digitaliKa - a radical simplification of Tech Services

At SAP Services we are finalising a concept to radically simplify how medium complex IT solutions can be sold and delivered. We call it DigitaliKa.

Interestingly in Tech Services the process Discovery > Solutioning  > Delivery involves still a lot of handshakes and labour. If it can not be addressed by easy-to-consume cloud-solutions, what can you do to simplify?

We found that combining IP & digitisation is a big lever for medium-complex solutions. That is what the term DigitaliKa shall evoke. We will elaborate in several posts about what it is, and what to expect from it.

That much so far: We were stunned by the results. We think the concept is applicable to up to 40% of the projects we conduct, gaining efficiencies of 40% and more, whilst reducing time to value and risks for our customers. Results from early pilots are validating our assumptions and estimates.

" digitaliKa: impact of first (level 1) pilots

This possibly will be a game-changer for SAP customers with a material impact on providers of implementation services inside the SAP Service Economy - a market worth 34 billion USD.

The idea and operating principlesWith digitaliKa we want to enable SAP customers to digitally discover, solution and deploy SAP solutions - all by themselves. By providing this customer-operated engagement cycle, we expect costs of implementation to go down dramatically, time-to-value to improve and risks to reduce.

Let's illustrate the idea and operating principles behind digitaliKa along three essential steps: Discovery, Solutioning and Deployment. The illustration below may help to visualise the structural components of digitaliKa.

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Discovery

The objective is to facilitate discovery of SAP solutions for a stated customer situation. This involves mapping the plain language a customer uses to outcomes SAP solutions can provide. Today this involves a lot of interaction: meetings, analyses and expert inputs often combine in a variety of way to achieve a single outcome. DigitaliKa changes this by exposing pre-defined outcomes and using data science to do the mapping.

The whole discovery and specification is done in this step, and it ends with the creation of a briefcase (note: not a shopping cart yet). In the ideal state, digitaliKa knows who the customer is, what SAP has in store, and how the customer is using SAP and his affinities. By applying appropriate data science, digitaliKa is capable of making targeted recommendations to be included in the briefcase. This process is fully customer-operated in the end-state; in interim stages, this part can be operated by a SAP sales specialist.

Through the process, digitaliKa interacts with the backend systems like CRM creating opportunities or changing their status. The system exposes all the needed collateral in the most recent version, and only what is needed.

Solutioning

The briefcase, an expression of the customers requirements, is translated into SAP-language and into a project scope. To that end, digitaliKa fetches assets from a repository to expose Rapid Deployment Solutions (RDS) which will address the business requirements. In many cases

additional design-based tasks will have to be conducted to complement the whole solution. They are identified in the same moment.

As digitaliKa is fetching these assets, it is also fetching the underlying work breakdown structures and hence is capable of running an estimation (pricing) to execute the project scope. A contract is auto-populated with this content, commercial terms are set based on the identity and purchase history of the customer, and the contract is proposed to the customer. The briefcase has then to be translated to a shopping cart.

Once this contract has been accepted and confirmed, digitaliKa communicates with the various backend systems. CRM status is changed, commercial documents are created in the ERP system, and technical specifications are created.

The technical specifications are used to pre-assemble the solution and provision it in our Cloud. Specified RDS are fired-up and are immediately available. As we pre-tested them, we ensure that every given combination is technically working together. The pre-assembled solution sits now in the Cloud for the next step.

Deployment

If the pre-assembled solution needs additional design-based activities to be complete, a deployment is necessary. The project scope is transferred and exposed in a way that a project manager can get his job done.

Based on the work breakdown structure and agreed upon start dates, resource requirements are identified. A connection to the resource management system provides automated staffing strawmen. The project execution can start and is monitored on task level.

Once done, the solution is ready for production environment - in pre-production state. There are then two choices: (1) either keep it in the Cloud environment use during the implementation phase, or (2) deploy it on-premise. During this phase, digitaliKa is interacting with the backend systems, to report progress of delivery, to forecast project financials, and ultimately to generate an invoice at the end. Consultants staffed to the project get their skill database automatically updated and are released for the next assignment.

Recap

If this sounds benign as a concept, it is not. The medium-complex nature of solutions make it actually quite a challenge. It involves several key components: • outcome-based portfolio • data lakes and associated data science • a repository of rapid deployment solutions • pre-assembly procedure and IP • common taxonomy and meta-data models

In addition to this, the bi-directional connection to backend systems as well as the embedding into a fully functional digital commerce platform need to be enabled. As appealing the end-state is, the path to it needs likely to be broken down into digestible phases. We think of three of them.

Level 1 digitaliKa is close to be fully operational and tested at SAP Services. The benefits are stunning our test-pilots. We think the concept is applicable to up to 40% of the projects we conduct, gaining efficiencies of 40% and more, whilst reducing time to value and risks for our customers.

How to get there?

Given the magnitude of the vision of this new concept, we, here at SAP, have opted for a gradual path to execution. We envisaged three levels of digitaliKa.

" digitaliKa - gradual execution towards fulfilling the vision

Level 1: Daisy chaining and connecting the backend

To begin with, existing elements which fit the bill for digitaliKa are daisy chained and overlaps eliminated. In our case these are three major tools: the sales navigator (for discovery), the solution configurator (for solutioning) and the deployment cockpit (for delivery).

In addition of daisy chaining, we need to connect them to various backends like our CRM, Financial Systems, Resource Management and the likes.

Next, Intellectual Property (IP) is injected at various points. Key assets are our pre-assembly framework, RDS, a common Taxonomy, sales plays, outcome based services. The discovery phase has some, but yet limited, smartness in the sense algorithm-based customer experience.

