How Digital Technology is Transforming Our WorldDigital Disruption
SAP Digital Report 2016
The Journey to Digital Transformation
Whats driving this enormous shift, and how can companies be prepared to take advantage of the vast opportunities that this progression will present? Also, how will businesses prepare for the inevitable risks that come along with change of this magnitude? We hope you will find some of those answers in this eBook.
This report is a unique opportunity to learn about digital transformation from some of the top companies in the technology and consulting industries today. It is produced by SAP, and includes a compilation of some of the latest thought-leadership perspectives from a variety of industry-leading SAP partners, such as Accenture, Capgemini, Cisco, Deloitte, EY, Hewlett Packard Enterprise, IBM, Intel, PwC, T-Systems and Wipro. This eBook is aimed at helping business leaders navigate their organizations through this technical shift in order to become leading digital enterprises.
Theres no doubt the business world is rapidly changing. It is racing at breakneck speed toward a digital economy in all sectors not just high-tech. Several technology and business drivers are propelling this evolution, and the massive digital transformation that is currently underway will affect businesses and consumers right across the globe in multiple sectors and in everyday life.
Digital transformation is the use of new digital technologies to enable major business improvements such as enhancing customer experience, streamlining operations, or creating new business models.Big & Fast Data: The Rise of Insight-Driven Business, Capgemini
Digital FoundationsThe underlying framework enabling digital technology to advance at its current rate. This framework includes Hyperconnectivity and Cloud Computing.
Digital DriversThe technology factors driving the exponential growth in digital computing. These include Data and Analytics, The Internet of Things (IoT), and Cyber Security.
Business DriversThe areas of business directing this digital shift, and the market and competitive forces that traditional businesses are facing in the digitally connected world. These include the areas of Customer Engagement, Business Innovation, Internal Process Changes, IT Transformation, and Digital Ecosystems.
Becoming a Digital EnterpriseHow to transform your business for success in the new digital economy.
In compiling this report, several megatrends emerged that are playing key roles in enabling this major digital shift across the enterprise landscape. These megatrends include the following categories:
The Megatrends Driving Our Digital World
Digital FoundationsEnabling Digital Transformation
Digital Foundations are the underlying technology factors enabling digital transformation to progress at its current rate.
This fundamental digital framework includes: 1 Hyperconnectivity 2 Cloud Computing
Companies are currently only scratching the surface when it comes to realizing the full potential of the networked economy. As digital ecosystems develop and the Internet of Things drives the need for more interconnectedness, businesses in every sector are moving toward hyperconnectivity, where everything and everyone is digitally connected.
Expansion of the already hyperconnected world is possible because of cloud computing. Hyperconnectivity enabled by cloud computing is rapidly accelerating business and product expansion into previously unknown and some still to be discovered areas and capacities.
This fundamental technology framework is a key factor, allowing businesses to realize the possibilities and true benefits of digital transformation across the entire enterprise.
The technology is available, the possibilities are endless, but the adoption is just at the beginning. Bob Parker, IDC Research, on SAP Radio Hyperconnectivity: Reinventing the World Economy
The GDP related to the Internet is worth over $4 trillion US, 3.5x more than the oil and gas industry #SAPDigitalReportShare This
HyperconnectivityEveryone has access to everything
Hyperconnectivity describes the rapid growth of interconnectedness between people, objects, and technology. People have access to more data and information than ever before, and they have the ability to develop and maintain more social and business connections across the globe than at any other time in history.
The Evolution of Hyperconnectivity
Hyperconnectivity has come about thanks to three phases of technological advancement:
1. The Internet enables all computers to connect on a single platform. Without the Internet, we wouldnt be digitally connected.
2. Mobile Technology continues to grow exponentially, which accelerates hyperconnectivity worldwide.
3. The Internet of Things is the next wave of advancement, and will take interconnectedness to an unprecedented level.
The Economist Intelligence Unit: Hyperconnected Organisations
Learn how the issues and opportunities of hyperconnectivity affect the economy in this video from the Economist Intelligence Unit.
