Today, companies are beset with a multitude of challenges and changes in their operating environment. From dealing with supply chain disruptions to adapting to new ways of work, companies have their hands full.

The question is no longer if companies should digitally transform; it’s a matter of how quickly and in which areas that digital transformation would deliver the greatest value.

Partner ecosystem never more important

In this environment, the role of technology partners has never been more important.

Companies and leaders need to be able to tap into a rich technology partner ecosystem to drive their digital transformation and ensure their business is geared for the challenges of a changing modern economy.

A strong partner ecosystem supports digital transformation, as each partner may have specialised services or knowledge that focus on specific industries, markets or competencies. 

As a partner builds experience and proficiency in an industry, that knowledge becomes embedded in their solutions and services, and can significantly reduce risk and drive successful outcomes across a broad range of digital transformation priorities. That adds value to their offering and allows them to create revenue streams beyond the core technology.

For example, a tech partner specialising in the retail sector would have products, services and insights that can help retailers more quickly adopt new capabilities and avoid costly mistakes in their own digital transformation efforts.

Customers ultimately need to see their technology partners as collaborators in driving the lifetime value of technology investments to achieve greater business outcomes.

However, the partner ecosystem is in a state of change due to the changing way organisations buy, consume and utilise technology.

Shifting financial model of digital transformation

One of the biggest changes in the way companies adopt technology and drive digital transformation is the switch from physical – or hardware – deployments to a cloud or as-a-service model.

Today, companies want the flexibility to subscribe to and pay only for the technology components that they actually use. In response, tech companies have transformed their revenue models to a pay-as-you-use model.

This holds multiple benefits. Firstly, it opens up greater choice to companies wishing to adopt the best solutions for every business function without having to also purchase functionality or products that they don’t want or will never use. 

Secondly, a consumption-based model is more easily scalable, as the hardware that enables a rapid scaling – for example when a company enters a new market or territory – sits on the tech provider’s side. If the company then decides to exit the market or scale down operations, they can simply scale down their consumption and associated costs.

Tech companies and their partners have also over the years invested in the development of technology templates for specific functions or industries. These templates are often developed with the knowledge of what worked and what didn’t work in other similar tech deployments, allowing other companies to avoid mistakes or lengthy customisation processes, which can inflate the overall costs of the project.

This can speed up the time-to-value for new digital transformation initiatives and help build a process of continuous innovation and improvement that drives the business’ success. 

Challenges remain

The partner ecosystem is not without its challenges, however. In some cases, partners are still focused on selling large deployments that carry huge costs to the company. While such projects can undoubtedly deliver transformative business value to the company, it’s not entirely in step with the way modern businesses want to consume tech.

Instead, the focus should be on a form of value engineering where partners join forces with their customers for the long haul and consistently innovate and transform business processes to drive value. 

Partner organisations need to evolve their business models around developing apps and IP that can be reused in similar industries and use cases, which can drive profitability for partners and cost benefits for customers.

Traditional financial models also need to evolve: in a cloud-first world, there’s no need for lengthy advisory and implementation projects. The focus is squarely on quick turnaround and rapid time-to-value that drive business outcomes in priority areas. 

It’s less a matter of finding the correct technology mix and conducting a once-off large-scale deployment, and more a case of continuous innovation and improvement across a broad spectrum of business cases to steadily enhance the organisation’s capabilities.

This can unlock untold benefits and establish a culture of co-innovation that enhances the organisation’s innovation capabilities while continuously delivering business value.

Skill sets also need to evolve and shift away from infrastructure to advisory and business value generation, in addition to expert knowledge and capabilities in deploying cloud solutions.

Technology partners play an essential role in companies’ ability to scale quickly, develop new competencies and unlock new market opportunities.

As the modern business environment continues to change at an increasingly rapid pace, companies need the support and insight of trusted partners more than ever.

A study by Oxford Economics and SAP has found that, while the business case for sustainability is well understood, most sustainability initiatives are simply not realising value.

