The Ability to Innovate Is a Must for Business and IT Processes

July 25, 2005 by admin

The current challenges in IT were revealed almost from the beginning in the plenary addressees of Geoffrey Moore, a strategy consultant and successful author, and Shai Agassi, a member of the SAP Executive Board. They identified the greatest challenge in a competitive environment filled with similar companies and products as the ability to clearly differentiate from the competition and for companies to realize the differentiation quickly and efficiently using IT.

The signs of core and context

The first address clarified the terminological and strategic foundation. “Core” – as in core processes –refers to the heart of an enterprise: everything that contributes to a future-oriented differentiation from the competition and everything that gives products and services a unique selling point. “Context,” however, refers to traditional characteristics: everything that has already become standard in the industry. At first, the core of an enterprise differentiates it from other companies. Then that core itself becomes an industry standard and part of the context. A current example is the mobile telephone industry and the rapid development of its devices. A color display was once a differentiator, but it quickly became an industry standard. The same happened with integrated cameras: they were quickly copied by the competition and brought to market.

More innovation in core areas, more productivity for the context

Success therefore first requires that companies keep permanent innovation in their core area: continuous monitoring, correction, and regulation of points of sale. The ability to innovate has become a point of sale. The second success factor is the steady ability to increase productivity in the context area, which also means outsourcing tasks or bringing external partners on board.
Management of both tasks in this constant circle of innovation, adaptation, and renewed innovation requires an extremely flexible IT landscape. In his keynote address, Shai Agassi posed the issue succinctly: When business processes change constantly, why should companies wait until the IT industry develops something and offers it to them? Why shouldn’t they just use ready-make components to develop the individual IT solutions that they require?

Always having new solutions for changing business processes

Consider the current development of the SAP solution portfolio against this background. SAP NetWeaver is changing from an integration and application platform into a comprehensive business process platform to support innovation in core processes and to increase productivity in standard areas.
In the core areas, composite applications can create new solutions quickly, and enterprise services help map newly developed business processes. In the context area, mySAP ERP and other mySAP Business Suite solutions supply the desired standardization to increase and consolidate productivity. And finally, SAP NetWeaver Portal offers employees access to information and self-services.
The integration of technology and applications from Microsoft is another component. The hot topic here is the Mendocino project that links SAP solutions with Microsoft Office applications – to enable direct access to the Outlook calendar, for example. But integration is important for more than Microsoft and Windows. In terms of legacy systems and solutions from third parties, the ever more finely ramified ecosystem can link additional instances and partners beyond the limits of the enterprise. Building upon the foundation of SAP NetWeaver, IT thus creates an environment that reaches the twin goals of innovation and productivity in a continually changing business world.

Innovations at all levels

Individual presentations at the congress examined these strategic and technological perspectives on the future in development and applications. The design of the congress selected by SAP and the stage design in Frankfurt also reflected the topics of openness, flexibility, and the ability to adapt using IT. A round stage visually reinforced the platform topic. The stage was open on all sides for plenary sessions but split into as many as nine segments later on, depending upon the number of individual sessions. This approach treated visitors to a visual preview of the sessions.
The program for the close of the first day of the congress also examined innovation. Hasso Plattner, the chairman of the Supervisory Board at SAP, delivered a challenging address on innovation, globalization, and technological leadership. He also discussed opportunities, risks, and the downheartedness of companies and entrepreneurs in Germany. According to Plattner, unleashing new resources – the focus of the congress – is not just a question of technology, but a question of mentality.

Reports from the real world

After the strategic content of the first day, sessions on the second day of the congress looked at the diversity of industries and existing IT solutions. Applications in the public sector were presented along with those in the automobile, high-tech, and utility industries. SAP NetWeaver – alone and combined with other SAP products – was introduced as a sustainable foundation for business processes within an enterprise and across enterprises.
An additional plenary session examined the benefits in the real world of business as an example. Torsten Niemietz, CIO of Nordzucker AG, reported on the implementation of SAP NetWeaver as a platform and access portal for customers, vendors, and employees. The solution operated by Nordzucker even includes farmers so that they can order and pay for seeds. Separate expert sessions, a forum on the future, and the exhibit booths of SAP partners also saw a great deal of activity. Overall, over these two days, more than 50 partners used more than 100 presentations and workshops to inform more than 1,500 participants about current developments.

A look into the future

The SAP NetWeaver Congress closed with a plenary session on the interplay of all business processes. Rolf Schumann of SAP Deutschland once again referred to the key terms of core and context and the relationship between differentiation and productivity. According to Schumann, tighter markets and margins in the economy make IT that is flexible and able to react to a situation a decisive success factor. He also treated additional components of process integration: consistent use of master data with SAP NetWeaver Master Data Management and more rapid adaptation of processes with SAP NetWeaver Exchange Infrastructure. He characterized further opening and flexibility of IT toward a customer-driven supply network as additional developments for the present and the future. “IT does matter,” he says.
Given the rapid sequence of changes in business and IT processes, he closed with a look into the future and forecasted that the existing position of CIO, which handles only processes, would develop into a chief process innovation officer whose tasks would include involvement in the design of processes.
The bottom line? Companies have an existential challenge of always taking a new direction in terms of innovation. Differentiation from the competition occurs through business processes as companies meet this challenge. IT solutions like SAP NetWeaver make it possible to adjust business processes flexibly to the current requirements of the market – and thus always to unleash new resources.

Petra Winkler

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