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SAP 2021 Predictions: The Pandemic Will Continue to Accelerate Digital Transformation and Cloud Deployment for Many Companies

vmblog 2021 prediction series 

Industry executives and experts share their predictions for 2021.  Read them in this 13th annual series exclusive.

The Pandemic Will Continue to Accelerate Digital Transformation and Cloud Deployment for Many Companies

By team members at SAP

Covid-19's impact on businesses over the past year has fundamentally changed the way businesses think about work while forcing a radical shift in working habits.  SAP expects businesses to continue moving to the cloud in 2021 and accelerate their digital transformation. The use of data will be a priority for many organizations with Chief Data Officers growing in prominence, and technologies like AI driving business process automation across the enterprise. 

Jan Gilg, President of SAP S/4HANA at SAP 

Jan Gilg 

In 2021, we will continue to see a focus on data and digital transformation. Data will be a priority for all organizations as they imagine and implement ways to take the data they have, enrich the data that is accessible, and make sense out of it. At the same time, they will be leveraging technologies like AI (artificial intelligence) to drive process automation. AI is enabling ERP (enterprise resource planning) to become more of an autonomous system that pulls the user in when needed and frees up a lot of time for the user to do more value-added tasks. From my perspective, AI has been hyped in the last few years but it's clearly becoming a reality as use cases become more well-defined and companies realize that they can reap tangible benefits from AI. In 2021, we will continue to see companies leverage data and intelligent technologies also because they feel the sense of urgency to realize smart, data-driven insights that they have never had access to before without a large-scale implementation.

The coronavirus pushed last year's predictions way off track, becoming a critical driver behind IT trends in 2020. For 2021 COVID-19 continues to be a central story and a galvanizing force behind this year's forecast.  

Digital companies had clear advantages in 2020, and in 2021 those with a strong digital plan will have the flexibility to pivot as needed. What's exciting is that the appetite for digitization is larger than ever before, and the desire for digital, intelligent environments will lead to transformations happening at rates faster than we have ever experienced.    

Watch for these changes within domestic and international organizations: 

  • Supply chains will become less global and more local with an increased emphasis on resilience and less focus on cost.
  • Rapid shift on business models:Businesses will continue to transition to cloud-based services to support virtual work environments, online commerce, and other pandemic-created facts of life.
  • CloudDeploymentswill uptake in 2021 and beyond, because itgives customers morestandardization andthe ability to consume innovation for a fast time to value.
  • Organizations will fast track short-term projects that show incremental value to the front of their roadmaps.
  • As companies look at upcoming projects, they will focus on how to leverage their own data during the first six months of the year. These projects will be around process automation and customer insight. The end of 2021 will see companiesincreasinglytapping into the data shared by their network of partners, ecosystems, or supply chains.
  •  Customer experience will drive all decisions so every portion of the customer journey must be seamless. Previously, companies invested in the best possible e-commerce shopping experience and ignored the backend needs of inventory management, logistics, and fulfillment. In 2021, companies will look at customer experience more end to endto ensure a positiveandseamless experience from order to delivery.
  • ERP systems will evolve towards a platform to enable growth,managingpeople, money,materialsand natural resources, so it'sbecomingmoreofa strategic investment. These systems will be less monolithic and more modular as companies pick the services they need for their business. A big difference in 2021 will be that more companies will rely on their ERP systems to help them make sustainabledecisions.
  • Sustainabilityisimportantnotonlybecause of theenvironmentalpressures,butalso becausecompanies want tobettermanage their operationsandensure that the natural resourcesand their carbon footprint emissionsaretakeninto accountbecominganew dimension ofcorporatedecisionmaking.
  • ExperienceManagement: will play an important role in the future, because it generatesa class of data that is extremely important for customers to receive sentiments in an early stage of a product-lifecycle processandto react accordingly.
  • For CFOs, cash management became the priority in 2020. It will continue to take precedence in 2021 with less emphasis on automation, optimization, and cost reduction. Those areas will remain critical but take a back seat to cash management, cash flow, and liquidity.  

Dan Lahl, Global Vice President, Product Marketing, SAP

Dan Lahl 

Covid will accelerate the move to the cloud for businesses across the board

Coming out of the Covid-19 pandemic, the push towards the cloud is the top priority for all businesses, making more important the need for data and application integration and extension a must as Lines of Business leaders choose a mix of SaaS applications and vendors.  In order for this transformation to happen smoothly and timely, customers, partners and - not least - developers need access to a single, unified business technology platform focusing on agility and flexibility that unites data and analytics, apps, business processes, intelligent technologies like AI/ML/RPA, and so on. And becoming cloud native should not require businesses to bring in truckloads of developers with years of coding experience. The business technology platform should include an array of low-code or no-code tools that can automate the entire data-to-value chain - for professional developers in the IT organization, as well as citizen developers in the LOB organizations.   Best of Suite cloud  applications AND a comprehensive, flexible, and open platform for pro-code and low-code innovation will be the best path forward for success in the move to cloud post Covid. 

Data-and-Process-to-Value requires a comprehensive Business Technology Platform

Earth, water, air, and fire are essential elements of all visible or physical things, so are the technology categories of a business technology platform for businesses to survive and thrive in today's rapidly changing market conditions. Database & data management, application development/extension and integration, analytics, and intelligent technologies (e.g. AI, ML, IoT, RPA, etc.) all must be addressed and tightly integrated in one unified platform to accelerate business applications that fixed function cloud applications just don't address.  All four platform technology areas need to come together on a central data foundation layer to achieve resilient and consistent business outcomes for driving continuous business innovation and business process evolution. When one solution portfolio is missing, the expected result of agile automation and digital transformation is put at risk. So just like Empedocles, we should think about these four essential platform elements working together holistically.

Rocky Subramanian, Senior Vice President & Managing Director, Midwest Region at SAP America

Rocky Subramanian 

"While IT leaders have routinely increased their tech investments with an eye toward more speed and efficiency, COVID-19 only accelerated this momentum by exposing organizations' inherent weaknesses when confronted with sudden workforce shifts. Looking ahead to 2021 and beyond, it's not necessarily the technology itself that will make the biggest impact on a company's success, but rather how well organizations deploy and manage their digital solutions.  In short, the success of a digital strategy hinges on the organization's larger people strategy: recruiting, retaining and reinventing the right talent to manage their technology investments."

Lloyd Adams, Senior Vice President & Managing Director, East Region at SAP America

Lloyd Adams 

  • Total spend management will be one of the most challenging processes for executives to manage as normal business operations resume and it will create new demand for technology solutions.
  • Chief Data Officers will grow in prominence. As software continues shifting product-oriented business models to services-focused offerings, new data streams created by this shift will call for greater investment in CDO organization structures. Equal pressure will be placed on CIOs to help orchestrate this shift, specifically in areas like total cost of ownership.
  • 2021 will be a defining year for hybrid cloud, balancing growing concerns over cybersecurity and data governance with the need to rapidly innovate and deliver new business models.
  • True value in the cloud will come from vertical industry-specific solutions. The days of one-size-fits-all cloud are over; because of this, technology providers will have to double down on success story amplification and references that help new customers find similar success.
Published Wednesday, December 30, 2020 7:40 AM by David Marshall
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