The future hybrid IT architecture of industrial enterprises must combine reliable global governance with innovation and agility
The design of the enterprise platform has a major impact on market supremacy. An increasingly unstable world and digital transformation are changing the target picture for companies. Corporate management and IT departments are under pressure to create a new generation of enterprise solutions. The hybrid architecture of the future must combine reliable global control with innovation, new degrees of freedom and agility. This goes to the very heart of global market leaders. New capabilities, new ways of thinking, but above all corporate culture is required. The blueprint for NEXT ONE exists, and so does the best practice for implementing it. It takes focus to become the global market leader for the next generation of business solutions.
“Europe’s top companies are doing well in global competition. Many companies are hardly known, but have achieved outstanding market positions through top performance. These “world market leaders”, so dubbed in German-speaking countries, define themselves through excellence. Their sustained success is based on a number of specific characteristics. Product quality is at the very top of the list,” says Stefan Risse by way of introduction. Hidden champions constantly improve their products, they satisfy the highest demands, and customer satisfaction is their top priority. Their ambition is market leadership, their basis is a sustainable, clear strategy. They strive for growth in a well-defined niche in order to be the best in the world. They are highly innovative and are usually supported by a strong corporate culture. They are active in all major markets and have a global presence.
The world is changing in shorter cycles
But growth had its pitfalls. How to steer the ever more powerful and complex tanker? How to manage the often rapid growth in new operating sites, national companies and acquisitions, and the expansion of market activities around the globe?
“ONE Global Enterprise” – until a few years ago, this was not only the focus of the best, but the goal of almost all medium-sized and large industrial companies. A robust backbone for shaping global business was needed: a solution platform that enables enterprise-wide business process management based on a globally available, seamlessly integrated IT system landscape consolidated into a few instances. With uniform processes, harmonized data and standardized applications. SAP software forms the core. The vision was a structurally strengthened overall company from a single source.
From left to right: The cbs Management Board Stefan Risse, Rainer Wittwen (CEO) and Holger Scheel
What is the situation today? Some companies have achieved their goal, many are still on their way. But the general conditions have changed noticeably over recent years. The world is in upheaval. Volatility, uncertainty, complexity and ambiguity are the keywords of a new reality of doing business, which is changing in ever shorter cycles. Ongoing pandemics, the climate crisis, the return of autocracies, new political upheavals and their impact on the global economy, supply chain bottlenecks, cyber-attacks, the energy crisis, and the quest for sustainability are all evidence of the multi-layered governance challenges that need to be addressed.
These changes also have a direct impact on the requirements that companies place on their solution platform. The specific business model of global market leaders and their competitive self-image are particularly affected. Meeting them appropriately is critical to their claim to leadership and will have a decisive influence on how they can maintain and further expand their status and pioneering role in the future.
Why? Especially in times of reorganization and restructuring of the global economy, the ability to operate international business efficiently across the company via a robust global governance model with high transparency, uniform business processes and harmonized data will make the difference in competition. “A strong corporate platform is a prerequisite for overarching governance in both crisis and growth situations. It enables targeted action and rapid penetration of the global organization, controlled acceleration as well as changes in direction, but also a safe jump into new business models. This is indispensable – but in view of the new quality of the challenges facing corporate management, it is no longer enough,” Rainer Wittwen, CEO of cbs, knows from numerous discussions with market-leading companies.
The qualitatively new thing is the digital transformation: it has to be mastered. New business models have to be integrated. New digital assets must be built that enable companies to keep pace with an increasingly fast-moving digital reality, its customer expectations, product requirements, logistical, financial, and technological consequences. It’s about meeting expectations; a champion wants to go beyond that to seize the opportunities that present themselves in the market.
