Today, every organisation needs to reimagine its business model. Customers expect business to meet them anywhere, any time, on any device. To meet this speed of response, businesses need to be ahead of the game, at the cutting edge of what their market is capable of doing and informed by real-time data.
To make this possible, businesses need to adopt cloud systems. Cloud is the direction of the digital age. Some still see cloud Enterprise Resource Planning (ERP) as the future, but I’d argue it’s what businesses need now. It’s not coming, it’s here.
Worldwide spending on public cloud services is forecast to reach £204 billion in 2021, according to the latest International Data Corporation (IDC) Worldwide Semiannual Public Cloud Services Spending Guide. In 2017 it will reach £98 billion, an increase of 25 % over 2016 spend and at S/4HANA Cloud, our adoption has grown by more than 70% year on year.
What forces are driving the business case? All the evidence points towards three advantages of intelligent cloud ERP: instant use, intelligent software, and innovative capabilities.
The business case for intelligent cloud ERP is not about reducing Total Cost of Ownership (TCO), but about simplifying the user experience to drive productivity. It’s about changing every business into a digital business. With no servers, no front-end rollout, no monolithic change management, the vendor provides it all without any time wasted.
While on-site implementations often take the better part of a year, an intelligent cloud ERP should be available for use in a fraction of the time. With the right system, you can expect implementations in a 12-16 week timeframe.
Another huge advantage is the pace at which intelligent cloud ERP can deploy the latest technology. Customers can expect regular, scheduled updates, expanding their capabilities as new tools using machine learning reach the enterprise.
What could you accomplish if you focused on delivering business value instead of keeping the lights on?
The future of software is in applications that learn from the business, provide information in context, and offer real-time analytics derived from big data. For enterprise software, machine learning and AI are already making this happen.
Machine learning and AI hold tremendous potential for enterprise. Think about the benefit of software that can predict what information users need in any given context. By learning from its users, an ERP becomes a system that interacts with and anticipates their needs, not a reactive platform that requires direction.
S/4HANA Cloud’s recent 1705 upgrade introduced SAP CoPilot – our first intelligent digital assistant for the enterprise space. It’s intuitive to use, highly intelligent and contextualised behind the scenes, providing customers with an effective tool for managing their businesses.
There are few things machine learning and real-time analytics cannot do: transaction fraud detection, assessing CVs or making procurement smarter through contextual analytics on suppliers. Already the potential is incredibly compelling.
Intelligent cloud ERP features a “fit to standard” model. It remains simple and intuitive and provides best practices for common business functions, streamlining processes and removing complexity.
This a feature – not a limitation. For businesses that have truly unique areas, as is often the case with SMEs, intelligent cloud ERP provides more freedom for extensibility than traditional on-premises systems. The platform’s standardised format means that third parties, including users, can build on it with industry-specific extensions. With a variety of business models and processes, this is an essential consideration for SMEs and in the first half of 2017 they constituted more than 60 % of all new S/4HANA customers.
Embracing the Business Case
The ability to start small and see the rapid time to value is one reason intelligent cloud ERP is becoming the platform of choice and demonstrating real business value for those who embrace it.
All the benefits are here today – and the cloud model is only getting more compelling. Customers select the service, bring their users and data, and vendors provide the rest. Cloud is here and it’s in every company’s best interest to start harnessing the benefits.
By: Elder Panlilio
Managing Director, SAP Philippines