Fawaz Al-Nouri, General Manager Transformation Acceleration Programs, EMEA, at SAP, discusses the best ways to succeed in digital transformation...
The necessity of digital transformation is well understood and easily grasped; businesses have to find new ways to deliver value, generate revenue, and improve efficiency. What is more obscure is the actual business of going about the transformation – what solutions to put in place, how to adapt them to specific industry, and how to measure and achieve success when doing such transformation.
Multinational enterprise software company SAP’s Transformation Acceleration Programs (TAP) offers customers the necessary expertise to achieve a successful spend management transformation, as Fawaz Al-Nouri, General Manager for TAP in Europe, Middle East and Africa, explains. “SAP’s purpose has always been about helping the world run better and improving people’s lives. In support of this purpose, TAP was formed to help businesses define their transformation roadmap and how to move from their current outdated systems – where they're not getting the most value they can – to new technologies that benefit and improve the way they do business and in turn achieve their vision to better serve their end customers.”
The TAP process begins with gathering an understanding of the client’s existing setup. “Our group of deployment experts will apply a proven engagement model to expedite and improve the success of spend management transformation. We provide software, industry and process expertise while championing an operating model focused on value and exceptional business outcomes. We take a design thinking approach, where we study where our customers are today, but at the same time we also try to understand where they want to be, and the barriers that are stopping them from getting there.” It is only after this exercise has been completed that potential solutions are put forward and discussed. “Based on the TAP analysis, we recommend the right technology and decide what makes sense for our customers to take on. Throughout the engagement we’re thinking about solving our customers problems and making them run better.”
The solutions and capabilities that SAP offers are centred around its digital core enterprise resource planning (ERP) system, S/4HANA. Tightly connected to this digital core are branching capabilities for customer relationship management and experience, network and spend management, digital supply chain, human resources and people management and more. “SAP provides end-to-end solutions that cover most of our customers’ needs” says Al-Nouri. “The important thing is to prioritise and plan when to implement what and tie all these pieces together so that the customer can run their business seamlessly.”
It’s worth noting that while the digital core S/4HANA is available in both on-premise and cloud editions, most of the branching capabilities such as spend management are on the cloud, and Al-Nouri is a big believer in working on cloud. “When I started implementing software, SAP was known as the ERP company; we delivered wall-to-wall on-premise solutions. At that time, I was a little bit sceptical about cloud. I used to think that large businesses with complex IT infrastructure wouldn’t be able to adopt the cloud. Then, in 2010 SAP embraced cloud to offer customers a choice in how they consume SAP’s software. This is when I started to work with many customers embarking on the journey to move to the cloud, seeing first-hand that it’s possible and all the benefits that come with it. It was then that I myself was transformed.”
In that regard, Al-Nouri cites three key reasons that spend management cloud transformation is worthwhile. “While we always look at the broader spectrum, we're big advocates of cloud technology. Number one is because of the return on investment. Instead of running IT processes inside your four walls, putting them on the cloud frees you from managing that on your own. Reduced maintenance, infrastructure and support costs results in significantly lower total cost of ownership. Number two is the connection to the outside world. The cloud gives you access to the business network you need to achieve a high level of collaboration with other companies and organisations, where businesses connect, communicate and collaborate to redefine how work gets done. When you plug into the business network, you get instant access to millions of potential customers, suppliers and solutions. This will bring value to all stakeholders; lower processing costs, eliminate mistakes, and speed up the transactions. It’s like comparing email to Facebook, sharing business cards with connecting on LinkedIn, and postcards to SnapChat. Thirdly, digital technology means you don’t have to invest a lot of money and time to build the technology that you need in-house, instead having access to it right away through the cloud. Artificial intelligence, the internet of things and many more innovations will be at your fingertips when you move to the cloud.”
However, such transformations cannot be achieved through technology alone. Culture must always be a consideration, as Al-Nouri explains. “It's important to understand the client’s culture, because every customer is different. What we find in cloud transformation is that transitioning to a cloud mindset by moving away from on-premise customisations to standard processes in the cloud is key. Therefore, change management to ease this transition is a huge aspect that has to be taken into consideration.” Because such approaches can lead to disruption, it is consequently vital that organisations keep on top of communication. “A lot of transformations depend on change management and how you communicate the change, not only to your internal stakeholders, but also to the external world so that everybody knows what's going to happen and everybody's onboard to move in a new direction.”
In the course of its assessments, TAP encounters differing reasons for embarking upon a transformation. Some businesses might be inspired by the need for modernisation, while others might be more existential. “In the current digital age, every company is under pressure to achieve digital transformation, simply because of all the technologies that we have around us. These technologies are connecting people, the internet, and the physical world like never before. When everything is connected business as usual becomes a thing of the past and the transformation of many industries needs to accelerate.” says Al-Nouri. “But some industries are under more pressure than others. While step change in productivity and incremental process innovation might be appropriate for some industries like mining, oil and gas, and chemicals, other industries like media, banking, and retail are under intense pressure to innovate their business model and improve their customer experience now.”
Whether it’s a step process or accelerated change, Al-Nouri sees procurement as a central element in the digital transformation. “As business grows, there’s more spend, across more channels, than ever before. This requires better control, better speed, and better sustainability.” To be able to manage these changes, a solid, adaptable and scalable procurement platform is needed. “We call it intelligent spend management, because it covers all areas needed for procurement transformation to be successful. Full transparency into what and how you’re spending is critical and is best achieved by adopting a seamless source to pay system. This system needs to be intelligently connected with your trading partners so that you and your suppliers are always up to date, and you can apply compliance policies to every transaction. Only then can you leverage advanced technologies like artificial intelligence, machine learning and natural language processing to further optimize and automate the system.”
Looking at 2020 and beyond, therefore, and understanding how many businesses need to embark on a transformation, scalability becomes very important for TAP. “We see a lot of demand and we want to help as many customers as we can to transform better and faster. We’re addressing this by developing tools that can streamline the transformation process, from legacy systems analysis utilities to data migration accelerators. We are also working closely with our ecosystem. Our technology partners provide solution extensions that complement our portfolio, such as process mining by Celonis to support process transformation from beginning to end, and signature management by DocuSign to eliminate manual steps. Our system integration partners support our teams by providing their knowledgeable resources for implementation, integration and change management. Large consulting firms such as Deloitte, IBM or EY can, on the one hand, look at the overarching transformation programs and process improvement. On the other hand, meanwhile, procurement niche specialists such as apsolut or ExceleratedS2P can focus on the functional design and technical integration aspects.”
Finally, Al-Nouri points out the importance of recognising that transformation is an ongoing process, and the most important factor is customer success. As SAP’s member of the executive board Adaire Fox-Martin said in her speech at Web Summit in Lisbon this November: ”I will tell you the single most truthful thing you can hear about transformation: It never ends. The market and the customer will never stop changing. That fact grounds us and should ground you. We hold customer success as the inspiration of everything we do.”