Digital Business Platform for SAP

Transcription

1 BUSINESS WHITE PAPER Digital Business Platform for SAP SAP ERP is the foundation on which the enterprise runs. Software AG adds the missing agility component with a digital business platform. CONTENT 1 Introduction 1 Building on bedrock 2 Evolving a digital business platform 3 Four elements of agility 6 Digitizing the enterprise 7 Summary Look at the beating heart of many of the world s largest and most successful organizations and you ll see three letters: SAP. SAP s Enterprise Resource Planning (ERP) software has proven itself time and time again. It is reliable, resilient and robust enough to handle the needs of a global enterprise. Introduction Flexible is not a word that comes quickly to mind when thinking about SAP ERP. And in a world of commerce that is changing as quickly as ours does, flexibility and agility are the hallmarks of today s successful companies. As a consequence, there is an impulse to try to find ways to tweak, tune and refine an established SAP ERP solution to accommodate the new demands of the marketplace. This white paper explores a different way to gain the flexibility and agility that today s businesses require one that does not involve compromising the integrity of your SAP ERP solution at all. Building on bedrock SAP leads the pack among ERP solution vendors. Analysts estimates vary by a point or so, but most concur that SAP s name is on approximately 25 percent of the world s ERP installations. The Oracle ERP offering occupies the number two spot and has just half the market share that SAP commands. Beyond that, the slices of the pie just get thinner by more than a dozen other companies, many of which are niche or specialty service providers. Despite its obvious popularity in the marketplace, there are certain things that SAP ERP is not. Agile is one of those things. Putting an SAP solution into production is no small task, and once it is configured, tested and validated, it can and probably should remain unaltered for years. As the system of record for essentially every enterprise in which it is installed, it needs to run precisely as it was designed to run. That in itself is not so strange, because ERP has been built for standardization and harmonization in areas such as finance, sales and distribution, material management and so on. Modifying so fundamental a system after it has been tested and validated even to gain greater agility in response to new market opportunities or changes is not a good idea.

2 Yet agility is critical to every business. The demands of the marketplace and the needs of your customers are all evolving at an accelerated pace. How do you keep pace without doing something to optimize your business processes? Those organizations that can keep pace with those changes can respond quickly to customer needs and deliver differentiated and innovative solutions to the marketplace. And it s not just customers you need to consider: Do not forget the demands of regulators. Compliance demands may change at a different pace than the demands of the market or your customers, but they will change and your organization needs to be as agile in responding to those changes as any other. The key to achieving the agility to keep pace with all these changes lies not in changing your SAP ERP solution. Just the opposite: Treat the SAP ERP solution as the bedrock foundation it is, and build your digital business platform on top of that foundation. Evolving a digital business platform In process-driven organizations, the agility challenge is fundamental. The organization has business models for engaging with customers and marketing its goods and services; and it has business processes that support and enable those business models; it has that bedrock SAP ERP system that tracks and manages everything from financials to the supply chain to the interactions with the customer. The business models interact with the business processes, which interact with the foundational systems that make things happen. But business models change quickly in response to new market conditions, new customer demands and even new technologies (think social media and the cloud). Instead of responding to this evolving world by trying to implement change at the level where the SAP ERP system resides, a better approach is to foster the evolution of that middle layer between the business models and the ERP system. Figure 1: Traditional operational structures lack a digital business layer. In many organizations, that middle layer of end-to-end-processes acts as a kind of compiler, taking input from the business model and transforming it into system code that the SAP ERP system can execute. To the extent that the business process layer has incorporated automation and streamlined operations, it has done much to contribute to what we think of as the Digital Enterprise. But many efforts to transform this layer have focused on improving the speed and consistency with which the business models can drive the core production activities taking place in the bottom layer. Speed and consistency are good goals, but many organizations find that those improvements only enable them to reach old goals more quickly and consistently. The goals themselves may have shifted, and that s where a digital business platform plays a crucial role. 2