Economic Impact of Hyperconnectivity
With mobile technology at an all-time high and the Internet of Things on the upsurge, the economic impact of hyperconnectivity on gross domestic product (GDP) is rising. A recent study using data from the World Economic Forum and other sources concluded that in the G20 countries, the GDP related to the Internet or digital activity is worth approximately $4.2 trillion U.S., roughly 3.5 times more than what the oil
Economist Intelligence Unit, The Economic Impact of Hyperconnectivity
https://twitter.com/intent/tweet?text=The GDP related to the Internet is worth over $4 trillion US, 3.5x more than the oil and gas industry&hashtags=SAPDigitalReporthttps://twitter.com/intent/tweet?text=The GDP related to the Internet is worth over $4 trillion US, 3.5x more than the oil and gas industry&hashtags=SAPDigitalReporthttps://twitter.com/intent/tweet?text=The GDP related to the Internet is worth over $4 trillion US, 3.5x more than the oil and gas industry&hashtags=SAPDigitalReporthttp://bit.ly/1QmM9zBhttp://bit.ly/1QmM9zB
and gas industry generates. Growth is at about 8% in developed countries; growth in developing countries is escalating even faster, at roughly 18%.Economist Intelligence Unit, The Economic Impact of Hyperconnectivity
The Benefits of Hyperconnected Commerce
For business, hyperconnectivity means quicker, easier global connections and innovation throughout the entire business ecosystem in todays networked economy.
Businesses that successfully incorporate hyperconnectivity into their strategy are more likely to experience the following results:
More effective collaboration across divisions, geographies, and business networks including suppliers and customers
New data-driven organizational approaches
Accelerated business processes
Hyperconnectivity Coming to an Industry Near You
If you think your industry hasnt been touched by hyperconnectivity think again. While some industries, such as retail, publishing, travel, music, and media, have completely transformed with the digital shift already, many industries will likely undergo significant changes in the coming years because of the hyperconnected economy.
Industries such as finance, consumer goods, and others risk becoming irrelevant if they dont take action and start capitalizing on technology advancements, including analyzing and acting on the valuable data that they most likely already possess. Hyperconnectivity allows many industries to expand beyond their traditional boundaries and increases competition from entirely new quarters.
Digital Darwinism: Adapting to Hyperconnectivity
Digital Darwinism has been defined as the era in which technology and society are evolving faster than businesses can naturally adapt. In light of this, its promising that a global survey of 561 executives by The Economist Intelligence Unit revealed that:
Eight out of ten respondents believe hyperconnectivity has been beneficial for their organization
69% of business leaders believe their companies are adapting well to hyperconnectivity
47% say business processes have accelerated as a result
45% say collaboration, both within and between divisions, has improved because of hyperconnectivity
Only one-third say it presents more threats than opportunities
More than a technological trend, hyperconnectivity is a cultural condition to which businesses must adapt #SAPDigitalReport
Todays businesses operate in a digital world one thats faster and more volatile than ever before. Accenture, How high velocity enterprises are changing the game
The Hyperconnected Economy, The Economist Intelligence Unit
https://twitter.com/intent/tweet?text=More than a technological trend, hyperconnectivity is a cultural condition to which businesses must adapt&hashtags=SAPDigitalReporthttps://twitter.com/intent/tweet?text=More than a technological trend, hyperconnectivity is a cultural condition to which businesses must adapt&hashtags=SAPDigitalReporthttps://twitter.com/intent/tweet?text=More than a technological trend, hyperconnectivity is a cultural condition to which businesses must adapt&hashtags=SAPDigitalReport
On the flip side, 57% of business leaders say they have experienced notable competitive pressure from digital products launched by established companies in their industry. Despite this growing competitive pressure, only 19% believe they will need to radically restructure their business in response to growing hyperconnectivity.
Digital Disruptors are Redefining the Business Landscape
Those companies that are willing to radically transform and disrupt their industries are seeing substantial benefits. Disruptive technology like in-memory computing and digital accelerators like social, mobile analytics, and cloud computing, can create faster, smarter, more agile, and better connected enterprises.
