an evolution of the microservices concept. SAP Cloud Platform offers business services, such as master data and integration, along with support for open standards, such as Kubernetes and Cloud Foundry. This openness supports uses cases for our customers as well as our partner ecosystem. By supporting modularization at these different layers, SAP Cloud Platform is evolving from a technology platform into a true business process platform.
A Balancing Act: Standardization Versus Flexibility
Our intelligent enterprise framework is also open enough to meet the needs of heterogeneous customer infrastructures. The API-first approach helps ensure that any third-party application can be quickly integrated using open connectors that are part of SAP Cloud Platform. These connectors also support business-to-business and business-to-consumer scenarios that allow our customers to integrate with their business partners.
The modular yet integrated approach for the Intelligent Enterprise also helps us infuse intelligence into the core of the end-to-end process. The technological foundation for this is SAP Cloud Platform, which offers services for new, emerging technologies, such as artificial intelligence (AI), machine learning, deep analytics, and blockchain.
Often, business leaders who want to use an emerging technology first need to identify the right business use case. With SAP Cloud Platform, the technology is already built in to the core of the end-to-end business process, so companies can begin using it right away. For example, some human resource (HR) applications use machine learning technology to help HR personnel automate resume matching. The technology can also accelerate headcount planning and identify the talent needed to meet specific project requirements.
Balancing the need for standardization and consistency with openness and flexibility is an interesting challenge in a modular environment. Although fixed-point connections within processes provide seamless operation already today, SAP is currently taking integrations to the next level by aligning the domain models for core objects of our solutions.
For example, a standardized domain for a customer object provides users with the same 360-degree view of a customer whether the information is viewed in the SAP C/4HANA suite, SAP S/4HANA, or other SAP applications. Other typical domains include employee, supplier, and asset.
To guarantee that data and processes flow across independent modules, we rely on our comprehensive API strategy. We offer a rich catalog of business APIs developed by SAP and our partners. These APIs are building blocks that developers can use to create modern applications that support open integration. Some business APIs can trigger processes while others use services, such as machine learning, translation, or tax calculation. We also offer an API sandbox where developers can quickly test, explore, and use these business APIs.
Flexible IT Components for a Continuous Evolution
To meet their goals, business leaders want to find new ways to deliver a best-in-class experience to customers, with faster delivery and proactive services. They strive to empower employees and allow them to do meaningful work. They also want to improve productivity, so the business can do more with less. At the same time, they need to allocate capital carefully and innovate with relentless speed.
Addressing these challenges requires the ability to make sense of huge volumes of business data. No one system is a perfect fit. But with modular IT, companies can consume just the pieces they need, from whatever entry point is best, always in the context of an end-to-end business process.
Working with a solid business platform allows companies to quickly extend, change, and adapt their modular infrastructure. It also helps partners deliver their innovations to customers.
As we move forward in the experience economy, business processes and models will continue to change and evolve. Nothing will be static. By building on a modular IT infrastructure, enterprises gain the flexibility to incorporate emerging technologies while continuing to modify processes, so they can meet their business and customer experience goals. Just as steel delivers more value than iron and carbon alone, modular IT helps organizations bring together the technologies needed to sustain innovation and progress.
Identify your end target – what you are trying to achieve – and work from there. It doesn’t matter whether you work to address traditional business challenges or you choose to start with, innovative use cases. When you build on the right framework, you have the flexibility to choose.
Sindhu Gangadharan is global vice president and head of Integration at SAP SE and heads up the program for the Intelligent Enterprise.