Time for the next industrial revolution

The industrial world has witnessed several revolutions. Hyper-connectivity and the rise in a plethora of technologies like IoT led to the birth of the innovation economy. This has now further led to the fourth industrial revolution - Industry 4.0 - which combines new technologies like cloud computing, Internet of things, and big data, to create an improved automation system. This super system will be smart and interconnected, enhancing agility and productivity, through advanced human-robot interactions. However, Industry 4.0 is not expected to remain limited to factories. This technology will eventually become embedded across spectrums and industries to improve all aspects of daily life.

SAP, with their position as market leaders are pioneering the Industry 4.0 revolution. Tayfun Topkoc, MD, SAP MENA, talks about digital transformation, the importance of data, and building smart, next-gen ERP systems.

What is SAP MENA’s new customer vision all about?

We believe that there are 10 important changes happening in the market and this is reshaping our customer strategy. Industry boundaries are blurring. Companies are trying to reinvest their business models on one side with a more focused approach and customer experience and moving into new industries.  The key changes include:

  1. Industry limitations are diluting and boundaries between industry sectors are blurring. This provides new opportunities for business for companies, if they choose to evolve.
  2. Data is becoming an enterprise asset. Everyone is trying to mine and monetize data or at least has a plan to work on it.
  3. The way we use and consume technology is fast changing. Therefore, ERP is moving into the Cognitive era: the integration of cognitive intelligence with service delivery. All this will impact and change the way we collaborate and make decisions.
  4. Customer experience is at the center of digital transformation. Therefore, interfaces need to become consumer friendly. Which is why we are changing our strategies in line with this.
  5. Market trend like artificial intelligence is impacting the way we design and build and service products. The focus now is on outpacing human capabilities and leveraging digital and robotic capabilities for increased efficiencies.
  6. IOT or the internet of things is the digitization of the value chain and this is a huge growth area. However, people are still unable to envision where it is headed and how critical can be its impact
  7. Cloud will become the main technology delivery mechanism as cloud based models shorten delivery timelines. SAP will operate its public cloud datacenter in the UAE from Dubai. The datacenter, part of SAP’s $200 million commitment, will help UAE diversify its economy and will impact SMEs, government and enterprises.
  8. Edge competing – companies are now building competitive advantage by measuring success on how they are able to innovate and use their data strategies with integrity to support this innovation. SAP’s Dynamic Edge Processing is all focused on enriching edge data with business context and simplify processing patterns, extending digital core & workflow, and securely transmit data
  9. The next-gen applications will be smarter, dynamic and loosely integrated. Computers will take over more processes, freeing resources to focus on high value work
  10. Open architectures will accelerate innovation. Therefore, SAP is investing in the HANA cloud platform.

Against the backdrop of these 10 facts, it has become very clear that we have to rethink how companies need to manage data as an asset and build smart next generation ERP with embedded artificial intelligence, connectivity and consumer grade user interface.

Could you talk about what you define as the new industrial revolution in the Digital Age?

The new industrial revolution, or Industry 4.0, is a whole new vision that will bring about a confluence of transformation, opportunities and technologies. Our vision at SAP MENA is not about bringing about the new industrial revolution in a theoretical way. SAP will help organizations change, along with enhancing their innovation capabilities. SAP’s holistic approach will offer technologies and methodologies to prepare IT infrastructures with Big Data, mobile, cloud, analysis, and applications and transform the business when moving from an ownership to a consumption economy.

Industry 4.0 is a collective term for technologies and concepts of value chain organization, combining components of cyber-physical systems, the Internet of Things and the Internet of Services, facilitating the vision of the Smart Factory. Industry 4.0 operates on six key design principles of Interoperability, Virtualization, Decentralization, Real-time Capability, Service Orientation and Modularity, which support companies in identifying and implementing Industry 4.0 scenarios.

SAP MENA is addressing the concept of Industry 4.0. What are some of the major changes this will bring about?

From our position of market leadership, I can certainly say that four things will happen:

  • Production environments will transform leading to automation
  • Everything will become connected and smart
  • Emerging technologies, particularly cloud and machine learning will take hold
  • And Data will become the most valuable component of any transformation

What are some of the emerging technologies that SAP is placing its weight behind?

The cloud market trend is very clear in the UAE. Although we are leading in business applications, the platform business is growing tremendously. And this is where the innovation stack and the data platforms that we have with HANA come into the picture.

The UAE is maturing and is fast becoming an innovation hub. It has become equal to ERP of the business to SAP. This represents a dramatic shift in the industry for us.

The UAE is similar to European markets in terms of maturity. The leadership and vision is strong and things get done because there is an action plan with clear outcomes. Public and private partnerships are pulled together effectively. The ecosystem already exists. Execution is the name of the game now. We will be a significant part of this strategy with Expo 2020 and we will provide unique experiences to the exhibitors and visitors. We will also contribute to high value job creation – like data scientists and engineering resources. This will accelerate the pace of growth in this phase. The SME segment is seeing major growth and I can see that the government is supporting the SME’s.

How are customers woven into this plan? How will you serve their requirements differently?

To answer this, we need to understand what really is digital transformation? Digital Transformation is a journey not a single point destination. And customers today need to own their own journeys. A big part of this journey is integration and integrating technology across the portfolio and extending this innovation across the ecosystem on the cloud platform.

We are moving towards this direction and we are successfully doing so with our SAP cloud platform – an Open Digital Platform.

  • IOT, open applications: Machine to Machine communications will run on the platform
  • Digital core: reinvested the ERP (S4HANA) into new digital back-office, which is simplified and user friendly. Most of our customers have migrated to this.
  • Supplier collaboration: Here we digitize the customer value chain and drive real-time collaboration with suppliers and partners. We studied Dubai government spending and a shared services approach, and supplier collaboration. What we found was that in the worst-case scenario, digitizing the procurement process could create AED 1 billion savings.
  • Workforce engagement: SAP SuccessFactors and SAP Fieldglass solutions, drive productivity and innovation by engaging contractors and employees in a smarter, faster and better way.
  • IOT and big data: The SAP Leonardo portfolio helps turn assets into insights, then action and ultimately into outcomes. This leads to increased revenues, improved asset utilization and an optimized customer experience.

And all this is based on the modern architecture of the SAP cloud Platform

What role will data play in the evolution of Industry 4.0?

Digitization makes supply chain more efficient. Industry 4.0 is all about data. Data and information play the most important role in Industry 4.0 – whether smart factories, supply chains, informed customers or alignment – starting from the operations till the final delivery of a product all the way to the end customer and beyond - it is all about capturing and analyzing data at the right time and place. The more information you gather, the earlier you gather it, the timelier your insights and actions, the more the value of the outcomes in the supply chain.

How will the concept of connected systems be different in the new digital era?

Every organization today needs to think about moving out of their traditional silos and cut across value chains. This can only be possible if you have the support of connecting systems, networks, and machines that can make your systems, factories, grids, and even cities smart. So you actually need to stand back and figure out where the biggest opportunities are and where you can create the most value for your customer

Kavitha Rajasekhar