3 The digital business platform performs all the tasks that organizations have traditionally required of that middle layer. It can provide the event processing and automation services, activity monitoring and alerting features, integration APIs, KPI measurement services and more. If built with intelligent business operations in mind, it can provide dashboards for real-time operational insights. But a digital business platform can do much more than that, too. With tools for both historical and real-time data analysis, collaborative process analysis, rapid app development and integration, a digital business platform provides the tools that an organization needs to connect the rapidly changing business models to the underlying back office infrastructure. These tools do not replace your SAP landscape; they enable a more agile and flexible interaction with that landscape. You can evolve business models, manage your business processes more efficiently and interact more effectively with those underlying ERP assets. Figure 2: The digital business platform facilitates the responsiveness an organization requires without compromising the integrity of its SAP landscape. Four elements of agility To enable the flexibility and bridging functionality, an organization needs to focus on enhancements in four distinct dimensions. Business and IT transformation Before you can facilitate the evolution of any business process, you need a full understanding of that process. You need to understand how one process interacts with, depends upon or affects others. This sounds like common sense, but in truth, many organizations document only high-level process names in SAP and have a very poor understanding of how their business processes really work. For that reason, business process documentation and analysis tools, preferably in combination with industry best-practice models, are crucial to the evolution of the Digital Enterprise. Part of the digital business platform will consist of tools designed to help an organization capture and understand the real state of business processes. Integrated with the process repository are other parts of the platform that will facilitate enterprise architecture management as well as IT planning and project portfolio management. With a thorough understanding of existing enterprise processes and the tools to model and manage the transition to a new state, the digital business platform can help the organization transform itself effectively. And one more thing: Along with the tools to understand the business processes and manage all aspects of a digital transformation project including time, resources, interdependencies and costs the digital business layer must provide the tools to manage this transformation with an eye towards governance, risk and regulatory compliance. With greater agility, an organization gains a greater capacity to move, change and manage risk, but along with that agility comes a responsibility to manage this transformation effectively. 3

4 Governance, Risk and Compliance (GRC) can t be an afterthought; it has to be tightly integrated with your processes and digital business platform from the start, and the reporting and monitoring tools you use for GRC must be flexible enough to accommodate all the changes that you may want to bring to the enterprise. Figure 3: Building out the four dimensions of the digital business layer Integration aimed at agility Particularly in heterogeneous IT landscapes where many applications are running, an organization s ability to integrate these applications is critical for effective end-to-end process execution. Without integration, end-to-end visibility remains elusive, as does the efficiency and flexibility required of an agile organization. Relying on SAP to integrate the pieces of your SAP landscape is appropriate; no other professional services organization is as well versed in the intricacies of SAP software. However, relying on SAP professional services for more than that may be inappropriate. Integrating the other business critical applications and processes within your organization and enabling those applications and processes to interact with the SAP foundation properly and safely requires capabilities not found within the SAP landscape. Moreover, it requires a different kind of expertise. Within the digital business platform, you will want capabilities that can facilitate the integration of applications and processes from the very top of the enterprise architecture where you are defining, managing and executing the business models themselves to the mid-level of the architecture, where the end-to-end processes are still running, and then to the foundation level where that single version of enterprise truth resides within the SAP landscape. You want to be sure that the high-level applications and processes are working with the right data from SAP and that any changes or modifications to that data are pushed back down into the SAP landscape in a secure and appropriate manner. Of course, because we re talking of automation and integration services within the context of enabling agility, it is critical that these tools deliver the performance, reliability and scalability required to meet the organization s ongoing needs. Similarly, it is critical that these integration tools provide services that support the full range of an API s life cycle from design to development, catalog management, exposure, access management and, ultimately, retirement. 4

5 Agile processes Implicit in the idea of agility is the understanding that change happens. Marketplaces change; regulations change; customer demands and wish lists change. The one thing that should change very little is your SAP landscape, which means that you must enable change elsewhere to meet evolving market demands and to differentiate your business against the competition. That elsewhere is the digital business layer. The key to agility here is agile processes, which you must be able to design and redesign quickly using a full model-to-execute approach. And your ability to design applications and business processes quickly should not be limited to working with data and processes that are already in the enterprise. You need to be able to incorporate the converging forces of social, mobile and big data. By ensuring access to integrated development tools that can support these needs, enterprises can deploy their changing business models and innovations much faster and stay ahead of competitors in the industry. Intelligent business operations Finally, the digital business layer should provide more than change initiatives that arise from within the organization. It must also enable an enterprise to detect and accommodate external events, opportunities and data streams as well. It needs to provide capabilities for identifying, assessing and acting upon emerging risks in real-time. And risk in this instance is broadly defined, encompassing everything from changes in internal process response times, which could affect downstream processes, to the discovery of certain market conditions that have historically preceded a change in customer demand, which will in turn affect inventories, the timing of raw material acquisitions and more. By enabling the analysis and management of these events in the digital business layer, local process improvements can be detected easily and included in SAP s process template in order to roll them out faster and gain the benefits on global scale. The ability to perform this kind of real-time risk analysis, to understand what the impact on the organization might be if a change is made in response to that analysis, and then to be able to change a business process on the fly lies at the heart of what we at Software AG think of as Intelligent Business Operations (IBO). IBO is not a product that can be purchased per se, but rather a state of operations with predefined analytic packages for SAP that enables and accelerates agility. There are products that can support real-time and historical analytics, products that can discover trends and patterns in big data in real-time and products that can execute changes in workflows and business processes in real-time, but it is the marriage of these functions into a cohesive operational solution that delivers IBO. The more integrated these functions, the more processes and data streams an organization can monitor in realtime and the more precisely the solutions can implement the right change or the right process refinement, the more agile the organization becomes. Figure 4: The conceptual architecture of the digital business platform 5

