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SAP Cloud Computing

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In 2013, ASUG launched a cloud integration Influence Council which spanned several integration topics between SAP Business Suite (with a focus though on SAP ERP) and SAP's recently acquired cloud solutions.  While the initial focus targeted cross-solution topics, this year the councils narrowed their focus further and formed separate groups focusing on integration with Ariba, HCI, and a broader council looking at the full Cloud for Customer solution development direction.

 

At this year's 2015 ASUG Annual Conference in Orlando, we hope you can join us at one of two events to influence SAP's development of more simplified and streamlined integration capabilities for SAP Business Suite integration with Ariba;

 

1. Preconference Deep Dive: Ariba & SAP Integration 101:

Arriving on Sunday or Monday?  During the all-day "Ariba & SAP Business Suite Integration 101" ASUG Pre-conference session, attendees will participate in a full-day deep dive workshop covering Ariba & Business Suite integration. Hear options, best practices, and the roadmap for Ariba Integration with SAP Business Suite and gain a deep dive into the integration options to simplify the integration including options for SAP HANA Cloud Integration, Ariba Integration Tool Kit, Direct Connectivity, and SAP NetWeaver PI, and what packaged SAP Best Practices are available in SAP Rapid Deployment Solutions.  We'll have several "bring-your-own-PC" hands on exercises using offline simulations you can take home with you, and download project tools to help you get started.


During the lunch break, we'll host Influence Lunch Table discussions with workshop participants, hosted by our ASUG Influence Customer Chair, Nick DeCenzo, and SAP Product & Package Owners including , Lisa Sammer, Cathal O'Sullivan, Kirsten Loegering, Sindhu Gangdharan, and Andreas Muno.

To participate, learn more here and note that ASUG preconference sessions have an additional fee;  $595 for ASUG  Members, and  $695 for Non-Members

 

2. ASUG SAP Ariba Influence session in the ASUG Hub  on Wednesday, May 6th at 4:15PM

Join Ariba Integration ASUG Influence Council Customer Chair,  Nick DeCenzo and several Ariba/SAP Product Managers regarding future development plans and ASUG member needs regarding Ariba integration with SAP Business Suite.

 

Last year the ASUG Cloud Integration Influence Council was run as one council with a bigger cross-cloud solution and technical focus, but has since been split into separate influence councils focused on specific cloud solutions.  In several cases in the past we collaborated with the existing SRM focus/influence group as well where possible, and will continue to do so.  During this session we'll have several SAP Product Management teams represented to hear your ideas and requirements, and to share their areas of development where SAP is actively seeking ASUG input via integration between ASUG Influence Councils and SAP CEI projects.  Join us to learn more!

 

Hope you are able to join us at one of these sessions!

Of course there is the regular and seasonal market floating, and some highs of economic instabilities. It happens with all industries, and all markets around the world.

 

The question is how to act in this time of uncertain. You must have heard "Behind every crisis, lies opportunities" and when it comes about market changes, invest and innovate this is 100% true. If you make the right call to keep up, change and adapt, by the time the market gets back to its stability and the "sea goes calm again" you will be one step ahead of those companies who did nothing, in a time you are supposed to do exactly the opposite.

 

Technology makes it lot easier to seek the correct information, and it helps you to change as you must, and as you can. This is why the implementation of new technologies such as cloud computing is so important today. Treading this path, and choosing the right tools can put you on a great position to take the right decisions and seek growth in a time everyone else seeks stability.

From last couple of months, I have been working with Cloud Platform. During this period, my journey was full of interesting questions and challenges. I thought I would sum up all challenges here which will help us to make our Journey smother towards Cloudification. Here are few points.

 

Compliance – When we think about Cloud, a few important questions to come to our mind -  Where will my data reside? Whether my data is safe in the cloud? What are the security features enforced by Cloud provider on their data centers? Will my company still comply with legal requirements?

Answer of all these question lies in careful evaluation  and discussion between the various stakeholders. So, during the feasibility study phase, it is very important to involve IT, Business, Legal and Finance etc. teams. One thing that we need to keep in mind that decision to move some/all of the systems to Cloud should not be an IT Team decision as it will impact everyone in the organization. Business will be impacted if Systems availability SLA in Cloud will not match with Business Continuity, Legal Team will be impacted if Data security is not in compliance with country’s legal requirements, Finance will be impacted if it will overshoot cost etc. So, everyone needs to be involved in this decision.

 

Infrastructure – Infrastructure plays an important role while implementing solutions on Cloud. A Simple question is How Cloud Providers network will be connected with Customers network? But answer of this question is quite complex as it depends upon lot of factors like Bandwidth, Network Latency, Cost and Connectivity etc.

Based on evaluation of these factors customer can decide to setup Corporate VPN connectivity between cloud providers data center and customer network.

Another option is to setup dedicated Local Area Network connection which will reduce network latency but at same time can have impact on cost.

So, these factors should be evaluated based on different factors and latency test can be carried out to test Network through put, round trip time and network stability etc.

 

DNS Resolution – Before implementing new solutions into Cloud, one of the important factors is DNS resolution. Systems installed in Cloud will be on different network than the customer’s network. In order to access systems installed in Cloud from Customer’s network, Customers need to establish DNS connectivity between Cloud Provider network and their own network. This will also be required if Cloud systems needs to be integrated with On Premise systems.

There are lots of DNS resolution mechanisms available in the market to achieve this like Static DNS Scenario, DNS Forwarding Scenario and DNS Zone Transfer Scenario etc.

 

High Availability & Disaster Recovery – While deciding on the Cloud then it is very important to discuss about Business Continuity as all Cloud vendors has SLA’s related to availability of the systems in cloud. So, it is very important to discuss about Maintenance Period.

Also, architecture for High availability of systems and disaster recovery plays a major role. So, it is important to know what will happen to systems in case of any disaster and how quickly systems in cloud can recover from any disaster to minimize impact on Business.

 

Integration Strategy – When moving to Cloud, it is very important to decide on Integration Strategy as lot of legacy systems, third party systems and On Premise systems need to interact with systems in Cloud. So, it is very important to design Integration architecture to show how different systems will integrate with each other, will there any requirement of any 3rd party integration solution etc.

 

Enterprise Single Sign-On – This is one of the important aspects when customer is using Enterprise wide Single Sign-On for their On Premise solutions. While migrating to Cloud, it is important to assess that whether existing Single Sign-On solution can be utilized for new systems in cloud or there is need to use different Single Sign-On solution as lot of Single Sign-On Solution depends upon operating system on which systems are installed.

This will be one of the deciding factors in case new solutions in cloud cannot use existing Single Sign-On solution and it can impact the cost & timeliness of the project.

