As someone who’s been on the front lines working in SAP’s industry cloud ecosystem space since its inception in 2020, I’ve learned to expect the unexpected.
One day might bring news of collaboration between companies that historically have been fierce rivals, or a customer implementation of modest scope that grows into a much larger and more lucrative project. Another day could bring reports of a new app or solution that uses an exciting tech wrinkle to fill a need for multiple customers. And another could bring news of an SAP partner breaking into a new market or vertical by developing a solution with applicability across multiple industries, then monetizing it on SAP Store.
A solution developed by SAP partner DataXstream highlights the possibilities that SAP’s industry cloud offers to partners that serve consumer industries. The solution, DataXstream OMS+ Cross-Channel Order Management Solution, helps streamline order management. The results it’s producing for customers are impressive: higher margins, lower inventory and training costs, and an improved understanding among wholesalers and retailers of their customers. Using the solution, one customer not only realized ROI within seven days, it saw a 1.5% increase in margin on sales and a 50% reduction in inventory carrying cost during the first year following implementation. That’s US$7 million added to the bottom line and $50 million in reduced inventory carrying cost.
Stories like this are among many developments I’ve been following in SAP’s partnership-driven, collaborate-to-innovate industry cloud ecosystem, which includes consumer-focused verticals like consumer products, retail, life sciences, healthcare, wholesale distribution, agribusiness, and fashion, along with more than a dozen other verticals. Here are some recent highlights from the consumer industries segment of the ecosystem:
- Apps developed exclusively by partners, with little to no involvement from SAP other than to provide the business technology platform (SAP Business Technology Platform) and a marketplace (SAP Store) in which to sell them.
- Apps built not by a developer but by a large customer’s internal development team, leveraging SAP BTP. One major global consumer products company recently did exactly that, using their SAP Business Technology Platform investment to develop an analytics solution that it is now deployed within a broader SAP digital infrastructure.
- System integrators “bottling” the key elements of a solution they developed for a specific consumer products company to offer it to other companies with a similar need.
- New SAP and partner commercialization models coming to life, enabling partners to quickly benefit from new – and in many cases, substantial – revenue streams created by the solutions they have developed.
- SAP handing over a development opportunity on the wholesale distribution side to an industry cloud partner instead of taking the work on ourselves, recognizing the partner was best equipped to develop the solution.
- Developers with expertise in technologies like artificial intelligence (AI), video graphics, and robotics bringing solutions powered by those capabilities to customers in consumer industries that provide the foundation for business transformation.
What’s particularly gratifying for me is that little to none of this likely would have happened even five years ago. Built on the premise that, by working together, SAP and members of the industry cloud community can create more value for customers and themselves than they otherwise would working separately, the program thus far has produced hundreds of potentially high-impact apps and integrated, end-to-end solutions.
SAP’s industry cloud represents an important evolution of SAP’s approach to partnership and serving the end customer, where the focus is on solving the customer’s business problem whether the solution comes exclusively from an SAP partner, from SAP itself, or a combination of the two, and where partners have a greater opportunity to monetize the solutions they have a role in developing. Ultimately, we’re building a vibrant community that, through co-innovation, creates open, ready-to-integrate, and ready-to-implement solutions to meet critical needs in customers’ business application landscapes.
The hundreds of consumer-focused solutions already produced via SAP’s industry cloud are just the tip of the iceberg. The door is also wide open for existing partners that serve consumer industries to become more engaged in the ecosystem and for new partners to become part of it. If they share SAP’s appetite for co-innovation, if they’re driven like we are to support customers in their business transformation efforts, and if they’re open to finding new partners, customers, markets, and revenue streams, our industry cloud community will welcome them with open arms.
Craig Schertler is lead for Consumer Products Industry Ecosystem at SAP.