6 Digitizing the enterprise Finally, there s yet another role that the digital business platform plays that is crucial to the evolving enterprise. It fosters what we call the digitization of the enterprise. The digitization of the enterprise is ultimately about enabling the enterprise to interact more effectively with the digital world outside the enterprise. The digital business platform opens digital channels through which customers and partners can interact more efficiently with the enterprise directly from mobile devices, remote digital processes and more. The organization can hand over a degree of process control to customers, which, in turn, gives customers the opportunity to interact more intimately with the organization to define and refine the products and services that will meet their needs. This direct-to-enterprise input from the customer can accelerate the evolution of new products and services so that these products and services are ready as the customer demand expands. The digital business platform also enables the enterprise to capture information from a wide range of digital streams, which can, in turn, help the enterprise to gain greater insight into everything from customer sentiments to social changes or events that may have an impact on the supply chain a few months down the road. The old enterprise may have conducted focus groups and polled customers randomly to get a sense for how products and services might be received. The digitized enterprise can capture and analyze customer sentiment directly from social network feeds, Twitter trends and more. It may be monitoring long-range weather feeds to anticipate the impact of storms on shipping lanes, or it may be analyzing traffic feeds to update its logistics management tools in real-time. Ultimately, the digitization of the enterprise is crucial to the transformation of the enterprise into one that can thrive in the 21 st century. Without the ability to interact with the rest of the digital world, the enterprise will soon find its position in the marketplace overtaken by those more agile companies that can interact in that manner. This is the manner in which customers want to interact going forward. Your business models may already reflect this, but until you operationalize those models, you will not be able to encourage this kind of interaction. More importantly, the idea that you might update or customize your SAP landscape to enable this kind of digitization and agility verges on the absurd. Let the SAP landscape do what it does so well. Instead, build out the digital business layer to enable the flexibility and interactivity that you need in the marketplace. Summary SAP makes powerful solutions for enterprise resource planning, customer relationship management, financial management and more but no one would claim that it facilitates organizational agility. Thankfully, no one needs ask it to play that role. Agility, the ability to be nimble and responsive, the ability to build new customer experiences and the ability to effect organizational transformation all the while building on the underlying foundation provided by SAP that s the domain of the digital business platform. By building out the digital business layer, you can retain the powerful production systems you already use, avoid the risk and complication that customizing those systems might entail and still gain the flexibility and agility required to meet the needs of customers in the 21 st century. Software AG is unique in its ability to deliver the full range of solutions that an organization requires for a digital business platform. With more than 10 connectors and integrations with SAP, Software AG can create and deliver the integration and connectivity into SAP that today s evolving organizations need. Software AG has a clear concept of the role and function of a digital business platform as well as field-proven products and processes that can help an enterprise build on and make the most of an existing SAP investment. By partnering with Software AG, you gain the ability to respond to changing market and customer needs more quickly and effectively. You also gain the ability to interact with your customers, partners and supply chain members in ways that are more satisfying and more aligned with the ways in which they would like to interact with your company. You can seize new opportunities and roll out operations in new regions quickly all the while building on your existing systems of record. 6

7 From IBO to agile processes, integration solutions, even in-memory solutions for managing and interacting with big data in real-time, solutions from Software AG have been tested and designed to work together and to work closely with your SAP solutions and business modeling tools to deliver end-to-end support. In these evolving times, the breadth of these offerings and depth of that experience can enable your organization to distinguish itself in the marketplace both today and tomorrow. Contact your Software AG representative today to learn more about how Software AG can help you make the most of your existing SAP investments while concurrently facilitating the transformation of your organization to meet the dynamic demands of the 21 st century. 7

8 About the author Sven Roeleven is Vice President, Global Solutions at Software AG, responsible for developing new and deepening existing solutions in close collaboration with customers and partners. After graduating in Public Administration from Erasmus University Rotterdam, Sven joined Software AG in He gained extensive handson experience covering almost all Software AG s products throughout the course of more than 150 projects. Sven has specialized in business process analysis & management solutions in an SAP environment. In addition, Sven is advisor and member of a dozen BPM and Risk committees in the private and public sector. Find out how to power up your Digital Enterprise at ABOUT SOFTWARE AG Software AG helps organizations achieve their business objectives faster. The company s big data, integration and business process technologies enable customers to drive operational efficiency, modernize their systems and optimize processes for smarter decisions and better service. Building on over 40 years of customer-centric innovation, the company is ranked as a leader in 14 market categories, fueled by core product families Adabas-Natural, Alfabet, Apama, ARIS, Terracotta and webmethods. Learn more at Software AG. All rights reserved. Software AG and all Software AG products are either trademarks or registered trademarks of Software AG. Other product and company names mentioned herein may be the trademarks of their respective owners. SAG_Digital_Business_Platform_for_SAP_8PG_WP_Jan15