Digital transformation in the private sector has taken on new urgency. Amid COVID-19, businesses were quick to adopt new technology and automation systems to forge a path through economic downturn and place themselves on strong footing to compete in the post-pandemic landscape - one that will look very different compared to just 18 months ago.
But in South East Europe, commercial organisations are now charting a near vertical trajectory in adapting to digital processes. In the words of Josephin Galla, Managing Director for SAP South East Europe, the region has “grown up”. The notion that it is the “little brother or sister” in Europe is not only outdated, but misinformed. “We are very strong, particularly in the public sector and consumer products industries,” she says. “My heart is with South East Europe because I can see the dedication and open mindset of the people here. Serbia is set to be labelled the next Silicon Valley anytime now.”
SAP SEE has been guiding businesses through rapid change for many years. Galla says “the world is actually opening up because of the shut down”, and businesses across the territory have responded. This means a more global approach to procurement, rather than previously when domestic or local efforts were the priority. “We also see the human element of the entire business value chain has been given more weight, so it becomes more relevant to have an actual employee experience. We talk a lot about customer experience, and yes, that will remain important. But the impact of this pandemic is so big that employers have to take responsibility, and therefore employee experience has become equally important.”
Predrag Cirkovic, Managing Director, SAP West Balkans, drills down into the localised perspective. “South East Europe is a very diversified region,” he explains. “In the West Balkans, it is clear companies are trying to adopt to a new reality by making efforts to digitize their businesses, work remotely as much as possible, and going online with their sales and marketing. In this market environment, we act as an “economic enabler”, helping the commercial sector to go digital and to go online through our products and our platforms for back office, online sales, web commerce and online marketing.”
The fulcrum of this private sector shift across the territory is the public sector, and it is here that SAP SEE is focusing its expertise. “Governments have the same goal as us: to help commercial companies adapt and grow while facing, let’s call it, a new reality with new challenges,” Cirkovic says. “The public sector is a key business focus for our investment in the West Balkans, and we have become a trusted advisor.”
Twelve months since the coronavirus outbreak was declared a pandemic, however, it is clear that governments are lagging behind. COVID-19 exposed weaknesses in their fundamental operations. Fiscal consolidation, tax administration modernisation, and citizen engagement are all essential functions that are under-developed compared to their counterparts in Western Europe, Cirkovic points out: “The government sector is still using old systems which, though still functional, are sometimes 15 to 20 years old. But this is the opportunity.”
Diversity in the region throws up additional issues. Some countries such as Bulgaria, which “is all over digital transformation and smart cities”, are gaining pace. “We have very close cooperation with the municipalities,” Galla says. “Just to mention one example, after the outbreak of the COVID-19 pandemic, Sofia Municipality and six other municipalities in the country introduced SAP SEE’s COVID-19 Pre-Screen & Routing Qualtrics Questionnaire. This is an intelligent online information platform for the citizens which gathers up-to-date information on the coronavirus and current developments, identifies high-risk groups with filter questions, and automatically redirects them to the appropriate channels. The system also sends summary reports to the municipalities, providing feedback on the trends of the disease, while helping authorities understand what information needs to be messaged more strongly to the public. I am also proud to mention that in all 264 municipalities of Bulgaria, our flagship ERP solution SAP S/4HANA will be the core digital platform to drive digital transformation.”
Other nations are a little slower to adapt, Galla says. Romania and Ukraine, which have also had to deal with other legacy infrastructure problems, have been slower to drive their digital initiatives and allocate funding, for instance. But this is part and parcel of working within the public sector. Galla points to the many issues families have faced in simply connecting their children with their teachers. SAP cooperated with the Romanian Ministry of Education and Research last year, supporting remote learning of students through specific modern applications.
“Not every organisation can do a big bang, wall-to-wall project; it's all about change management, and we deliver all of the components to a successful project and are always there to stay,” Galla says. “With SAP’s experience, with more than 47 years in the market dealing with key players, we bring best practices to the table, as much as we bring technology, which can then help governments, private organisations, even healthcare organisations envision, ‘This is where I am now, and this is where I want to be’. We put a lot of effort into not only selling the products, but helping to develop roadmaps.
“Actually, this is exactly what our new cloud offering, the recently announced RISE with SAP, is focusing on,” Galla continues. “To deliver business transformation as a service, offering customers at all stages of digital transformation a completely new way to redesign processes to increase their resilience, operational efficiency, and their agility, and to enable them to innovate faster and more frequently.”
“In the West Balkans, exactly as Josephin says, we are using SAP best practices to create roadmaps towards a potential future, and the most efficient route,” Cirkovic adds. “We are one of the rare companies providing everything for the back office, and the new way of doing business online through our customer experience portfolio, web commerce, customer experience measurement software and so on. So we are bringing technology, we are bringing best practices, all the while remaining very close to all these projects. Whether SAP or a partner is implementing the solution doesn’t matter; we are always present to offer quality assurance and be that trusted advisor for our customers.”
Infrastructure reform, which underpins the entire process of government digitalisation, is well underway and has already yielded positive, proactive steps towards more pressing concerns. “We are at the beginning of the project for tax modernisation based on a new back-office fiscalization platform which aims to simplify the process for citizens and business,” Cirkovic says. “We also have citizen engagement initiatives, which essentially bring greater transparency and ease the process for citizens to approach and access city services.”
As governments gain pace under the stewardship of SAP SEE, Galla concedes that the “next few years will be tough”, though now things are rolling, governments can take swifter action to become leaner. “Similar to private corporations, they want to increase revenue, decrease costs, and increase cashflow, because this cashflow enables them to reinvest into government. There will be education and innovation, and we foresee the trend to optimise business and government processes continuing.”
Already this has had a positive impact on how governments consider and interact with citizens beyond the cold mechanics of economic governance, business relationships and handling the strains in healthcare caused by the ever-present threat of COVID-19.
“There has actually been quite a shift in the empathetic part of governing,” Galla says. “We’re seeing governments reaching out to their citizens and saying, “It’s okay not to be okay’. They’re placing emphasis on mental health, and I think this is a really great thing. The paradigm shift that we're seeing right now will yield results in new fields that we haven't even thought of yet.”
As governments and businesses adapt in the region, Galla says that internally SAP understands it also needs to evolve. “We have a constant learning mindset about how we must react faster to what the market wants. How we provide the right solutions to the business challenges that our customers have. The transition to a more agile, millennial-style company is something we are all constantly developing.
"I'm very happy that I have leaders that are driving that. Predrag and all the other leaders of the respective countries are working in areas that are highly innovative and forward-thinking. I love that because that means we are in the right mindset and always one step ahead to boost our customers’ success. The pace of change in the market is picking up speed.”