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SAP Sapphire Day 1: Accelerating Digital Transformation

Posted By David Brousell, May 16, 2017 at 3:58 PM, in Category: Transformative Technologies

Nearly 30,000 SAP customers, partners, and media representatives converged at the Orlando Convention Center in Florida yesterday to open the software company’s annual Sapphire conference, and the message they heard was loud and clear – companies need to accelerate their transformation into digital businesses.

The demands for greater innovation, faster time to market, and greater business speed and agility are requiring companies to transform themselves into digital enterprises. But most companies are still at an early stage in the transition due to difficulties associated with needed cultural change, the development of digital knowledge and skills, and required organizational redesign.

Nevertheless, SAP officials and other industry executives emphasized that companies must speed up their embrace of the digital model of doing business.

“Every two weeks, a company falls out of the S&P 500,” said Bill McDermott, CEO of SAP, in an opening keynote. “In this new age, there will be early adopters and also-rans of the intelligent enterprise. The digital revolution waits for no one.”

McDermott’s sentiments were echoed by Michael Dell, founder of Dell Computer who is now chairman and chief executive of Dell Technologies, which was formed after Dell’s merger with EMC and a number of other companies. Dell said that several trends are converging to make the creation of intelligent enterprises easier. He cited the declining costs of electronics, the Internet of Things, and the development of a fifth-generation cellular network as developments that provide the technological underpinnings for digital transformation.

“Digital transformation is real and it’s coming fast,” Dell said. The next 30 years in IT, he added, will make the past 30 years “look like child’s play.”

But Dell warned that digital transformation is not at its core an IT project. “It is a CEO project,” he said.

A Manufacturing Leadership Council survey on Next-Generation Leadership, published in April, underscores the challenges cited by both McDermott and Dell. The survey reveals, on one hand, a near universal belief that Manufacturing 4.0 requires a substantially different approach and set of skills on the part of manufacturing company leaderships. On the other hand, there is an acknowledgement among manufacturers that only a fraction of current leaders understand what M4.0 is all about.

So, rather than expecting that the journey to M4.0 will resemble a modern bullet train, speeding to its digital destination, the transition is beginning to resemble an old-fashioned horse-drawn wagon train -- slowly, sometimes haltingly, slogging its way to a digital future.

SAP has taken steps to help its customers transform digitally, announcing in January of this year an initiative called SAP Leonardo that was originally focused on just IoT but now has been expanded to include analytics, machine learning technology, Blockchain, and its cloud platform. The company is offering what it calls “accelerators” – bundles of expertise, data, and software – to five industry segments. These include manufacturing, healthcare, consumer products, retail, and sports and entertainment.



Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council

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