SAP takes digital transformation from boardroom to stadium

THE next big buzzword in digital is, well, digitalisation. Generally, it means conversion of business processes into digital and connected processes that, among other things, make it possible to leverage, analyse and action all business content at the click of a button.

It also means being able to change or refine existing processes without bringing to a halt the areas of business that depend on them. Few companies appreciate the benefits better than global business software organisation SAP.

It used to be best known for its heavyweight enterprise resource planning software, which bolted digital processes onto traditional businesses. But, with the rapid demand for full digitalisation, it found itself having to change its thinking.

“We had been working on tweaking our own processes, but realised this wouldn’t be enough if we wanted to transform other companies,” says Simon Carpenter, chief technology adviser for SAP Africa. “You have to move fast because the pace of change is phenomenal. More than half of the Fortune 500 from 15 years ago have disappeared. They didn’t see the changes coming, and either became irrelevant or so weakened that they were acquired.”

SAP itself saw the danger of being swept away by digitalisation if it did not take control of it. Among other things, it developed a platform called SAP Hana that allows all systems and data in the business to be loaded into instantly available memory, which means it can be accessed live, or in “real time”.

Says Carpenter: “We as SAP couldn’t develop the solutions we had to make available fast enough, so we had to acquire them. It’s like changing an aircraft while it’s in flight.”

In the process, SAP spent $30-billion (R429-billion) in the past five years on acquisitions, and $1-billion a year on organic research and development. It still supports customers with traditional enterprise resource planning as well as customer relations management software, but increasingly delivers such services from the cloud. This means it can achieve scale and drive down cost. The ideal is that these companies then evolve their own systems to take advantage of digitalisation.

For example, Under Armour started with SAP on a traditional enterprise resource planning platform but is now working with SAP Hana to turn itself from an apparel into a hitech healthcare company. The Apple App Store uses the platform to support a community of 1.5 million developers putting apps in the store and monetising them.

Carpenter offers a startling statistic: 74% of the world’s transactional revenue touches an SAP system.

The most fascinating example of a new kind of customer is the digital sports team, using highly specialised software, SAP Sports One. Launched just over a year ago, it is used by the likes of the German football team, the McLaren Formula One racing team and the Women’s Tennis Association.

Brett Parker, SAP Africa MD, says that while the technology is complex, the idea is simple: “Unifying team performance and operations data on a realtime platform.”

He acknowledges that sporting competitions will always require talent and skill. But, he says, “in an era when the difference between success and failure is often marginal, technology may well be the magic ingredient to ensure success.” As in sports, so in business. Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee