There is not a single industry that hasn’t been impacted by digital disruption. From hospitality to manufacturing, retail to finance, businesses are seeing the landscape change as quickly as consumer whims. Companies that are successful today may be left behind next year, as new business models and new technologies are changing business as we know it. To keep pace, the world’s most successful enterprise IT organizations are looking at new ways of delivering services to the business – and that includes leveraging agile and DevOps methods to compete. Otherwise, they know they run the risk of fading into obscurity.
Change Is Required to Compete
According to the American Enterprise Institute, only 12 percent of the Fortune 500 firms from 1955 still remained in the category. Companies like Studebaker, Detroit Steel, and Zenith Electronics dropped off the list – and in some cases, have ceased to exist or been acquired by other companies due to slow adoption of new technologies.
For example, Zenith Electronics, once an American electronics powerhouse with a radio or television in almost every household, is now owned by South Korean electronics manufacturer LG Electronics. The introduction of the color TV, combined with an influx of imports from other countries that cost less, chipped away at its market share. Unable to adapt and compete with the quality of the imported units, and slow to adopt the solid-state transistor technology, Zenith was forced to declare bankruptcy and leave itself open to acquisition by the same competitors that brought it to its knees.
The same scenarios continue to play out today as companies fail to adopt new technology and adapt to the changing marketplace, while their competitors continue to evolve. Toys R Us, which declared bankruptcy in September 2017, once was the leader of the toy industry. While it may seem like price competition from Amazon, Walmart, and Target took down Toys R Us, in reality, experts point to a stagnant business model, the failure to incorporate technology, and an inability to adapt to changing consumer behavior. It’s why Barnes & Noble continues to exist, while mega-bookstore Borders folded: Barnes & Noble invested in its own e-commerce platform and its Nook e-reader, while Borders outsourced its online sales to Amazon and instead doubled down on its physical presence, CD music sales, and DVDs.
Walmart is now working to outpace its e-commerce competitors with its acquisition of Jet.com, a fast-growing e-commerce company. Jet.com brings with it a growing customer base, more brand partners, and new technology that can reduce supply chain and logistics cost, often a sticking point for retailers. The acquisition has proven itself fruitful for Walmart; one year after its purchase of Jet.com, its e-commerce sales climbed 63 percent. It’s now poised to offer Amazon some real competition.
IT Change Paves the Way for Business Change
Other companies are leveraging the power of their IT departments to drive business change and get ahead of the competition. Under Armour is already shifting from being a clothing company to a data-driven technology company; its fitness apps MapMyFitness, Endomondo, and MyFitnessPal already speak to that. On the back end, the company implemented SAP S/4HANA and is leveraging its SAP system to better understand and market to its customers. Demographic data like how often users exercise, how much sleep they get, what type of exercise they do, and what they eat is being used for predictive and prescriptive analytics.
Changing the way Under Armour approaches IT, by making data a key focus to fuel research and development, brand segmentation, and more, changes the way it can do business. It can compare consumers’ demographic profiles and purchase behavior, fine-tune its marketing, and create personalized e-commerce experiences. Experts say that this change can pave the way for Under Armour to compete with Nike – and successfully distribute its products as its retail partners file for bankruptcy or shrink floor space.
Agile and DevOps Enable Digital Change
These digital transformations can’t happen if businesses continue to operate with IT on one side and business on the other. The goal is the same with all these changes: deliver what the business needs, faster and at a lower cost. Leveraging agile methodologies throughout the company and implementing DevOps principles help companies keep up with the rapidly-changing digital landscape. One of the key tenets of DevOps is to automate wherever possible, and this often requires a continuous integration or continuous delivery (CICD) pipeline from the source repository through automated testing and deployment – without any manual intervention.
Clothing retailer Boden is a company that recognizes the need to use DevOps techniques to encourage change. Boden embarked on a mission to improve customer experiences, but realized its waterfall methods of development created silos not conducive to change. The company used a customer mapping exercise to understand where the difficulties were, then pulled together a cross-functional, agile team to remedy any broken experiences. The new Agile method across the organization is enabled by DevOps, making it possible to move quickly with advanced technology because teams are working together, yet human intervention is minimal in the actual deployment process.
However, companies may struggle with how Agile and DevOps can fit into their existing IT and business environments, especially if they’re running a system not historically known for its agility. In the case of a major European grocery retailer, the company needed to release its SAP changes quickly to keep up with business and customer demands – a key theme we’ve seen with digital transformation. SAP changes come with a lot of interdependencies and reporting, and enabling DevOps on an SAP platform requires technology that can ensure changes don’t introduce errors or conflicts that create system downtime.
Consider a company like BP, one of the world’s largest oil and gas companies. It operates in 80 countries – and needs to run a large number of parallel SAP projects across more than 80 SAP instances. All changes need to happen seamlessly with minimal downtime to ensure high safety standards are met. BP automated deployments, a key tenet of DevOps, which minimizes risk to the company. Changes to the SAP system are automatically sequenced, which ensures they’re deployed in the right order. It couldn’t do this successfully without the right platform and automation technology, and it chose ActiveControl from Basis Technologies.
The only one of its kind on the market, our DevOps and testing platform equips BP with a sophisticated method to ensure business continuity at every stage of SAP change. Our patented “Backout” technology also helps the organization avoid business disruption with the ability to simply back out an SAP transport in a matter of seconds. This gives BP the safety and security they need to manage delivery of critical change in their complex SAP environment.
Is your enterprise IT organization prepared for digital transformation? If you want to learn how Agile and DevOps can fit with your SAP implementation, contact us for more information.