In June 2023, Germany's Fresenius Group, the world's largest medical group, announced that it would migrate the group's 134 SAP systems to the SAP cloud in less than 15 months. Using the Rise with SAP solution, the German Fresenius Group was able to migrate its core business process ERP system and CRM system for finance, manufacturing, supply chain and procurement to the cloud architecture - which greatly promoted the digitization of the group process.
Coincidentally, Germany's BMW, the world's largest automaker, and HP and AMD, the world's largest technology companies, also announced this year that they will adopt the Rise with SAP solution to migrate their digital infrastructure to SAP H/4HANA Cloud. The core SAP cloud. SAP has strengthened its cooperation with enterprise-level cloud and AI partners such as Red Hat, IBM Watson AI, and Google Cloud this year, consolidating the position of ERP as the core of the digital base.
At the 2023 SAP China Summit, SAP and Zhongkesoft, two software "champions" from the global and Chinese markets, launched a "champion" dialogue-digital base empowers high-quality development. Dr. Huang Chenhong, global executive vice president of SAP and president of Greater China, together with Zuo Chun, doctoral supervisor of the Institute of Software, Chinese Academy of Sciences and chairman of Zhongkesoft, discussed the importance of building a first-class digital core (ERP) for digital transformation and high-quality development sex. So, what kind of digital base is needed to benchmark global digitalization? Where should China's software industry go in the era of cloud and AI?
Digital Transformation Technology Trends
The National Industrial Information Security Development Research Center and the National Integration of Industrialization and Industrialization Standardization Committee "Management Upgrade under New Industrialization - High-end ERP White Paper (2023)" pointed out that the high-quality digital transformation technology of large enterprise groups needs to meet: for large-scale group management and control, to meet Complex applications; enabling real-time management of enterprises and comprehensive business collaboration; integrating best industry practices and supporting personalized agile development. High-end management application software is essentially the software carrier of advanced enterprise management concepts and successful industry practices. It absorbs the rich management models of large-scale group enterprises in the world and condenses the best business practices in the world.
Today, as the world enters the digital economy in an all-round way, the development of Chinese enterprises has entered a new stage represented by global management, global operation, and global resource allocation, and the "chassis" of enterprises has also ushered in a comprehensive renewal . Zuo Chun, chairman of Zhongkesoft, said at the 2023 SAP China Summit that the current enterprise application software has entered the stage where software defines everything, application software is moving towards the C position of enterprise management, and ERP is the digital base of enterprise application software.
For the application management software and ERP base: on the one hand, it is necessary to transform from the traditional data center to public cloud, private cloud, data center and other architectures, and realize modularization and integration on the unified cloud computing architecture to meet the needs of the entire enterprise. At the same time, it can be expanded on demand; on the other hand, it is necessary to develop and embed real-time computing, artificial intelligence, machine learning, predictive analysis, RPA, AIGC and other intelligent computing capabilities. More importantly, on the basis of realizing the integration of multiple application software, it also provides rich and personalized industry solutions to meet the individual needs of enterprises.
Through the dialogue between SAP and Zhongkesoft at the 2023 SAP China Summit, we can summarize the digital transformation technology and software industry trends in the cloud era: first, application software goes to the cloud, and application software moves to the C position of the enterprise; secondly, it supports multiple clouds and The ERP cloud in the form of IT is the core of the enterprise's digital base; the third is that the digital base not only provides the best practice in the standardized industry, but also supports personalization and customization, and fits the diversity of enterprise management through personalization . From the development trend of application software, we can see the main features of application software digital base: simple and flexible, easy to accept innovation; technical flexibility, able to support changing business environment and innovation needs; support the combination of technology and business, etc.
Benchmarking international software, with ERP as the core of the digital base
Ronald Coase, a Nobel laureate in economics, said that the essence of an enterprise is a resource allocation mechanism. Entering the era of digital economy represented by Industry 4.0, the development trend of enterprises is from extensive management to refined management, from pyramidal structure to peer-to-peer flattening, from rigid organizational methods to agile iterative changes, based on customer needs As the center, especially the software-defined digital technology driven by cloud computing makes business and production more and more flexible and resilient.
This is a long-term accumulation process, especially for complex business software. As the "champion" of global enterprise management software, SAP has bravely revolutionized itself since 10 years ago, and started a great journey to actively embrace cloud computing - costing 70 billion US dollars, not only rewriting 400 million line sources of core products The code has completely realized cloudization, especially the support of the ERP cloud product S/4HANA Cloud for multi-tenant, single-tenant, public cloud, private cloud and customer data center deployment methods, as well as the adaptation of big data and real-time computing The SAP HANA data platform, in addition to subdivided application fields, has various business clouds covering the end-to-end of the enterprise value chain.
In 2015, SAP released a new ERP product, S/4HANA, which completely rewrote all ERP codes based on SAP HANA. In 2017, SAP released the public cloud version of S/4HANA, the ERP public cloud. In 2021, SAP released the private cloud version of RISE with SAP S/4HANA Cloud, which supports multiple deployment methods. It is worth mentioning that SAP released a business technology platform in 2020, which provides customers with the ability to build, manage and deploy applications on an integrated platform.
Today, the ERP cloud has become the core of the digital base of all SAP application software . SAP has also migrated the business and industry solutions formed by the management model and best business practices of large global group companies accumulated for more than 50 years to the ERP cloud base. Based on cloud ERP, enterprises can incorporate industry benchmarks and best practices into their own business processes, and discover huge potential for improvement through performance analysis; or realize greater value by changing their own processes. RISE with SAP, as a one-stop solution for enterprise business transformation, continuously iterates and optimizes with the help of the flexible scalability of the cloud platform, and can provide enterprises with innovative functions such as green ledger and business embedded AI on demand.