Once done, the basic infrastructure for level 1 digitaliKa is available. The core IP is available. The process runs behind the firewall. We are good to go.

Level 2: customer operated discovery & more IP

Taking it to the next level, the discovery-phase is now operated directly by the customer. Discovery needs to be sufficiently smart to deliver inputs in form of machine-language, that the solutioning engine in the following phase understands.

This asks for a nonnegotiable injection of additional IP and content into this phase. Identity, Affinity, Catalogue, Algorithms, are the most crucial ones to make available.

Further, this process has to run outside the firewall as it shall be customer operated. The rest of the infrastructure and processes remain behind the firewall.

A way to implement this is to plan for a hand-shake between Discovery and the rest of the level 1 daisy chain. Admittedly this is a workaround, but an important one if we want to make it customer-operated whilst maintaining key security aspects.

At this stage, sales reps intervene only by exception.

Level 3: digital business

Finally, the process is run end-to-end as a digital business. As a reminder, digitaliKa is predominantly a make-to-order scheme, albeit based on pre-assembly of pre-defined components.

There are, of course, technical challenges to this. The level 2 digitaliKa has to be lifted in all its components to enable fully digitized commerce in a robust and secure way.

And there are even bigger change management challenges to it. The whole process needs to be run and managed as a digital-business. The way we expose our services & solutions changes, there are no sales reps in the classic definition anymore, and delivery occurs more in a factory-style paradigm than anything else.

A lot of fundamental changes compared to the way medium-complex implementations are discovered, solutions, and implemented today.

Timelines

You might ask: How long does will this take? Starting from where we stand at SAP Services, we think Level 1 can be achieved within a quarter. To get to Level 2, we believe you have to add another 3-4 quarters. Level 3 is difficult to judge, but certainly may take another 2-4 quarters. So it might - maybe optimistically - take us 6-8 quarters to get to Level 3.

But the benefits are beginning to materialise already with Level 1. So, the effects and promise of digitaliKA are pretty immediate.

Selected industry examplesIs digitaliKa a unique concept? I do not think so, but at its end-state it is certainly an industry-grade innovation. The combination of B2B-type complexity, configuration, and commercial arrangements, paired with the end-to-end digitisation lead me to make this bold statement.

In our industry - the last time I checked - I could not find examples that achieved the same levels of digitization in a B2B or B2B2C setting. Nevertheless, it is worthwhile to look around what others have in store.  

" digitaliKa - Selected industry examples along levels

Level 1 Example: Sto

I picked a concept from Sto, a German manufacturer which offers an entire range of façade insulation, rainscreen cladding, paints, plasters and acoustic systems, amongst others. One of their core capabilities is direct sales and delivery to construction sites.

To that end, Sto provides customer-specific stillages, which are customized support pallets, ready for each construction site. Specification of the pallets to be delivered is taken directly, and processed with pre-assembly done in Germany, colors mixed on demand and in quantity. Robots assemble all items on the stillage, then the order is shipped to the construction site.

The whole chain is digital with limited to no human interaction. However, it is completely internally operated, hence level 1. Having visited the facilities, I was really impressed.

Level 2 Example: BMW

I picked the car configurator service of BMW ("build-your-own"). As a customer you can discover the offerings of BMW and ultimately configure all aspects of your choice and save it in a virtual garage. These specifications can be transferred digitally to a dealer who would complete it with missing details or other recommended options and submit an offer to you. Once confirmed, production (actually assembly-to-order) of your car is started.

The front-end is more a hierarchical navigation vs a dynamic exposure of offers based on data science. Never the less there is significant IP and rules involved to make it as smooth an experience as it is. The front-end is customer operated, then it is taken inside the firewall, hence level 2. Having order my BMW this way, it is actually quite a stunning digital experience.

Level 3 Example: Apple

Although it's in the consumer space, I decided to go with Apple's configure-to-order service as example for level 3. If you order a Mac Pro, the number of configuration options are massive. Given the number, they are assembled-to-order, customer-specific software builts are added, and the final system tested. All is done digitally; it's customer operated in a truly digital business sense.

Here too, the front-end is smart. But not that smart. It is largely a hierarchical navigation which can do the job without knowing everything - For instance, which business am I in - creative, science, business? So it is level 3 without the dynamic element we are looking for in our own discovery phase.

One can find smart examples which follow the operating principles of digitaliKa. But I must admit I had a hard time finding one which would be at the level of digitaliKa in all elements, notably in discovery. And the discovery component is critical for B2B or B2B2C.

If we succeed to pull off digitaliKa end-to-end, and notably with the discovery functionality - it seriously will be an industry grade innovation.

For all of you who still do not believe, check out this: Already we have won industry innovation awards for two out of the three elements of digitaliKa. To see for yourself, click over here, and here.

Showcasing the operating principlesAfter all conceptual discussions, we thought it would be a good idea to put together a demo of the operating principles of digitaliKa. We're showcasing digitaliKa on Level 1, not its full-fledged end-state, and highlight 5 key steps of the flow.

" digitaliKa - flow for the level 1 demo

The skunk-work team working on digitaliKa has put together a hands-on  / LoFi technical demo to showcase above flow. 15 Minutes duration. Courtesy Oleg Figlin, Hermann Reiter, Jan Musil, Marc-Alexander Winter. 

Click on the chart to start the demo.

" digitalika - Demo on level 1

Note: This demo showcases the operating principles of digitaliKa, not its final look and feel or any type of solution. It does not represent a commitment or plan to develop such a solutions.