 

Email Server Integration – If systems installed in Cloud needs to send email with in customer organization or outside organization then it is very important to decide how email server integration. There can be multiple options in this scenario like Customer can integrate their own Email server to the systems installed in cloud, this might require change in firewall rules to allow systems installed in cloud to use email server or Cloud provider provides their own Email server to integrate with systems installed in cloud etc.

So, it is important to decide how Email services will work in systems installed in cloud.

 

Responsibility Matrix – This is one of the areas where Customer and Vendor need a lot of attention in order to effectively define Roles and Responsibilities. Responsibility matrix includes who will support the systems, who will ensure proper backups of the systems, if it is Managed Cloud then what are the responsibilities of Vendor for managing the systems and who will do upgrade & when etc.

 

FQDN – This is very small but an important aspect while installing new solutions in Cloud. When few systems are installed in cloud and few in On Premise infrastructure then it is important to use Fully Qualified Domain Name while setting up communication between On Premise system and Cloud systems. This is required because Cloud systems and On Premise systems are in different domains. So, always use FQDN while setting up any connectivity.

 

Conclusion – While Future of Technology lies in harnessing the Power of Cloud, so, it is very important that we make our strategy in such a way that it will faster Innovation cycle, increase flexibility, reduce carbon emission, make Business more scalable and make Business real time.

 

For more information, please refer to below links.

 

SAP HANA Cloud Platform

Amazon Web Services

 

Disclaimer: This Blog is the personal Blog and only contains my personal views, thoughts and opinions. It is not endorsed by my employer nor does it constitute any official communication of my employer.

At the recent Hybris Global Partner Summit in Munich,  hybris-as-a-service (yaaS) was introduced as a modern commerce platform based on microservices (it is now in beta ).  I’ve blogged about YaaS in the past in conjunction with SAP’s PaaS – HANA Cloud Platform (HCP) – and its evolution towards a tighter association with Cloud Foundry.

 

YaaS contains a modern architecture and uses cutting-edge technology such Cloud Foundry, Apache Kafka (a high throughput distributed messaging system), apigee, RAML, etc.

image001.jpg

[SOURCE]

 

Note: Other SAP competitors (such as Workday) are also moving towards such micro-service-based architectures.

 

The architecture also uses micro-services mash-ups to aggregate service calls or to compose more complex service flows that “stop cascading failure and enable resilience in complex distributed systems where failure is inevitable”. This model was demonstrated by NetFlix in its Hystrix solution) and has been used successfully in numerous environments.

 

Note: Before people start screaming and yelling that YaaS will replace HCP, it is important to understand that YaaS will be based on HCP as its underlying PaaS layer.

image002.jpg

[SOURCE]


NoteCurrently HCP does not yet support Cloud Foundry so the YaaS Beta doesn’t run on HCP.

 

As others have discovered, this architecture has broader implications for SAP’s general cloud efforts.

 

Journalist Jason Bloomberg  states:

Not only does YaaS represent a next-generation strategy for hybris, it portends a momentous transformation of the SAP mother ship as well.

Christine Crandell compares YaaS to Force.com and describes YaaS’ differentiators as a threat to Salesforce:

  1. Independence from the business domain
  2. Independence from devices
  3. Pre-build business processes
  4. Non-proprietary that offers freedom of choice in programming languages, underlying database technology and portability of services and applications between cloud infrastructures.

Truthfully, a threat to Force.com from SAP would be a pretty big change in the “Cloud Platform wars” and would require a very widespread use of YaaS and similar architectures in SAP’s various cloud assets. How realistic is this transformation?

 

SAP’s developers and YaaS

 

Cutting edge architectures – such as YaaS- often move slowly into larger organizations / vendors that have other entrenched (I won’t say “legacy”) technologies.  How fast can SAP move towards implementing YaaS-like architectures and engaging internal developers to use such tools.

 

SAP’s main focus in the PaaS arena remains HCP, yet publicly-available session lists for the upcoming internal DKOMs in Waldorf and Palo Alto provide additional insight into SAP’s activities concerning YaaS, Cloud Foundry and other related development topics.

 

NotePlaying with the sessioncatalog.sapevents.com URL, I discovered other session lists for internal SAP events (recent FKOM in Mexico, etc).  Although only the abstracts are available, there is a wealth of information available for those patient enough to look at the specific details of individual sessions.  The associated presentations aren’t available but the abstracts provide enough additional information to see patterns and thus gain valuable information.


Session

Description

YaaS

YaaS Overview

Loyalty Management on Hybris as a Service (YaaS) Platform

Hybris Loyalty Management is a brand new application based on the micro-services architecture and Cloud Foundry. It extends Hybris Commerce as a Service solution and helps retailers easily run their loyalty programs to engage customers, deliver personalized promotions, encourage advocacy, and increase sales. Learn how easy it was for us to build business functionality, rule engine, job scheduler, integration with Hybris and SAP systems and responsive UI using YaaS and microservices architecture.

Modern Customer Engagement Center Built on Hybris YaaS.IO-Cloud Platform

The Customer Engagement Center is YaaS.io Cloud Stack based to enable our customers to provide simple and direct next generation customer service via Peer-to-Peer VideoChat and Social Media capabilities. It was built in an greenfield approach using Hybris YaaS.IO commerce cloud platform to deliver a glimpse of what is possible in 8 weeks using Cloud Development paradigms like Yaas.IO factors, microservices, open sources libraries and modern Web based real time communication technologies.

Hands on YaaS - a new cloud platform for CEC

Get your hands on the brand new YaaS (hybris-as-a-service) platform, based on a microservices architecture. Define your RESTful API, use the SDK to bootstrap a service stub in Java within a few minutes, and make it do something cool by calling existing Core and Commerce APIs.

Development on YaaS: First-Hand Experience on Building Microservices

Field report from first projects within the LOB CEC building on hybris YaaS: - Lessons learned and best practices from running proof of concepts and CEC Cloud Bootcamps - Getting started with the help of a growing community

Cloud billing based on yaaS platform

This session will demonstrate how an end-to-end public cloud billing solution can be developed on the cloud foundry (open source) based yaaS platform. We will explain to you the architecture we drafted to be able to quickly deploy rich functionality and how we plan to evolve the solution over time. Based on a realistic user story, the session will give insight into what and how we exactly developed on the various layers of the platform.

Service Management in C4C with Drones

In this talk we will discuss inner workings of drones, software integration of drones with C4C and code that runs on yaaS running image analysis routines and algorithms.

