As a sneak preview, here is the inaugural article from SAP Chief Innovation Officer Max Wessel, who discusses what it takes to innovate in an era of choice and personalization.
Using Decomposition as a Catalyst for Greater Choice, Personalization, and Innovation
The job of every business leader is to see into the future, anticipating change and taking action that puts the organization on the path to success. Yet in times of rapid change, visualizing the steps needed to prepare for the future has never been more difficult.
Improvements in information technology are largely responsible for the increased pace of change. They are also the source of enormous opportunity facing each industry. Software is permeating every business, imbuing the services and solutions we consume with near-magical characteristics. We can secure transportation wherever and whenever we want with a click of a button, changing the automotive industry forever. Language barriers that terrified travelers for generations melt away through character and voice recognition features residing on tiny computers that fit in our pockets and translate the language at hand, opening worlds of travel to those previously constrained. Small business owners anywhere can access large customers around the world, creating opportunity for development and spurring competition in global markets.
All of this has been made possible by the connections enabled by cellular improvements, cloud computing, and mobile phones. Less than two decades ago, only 360 million people were connected to the Internet. Today, that number is almost 4.4 billion. Cheap, seamless access to software is available to everyone. It’s no wonder that each of our industries has changed so dramatically in such a short period of time.
But the world isn’t standing still. The cost of computing continues to drop. The potential of emerging technologies such as machine learning continues to unfold. And the number of devices and services enriched with software-based intelligence rises every day.
Less than two decades ago, only 360 million people were connected to the Internet. Today, that number is almost 4.4 billion.
And so, we, as leaders in the IT industry, must ask the obvious question: What’s next? What are the tectonic shifts in enterprise operations that IT can – and should – enable? How should executives prepare to deliver the perfect experiences their customers demand? Which technologies are worth championing and which will go the way of the floppy disk?
As Scale Grows, Infrastructure Components Shrink
Here’s my take: Technology is opening up an era of unprecedented choice. In every market, production costs drop, competition increases, and the ability to customize products expands. For all those reasons, people are demanding more, and we must respond.
If we don’t deliver the experiences our customers demand, we stagnate. We get commoditized. It’s that simple.
In the world of software, that means IT must enable each of our businesses to deliver more of what every individual wants and needs. In the consumer market, we know what this means. Across our operations, the solutions we provide employees and partners must not require users to conform to enterprise systems. Instead, the next generations of software will adapt to users and help them perform better.
Next-generation systems won’t just record activity. They will understand our specific context, interact with tools we already use, and amplify our activities in a way that makes sense.
It may seem that we’re far from that world. But this new horizon is very much within reach. How do we get there? The answer rests with the impact of scale. Every business is becoming a software business. As this transition occurs, demand enables more applications, integrations, and services to emerge. The scale of our digital systems is huge and still growing.
This increasing scale comes with an interesting by-product: The smallest unit of viable software shrinks every day. Applications are more focused on ever-smaller market segments. Standard integrations allow connections among various systems and users. And services are becoming more focused on ever-slimmer customer segments. The world is being decomposed into its smallest units.
As scale enables decomposition, decomposition in turn creates choice. With more offerings, people can select whatever best matches their needs. And vendors can create more personalized offerings designed to attract more customers.
We are deconstructing our IT monoliths into smaller pieces and slotting them into the environment we’ve already constructed, where they integrate with existing modules and those still to come.
This is what’s meant by modularization or modular IT. We are deconstructing our IT monoliths into smaller pieces and slotting them into the environment we’ve already constructed, where they integrate with existing modules and those still to come. Modularity paves the way for reassembling the IT world in new and untried combinations, which supports the innovation of enterprise business and technology teams.
Get Ready for a New Approach
To succeed in this new environment, it’s time to evolve. In the past, our industry bet on decreasing costs and increasing the performance of standard applications. Now we must embrace approaches that help us decompose the monoliths and deliver the most personal and modular software our customers can imagine. We need technology and services that allow us to deliver business models and solutions that exceed the virtual boundaries of application code.
Coming Soon: Horizons by SAP
Horizons by SAP is a future-focused IT journal where thought leaders from the global tech ecosystem share their thinking about how new technologies and major business trends will impact our customers’ landscapes in the fast-arriving future. The first issue will focus on the implications and opportunities of modular IT. The journal will be launched next week at SAPPHIRE NOW.
In the inaugural issue, we address the challenges and opportunities of modular IT. With the help of thought leaders and SAP experts from around the world, we explore a variety of issues and trends that impact and are shaped by modularity. The first issue includes important discussions that will help evaluate your approach to users and partners, the use of emerging technologies such as machine learning and augmented reality, and foundational issues including security and end-to-end business processes. We hope these articles will provide business leaders with the foresight and flexibility to make the best decisions for today and tomorrow – propelling your enterprises into a successful future.
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