Coupling, harmonizing, individualizing
E-3: Mr. Failer, you say that the lesson for business life from the past eighteen months can be summed up in three terms: Resilience, flexibility and individuality.
Thomas Failer: That is correct. The three terms mentioned belong together in terms of content. And they also have a temporal dimension that links them together. Companies must become more resilient, i.e., more resistant to external shocks, and they must do so in the short term. Flexibility and individuality build on this, but can be considered downstream in terms of time, provided the basis of resilience has been laid correctly.
E-3: It sounds like companies will have to adapt to massive changes on a permanent basis.
Failer: You are absolutely right. The increased speed of adaptation, born out of necessity, must be translated into a significantly increased ability of companies to adapt. This is precisely why the second concept of flexibility is so important.
All measures and investments aimed at greater resilience in the short term must also increase flexibility, at least in the medium term. This is the only way a CIO can escape the typical dilemma between cost management and promoting innovation.
E-3: Examples please.
Failer: Very much so. Buying and selling companies and parts of companies are now part of the agile toolbox of the automotive industry and other industries. But what is already a challenge at the level of contracts and processes because of the complexity involved is a real problem for IT. This is because it inherits the IT landscape of the acquired companies or parts of companies and has to integrate it. And it must ensure that, in the event of a sale or spin-off, the intellectual property is preserved and the buyer can work with the transferred information.
E-3: What does the IT legacy look like in mergers and acquisitions?
FailerIn the case of M&As, the buyer's IT inherits a historically grown IT landscape with a large number of different systems and applications from a wide variety of manufacturers and in different release statuses, the number of which quickly runs into the hundreds. The resulting complexity is enormous and must be reduced as quickly as possible. As a rule, however, this is achieved rather poorly than well. The operationally required data is transformed and migrated at short notice, while the legacy systems are frozen for the legally required retention periods. But this severely limits access to the valuable historical information and puts it out of reach for day-to-day business. This is not what a good solution looks like.
E-3: This doesn't just affect the SAP community, does it?
Failer: Yes. If we also consider that this complex situation is generally not limited to the SAP world, but also affects other systems such as PLM or CAD solutions, it becomes clear that behind all these practical challenges lies a fundamental problem: that of binding data and documents that are no longer required operationally to their original systems.
If, on the other hand, the levels of systems and information are consistently separated from one another, the aforementioned challenges can be mastered much more easily and quickly than before. This is a direct starting point for companies to become not only more resilient, but also more flexible. This separation is the core idea behind our offering of a platform for information management.
E-3: Could you please explain this approach in detail?
Failer: Let me start with the aspect we call harmonization. Our information management platform enables virtual, i.e. system-independent, master data management that maps all the different table structures and attributes from the individual systems to the golden standard of the virtual layer to create a common register for business objects. The register is called the Common Business Object Record. For master data harmonization, our platform searches all relevant systems, extracts the data and stores it centrally. Automated procedures then check for duplicates, zip code errors, bank data, etc., and make automated corrections based on rules.
E-3: But the users also see the corrected information only in the original structure, right?
FailerYou are addressing an important point here, which not only concerns ease of use for business users, but also their productivity. Our platform acts as a central collection point and staging area for enterprise information as part of data quality optimization projects.
The biggest advantage of a data staging area is to create a harmonized master data structure, even for legacy data, that is similar to the one that exists in the leading operational systems.
This procedure, called "Technical Structure Mapping", means that, for example, the master data for a customer or vendor that was originally created in SAP ECC 6.0 or any third-party system is queried and displayed as if it had been generated in S/4 according to the structure of the business object Partner, which, as is well known, no longer distinguishes between customer and vendor.
If this mapping reveals that individual data records are missing to obtain a true 360-degree view, they can be enriched from third-party systems such as sales and service solutions.
E-3: But it has to go further, right?
FailerThese views of business objects can also be designed selectively and linked to transaction data. Appropriate filter rules can ensure that users are only shown those customers for whom orders exist in the past five years.
However, since all legacy information has been transferred to the platform, the filter rules can be changed at any time and thus, for example, also display those customers who last bought something ten years ago.
As a result, SAP legacy customers can thus gain a complete view of business objects in the current data structure of the leading system at any time. In addition, our platform also offers massive advantages for value mapping.
E-3: In what way?
FailerCustomers who want to transform to SAP S/4 Hana find out during the project that they have 40 or 50 different order types in their legacy system, of which they have only used perhaps a maximum of ten operationally in the past two years. Therefore, they only want to create and work with these ten in the new system.
But by doing so, they lose access to the historical order types and related data and documents from within the new system. So what to do? At the moment, many existing SAP customers take over all historical order type fields, thus creating a huge and expensive mapping project, which is also nonsensical in many places, because, for example, values appear again on the delivery bill for an old order that have no equivalent in the new system.
However, our platform allows customers to view historical information on order fields that are no longer needed, even in the new system, without the need for mapping.
Our way of connecting historical information with operational systems and data paves the way for a selective and thus much faster and more cost-effective transformation to S/4 Hana. With a new, but small and fine system, companies can then really take off.
E-3: But in the end, it's about linking historical information with operational information again?