Cloud for Customer - OData APIs and Extension Apps on yaaS/HCP

To complement SAP Cloud for Customer (C4C) application, our customers and partners, can leverage yaaS or HCP to build innovative cloud scale application integrated with C4C. We have built new capabilities in C4C enabling customers to quickly consume OData APIs exposed by SAP Cloud for Customer for not only standard business objects but also those extended/customized by customers in an open, standard based, easy to use cloud development and runtime environment and build application using HCP/yaaS

 

Interesting dimensions

  1. Session  speakers are from SAP SE and hybris which shows that the technology is expanding to include more than just hybris developers.
  2. Although the focus is primarily on LoB Customer Engagement & Commerce (CEC) applications, there are a variety of other YaaS-based applications (drones, cloud billing, etc) which are more generic in character.
  3. The fact that extensions might also run on YaaS technology is intriguing.
  4. There are still more general HCP sessions than YaaS sessions at the DKOMs - Palo Alto : 20 vs.6 – Waldorf: 17 vs. 9) but the amount of YaaS-related sessions is interesting especially as it was just released at the beginning of February .
  5. The development speed that this new architecture may bring is important to consider – building a cloud solution in 8 weeks is pretty impressive.

 

As mentioned above, YaaS also focuses on micro-service-based architectures; I also found a variety of related sessions.

 

Session

Description

Developing apps with SAP HANA Cloud Platform and Cloud Foundry

At this booth we will present our plans to integrate the open elastic runtime platform Cloud Foundry as substantial part of SAP HANA Cloud Platform. We will explain how this allows developers to build applications in Java, node.js or XSJS. And you will learn how developers can use well-known community as well as enterprise-grade SAP services to build micro service oriented cloud applications.

SMP/HCPms and Microservices in the Cloud

This talk will describe the factors and techniques that were involved in taking an existing monolithic on-premise application, SMP - SAP Mobile Platform, and turning it, without major redevelopment, into deployable cloud services; HCPms - HCP mobile services. This includes the steps taken to ensure we can adapt to the evolving cloud microservice architecture and container strategy of SAP. Targeted at server-side developers and architects, you will gain insight into the HCPms cloud architecture.

LoB CEC Strategy and Architecture

Our mission is to enable companies to provide real-time, contextual, consistent, and relevant experiences to their customers, regardless of channel or device, across Sales, Service, Marketing, and Commerce. This talk discusses the architecture implications, API and integration technology strategy, and evolution of product portfolio towards a more harmonized micro-services based cloud architecture to enable these customer experiences and different deployment options.

 

Note: I just have access to the DKOM session abstracts and have no way to judge how many developers will really attend them but the presence of such sessions is an indicator of their relative importance.


My take

SAP DKOMs contain many sessions (in Waldorf there are over 300) that compete for developers’ interest and the emergence of S/4HANA, Fiori /UX or HANA will probably pull larger crowds but I’m hoping that the YaaS sessions will also draw crowds.

 

As SAP moves towards the cloud, YaaS and its architecture will play an important part in this evolution.  DKOM is an internal event for developers – I’m waiting for similar efforts to educate the partner ecosystem. One of the most important features of YaaS is an app / services marketplace that will finally provide SAP partners with the opportunity to easily sell their cloud assets – a change that will be welcomed by such companies considering the present lack-luster SAP Store in terms of its support of cloud solutions.

 

For SIs / ISVs struggling to understand / cope with the impact of this transition to the cloud, the necessity of learning yet another new technology may not be welcomed.  Thus, existing partners must be motivated to take advantage of such offers. In the future, they will be faced with a new type of competitor who is micro-service-savvy and already accustomed to the new development paradigms promoted by AWS, Netflix , etc.  Such competitors may not have experience in enterprise software space but their technical maturity in the necessary technology makes them excellent choices for larger more traditional SIs to acquire to quickly gain market share.

After facing Concur in FKOM2015 in Barcelona, I really want to test concur by myself, so today I have registered a 30 days free trial account here: Test Drive Concur® Expense - Concur  and immediately start to use.

 

Once I have logged in, I have found everything that I might need while punching ( for mobille version I think we'll no more enter many things). Looks so simple, I did not refer to any help or manual, Concur guided me to start.

Concur_Sarhan_02.jpg

Then I have started to enter my FKOM expenses, wow it is really easy, just select the expense item from right-end side and concur will propose you the vendor from it's database, if not recognized one just enter the name.

 

Concur lets the organizations to define expenses and the limitations, this gives confidence to managers that expenses are under control. I have hit the limits while entering the taxi.

 

Concur_Sarhan_03.jpg

No problem I have proceeded by entering an explanation to my manager I finished my entry and submitted for approval. Without any training or preparation I have completed all in 5 minutes!

 

Concur_Sarhan_05.jpg

Concur really fun and easy,

 

Cheers,

 

Sarhan, follow me on twitter http://www.twitter.com/sarhanpolatates

Here is something we all have witnessed at some point of time. Everybody keeps talking of some term, it becomes a buzz-word in no time & then it becomes so hugely popular that you won’t dare to ask what-the-heck-it-actually-means? Right :-?

 

Ok,  so here is one sincere attempt to unravel the hazy world of Cloud..!  

 

We’ve come a long way from that famous quote “ 640K ought to be enough for anybody”! With the ICT convergence, 3G (& now 4G) network & the humongous BIG social media apps, DATA is growing faster and faster.   No wonder, if given the choice to move one workload to the cloud, most choose storage & which has given rise to Cloud computing model of IaaS – Infrastructure as a Service, which basically offers  bundled services of Compute, Storage, Network & Security requirements. Many organizations are moving their ERP applications to Cloud either at the time of hardware refresh/upgrade or are directly hosting the applications on Cloud right from the inception of business. By doing this, not only they move away from Capex to Opex (Capital expenses to Operating expenses), but also enjoy the scalability of Cloud (can add/reduce storage/compute/network bandwidth as per the need) within an agreed SLA-framework! While Amazon is a global leader as IaaS provider, ICT players like Sify Technologies (India’s first SSAE-16 Cloud certified provider) in India have helped many organizations in moving their ERP applications (& especially SAP) to Cloud seamlessly.

PaaS (Platform as a Service) – Here cloud providers deliver a computing platform, typically including operating system, programming language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software layers. With some PaaS providers like Microsoft Azure and Google App Engine, the underlying computer and storage resources scale automatically to match application demand so that the cloud user does not have to allocate resources manually.

 

SaaS  - In Software as a Service (which is also called as ‘On-demand’ software) model, cloud providers install and operate application software in the cloud and cloud users access the software from cloud clients. This eliminates the need to install and run the application on the cloud user's own computers, which simplifies maintenance and support. The pricing model for SaaS applications is typically a monthly or yearly flat fee per user so price is scalable and adjustable if users are added or removed at any point.

