The Future of Retail and Consumer Products is Cloud Native
By: Laura Marwood
Tags: Cloud, Industry, Consumer Products, Cloud Native, Retailing

A post by Jan Gilg, President of SAP S/4HANA

There’s no denying that 2020 has been a challenging year. Almost nothing is said or written anymore without referencing what the world continues to go through. Communities and businesses have been affected by the pandemic in many different ways: But events like this can lead to a seismic shift in our thinking that can leave us in better shape for the future.

This has been a year of rapid change from a business perspective: Industries must be agile in order to address new business challenges and stay resilient. Core process transformation is needed more urgently now than ever before in order to cope with the effects of today’s rapidly changing market conditions.

Our customers put a lot of trust in SAP to run their most business-critical operations. That’s why, when we talk about next-level enterprise software, we’re talking about solutions that are fully tuned-in to current and evolving market needs. Businesses today need greater agility & speed, reduced complexity, and high-value innovations — all delivered in the cloud while leveraging the existing business process expertise at an industry level.

Industry Cloud: Meeting the Needs of Your Industry

Agility in the end-to-end industry value chain is critical to the success of a business. But how can industry cloud benefit your business? Vertical solutions are designed to meet the needs of a specific industry and can therefore help your core business grow to accelerate new opportunities and face market challenges while balancing cost efficiencies.

With this in mind, this year SAP has been focusing on its industry cloud portfolio: We are developing industry-specific, vertical capabilities in the cloud that provide a rich library of innovations — including industry apps and core extensions that are enabled by SAP S/4HANA at its core. These purpose-built solutions are created in collaboration with our partners on an open platform and make use of advanced technologies that help simplify the aspects of provisioning and delivering value to our customers.

Building on the assets in the core SAP portfolio, we at SAP S/4HANA are fostering a strong spirit of innovation to develop and ship extensible, end-to-end applications that are not only cloud-native, but which also solve real-world industry problems. To do so, we’re collaborating with our customers and partners to build and shape the solutions that they really need. These solutions integrate easily with our business network and our intelligent suite, and above all, they protect the integrity of the existing business processes and IT landscape.

Consumer Industries Cloud: Cloud-Native Innovations from the Ground Up

We are committed to being a proven partner for our customers in helping them revamp their core processes. Let’s have a look at our SAP S/4HANA Consumer Industries Cloud (CIC) offerings: An ensemble of cloud-native applications that will allow companies in the retail and consumer products industry to transform their existing processes through increased transparency, greater automation capabilities, and additional end consumer-specific services, as well as expand their businesses by tapping into new processes and benefits previously not possible.

Consumer Industries Cloud: Focus Areas

SAP S/4HANA Consumer Industries Cloud is focusing on several areas to deliver value to both existing and prospective customers with capabilities like Revenue Growth Planning and Optimization, Intelligent Store, Order Management, Outlet Management and Execution, and Predictive Inventory Orchestration. As the transition continues from the Industrial Revolutions of the last two centuries to the world’s first true Information Revolution, advances in e-commerce have only become more rapid. Moreover, the seismic effects of COVID-19 continue to reverberate throughout the Retail and Consumer Products landscapes as low and no-touch offerings expand to meet the preferences of consumers driven by the pandemic to seek safer ways to engage the marketplace. SAP’s spectrum of solutions understands this new environment, helping Retail and Consumer Products companies position themselves for success.

Revenue Growth Planning and Optimization solution supports Consumer Products companies needing to measure and improve their overall marketing and sales ROI. Moreover, it doesn’t narrowly optimize top-line sales in isolation, but seeks to maximize profitability, too. SAP has launched next-generation Revenue Growth Management capabilities for three core business processes: Revenue Growth Optimization, Revenue Growth Planning, and Marketing Mix Console. These easy-to-manage-and-operate business process services are the next step in modularization of business and are a part of SAP’s vision to gratify customers by addressing revenue opportunities and process inefficiencies.

Intelligent Store helps companies across many industries run their stores more efficiently: By leveraging modern technologies and setting themselves apart from the competition by improving the shopping experience and by closing the gap between online and physical stores. Intelligent Store focuses on user experience and makes use of distinctive capabilities such as AI-driven task management.

Order Management System will support retailers who continue to prioritize seamless omnichannel experiences for consumers. It will enable retailers to transform their order management system with orchestration that unlocks key omnichannel capabilities through core functionality and ease of integrations. The solution will further aim to improve Retailers’ fulfillment capabilities through easier enablement and integration with third party vendors.

Outlet Management and Execution will allow sales representatives and sales managers in Consumer Products companies to leverage SAP Intelligent Enterprise technologies to enhance the efficiency and effectiveness of in-field and in-store activities. It will be modular, focused on user experience, with integrated AI/ML-driven capabilities that will anticipate and deliver the right insights and next best actions.

Predictive Inventory Orchestration is a suite of tightly integrated solutions for elevating merchandising and supply chain processes. SAP has delivered a data and services foundation for advanced omnichannel demand and inventory planning, next generation AI/ML-based demand forecasting services, and agile merchandising tools that intelligently recommend next best actions based on identified risks and opportunities. Tightly integrated with SAP Supply Chain Planning for Retail, the latest cloud architecture enables retailers to consume the innovations rapidly, achieve quick ROI, and simplify their application landscapes cost-efficiently.

Doubling Down on Agility and Velocity

Fundamentally, however, this is not a software story. At the core, this is a story of culture. It is a story of how SAP is doubling down on agility and velocity to build a world-class cloud native capability from the ground up. In short, if Consumer Industries Cloud is intended to produce a topnotch cloud native software, it must first, brick-by-brick, person-by-person, create a truly cloud native mindset and culture. This is the story. This is at the core of Consumer Industries Cloud’s ability to truly compete and win in a modern, increasingly unconstrained cloud marketplace. It is an authentic shift that paves the way for us and our partners to address the unique business needs of our customers — who will always have the last word.

Further Reading: Industry Cloud White Paper, SAP S/4HANA Strategy Paper

This article was published by Jan Gilg, President of SAP S/4HANA on November 24, 2020 on LinkedIn

Co-authored by Abigail Haley, Thorsten Haas, Laura Marwood, Deepti Chandrasekhara