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Kathy Gibson reports from SAPInsider in Vienna – McKinsey tells us that, in just 11 years’ time, 75% of businesses won’t be around in the format they are now.
Digital transformation is both the main threat to organisations; and the solution they need to embrace in order to survive over the next decade.
In fact, digital transformation is a difficult concept, but every organisation in the world has to start embracing it.
There is a confluence of forces that are affecting everyone, says Chris Hallenbeck, senior vice-president: database and data management: EMEA at SAP. These include hyper-connectivity, supercomputing, cloud computing, the smart world and cyber-security
“This is what is affecting us, and its affecting every industry,” Hallenbeck says. “For instance, banking has to manage trade, risk and compliance across multiple trading risks.”
Meanwhile, the oil and gas industry is being affected: in the face of clean energy competitors, they need to make more intelligent decision about how they produce electricity.
Retail is increasing its use of data, as they need to gain deep insight into customer profiles and buying patterns; they need to remain connected to every user, Hallenbeck says.
Utilities find themselves competing in the market, and possible facing bankruptcy. “It’s incredible how they will be affected by clean energy,” Hallenbeck says.
This means they need to analyse smart grid meter data quickly to maximise energy delivery.
“They need to become part of the solution rather than someone who gets run over in this digital transformation age.”
The external factors hitting organisation are a combination of emerging technologies, the competitive landscape and new risk factors.
“And of course budgets are being cut as data volumes grow,” Hallenbeck points out.
Internal forces are a big challenge for companies, too. Hallenbeck points out that new, millennial employees want a different way or working. This evolving workforce could be made up of contingent employees as well – all of which brings new challenges for management.
Data is growing all the time, but customer needs are also growing, Hallenbeck says. “How do we move on to become agile, to respond to internal and external customers’ needs?
“This is digital: the confluence of these forces. We need to get closer to the customer and reduce all those layers.”
This means companies have to modernise the value chain, integrate development, production and services; and increase throughput and business efficiency.
They have to do this by reducing human error, supporting data-driven decision-making; and creating a common business experience