  1. Saleforce.com, Ariba, & Success-factors (latter two are from SAP stable) are some of the hugely popular applications used by enterprises all over the world to manage their sales/purchase/HR processes dynamically.

SaaS allows a business the potential to reduce IT operational costs by outsourcing hardware and software maintenance and support to the cloud provider. This enables the business to reallocate IT operations costs away from hardware/software spending and personnel expenses, towards meeting other business goals. In addition, with applications hosted centrally, updates can be released without the need for users to install new software.

 

Depending on the deployment options, Cloud is classified under Public, Private & Hybrid Cloud, which vary due to security considerations.  As the world embraces Cloud, Cloud players are adding more and more stringent layers of security through software/hardware firewall & Managed Security services (including data encryption technology) .

 

Last word .. Cloud is not vaporware, it is there to stay and …only to grow bigger and BIGGER by the day!

 

So, when is your organization moving onto Cloud nine :-?

SAP announced its next big thing in FKOM and I am excited to be part of it: Business Suite 4 HANA or S4HANA.


The S is for Simple and the 4 is for the 4th generation of SAP ERP: R/2, R/3, ERP, and S4HANA.

 

4thGeneration.png

 

 

S4HANA is the successor of SAP Business Suite, built on SAP’s HANA platform. It comes with re-written code (no materialized aggregates) to leverage SAP HANA transactional and real-time analytical capabilities, delivered through a simplified and enhanced end-user interface based on SAP Fiori, available in the cloud and on premise.

 

 

CloudandOnPremise.png

 

 

Some takeaways from FKOM

 

 

Simplicity delivered with S4HANA:

 

- Based on cloud-first approach

 

- HTAP (hybrid transaction analytical processing) – a database that can support OLTP and OLAP without data replication

 

- HANA multi-tenancy – in the cloud or on premise

 

- No unnecessary indices, no aggregates – replaced by on-the-fly calculations, thanks to an in-memory database

 

- User interface is Fiori based

 

- Maintains ERP core data models

 

 

Real benefits:

 

- Reduced data footprint – highly compressed data, less tables

 

- Higher table throughput – fewer table updates, less locking, faster processing

 

- More Flexible – complexity is reduced as indices and aggregates are removed

 

 

SAP’s new cloud-based business models are disrupting the enterprise-software industry – watch this space.

I see that far from the main capitals in third world countries, the Cloud Business is approached very cautious by entrepreneurs.

 

 

This is rightly? We here know the poor quality of internet services in comparison to other countries when you are away from the capital, and this serves as ammunition to favor other negative factors.

 

 

 

Of course not everything is negativity, and this has been changing gradually, the internet services are improving and some entrepreneurs are taking Their chances in cloud business.

 

 

Such infrastructure problems in these countries directly affect the results of technology-related business, the advancement of information and technological should be pillars of these countries economies.

In my last blog,  I talked about creating a "decision framework" to help organization move towards Cloud adoption. However, I had little idea of what it may take to create a “decision framework” until attended this Gartner webinar by Drue Reeves, Distinguished Gartner Analyst. This webinar, titled "A methodology for determining which application can go on the Cloud", taught me something that I believe can also be used an inputs for developing “Cloud Strategy”. I would like to share with you the notes I took from this webinar.

 

Step 1: Risk Assessment

When you put the application in the Cloud, you need to understand that you are losing control over it to some extent, especially when you are putting your application in the public Cloud.

With IaaS you have much more control and with SaaS you have some control.

 

Think of what is your risk tolerance for the application if you lose some transactions/data, or you lose service connection. Will that cause any loss of life, or loss of your brand or productivity?

Are you risking customer privacy? Are you staying complaint? If you think that you can't tolerate your Cloud application going down for few minutes or your risk tolerance for the Cloud application is extremely low then stop here!

 

Step 2: Risk Mitigation

Once you have evaluated your risks and risk tolerance and decided to move forward, you need to think how you can mitigate these risks. You may mitigate some of the risks by :

- making sure the Cloud service is in compliance to security requirements

- by adopting a hybrid Cloud approach where you can run your application on the public Cloud but store your data and access control inside your own company network. This way even if you lose access to the Cloud, your data stays secure.

- having an insurance that will pay you in case you loss of control and resulting financial loss to your business.

 

Step 3: Select Cloud Layer

Once you understand the risks and have a plan for risk mitigation, next step is to select Cloud layer: "IaaS, PaaS or SaaS. You should involve application owner in this process.

You should ask them if they want to manage the application at the user level or at the storage level,

Do they want to just replace the application or want to re-factor the application?

If application owners want to manage applications at the storage level, then you will select IaaS layer.

If the application owners say that they are not looking to manage the application at storage level, don't want to deal with backups, don't want to build extensions or refractor the application  then you know that they are just looking for the replacing the application with a SaaS application.

However, if the requirement is to re-factor the application and run it using Hybrid model then the right option is to go with PaaS.

 

Step 4: Technical Assessment

Next, you need to perform technical and cost assessment of the Cloud layer that you are thinking of using.  For example, if you are going for IaaS, you need to find out what kind of computing resources (CPUs, memory) and storage are required by the application. If you are going for SaaS, you need to find out how many users will be using the application, what functionality business owners plan to use and what data will flow in or out of the application. Based on your technical assessment, you need to come up with a total cost.

 

Step 5: Cloud Application Design

Once you have selected your Cloud layer, you need to decide what design changes are required to make it usable for the business.

If you are going for IaaS or PaaS, you may want to:

- design it for resiliency

- add services for backup and snapshot

- add additional servers for load balancing

 

If you decide to use SaaS:

- You need to customize the user interface to make it usable for the business.

- You may add a mobility layer so that application can be used from mobile devices.

 

Whatever service you select, you want to add it to a check list of things to monitor.

You want to monitor your Cloud application and services to make sure it is keeping up with the growth.

 

Step 6: Cloud Bill Estimation and Governance

You can't deploy to the Cloud without knowing how much it would cost. You don’t want to find out later that your Cloud requirement has grown and your IT budget is blown out.

You should also want to ask your business how the application will grow over time, so that you can estimate the cost for adding resources and features to the application in the Cloud.

For example, how many users you will need to added with time, how many instances you may have to add to keep up the optimum performance. You need to have a governance process in place to make sure you have only the required number of active accounts in the Cloud and you are not over-consuming.

 

 

Note: Once you have reached this point, you have everything you need to make go/no-go call for moving to Cloud.

