In the recent position paper jointly written by SAP and DSAG, the German-speaking SAP User Group, the authors develop scenarios for the “next but one” generation of digitalization.
The unanimous credo is that digitalization has long since ceased to be nice to have and is now unavoidable.
Written by Thomas Saueressig, member of the Executive Board of SAP SE, Product Engineering, and Otto Schell, co-chairman of DSAG, Vision Paper: Digital Transformation focuses on four predicted scenarios that should enable companies to implement new business models, operate intelligent business processes, build interconnected networks, and develop sustainable solutions.
The focus is neither on individual products nor on technological success factors. While technologies such as cloud computing, the Internet of Things (IoT), Big Data, artificial intelligence (AI), and machine learning play a key role in digital transformation, the authors look at corporate digitalization from a higher perspective.
Beyond technical implementation, above all they address the question of how to achieve end-to-end vertical digitization that goes beyond selective digitization projects and takes the entire company into account.
“In the future we envision, it won’t be enough to achieve horizontal digitalization (focused on optimizing for efficiency),” Saueressig and Schell write. To them, digital transformation is a necessity if companies are to remain relevant and economically successful and meet their social responsibility. “From a technology lens, one might get the impression that the IT ecosystem in the past only did what was absolutely necessary, going from one technology stack to another while avoiding a true transformation.”
Lack of Thinking in Holistic Digital Models
The predominant approach of conventional business processes is mainly characterized by an internal perspective, thinking in new models is far from being the norm. At the same time, the economic and social view of companies is also changing. According to the authors, “Corporate purpose and stakeholder values are making it critical for companies to deliver services and products with sustainable purpose for society. Short-term ROI will become less relevant as companies must execute against a long-term vision for the environment and the wider society at large.”
Intelligent end-to-end digitalization is the key to driving this fundamental change. Saueressig and Schell write that even against the backdrop of the pandemic, which was not the reason but the trigger for increased thinking about digital projects, new approaches are emerging: “Adversities often create an opportunity to emerge more resilient and stronger,” the authors write, describing how companies will design and provide their value flows after COVID-19.
Systems and Applications Not Enough for Digital Change
Many companies have already taken the first steps toward the forecast scenarios described in the paper. However, none have come close to reaching the target line. In order to achieve a real digital change, companies must radically rethink — from pure error correction in existing system landscapes and selective projects to the development of a future-proof, forward-looking and holistic strategy. This strategy must bring processes, systems, and data together with employees and other stakeholders.
“Companies will find that systems and applications are not enough,” Saueressig and Schell assert. “Digital transformation first and foremost requires a culture and mindset suitable to address the associated challenges.” Digital projects never end with a successful implementation, and above all, digital change requires a new culture and way of thinking. An agile way of working with a true DevOps culture — with consistent responsibilities and ownership — is becoming the new normality for which companies must prepare their employees and stakeholders.
Digital Transformation: Four Scenarios
Saueressig and Schell describe four forecast scenarios of how companies will design and provide their value flows after the pandemic.
- Business Transformation for New Business Models in All Industries
- Moving from Process Workflows to Surfacing Business Process Intelligence
- Extending Intercompany Integrated Processes to Open- and Closed-Loop Business Networks at Scale
- Sustainable Enterprises
To explore these scenarios further, read the paper here.