SAP defines ‘laggards’ and ‘winners’ at SouthEast Asian virtual event

SAP Forward Together
SAP Rachel Barger at Forward Together 2020 (14 July)

SAP launched its ‘Forward Together 2020’ earlier today (14 July), which it bills as ‘this year’s most important virtual event across SouthEast Asia,’ utilising an online environment – a mixture of live Zoom webinars and other webcasting technologies.

This was a wise move given that its global SAPPHIRE NOW 2020 virtual telecast last month got off to an embarrassing start when some visitors couldn’t access the site, and had to opt for other platforms like Twitter and LinkedIn. SAP subsequently had to ‘profoundly apologised’ for this embarrassment last month.

Yesterday’s Southeast Asian telecast went smoothly with an opening keynote by Rachel Barger, President & Managing Director of SAP SouthEast Asia, which highlighted the way in which various companies have responded to the new economic reality as a result of the ongoing COVID-19 pandemic.

She also outlined the characteristics of both poor performers (‘laggards’) as well as successful companies (‘winners’), based on an analysis undertaken by SAP using studies from Harvard and BCG, as well as the company’s own customer base.

“Laggards represent about 44% of the sample size of our analysis. Firstly, according to SAP, they adopted a ‘wait-and-see’ attitude. They also focused on random activities or piecemeal solutions, while devoting their time and effort toward cutting cost instead of focusing on development activities and investments; leaving out future growth from their plans and instead using a very short-term lens.”

Meanwhile, she said that 14% of companies improved both the top and bottom-line performance during the same time period.

“Forward thinkers didn’t just abandon their long-term plans. They reviewed them in light of the current situation, focusing on key programmes as relevant. They also kept their focus on people, listening to feedback and concerns from their employees, suppliers, most importantly, their customers. These winners also used the downturn as an opportunity and an impetus to drive large-scale transformations.”

Building flexibility for the future

According to SAP President Barger, there are 6 practical business strategies that leading organisations used to drive their success. These were to enhance their situational awareness, look out for their employee welfare, focus on their customers, manage their resources, streamline their spend management, and pursue innovation and transformation.

“Let’s start with a very foundational behaviour: seeking and understanding. In order to truly have resilience, you need to have easy access to both historic and real-time information across your entire organisation. This allows both your general staff and your leadership to have the functionally-relevant information that they need to make better decisions instead of just jumping to conclusions. This allows you to prepare and plan before acting.”

Speaking about employee welfare, Barger pointed out that it’s not just all about the data; there was a need to ensure that human capital stays at the top of employers’ minds, by tapping into the unique insights of their No. 1 assets – their employees.

“We need to prepare our teams for success, and listen to the feedback from the frontlines, especially during times of crisis. We need to ensure that our employees feel that their needs are being accounted for, and that they feel safe to do their jobs. They need to be in the right frame of mind and have the right tools in order to best contribute to the success of your organisation.”

From an internal view of the organisation, Barger moved on to focusing on customers.

“During challenging times is when customer loyalty is paramount. Leading organisations actually have a few common characteristics on how they listen and respond to customer needs.

“First, leaders maintain flexible routes to market, which enabled them to quickly react and to take advantage of new market opportunities; many of which maintain customer-centric commerce channels across any channel that their customers wanted to interact on. We’ve also seen the importance of proactively gathering information and customer feedback, and having the ability to quickly incorporate these insights across every part of our business. This allowed leading companies to understand their customers’ priorities and offer a unique & differentiated experience.”

Barger stated that it was not enough to engage and excite customers. “We have to be able to deliver on promised outcomes. You can’t have a truly great customer experience if your front office isn’t connected to your operations and supply chain, especially in today’s low-inventory and just-in-time world.”

Further, while Barger noted that managing the flow of material within the business is critical, she also argued that managing cost structures is equally as important.

“Liquidity is one of the fundamentals of all our organisations during normal times, but it takes on increasing importance during times of downturn or crisis to make sure that we can stay the course for today, while also having the funding to plan for the future. Leading organisations are not just focused on slashing and cutting costs, but instead, they focus on streamlining their spend in a strategic manner.”

SAP chief Barger was joined by Gwen Lim and Gerry Mattios, Vice Presidents of Bain & Company, who shared their insights on customer experience and supply chain respectively.

Lim noted that aside from a surge in online purchases, 3 other trends became apparent over the past 6 months.

“First is a flight to quality; really well-known brands have done well through COVID-19. There has also been a flight towards companies that are more locally-based. Thirdly, people are going online to discover where they should be ordering and what brands are out there.”

Meanwhile, Mattios highlighted the change in supply chain strategies. “Previously, all the big conglomerates had been building global supply chains. That paradigm is now coming to an end.

“Companies are investing right now in making their supply chains more resilient. The impact of that is that we’re seeing far more fragmentation in manufacturing; instead of having mega-factories, we’re having micro-factories in multiple parts of the world, and we’re having regional and local supply chain environments, where I build and produce close to where I sell.”

In concluding her keynote, Barger expounded on leading companies’ ability to think about the long term and transform even in a downturn.

“Successful organisations have made innovation part of their long-term plan. It’s critical that we build the flexibility within our organisations that allows us to be agile; to take advantage of new market opportunities, and gives us the space to truly innovate.

“Innovation can come in many flavours. It can be as simple as optimising operations with new technologies to make our customers’ and employees’ lives easier. It can also be as bold as taking insights and ideas from one industry and transferring them to another.”

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