 

Step 7: Flow of approval

Once you have decided to go ahead with Cloud deployment, you need to get buy in from all key players: application owners and their business unit leaders. On the strength of this process, you can show that due diligence is done, and you can get approval based on that.

 

Step 8: Cloud Supply Chain

Now you have the approval to migrate app to the Cloud. You must have process defined for opening and shutting down could account. Migration strategy: you have to order the app, you have to think hybrid when putting application the public Cloud but may want keep access control inside your network. Storage migration strategy: if you decide to keep data in house, you may need fast connection between Cloud and on-premise systems.

 

Step 9: Manage and evaluate

Information you have gathered from previous steps need to be used to manage expectations.

You need to monitor and control your Cloud application to make sure it meets the expectations that has been set with the business owners.


Reference:

Webinar Registration: A Methodology for Determining Which Applications Are for the Cloud | Gartner

Until 2014, CIOs were asking "Why should we adopt Cloud computing?” Along with the maturity of Cloud over the past couple of years, understanding its benefits has grown as well. CIOs are now more open to the idea of exploring Cloud technology. They are curious to find out how other companies are adopting Cloud as part of their IT strategy. They are now asking "What does Cloud mean for our organization and how can we formulate a Cloud strategy?


Many organizations considering Cloud computing have questions around its security, availability and integration. According to KPMG's 2014 Cloud Computing Survey, enterprises are now evaluating cloud-based applications and service providers on security first (82%), followed by data privacy (81%) and cost (78%).  In the article “Five Cloud Computing Trends Affecting Cloud Strategy Through 2015“1 Gartner says: “The cloud promises to deliver a range of benefits, including a shift from capital-intensive to operational cost models, lower overall cost, greater agility and reduced complexity. It can also be used to shift the focus of IT resources to higher-value-added activities for the business, or to support business innovation and, potentially, lower risks. However, these prospective benefits need to be examined carefully and mapped against a number of challenges, including security, lack of transparency, concerns about performance and availability, the potential for vendor lock-in, licensing constraints and integration needs. These issues create a complex environment in which to evaluate individual cloud offerings.” Enterprise architects can help organizations create a “decision framework” for cloud adoption. In this article, I will try to look at cloud security, the most important factor for cloud adoption, and explore the specific security features of SAP’s IaaS and PaaS cloud solutions.


SAP’s Hana Enterprise Cloud Security


Hana Enterprise Cloud (HEC) is SAP’s IaaS (Infrastructure as a Service) cloud solution, located in SAP datacenters. SAP’s datacenters are certified to internationally recognized standards such as ISO 9001 for Quality Management or ISO 27001 for Information Security. They are also in compliance with industry accepted best practices such as COBIT or the ISF Standard of Good Practice for Information Security to assure the best possible security and risk management approach. You can find details about HEC security certificates here . Security compliance and effectiveness of HEC datacenters are closely monitored and audited by ISO/SOC auditors.


HEC customers receive an isolated, logical grouping of several Virtual Machines and physical systems. All customer networks are completely isolated from each other. Customer Landscapes can be connected to HEC using IPSEC VPN and MPLS. IPSEC stands for Internet Protocol Security which is a protocol suite for securing Internet Protocol (IP) communications using authentication and encryption. IPSEC VPN uses the tunnel mode where it wraps the original packet, encrypts it, adds a new IP header and sends it to the other side of the VPN. IPSEC helps provide defense against 1) Network-based attacks from untrusted computers, attacks that can result in the denial-of-service of applications, services, or the network, 2) Data corruption, 3) Data theft, 4) User-credential theft and 5) Administrative control of servers, other computers, and the network. MPLS stands for Multiprotocol Label Switching. It is a scalable, protocol-independent transport mechanism where data packets are assigned labels and packet-forwarding decisions are made solely on the contents of this label. MPLS protocol provides end-to-end high availability and consistent performance, protection against denial of Service attacks and unauthorized network access. SAP provides encryption facilities for customer data that traverses public networks, including Internet, dedicated VPN, and MPLS lines3. They also have the capability for unique encryption keys per customer or customer-managed encryption keys along with documented encryption key management procedures3.


SAP has enhanced HEC datacenters with attack detection and prevention capabilities for customers. This has been done by2 integrating multiple tier firewalls, IDS (Intrusion detection system)/IPS (intrusion prevention system) appliances and Web Application Firewall (WAF) services. IDS and IPS work together to provide a network security solution. An IDS works using the promiscuous mode by capturing packets in real time and processing them. This way IDS can respond to threats and work on copies of data traffic to detect suspicious activity by using signatures. An IPS works inline in the data stream to provide protection from malicious attacks in real time. This is called inline mode. Unlike an IDS, an IPS does not allow packets to enter the trusted side of the network. An IPS monitors traffic to ensure that their headers, states, and so on are those specified in the protocol suite. IPS sensor analyzes the payload of the packets for more sophisticated embedded attacks that might include malicious data. This deeper analysis lets the IPS identify, stop, and block attacks that would normally pass through a traditional firewall device.


All detective/preventive services and devices, that are part of HEC datacenters, are hooked to a 24x7 security monitoring center where SAP personnel can perform analysis, plan mitigating activities and take respective actions. IT security knows that there is no “perfect security” – it is more of a constant race to be ahead of trouble. Keeping this fact in mind, SAP is constantly striving for improving the security of HEC and their customers. Following this line, SAP has taken up the following activities to improve the security around HEC2:

  • Implement ongoing automated regular penetration tests externally over the Internet
  • Perform internal vulnerability scanning of systems
  • Organize black-box / white-box security challenges and technical security validations where third party security experts try to deliberately circumvent our security controls and measures.

 

Last but not the least, SAP datacenters are supported by a backup power grid that can take charge of the power supply in case of main power grid failure. As an added precaution, datacenters have diesel generators that can provide enough electricity for datacenter operations. To make sure a natural calamity cannot disrupt a customer’s system operation, datacenters are spread out in multiple locations across the USA and Europe.


Itelligence is a certified Hana Enterprise Cloud service provider. You can learn more about our HEC service offering here.

 
  

Hana Cloud Platform Security


Hybrid cloud deployment option is most popular in today’s IT world. The Zdnet article9 titled “The Age of the Hybrid Cloud is Upon Us” states “A report from managed services provider Avanade said that 73 percent of large enterprises agree that adopting a hybrid cloud solution will give them an edge over competitors, with 75 percent agreeing that a hybrid cloud strategy should be one of their main priorities next year.”  Hana Cloud Platform (HCP) is SAP’s PaaS (Platform as a Service) cloud solution. Customers can use HCP to run SAP’s cloud applications, develop & run extensions for SAP cloud applications or custom developed cloud applications. Before customers decide to use HCP to run and extend their business processes, they may want to know how secure is this platform, specifically its integration capability with on-premise systems. HCP runs in SAP-hosted data centers. So, the network and physical security provided by SAP datacenters, as described in the above paragraphs, are also applicable to HCP. In the following paragraphs I will try to shed light on the security aspects of integration between HCP and on-premise system.


