A clear and sobering spotlight is shining bright on the urgent need for resilience and digital capabilities. But first, executives ought to digitally amplify business competencies that resonate well with a changing marketplace of new demands, values, and expectations.
Although the situation is evolving constantly and differently across geographies and industries, every business faces the same issue: the challenge of sensing every twist and turn and shaping core competencies to respond in kind quickly.
What will it take to compete going forward? According to McKinsey partners Kevin Laczkowski and Mihir Mysore, companies should start as early as possible to assess potential exposure, identify core competencies to mitigate it, and establish a “nerve center” – such as intelligent enterprise resource planning (ERP) software like SAP S/4HANA – to monitor progress. With a focus on what sets the business apart from competitors, they can avoid costly maintenance of operations that may dilute working capital and balance sheet reserves.
Delivering Core Competencies that Secure a Critical Competitive Edge
Most implementations of SAP S/4HANA begin with a promise to enable core competencies that preserve business continuity, drive an exceptional customer or employee experience, and increase operational efficiency to create a competitive barrier. These capabilities may include anything from delivering unique or personalized products that are high quality and compliant to adapting to new requirements for differentiation.
Every pivot to seize opportunity and respond to change as it happens is, without question, critical. However, acquiring it can be slow and risky without an integrated technology platform. What’s required is a system that continuously revaluates itself based on the current norm, looks for new patterns, and adapts core competencies.
Core competencies grow stronger when employees quickly access insights from accurate, synchronized sources of real-time data, running on a technology platform that supports new business with considerable flexibility and responsiveness.
Setting the Stage for a Consistently Capable and Intelligent ERP
In the past, ERP systems were designed and optimized by taking on defined opportunities or overcoming challenges. For example, bidding out the shipping of products to a less-than-load (LTL) carrier makes sense when shipments have a certain weight, size, delivery date window, and destination. Determining which inventories should be shipped with this approach is best done by analyzing and defining business rules and building a routine to find products that meet the criteria and hand them over to an LTL carrier bidding process.
For these technologies to work, the architecture should include a broad data set of information and hold it in memory for continuous pattern searching. Intelligent systems for ERP, including SAP S/4HANA, need to tightly connect across the digital landscape and with business networks to access device data for deeper insights. In the end, businesses possess a highly capable system – complete with the connected, secure, analytical, and business process architecture necessary to drive an agile and fast business operation.
Take, for example, Karma Automotive. The American luxury electric car automaker considers SAP S/4HANA as a critical part of revving up its transformation efforts to secure 100 percent customer satisfaction. The privately held manufacturer of world-class plug-in hybrid cars faced significant challenges in implementing a single system that would meet rigorous requirements at every level of the value chain.
By adding a mix of cloud solutions to a digital core of SAP S/4HANA, Karma runs fast, efficient, and flexible operations with clear visibility into customer interactions and vehicle performance – from design to manufacturing and delivery. The business simplified customer and dealer engagement by streamlining transactions such as vehicle order and warranty claims.
But perhaps the most rewarding outcome of this initiative is delivering a platform ready to carry out the expectations of its dealers and customers. According to Mikael Elley, vice president and CIO of Karma Automotive, “From order through delivery, we have one system of record, one version of the truth, and one platform to ensure 100 percent customer satisfaction.”
Matching your Core Competencies to Deep Technology Capabilities
Is your ERP architecture keeping every aspect of your business humming in unison? Or do you have delays in your systems and upgrades or inconsistent data models?
Let’s face it, running on data-driven technology alone is not enough to keep up with the competition. As Karma’s story proves, core competencies need to evolve – fueled by an ERP that converts data into a precise system of automation, split-second and informed decision-making, and real-time adaptation to market dynamics.
Discover SAP S/4HANA can boost business resilience while navigating turbulent times and planning for whatever comes next. Read the Harvard Business Review article, “What Companies Should Do to Prepare for a Recession,” and explore the intelligent ERP SAP S/4HANA.
David Sweetman is senior director of Cloud Global Marketing at SAP.