Companies that are quick to adopt digital technology and become disruptors in their industry are reaping rewards such as:
Significantly reduced costs
Quicker time to market
Increased customer satisfaction
Learn how to become a high velocity enterprise in the Accenture video, Architecting the High Velocity Enterprise
Hyperconnectivity: Next Steps
If your company is lagging behind the digital disruptors in your industry, its time to catch up while you still can. Accenture outlines what companies should do to become a hyperconnected, high velocity enterprise:
Ensure your company has solid Enterprise Resource Planning (ERP) systems in place to manage and automate back-office functions
Incorporate advanced technologies, such as in-memory computing, cloud computing, and Big Data
Extend your digital capabilities with social media, mobility, and analytics
Collaborate with business partners for process and product innovation
Create new industry-specific solutions
Learn more in the Accenture report, How high velocity enterprises are changing the gameHow high velocity enterprises are
changing the game Powered by a new role for their enterprise systems
The (Hyper) Connected CarSAP and BMW show you whats possible with connectivity and the cloud.
An Age-Old Industry Uses New-Age TechnologySee how farming is being transformed by hyperconnectivity.
Making Digital Real With Hyperconnectivity
Cloud Computing Connecting in the Cloud
Cloud computing enables the growth of hyperconnectivity by allowing flexible, scalable connections to multiple applications.
What is The Cloud?
Gartner Research defines cloud computing as a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service using Internet technologies.1 Simply put, its a flexible way for businesses to access the technology they need, when they need it, without having to own and maintain their own servers and other hardware.1SCN Blog: A Brief History of Cloud Computing, Source: Gartner
Cloud Technology and Services: The Great Equalizers
Cloud technology is a great equalizer for organizations, whether a company is a huge enterprise or a small start-up. Companies of any size can now access technologies that may have been previously unattainable, such as advanced predictive analytics, and jumpstart their ability to disrupt the status quo and radically affect the competitive landscape.
Cloud has the power to fundamentally shift competitive landscapes by providing a new platform for creating and delivering business value.IBM: The Power of Cloud
How the Cloud Works
Deployment models are how cloud infrastructure is supplied to customers. There are basically four types:
1. Private Cloud: This is when the cloud infrastructure is supplied to a single tenant (organization) with multiple end-users. It may exist on- or off-site and may be managed by a third-party vendor
2. Community Cloud: A multi-tenant solution for a group or specific community (industry) that has shared software and/or platform use
3. Public Cloud: Provisioned for open use by anyone or any organization
4. Hybrid Cloud: When the cloud infrastructure is a combination of two or more distinct cloud models
Service Models define the type of capabilities provided to the end-user, and how they are delivered. These generally include three types:
1. Software-as-a-Service (SaaS): Users can access the providers applications, which run in a cloud-based infrastructure
64% of SMBs already use cloud-based software, and 88% expect to in the next 2-3 years. #SAPDigitalReport
Share ThisForbes.com: Roundup of Cloud Computing Forecasts and Market Estimates, Q3 Update, 2015, Source: The small business revolution: trends in SMB cloud adoption.
https://twitter.com/intent/tweet?text=64% of SMBs already use cloud-based software, and 88% expect to in the next 2-3 years.&hashtags=SAPDigitalReporthttps://twitter.com/intent/tweet?text=64% of SMBs already use cloud-based software, and 88% expect to in the next 2-3 years.&hashtags=SAPDigitalReporthttps://twitter.com/intent/tweet?text=64% of SMBs already use cloud-based software, and 88% expect to in the next 2-3 years.&hashtags=SAPDigitalReport
2. Platform-as-a-Service (PaaS): Gives consumers the ability to deploy applications onto the cloud infrastructure using programming languages, services, and tools supported by the provider, but the customer does not own, manage, or control the underlying infrastructure
3. Infrastructure-as-a-Service (IaaS): Provides the capability for the consumer to provision access to fundamental computing resources within a cloud-based infrastructure. Many companies choose IaaS to maintain control of their overall infrastructure and automatically deploy servers, processing, networking, and storage capabilitiesSAP HANA Blog: What is the...