HCP consists of four services: AppServices, DBServices, Infrastructure Services and Connectivity Services. As a part of the connectivity services, SAP offers a product called “Cloud Connector” that enables integration between HCP and on-premise systems. Cloud connector can be installed inside customer’s DMZ zone or its internal network. The best practice is to restrict the access to the operating system where the cloud connecter is installed, to only a set of users who will administer the cloud connector. The communication from HCP to on-premise systems happens using a SSL tunnel that uses TSL (Transport Layer Security), encryption of the communication, and mutual authentication of both sides (cloud connector and HCP) using X.509 certificates. Communication protocol used for communication form cloud (HCP) to the cloud connector can be either HTTPS with system certificate or RFC over SNC.


The tunnel between cloud and cloud connector can be established only by the administrator of the cloud connector using a valid cloud account. The administrator can configure when this tunnel will stay open or closed. Having an established tunnel does not expose on-premise systems and resources to the connected cloud account. The administrator needs to configure explicit access for each system and resource that will be accessed on connected cloud account.  In the scenario where you have multiple applications running in HCP, you can configure to enable access for only specific cloud applications. The customer can have multiple cloud accounts in HCP which are always isolated from each other. One cloud connector can be used to connect to multiple cloud accounts. However, each cloud account needs to have its own tunnel to communicate with on-premise systems. A tunnel cannot be shared across cloud accounts. Audit log feature in the cloud connector gives a list of all records exchanged between the cloud connector and the cloud and can be used as a part of a risk management strategy. An alert mechanism can be set-up to alert the administrator in case of fraudulent or malicious network activity.  Cloud connector can also be used to support communication from on-premise systems to the HCP. This is done using database channel to connect local database tools via JDBC or ODBC to the SAP HANA DB or other databases on HCP.

 

I hope this blog helps you understand the importance of cloud security and the security features offered by SAP’s Cloud solutions. I hope that an enterprise architect or a CIO can utilize the information laid out in this blog to talk to the Line of Business owners, help remove their doubts or concerns about cloud security and create a positive atmosphere for Cloud adoption.

 

References:

  1. http://www.itbusinessedge.com/slideshows/show.aspx?c=95261&slide=2
  2. http://scn.sap.com/blogs/sro/2013/12/30/hana-enterprise-cloud-security--our-passion-our-purpose-our-pride
  3. https://hcp.sap.com/content/dam/website/saphana/en_us/PDFs/HEC_IT_Security_and_Compliance_Customer%20Package_v2.pdf
  4. http://www.cisco.com/c/en/us/products/ios-nx-os-software/mpls-security/index.html
  5. http://en.wikipedia.org/wiki/Multiprotocol_Label_Switching
  6. http://www.ciscopress.com/articles/article.asp?p=1336425
  7. http://scn.sap.com/docs/DOC-60903
  8. http://www.forbes.com/sites/louiscolumbus/2014/12/26/kpmgs-2014-cloud-computing-survey-enterprises-quickly-moving-beyond-cost-reduction-to-customer-driven-results/?utm_channel=Technology&linkId=11356784&utm_campaign=buffer&utm_content=11327282&utm_medium=social&utm_source=linkedin
  9. http://www.zdnet.com/article/the-age-of-the-hybrid-cloud-is-upon-us/

Human behavior is changing. Technology is on track to dominate our lives, and we are becoming digital-first. There is no doubt that a digital transformation is already ongoing and omnipresent.

We see industry after industry and enterprise after enterprise equipping themselves with new technologies like cloud, mobile, data, and networks to digitally transform and get prepared for the digital universe. Those leaning back and relying on their current success will soon bite the dust. 52% of the Fortune 500 since 2000 did so already. Nothing and nobody is safe from disruption, but at the same time, nothing and nobody can find an excuse to not be a disruptor -- given the great opportunities created by a digital transformation.
With our series on Digital Transformation, we hope to have given you some insights into what is happening -- and also some helpful ideas on how to tackle the challenges ahead. This infographic sums it up nicely:
DigitalTransformation-Infographic
Below, you will find a wrap-up of our series of blogs on the topic of digital transformation:
Digital Transformation, Part 1: Rapid State of Change
When businesses today want to outpace the disruption happening in the market, they need to equip themselves with technology that will help them adapt to change quickly - and the cloud is the spearhead of that. It's not only cloud computing technology that is the driving force for business innovation; it is the advent of multiple disruptive technologies, like mobile, in-memory computing, and predictive analytics, coming together thanks to the cloud.
Digital Transformation, Part 2: What makes it disruptive?
The smartphone has brought a deluge of disruption to our lives, changing and challenging one industry after another at a staggering pace.  It has not only changed the way we interact with games and media, it has even transformed experiences like customer engagement. More than ever, consumer expectations matter.
Digital Transformation, Part 3: The Building Blocks
We see four key building blocks of digital transformation that, taken together, can drive enterprises' shift to the new way of business: cloud, mobile, data, and networks.
The cloud is far more than a deployment model. Ultimately, it means freedom, efficiency, and integration.  With the cloud, businesses can focus on their core missions with better collaboration and always up-to-date solutions.  It's scalable, flexible, and accessible. Mobile enhances and is inextricably related to the digital transformation.  It takes freedom and connectedness further by allowing for greater access. Using the right data in the right context means smarter decisions, new opportunities, and ultimately, a big competitive advantage.  Big data is really BIG, with over 2.5 quintillion bytes of data being produced daily -- but only a fraction of this is actually used. With over 1.3 billion people now on social networks, it's no surprise that networks play a large role in digital transformation.  Common examples include businesses using Twitter, Facebook, and the like as a means of customer service and engagement.
Digital Transformation, Part 4: The Role of Leadership
Mastering the digital transformation under the pressure of possible disruption is challenging, especially with so many lacking the management and experience necessary.  Leadership is critical in order to kick-start the transformation.  Clear direction and initiative from the right leader can make a substantial push forward toward achieving digital transformation. I would even argue that no leadership means no change and no transformation.
Digital Transformation, Part 5: Transformation by Industry
Digital transformation has hardly been uniform across or within industries.  It's clear that some industries surpass others in their transformation. It's also no secret that within every industry, we find digital beginners, the digitally mature, and everything in between. Digital maturity stems from two factors: digital intensity and transformation management intensity.  In other words, digital maturity is determined by a firm's initiative in incorporating technology and by its leadership in this direction.
Digital Transformation, Part 6: Examples of digital transformation done right
Every business should jump at the opportunity to improve and transform, especially when there are great rewards to reap, and when not doing so could be harmful. The never-ending advancement of technology presents enterprises with countless promising opportunities for every aspect of their business. Three outstanding examples show the great benefit of co-innovation -- usage of new technologies and putting the customer in the center of the business model: Marriott, Nespresso, and T-Mobile USA.
Digital Transformation, Part 7: The Outlook
Without a doubt, technology will play an ever-increasing role in our lives.  The growing Internet of Things will be ubiquitous, tying our lives closer to technology.  It will no longer be an option to be digitally clueless; businesses that lose customers because of poor communication will not survive.  People and therefore customers are changing; businesses need to change with them. But the path to digital transformation won't come without challenges.  Certain jobs will become obsolete, so businesses need to act accordingly and up-skill their employees.  Another struggle is the variability of digital proficiency - not everyone will be so eager to jump on the digital bandwagon.
After intensively researching the topic, we, the Cloud Strategy & Co-Innovation Team, are 100% convinced that a digital transformation is indispensable for the future success of businesses. So far, this is our last blog on this topic, but we won't leave you behind without some goodies. During the last six months, a lot of great success stories came our way, and they help illustrate opportunities that companies are already leveraging. We don't want to hold these stories back. We'll provide you with amazing examples during the coming weeks to help you kick-start your own digital transformation.
Stay tuned for more use cases and get prepared for the digital transformation that will happen. You'll either lead, follow, or be outpaced -- your choice.
We are also excited to discuss the many different aspects of digital transformation with you. Follow us on Twitter via @SAPCloud, @SDenecken, @BeSchulze, @NikolaiVetter
We also invite you to join us in the next openSAP MOOC “Digital Transformation and its Impact” starting on February 24.

