Companies seeking to innovate need a sound strategy—and the right technology partners.
Spending on digital transformation is on a steep upward trajectory, projected to reach $6.3 trillion between 2022 and 2024, as indicated by recent research from IDC. Anticipated to represent up to 55% of all information and communications technology investments by 2024, these initiatives underscore organisations’ commitment to enhancing agility, fostering innovation, and optimising efficiency.
One key factor driving this growth: the widespread availability of solutions to power transformation initiatives. At the centre of those capabilities is the cloud.
“The cloud infrastructure has evolved with so much capability, creating scale, security, high availability, ease of use and performance. It has enabled businesses to stay ahead in changing conditions,” says Chris Tobias, senior director of the global data centre ISV account team at Intel.
With these tools, enterprises are free not only to focus on a more competitive and prosperous today, but also to design a strong strategic vision for what’s ahead, allowing them to gain a competitive advantage. “Companies that are constantly innovating with technology and building that capability to continuously change can drive more revenue and higher profit margins,” says George Westerman, senior lecturer and principal research scientist at the MIT Sloan School of Management. Getting there, he says, requires a clear strategy built around the transformation journey and the technology that enables it.
“Effective transformation is a coherent process,” he says. “Leaders need to set a vision for how the organisation is going to be different and then engage their people in that. It’s not a project or disconnected set of experiments, but a capability where the organisation is more able to change on a regular basis.”
Understanding that digital transformation is not something with a defined endpoint, but a constant process, helps frame questions around the type of digital architecture and tool sets companies need to meet their strategic goals, says Mickey North Rizza, program vice president for enterprise applications and digital commerce at IDC. “They’re asking a question: ‘Is there some sort of digital-based capability or enhancement to something that we’re doing that could improve either our lives or the desired outcomes of what our business does?’”
An Architecture of Transformation
At Bertelsmann, asking that question has become a core part of the company’s culture. Headquartered in Gütersloh, Germany, the media, services and education business has over 130,000 employees and operates in about 50 countries. “Digitisation and digital transformation are at the top of the Bertelsmann strategy,” says Matthias Moeller, the company’s chief information officer. Bertelsmann, he says, has developed key priorities and a clear vision of what it wants to accomplish through transformation to advance the business.
“Innovation, entrepreneurship, creativity. These are essential for Bertelsmann. We want to be the world’s technologically leading media, service and education company,” Moeller says. “It’s in our DNA that we need to implement technology to run a permanent change process and thrive in the market.”
“SAP S/4HANA forms the business backbone for Bertelsmann, with around 10,000 colleagues and more than 300 companies in the group working with it. So the ability to run essential systems like SAP solutions on the Microsoft cloud platform is fundamentally important to us,” Moeller says. “We chose Microsoft Cloud for its strong track record of building best-of-breed enterprise solutions with an extremely high degree of flexibility, rapid adaptation and go-to-market speed. And we have trust in Microsoft’s leading security and compliance management solutions; these areas are of enormous importance for digital businesses operating at a global scale.”
The right cloud partner has allowed Bertelsmann to translate its digital transformation goals in the most efficient way possible, maximising the potential for innovation while minimising disruption. “It’s enabling smooth collaboration in the best way and providing the context of AI and other opportunities that support our model,” Moeller says. “It also provides an excellent foundation for developing solutions for our customers. So this triangle of Microsoft, SAP and Bertelsmann has been a really great combination,” Moeller notes.
Partnerships Drive Transformation
Bertelsmann’s experience in digital transformation reflects the collaborative nature of a dynamic, living process. “You’re not going to have all the answers,” says IDC’s North Rizza. “You’re always asking, ‘How do I future-proof my business? How can I continually add to it, with the right partners?’ And those partners work together in a cohesive ecosystem, making your business stronger because they’ve enabled a technology underpinning that no one can match.”
Enterprises benefit not only from the relationship with the technology partners they choose, but also from relationships between those technology companies themselves. Microsoft and SAP have a deep partnership going back more than 25 years, with SAP running many of its own cloud business systems on Azure and vice versa.
Intel has pioneered technologies to optimise SAP solutions, such as in-memory computing using 3rd Gen Intel Xeon Scalable Processors and Intel® Optane™ persistent memory. “Intel and Microsoft have a decades-long history of collaboration,” Tobias says. “We have a talented group of technologists, software developers and engineers with a desire to push boundaries and create lasting products people will use.”
Those relationships help enterprise partners on their transformation journey, says Talal Alqinawi, senior director of product marketing at Microsoft. “Moving SAP solutions to Azure benefits customers beyond the infrastructure innovation and optimisation. We’ve helped customers, large and small, extend their cloud capabilities by leveraging a broad set of advanced services like AI, machine learning, Power BI, and Power Apps. At the same time we’re enabling their employees, suppliers and customers with Microsoft 365 including Microsoft Teams—market-leading business productivity platforms people are familiar with.” The tight integration between SAP applications and the Microsoft Cloud solutions also improves reliability, risk mitigation and security posture.
“ERP systems are the digital backbone of any organisation. It is supposed to be a dial-tone service, always up, with business continuity at the highest levels. The risk of being down even for a few minutes can cost not only money, but also trust from your customers, frustrations with your employees and liability with suppliers. You need to trust these systems will always run, always secure and always reliable,” he says.
Ultimately, these advantages point back to the foundations of successful digital transformation: a focus on strategy. Armed with an agile, secure and powerful infrastructure, enterprises can engage their employees in that which excites and energises. “It’s all about bringing value faster to companies and the end customers,” Alqinawi says, “About doing something new, accelerating or adding new value that isn’t there today.”
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