As the IT leader in China's insurance industry, Zuo Chun, chairman of Zhongkesoft, said that due to the wide variety of application software, each enterprise is actually performing similar reuse instead of identical reuse, which means that the competitiveness of each enterprise must and cannot be compared with Other enterprises are exactly the same, so it is "similar reuse". At the bottom of "similar reuse" is the so-called standardized business process, and these standardized businesses are often international standards, because the process of forming standards is often a process of reaching consensus through continuous practice accumulation. In the past 50 years, SAP has established branches or offices in more than 130 countries around the world, has development teams in more than 100 countries, and has more than 24,700 partners in more than 140 countries, covering all industries in 193 countries/regions With 390,000 customers, solution packages for more than 26 industries and 12 business lines have been accumulated accordingly. SAP S/4HANA Cloud is a complete modular cloud ERP and the core of the digital base for "similar reuse" of enterprises .
Why pay special attention to SAP? Zuo Chun, chairman of Zhongkesoft , emphasized that this is because SAP has accumulated a large number of corporate customers in various markets around the world, so the process defined by SAP software has become the de facto standard. On the basis of this standard, enterprises can achieve "similar reuse" and at the same time create the characteristics of each enterprise, that is, "diversification". Whether it is SAP's general application software such as finance, human resources, and customer relationship management, or industry-oriented application software, it is worth learning from the Chinese software industry, especially SAP's newly launched business-financial integration, business-human integration, and business-human integration. Integrated software such as financial-carbon integration can realize the synchronization, same source and unification of business data, financial data, human data, and carbon data.
Taking carbon emissions as an example, many listed companies and Fortune 500 companies are participating in various ESG rankings, and carbon emissions are an important ESG indicator. SAP's new green book initiative integrates sustainable development solutions into the ERP cloud. Enterprises can directly obtain real, accurate and auditable carbon data from SAP ERP, making carbon accounting possible. With the help of green book initiatives, companies can obtain actual rather than estimated carbon emission data, and manage corporate sustainable development efficiently just like managing revenue and profits. Zuo Chun, chairman of Zhongkesoft, said that SAP has carried out a lot of practice in ESG. For example, European insurance companies have launched liability insurance including carbon emissions, and formed carbon emission indicators through digitalization of carbon emissions and integration with ERP software. It is possible to rank all enterprises in terms of carbon emissions, which are very worthy of learning by the Chinese software industry.
It is worth mentioning that SAP ERP provides local financial, tax, labor, ESG and other cross-industry management solutions for more than 190 countries, and Zhongkesoft is most concerned about SAP's advantages in management accounting, especially international accounting standards Applications in the insurance industry. Zuo Chun said that SAP has strong experience in international accounting standards, and the future digital operation of enterprises is actually digital management accounting, and SAP's experience and practice in this area deserve the most attention.
Talent and Ecology: Winning in the Digital Economy Era
For the software industry, talent and ecology are the foundation of survival and development. SAP software products and services cover 390,000 customers in 193 countries/regions, and these are also inseparable from a large number of talents and comprehensive ecological partners.
Dr. Huang Chenhong, SAP Global Executive Vice President and President of Greater China, said at the 2023 SAP China Summit: "Under the new development pattern, new Chinese companies are accelerating towards full data, full links, and full green. SAP will uphold the 'in China, for China's original intention, to provide them with first-class digital technology, help them build a solid digital foundation, promote business transformation with innovative technology, and jointly grasp new opportunities for high-quality development." Talent and ecological cultivation are SAP" In China, for China" is a concrete manifestation of the commitment. In the past 30 years, SAP has cooperated with many Chinese universities and colleges, trained millions of software talents, and continuously provided professional talents for customers, partners and the software industry .
Zuo Chun said that SAP's emphasis on "in China, for China" is actually a manifestation of "customer-centric" thinking and a manifestation of cultural tolerance . If an enterprise wants to develop and grow, especially to achieve high-quality development through internationalization and globalization, it must learn and tolerate the cultures of various places, and be "customer-centric" "in one country, for one country". It also includes cultivating and absorbing local talents and ecological partners. In addition, ISVs are characterized by developing industry application software, and industry application software places great emphasis on domain knowledge, that is, they must become industry experts. At the beginning of SAP, it was not an all-rounder in all industries, but started from a specific industry, and then expanded to more industries by continuously absorbing talents and ecological partners from various industries. Especially in the process of ISV globalization, in addition to software technology and industry domain knowledge, it is also necessary to learn and understand the laws and regulations of various countries. To reserve global talents, we must also learn and communicate with global application software "champions" like SAP.
Through extensive talent cultivation and ecological establishment, SAP has laid a solid foundation for application software to take root in customers. In the "fertile soil" of talent and ecology, the digital transformation and high-quality development of enterprises must answer basic questions well, then consider multiple-choice questions, and then go beyond. As the core of the digital base, SAP ERP cloud not only has a broad global talent base, but also has a rich and diverse global partner ecosystem, which can help companies answer basic and multiple-choice questions.
To sum up: With the deepening of digital transformation and high-quality development entering a new stage, application software has reached the C position, and digital transformation has developed from technology cloud to management cloud, and management cloud requires a new generation of ERP cloud as The core of the digital base helps companies to collect management information and lay the foundation for later digital management optimization. At the same time, it "similarly reuses" the world's advanced corporate management concepts and successful industry practices, and benchmarks world-class companies on top of world-class application software. Enhance global competitiveness. Both Chinese enterprises and ISVs should look at the world, and do not need to "build a car behind closed doors". On the basis of globalized digitalization, they will succeed in digital transformation and achieve high-quality development. (Text/Ning Chuan)