Organizations are investing millions to digitize everything from supply chains to human resources. This can result in multiple applications that create siloed processes and data. Even more complex, companies’ IT landscapes exist in the cloud, on premise, or, more likely, a hybrid of both. The volume of applications and mixed landscape is complex and costly, and this “spaghetti landscape” can be an obstacle to digital transformation.
That’s where integration capabilities become a critical success factor. Analyst firm IDC released its “IDC MarketScape: Worldwide Cloud Integration Software and Services (iPaaS) 2023 Vendor Assessment.” The report found that “Integration is a foundational connectivity automation technology that not only unlocks immediate business benefits but also replaces technical debt that was previously used to connect applications, making it easier to replace outdated legacy applications.”
Additionally, the IDC report said, “Despite economic conditions, many organizations are still prioritizing investments in connectivity-based automation, particularly cloud-based integration software and services.”
Consider this customer story. Jumbo Supermarkten is a food chain based in Veghal, the Netherlands, with stores across Belgium and the Netherlands. Previously, Jumbo used an Excel-based tool called Production Advice List (PAL) to forecast its freshly made baked goods, convenience items, and prepared meals. This manual process resulted in inaccurate forecasting, unhappy customers, and food waste.
Food waste is a significant global sustainability issue. It wastes the natural resources used to produce and transport food to consumers – and rotting food produces methane, a greenhouse gas. In the Netherlands alone, over 75 pounds of food is thrown away annually per individual.
To improve its sustainability and customer experience, Jumbo decided to digitize its PAL system using SAP Business Technology Platform (SAP BTP), which includes integration, automation, and data and analytics solutions.
With SAP Integration Suite, a cornerstone of SAP BTP, “PAL 2.0” automatically brings together historical information with current data from SAP and non-SAP applications. Now employees can analyze real-time information on pricing, promotions, assortment, and other factors to accurately forecast how much food should be stocked.
Even better, employees get this information on their iPads so they can make better decisions while on the go. This intelligent forecasting system has allowed the company to work towards achieving the delicate balance of ensuring product availability for customers while not overstocking.
Jumbo’s story provides a few lessons. One, as IDC points out, integration helps reduce technical debt. Companies can leverage existing applications to add value to their business versus legacy applications creating a “drag” on their resources. Two, integration drives innovation. By connecting SAP and non-SAP applications with outside data like weather or holidays, companies can innovate to address their most pressing challenges.
In the above-mentioned IDC report, SAP was named a Leader in this first vendor assessment. Strengths includes its “extensive partner network” and “strong AI capabilities including interface and mapping proposal services based on AI and machine learning, speeding up the development of new connections.”
With an uncertain macroeconomic environment, organizations are under increased pressure to improve margins. The first step towards getting more value out of existing IT systems is a robust integration strategy. That’s why choosing the right enterprise-grade integration solution is critical to creating a path to accelerated connectivity and innovation.
To learn more about the benefits of integration, tune into the Integration Scoop podcast series.
Ragunath Ramanathan is chief revenue officer for SAP Business Technology Platform.