Tracy Bolton, Chief Operating Officer at SAP Africa, says organisations face a number of barriers to realising the broader value of their sustainability initiatives.

“Issues such as lack of engagement from company executives, ineffective use of data, siloed technologies, and a lack of collaboration undermine the impact of sustainability initiatives on a company’s operations and bottom line. Closing the so-called Green Gap requires that organisations reach across their business ecosystems to bring suppliers, regulators, employees and board leadership into their sustainability efforts.”

According to the report by Oxford Economics and SAP, so-called ‘Sustainability Leaders’ – those organisations that have embraced comprehensive sustainability programs and have achieved great outcomes as a result – account for only 9% of study respondents. 

Leading sustainability efforts

“Sustainability Leaders set clear expectations of their sustainability goals and communicate those effectively to the broader organisation.

Technology and data management is applied in key areas, and core audiences, such as supply chain partners, are regularly engaged. This creates a system of accountability that ensures sustainability efforts go beyond pure talk into action.”

The report found that, among nearly 2000 global executives, the most common sustainability efforts included waste reduction (65% of organisations surveyed), emissions tracking (53%) and minimising energy use (47%).

“To unleash the true potential and impact of sustainability, organisations need to harness the network effect by developing policies and processes that enable partners and vendors to work sustainably with the business,” says Bolton. 

The pay-offs for closing the green gap are significant. The report found that executives identified sustainability initiatives as driving benefits across the organisation, with 58% citing increased efficiency, 46% enjoying improved brand reputation, and 44% being better able to meet customer needs.

Sustainability Leaders that are leveraging the strength of their networks are also better positioned to reap the rewards of the circular economy. 

“The circular economy depends on the strength of networks including customers, manufacturers, competitors, employees and regulators who are all aligned to sustainability goals,” says Bolton. “The organisations that lead with their circular economy efforts unlock a range of business benefits that include increased customer loyalty (74%) and innovation (79%), better brand reputation (80%), new revenue streams (70%) and reduced costs (59%).”

Bringing profitability and sustainability closer

Bolton adds that organisations can close the gap between sustainability and profitability by enhancing the impact of their sustainability efforts. “Research show five key areas of focus for organisations that want to overcome sustainability challenges and move into the Leaders category.”

The five key areas of focus include:

1. Driving sustainability from the top down through executive sponsorship. “Effective sustainability efforts start with an explicit plan driven from the top down and clearly communicated by company leadership,” says Bolton.

2. Providing clear, consistent communication that permeates every layer of the organisation. “Sustainability efforts may start at the top, but for any such effort to succeed, it needs to be adopted and driven by employees throughout the organisation. Establishing clear goals can also drive better sustainability performance among teams.”

3. Integrating processes, technology and data to provide a unified view of the organisation’s total sustainability performance. “Most businesses have not put sustainability at the centre of their strategies, which leads to disconnected or siloed processes that can hamper strategic planning and create discord between financial and non-financial information. By unifying these assets, organisations gain greater visibility into their sustainability performance and progress.”

4. Putting data at the centre of sustainability. “Data is critical,” says Bolton. “Organisations gain vital insight into resources and efficiency by capturing and analysing data. In addition, data helps measure sustainability outcomes and can point to areas for improvement.”

5. Extending sustainable practices to customers, partners and suppliers. “Sustainability is a team sport that requires participation across the entire supply chain,” says Bolton. “For example, more than a third (36%) of executives don’t view using sustainable energy providers as important to their carbon-reduction goals, despite the enormous impact energy providers have on overall sustainability practices. Getting internal and external stakeholders aligned around core sustainability goals can unlock the network effect and greatly enhance sustainability outcomes.”

“In essence, sustainability is a resource management issue, and SAP has specialised in helping companies optimise their resources for more than half a century,” says Bolton. “The challenge is to make sustainability profitable, and to make profitability sustainable. Technology provides companies with the opportunity to leverage technology and bring transparency to their operations through improved measurement of Environmental, Social and Governance KPIs across their entire value chain. This can help African enterprises identify areas for greater efficiency to bring business processes onto more sustainable paths.”