Hybrid business architecture
The target picture is changing. The integrated digital solution platform of the future is less monotonous and built from a single piece. It is extended as an end-to-end process architecture across the internal and external value chain, across complex delivery networks and a multi-channel customer experience framed in both digital and analog outlets. It is a hybrid entity, with agile applications around a stable, standardized core, enriched with new technologies such as AI (Artificial Intelligence), ML (Machine Learning) or RPA (Robotics Process Automation) that bring proactive intelligence to operational processes. Not a static, but a growing, flexibly expandable architecture, dominated by operating models from the cloud, and an overall solution that is supported to a much greater extent than before not only by SAP, but by software packages from different vendors.
What’s the problem? The sheer diversity itself is a challenge. It does not replace the existing task, but adds to it. The end user is granted more simplicity on the surface, but this means increased complexity for design and operation. Digitization and data-driven business models promise more automation, and for this they need more than ever the overarching integration and consistency of processes.
But what is added is also qualitatively different. There are new, expanded requirements for the design of the corporate platform that cannot simply be solved with the old recipes and existing skills that have been developed over the years. No business as usual, a structural break. New capabilities need to be built and incorporated. New technologies, methods, and ways of thinking are making their way into the company, driven, moreover, by demographic change and the generational shift in the workforce. The way of working that has become ingrained in companies over the years of cultivated product excellence must be questioned in view of the specific quality of the new. An agilization of the organization must be initiated if the logic and speed of new intelligent technologies and data-driven business models are to be taken into account and used for the company’s own progress.
Long-term strategic partnerships
Just as the corporate platform is expanding, companies must also expand their sphere of influence. Global market leaders are proud of their great independence, of what they manage to do on their own due to their special skills, what makes them unique. The new reality requires more thinking and action in ecosystems. The importance of business partners is growing, and with it the relative dependence of corporate success on strategic cooperation. This must be considered with equal consistency when delivering the new, extended generation of enterprise solutions. Long-term strategic partnerships at eye level are becoming a success factor for companies, their innovative capability, business process excellence and for the sustainable efficiency of modern IT systems.
Ultimately, the new and extended challenges to the design of a future-proof corporate platform put companies to the test. At stake is the resilience and mutability of one of the key characteristics of global market leaders – their corporate culture. Holger Scheel explains: “Customers must prove themselves in an unprecedented balancing act and master the new bimodality as a permanent process not only in IT, but in all affected areas of the company. On the one hand, it means continuing in the controlled mode of global management and operational excellence, but at the same time breaking new ground with creative energy, a high degree of freedom and agile approaches.” Control and freedom, standards and flexibility, experience and creativity, implementation of the tried and tested and exploration of the new, best practice and innovation – these are the dichotomies of a new age, which place great demands on organizations and generate a great deal of friction, but there seems to be no alternative to bringing them together.
Consultants at eye level
The good news is that NEXT ONE, the target picture of the next generation of enterprise solutions for global market leaders, can be concretely defined and described. For all the provisionality and disparity in the maturity of the software solutions and roadmaps that are available, the new enterprise platform can be built today with a reliable plan. With the right philosophy, methodology and technology, the path to this goal can also be taken safely and successfully; this is already impressively demonstrated by lighthouse projects in the SAP environment.
What helps? Once again, combined skills that are at the level of the customer’s problem and can not only design solutions, but also consider them from end to end and demonstrably also create them with real existing software. Quite clearly, designing digital business processes across the enterprise and across technologies is not available on every street corner. There are specific assets for the digital transformation of global market leaders: solutions, best practices and methods that are tailored to the operators of SAP-dominated process platforms.
Global market leaders who want to stay ahead in the digital transformation thanks to their solution platform need consultants at eye level who, in addition to the necessary skills, have the right mindset to be able to deliver the next generation of solutions with rapid value creation in the appropriate sequence of steps. But even then, it remains a viable path, but not an easy one.
Next Generation Corporate Business Solutions
Passion, courage and innovative spirit are required – it is a matter of activating the very own strengths of world market leaders and carrying them into the sphere of corporate solutions. “Why not raise your own standards here, too, and become the showcase company for the next generation of corporate solutions, the Next Generation Corporate Business Solutions? If this succeeds, the chances increase that the world market leaders will also remain in the long term where they belong on the basis of their ambition: at the very top,” concludes Holger Scheel.