At the recent series of SAP Field Kick-Off Meeting ( FKOM ) sales events,  I noticed that there were various #FKOM tweets with an unfamiliar hashtag #S4HANA – some of these tweets included a new logo.

image001.jpg

 

Since I didn’t attend the private events and no official related press releases from the event are present, it is tough to know the exact meaning of the new name – but I have a good idea.

 

At the TechEd in Berlin, Bernd Leukert announced s-Innovations also known as Hasso Plattner’s sERP .  In my analysis of this new offering, fellow blogger Dennis Howlett stated:

While Dick uses the terms s-Innovations we understand this is not the final marketing terms that SAP will use.

Well, it looks like SAP Marketing finally decided on a new term - S4HANA.

 

FKOM slides associate S4HANA with the Business Suite and the characteristics mentioned in the Berlin TechEd keynotes - where s-Innovations was announced – are also present.

 

image002.jpg

Here is some further evidence of the association:

 

A change in Sven Denecken’s LinkedIn profile

 

I know that Sven was closely associated with s-Innovations. Sven’s LinkedIn profile now specifically refers to S4HANA.

image003.png

 

Trademark

 

SAP has acquired the trademark for S4HANA.  The registration was made on Jan 05, 2015.

 

Domains

 

SAP has acquired the related domains. This registration was made on Jan 06, 2015.

 

Hungry for more details?

 

A tweet from Robert Enslin announced a “wild” S4HANA US launch which I assume will take place on New York on Feb. 3.  For those developers interested in S4HANA technical details, I would wait for the upcoming TechEd in Bangalore on March 11-13 where Bernd is also holding the keynote.

Imagine that it is now 2020.  A driverless car pulls up to your driveway at 5 PM, exactly the time for which you had booked it.  You grab your phone and head out, the lights and appliances in your home turning off behind you automatically as you step out the door. Once you've buckled yourself in, a message is sent to your girlfriend to let her know that you’ll arrive to pick her up in precisely 17 minutes.

 

 

 

As the two of you near the theater, the GPS reroutes the car to avoid a traffic accident nearby and directs you to your final destination: the least expensive parking garage within a half-mile radius of the equestrian show venue.

 

 

In no time, you’re seated in the stands with your phone in hand, totally immersed in each rider’s performance.  You can’t imagine how people used to watch sports without having real-time access to stats and without the option to watch the race from the rider’s POV.  But your favorite part comes at the end of the performance: rating the riders yourself and seeing how your scoring compares to that of the judges.

 

All of the technologies in this scenario already exist.  In fact, digitized equestrian shows are already a reality with CHIO Aachen.  Find out more in this video.

Like it or not, some of our private life experiences may be “enhanced” as well – see the example below:

 

 

 

 

The importance of digital transformation

Again, why is digital transformation important?  As Nicholas Negroponte put it, “Computing is not about computers anymore.  It is about living.”

Without a doubt, technology will play an ever-increasing role in our lives.  The growing Internet of Things will be ubiquitous, tying our lives closer to technology.  It will no longer be an option to be digitally clueless; businesses that lose customers because of poor communication will not survive.  People and therefore customers are changing; businesses need to change with them.

The imminence of digital transformation makes it imperative for all businesses to start or accelerate the process.  Luckily, the four building blocks ( see Digital Transformation, Part 2: the Building Blocks ) are here to help: the cloud, mobile, networks, and data.  Equipped with these technologies, businesses can unlock new capabilities like greater efficiency, instant data analysis, and better collaboration.  Ultimately, businesses will have the necessary platform to support and cultivate innovation.

It is up to the business itself to push for the real transformation; simply putting everything on the cloud and providing everyone with phones and tablets is not enough.

 

It is up to the business itself to push for the real transformation; simply putting everything on the cloud and providing everyone with phones and tablets is not enough.  While such measures can indeed bring some improvements, you can be sure that in the meantime, other businesses will be getting ahead with true digital transformations. 

Undergoing digital transformation keeps businesses modern, improves the customer experience, and enables better collaboration and empowerment of the workforce.  Automation also boosts efficiency and data analysis unveils valuable insights from patterns and even allows for predictive action.

 

But the path to digital transformation won’t come without challenges.  Certain jobs will become obsolete, so businesses need to act accordingly and upskill their employees.  Another struggle is the variability of digital proficiency – not everyone will be so eager to jump on the digital bandwagon.  Leaders will also have to grapple with the negative side of technology.  Greater sharing and data collection, as well as using solutions from other businesses, may lead to privacy or security concerns.  When dealing with these challenges, businesses must keep their end goal in mind: a dramatic, transformational change to solve new or existing problems in the best way.