With a growing population that is expected to triple in size by the end of the century and relatively underdeveloped infrastructure, Africa is particularly vulnerable to the impacts of climate change. Recent data also indicates that the volume of greenhouse gas emissions will continue to grow unless there is a drastic change in business practices.

Enabling enterprise & SME sustainability

SAP takes a two-pronged approach to sustainability by acting as an exemplar of sustainable best-practices, and an enabler.

“As a business that sits at the heart of global enterprise, SAP is uniquely positioned to enable more sustainable business practices for our customers,” says Bolton. “As an enabler, SAP provides access to business networks and technologies that can help companies meet their sustainability targets while also driving profitability.”

SAP’s Ariba Network, for example, is the largest of its kind in the world, facilitating 5.3 million organisations to trade more than $3.75-trillion in goods and services per year while also bringing greater transparency to enterprise supply chains. 

“We are building sustainability capabilities into a broad range of our business solutions,” says Bolton. “The SAP Cloud for Sustainable Enterprises Portfolio gives business leaders access to a comprehensive suite of solutions that can be leveraged for quicker progress in achieving sustainability KPIs across their organisations, while the Sustainability Navigator provides an easy entry point into which solutions are most relevant to each customer’s sustainability efforts.”

Key solutions in SAP’s Cloud for Sustainable Enterprises Portfolio include: 

SAP Product Footprint Management, a cloud-based application used to calculate product footprints periodically and at scale across the entire product lifecycle; 

SAP Responsible Design & Production, which enables organisations to achieve their Extended Producer Responsibility (EPR) reporting obligations to governments and regulatory bodies accurately and on a global scale; and 

SAP Rural Sourcing Management, a multi-faceted solution that connects value chains from the most vulnerable – for example small scale farmers or waste pickers – through to global agribusinesses and consumer product companies. 

“Customers can use the SAP Sustainability Control Tower to set and track their sustainability KPIs using data pulled from SAP and non-SAP systems to harmonise sustainability efforts across every aspect of their business, from finance, HR and real estate to operations and procurement. Our sustainability dashboard gives decision-makers easily understandable information about their sustainability performance, with actionable insights that can help drive continuous improvements in an organisation’s sustainability efforts without sacrificing profitability.”

Every company potentially an exemplar of sustainable practices

SAP has made a global effort to be an exemplar of sustainability through leading by example in our own sustainable business operations and practices towards a net zero world. This entails achieving zero emissions through better carbon tracking and a smaller environmental footprint, zero waste through adopting circular economy principles, and zero inequality through balancing social responsibilities in its workforce, sourcing, and procurement practices. 

SAP is currently on track to achieve carbon neutrality by 2023, two years ahead of its initial goal.

Kwena Mabotja, Global Director: Purpose and Sustainability Marketing at SAP, says SAP is considered as one of the global sustainability leaders due to its commitment to running its business sustainably. SAP has the products, people, partnerships and programs to drive sustainable impact at scale. “Bringing Profit and Planet together. That’s Economics.”

“Our Corporate Social Responsibility practices improve access to economic opportunity, education and employment, and the green economy. Such programmes are supported by a network of social partnerships, employee engagement, social impact management and the technical and business expertise of our global workforce.”

Mabotja cites the impact of initiatives such as SAP’s Procurement with Purpose program as an example of how companies can be exemplars in creating economic equity as part of their core business operations to achieve zero inequality.

“We drive social and inclusive entrepreneurship by supporting social enterprises that are working to solve key sustainability issues by redirecting a set portion of our own spend their way. As part of our contribution to achieving net-zero waste, SAP’s local facilities team is also working to optimise water and electricity consumption at SAP offices using IoT and SAP’s Analytical Cloud. Data and insights gathered this way will be used to educate work-from-home staff to optimise water and electricity use at their own homes, further embedding sustainability across every level of our organisation.”