Digital platforms – Challenges through new and disruptive business models [part 1]

At the end of September 2018, Microsoft, Adobe and SAP announced at Ignite Conference in Orlando that they would like to work closely together in the future. The aim of digital companies is to facilitate the exchange of customer data between different applications with the Open Data Initiative. The initiative is not limited to the solutions of the three companies, but should also be available to other providers. Microsoft hopes to develop the data exchange on its own cloud platform Azure. Adobe and SAP have also published their own cloud solutions for their systems in recent years. But isn’t the cloud Salesforce’s territory? Can SAP, Microsoft, and Adobe even use cloud computing?

The world was fine when SAP stood for ERPs, Microsoft for office software, and Mac users for being hipsters. Now, SAP also wants to swim in the CRM channel of Salesforce with their own commerce-focused cloud platform. What the new portfolio from SAP means for existing systems and whether cloud-based digital platforms are the answer to disruptive business models, we would like to show you in our new article series »Digital Platforms«. We will take a closer look at SAP’s C / 4HANA to see if, as the strategic platform of the future, it can meet the challenges of retail and generate competitive advantage.

Big data as a driver for innovations in marketing, sales, and services

Before we clarify whether SAP is as good a swimmer as Salesforce, let’s take a look at the changes in the ocean of retail. What does it take to swim and what does the fairway look like? With the increasing interconnectedness of everyday items and the increasing number of people using the Internet, the stock of available information continues to grow exponentially. This is additionally supported by the spread of mobile devices.

One of the biggest technological challenges of our time is the meaningful use of the vast amounts of data. The economic extraction and use of relevant knowledge for operational and strategic decisions represent the biggest challenges in retail. This is similar to crossing a lake full of water lilies. It needs the right technology to reach the goal. A promising solution is the use of big data-based technology, in which not the storage of data plays a decisive role, but the analysis and evaluation. Big data opens up new potential in a wide range of industries through the use of previously untouched data The goal is to pool data that is still in silos into a single, linked section of data.

With the widespread use of the Internet over the last two decades and the centring of all business processes around the customer, not just the number of customer contact points are increasing, but also the mass of information and communication possibilities. Customer activities and interactions shift from real to virtual channels. The demand for services that go beyond traditional means is also increasing.

A good swimmer has to be able to adapt to the water

But what makes a good swimmer? What qualities do they have to bring with them to swim through the shoals of digitised commerce? Key phrase: The paradox of digitisation. Established companies that only meet the current needs of their customers are driven out of the market in the long run by competitors with technological innovations and go out of business in the long run.

New business models and optimised business processes are needed to prevent this and return to the surface. Changes that, in turn, could neglect the needs of existing customers and impact business performance. This paradox leads strategically to a disruptive innovation in which a more unknown and innovative product, brand, or company replaces existing ones.

Business owners have to realise that the development of their business model is necessary. Digitisation is not a one-time change. It is a necessity for constant transformation. Our swimmers have to adapt to the different waters. They need to respond to the changes triggered by existing as well as new competitors.

Key factor: Customer engagement

Up-to-date and accurate information is critical to business success. Digital systems help to properly address the customer’s situation and to identify needs-based information. This increases the number of new customers and expands existing customer relationships in the long run. Decisive is, therefore, the contact with the customer and the interactions with them. Key phrase: Customer engagement.

As with swimming, there are also different techniques. There are three dimensions to customer engagement: cognitively, emotionally, and behaviorally.

The customer’s belief that a company or brand is superior to competitors is based on knowledge and insights. In contrast to the cognitive triggers, in the emotional dimension, there are human instincts and needs that influence customer behaviour. Not to be underestimated is the third dimension of customer engagement, in which the customer acts according to their experiences in the social environment.

Speaking of forwards

If you would like to know more about trends and developments in digital transformation, you will find answers in the current Handelskraft Trend Book »Moving Towards Digital Excellence«.

From covering digital customer experiences to how employers need to market themselves as an appealing place to work, we cover it all. Also in the trend book: Digital Business Facts & Figures – Including but not limited to: Internet usage, consumer behaviour, marketplaces, payment methods, technologies

This guide with all the important facts and figures are available here for free to download.