 

Read more here.

 

Follow us via @SAPCloud and @SDenecken.

Every business should jump at the opportunity to improve and transform, especially when there are great rewards to reap, and when not doing so could be harmful.  The never-ending advancement of technology presents enterprises with countless promising opportunities for every aspect of their business.

If you had the chance to double the number of customers or make your employees twice as efficient, wouldn't you take it?

 

Digital transformation is not something to be left for the future.  In fact, quite a number of businesses have already begun their successful digital transformations.  For any doubtful readers that remain, let me convince you of the benefits of digital transformation with three outstanding examples, for which we had the pleasure to co-innovate: Marriott, Nespresso, and T-Mobile USA.

 

 

Marriott

Marriott has done an excellent job using technology for learning, engagement, and sharing across its 15 brands.  Rather than letting its large size hinder any changes, Marriott focused on tapping into the value of its employees.  It accomplished this by adopting a collaboration solution to highlight best practices, accelerate decision-making processes, collect proposals, and rank ideas.  This solution ensures that innovations and information don't fall through the cracks and can instead be shared across the enterprise.

This fundamental aspect of digital transformation involves networks and collaboration

 

The core of Marriott's efforts lies in sharing.  This fundamental aspect of digital transformation involves networks and collaboration (see Digital Transformation, Part 3: the Building Blocks).  To make this transformation comprehensive, key executives at Marriott came up with a shared vision centered on collaboration and mobile (see Digital Transformation, Part 4: The Role of Leadership). Next, Marriott adopted Work Patterns to bring the sharing of best practices into its company culture.  This ultimately improves Marriott's business practices and increases customer satisfaction.


Sharing also extends beyond the company.  Through collaboration with vendors on project requirements, Marriott has reduced the time of issue resolution. Having successfully adopted these measures, Marriott is agile and ahead, ready to handle future challenges.

 

Nespresso


Our next example is also my favorite, given the amount of coffee I consume. Nespresso provides another illustration of digital transformation done right.

Nespresso's overarching goal is the same as it has always been: to provide customers with the perfect coffee experience.  What has changed is Nespresso’s incorporation of technology to achieve this, allowing for an even greater focus on the experience aspect of its products.

The desire to win new customers, gain a deeper understanding of its customers, and manage complex buying processes triggered Nespresso's transformation.

 

The desire to win new customers, gain a deeper understanding of its customers, and manage complex buying processes triggered Nespresso's transformation.  Its initiatives are supported by a modern customer engagement solution based in the cloud, complete with network capability.  Its cloud solution serves as an innovation platform with a full-fledged sales solution capable of handling the entire buying cycle: pricing, quotes, and orders.  With the help of these networks, Nespresso pulls information about its customers from external sources like social media. Nespresso now can also engage directly with its customers, a market that the industry calls “a segment of one.”


Nespresso's digital initiatives have proven fruitful.  Benefits include greater penetration into new markets, higher sales and user adoption, better sales productivity, and better visibility across the entire engagement cycle.  Business processes are faster than ever thanks to its new capabilities, with delivery and innovation cycles now as short as four weeks.

Most importantly, Nespresso has a single, simplified, and optimized view of its customers across all channels (an omnichannel) and systems, irrespective of connection method. It encompasses customers who engage via the website, via mobile, at an airport vending machine, or those who plan to meet George Clooney in a flagship store...

 

 

 

Read more here.

 

Follow us via @SAPCloud and @SDenecken.

From businesses to entire industries, we find leaders and followers. And as Steve Jobs once said, "Innovation distinguishes between a leader and a follower."  This saying applies to all realms of life, including, of course, digital transformation.

 

Digital transformation has hardly been uniform across or within industries.  It's clear that some industries surpass others in their transformation.  Just compare pharmaceutical giants to the high technology companies of Silicon Valley.  It's also no secret that within every industry, we find digital beginners, the digitally mature, and everything in between.

 

Digital Transformation by Industry


Digital maturity


For the purposes of discussing digital maturity on the industry level, I'm going to borrow the classification and definition of digital maturity outlined by Capgemini Consulting and MIT Sloan.

Digital maturity is determined by a firm's initiative in incorporating technology and by its leadership in this direction.

 


Digital maturity stems from two factors: digital intensity and transformation management intensity.  In other words, digital maturity is determined by a firm's initiative in incorporating technology and by its leadership in this direction.


From these two metrics, digital maturity sorts businesses into four profiles:

  • Digital beginners: low digital intensity in both technology and leadership
  • Digital fashionistas: some digital initiatives, but not really maximizing business benefits
  • Digital conservatives: holding back and may miss opportunities as a result
  • Digirati: digital culture and investments, plus competitive advantage. Simply put, the digital elite.


Looking at the numbers is proof enough that Digirati are, by far, the most profitable.  Unsurprisingly, the same study also finds that digital beginners are the biggest losers in all categories: revenue generation, profitability, and market valuation.


On average, Digirati enjoy 9%, 26%, and 12% higher rates of revenue generation, profitability, and market valuation, respectively.  Digital beginners, on the other hand, are losing on all fronts, lagging in those three areas by 4%, 24%, and 7%.


Need more proof?


A different study from McKinsey came to similar conclusions.  After comparing the intensity of digital transformation across 10 industries, McKinsey finds that digital leaders have a 50% boost of net profits over the next five years compared to less-digital businesses.  Part of this success is fueled by the 2.5 times greater growth of digital sales.


Variation across industries


The nature of certain industries makes them more likely candidates for digital transformation.  It's expected that businesses offering virtual products, like a telecommunications company, have obvious opportunities for digital transformation.

Anything is possible, but start early to avoid having to play catch-up.


But take, for example, grocery and apparel stores, for which sales are anticipated to still come primarily from brick and mortar stores in coming years.  Only 10% and 24% of sales, respectively, are expected to be digital by 2018.


Most customers still prefer picking their product and trying on clothes before purchasing them.  Going shopping with friends also has a social aspect to it that, as of yet, cannot be entirely replicated online. Nevertheless, every sector has digital transformation opportunities.

Trips to the grocery store could be complemented by digital initiatives like mobile apps, promotions, and more.


Some examples


Robert Bosch is undergoing his digital transformation by pursuing digital initiatives while also future-proofing itself.  First, Bosch recognized that paper processes are bogging down production sites.  For that reason, Bosch is looking into developing a mobile device and smart glasses for its warehouses so that workers can instantly scan and move products.  With over 250 manufacturing sites, implementing this would reduce inefficiency significantly. It should look something like this:


Read more here.



Follow us via @SAPCloud and @SDenecken.

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