Failer: Definitely yes, although from a technical point of view I would rather talk about flexible coupling. From a business perspective, of course, the two belong inseparably together. But precisely for the purpose of making historical information flexibly usable for business goals and their dynamic change, they should be located and managed on a separate level.
E-3: Is there also an opportunity in the new software generation?
Failer: Yes. Against this backdrop, the upcoming transformation to the new software generation from Walldorf is the great opportunity for data harmonization, which can be achieved most easily, cost-effectively and effectively if it takes place before the switch to S/4.
Only if data harmonization takes place independently of the individual systems can it play its role as a catalyst for digitization. This is because it can be used not only to optimize data quality, but also to determine the reduction potential of data before it is transferred to new central environments.
At the same time, SAP legacy customers can use it to define the filter rules for data transfer and make them available in a neutral format for subsequent transformation and migration. This prepares information for transfer to operational systems as part of consolidation projects or to analytics solutions for digitization initiatives.
E-3: What are the advantages for existing SAP customers?
Failer: On the one hand, they can save operating costs of 80 percent by completely decommissioning the legacy systems. In addition, the transformation effort is halved and the total cost of ownership for the S/4 Hana environments is reduced by 25 percent.
But there is another aspect: Even if there is inexpensive cloud storage for mass data, this does not apply to the same extent for large-volume databases of SAP inventory systems, on the contrary. Whether a common relational database with 10, 15 or 20 TB of data volume is moved to the cloud or a corresponding Hana database is to be built and filled there, the result of such a consideration is always the same: disillusionment.
Because the costs are higher than hoped for and expected. The cost comparison between storing and managing historical information in in-memory systems and doing this on our platform is particularly illuminating: the operating costs are 100 to 1000 times lower with our solution.
E-3: But not a new topic, right?
Failer: CIOs and SAP managers are therefore rediscovering an old topic: archiving, which we have already discussed from the point of view of harmonization. Because it promises to kill two birds with one stone. That is, to massively reduce the size of the productive databases of SAP inventory systems before they are moved to the cloud, thereby saving costs in the long term.
The only problem is: traditional archiving approaches come from a different time, when the main focus was on data backup instead of managing the lifecycle of data. That's why it comes down to a more modern and intelligent way of archiving, what we call historization.
E-3: Can you undo the disadvantages of classic archiving in retrospect?
Failer: This is indeed possible. Our platform allows, after the automated copying - keyword snapshot - of the entire data and document inventory from the online database, to automatically determine the reduction potential based on the selected criterion.
Since our platform is integrated with SAP, our Rightsizing Cockpit uses and optimizes the standard ADK functions and displays the reduction potential per ADK object. In addition, the cockpit allows open processes that would have to be closed individually by hand using the conventional method to be brought to a close automatically.
Where this is not possible, we offer the SAP team the choice of performing a cleanup or ignoring the problem, depending on the root cause assessment. All open cases are displayed at once and independent of the respective ADK object.
One mouse click is all it takes and the selected solution variant is applied to all cases that have not been automatically purged. The time and cost savings are correspondingly large compared to traditional archiving approaches. In this way, the target of an 80 percent reduction can also be achieved in the real world. This also makes companies a good deal more flexible again (see technical article by Peter Schönenberger starting on page 62).
E-3: That leaves the aspect of individuality. What exactly do you understand by this?
Failer: In the digital economy, companies will increasingly differentiate themselves through digital services, whether these come directly to bear on the end customer or play an important role in the internal value chain. The demand will be so great that not everything can be bought in.
IT is thus definitely moving into the core area of value creation and is developing its role in the traditional industries from that of an extra to that of a leading actor. The vast majority of these developments will not be large application packages, but functions and functionalities created cloud-natively and provided as containers and microservices.
And can thus be flexibly reused depending on the context. In this way, flexibility merges seamlessly with individuality, the strongest differentiator in the digital platform economy. However, the prerequisite for this is to establish and permanently maintain openness both at the level of the information and the applications via the support of standards.
E-3: What do you mean?
Failer: Even as IT becomes more strategic, it has never been more of an end in itself. It must prove its business value and benefit as never before. This includes the optimal use of all available resources. Companies can afford less and less to waste them.
This even includes the only partially used physical infrastructure components such as NVMe storage or graphics cards, which must be fully usable today precisely because they are so much more powerful than their predecessors. The technology for this is emerging.
The previously hard-wired physical components of server units or storage arrays can be decoupled from each other and flexibly combined to meet the requirements of the respective workload. Gartner has created the term Composable Infrastructure for this.
E-3: So a look into the future.
FailerHowever, we take this idea further and find that the term is the right one for all levels from the infrastructure upwards and only ends with the Composable Enterprise.
The Composable Enterprise can continually reassemble and evolve its structures and processes based on coupled application building blocks, analytics, and data packages in a resource- and cost-optimized manner, allowing it to respond resiliently but also quickly and flexibly to unforeseen changes, including external shocks, without seeing its existence threatened.
That is resilience, flexibility and individuality all in one. With our platform, we deliver the managed data fabric required for this, and this, if the pun is allowed, not only as a data layer, but also as a kind of data factory. That is our modest contribution to the industrialization of IT.
E-3: Thank you for the interview.
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