The fol­low­ing guest per­spec­tive, about the mod­u­lar inno­va­tion mod­el behind SAP’s expand­ing app mar­ket­place for indus­try-spe­cif­ic solu­tions, was authored by Kai Finck, SVP & Head of Indus­try Cloud at SAP.

As senior vice pres­i­dent and head of SAP’s Indus­try Cloud pro­gram, I’m often called upon to dis­cuss and detail this expand­ing app mar­ket­place, co-cre­at­ed by SAP and its glob­al part­ner net­work. Designed around spe­cif­ic indus­tries, Indus­try Cloud solu­tions are growth-ori­ent­ed in nature, address­ing next prac­tices and allow­ing com­pa­nies to cre­ate tai­lor-made solu­tions com­pat­i­ble with their cur­rent systems. 

Recent­ly, I was think­ing about how to make Indus­try Cloud more tan­gi­ble to a wider audi­ence. Usu­al­ly, my work involves speak­ing with groups that pos­sess exten­sive indus­try knowl­edge and in-depth tech­ni­cal skills relat­ed to this pro­gram, but the con­cepts that dri­ve Indus­try Cloud can be under­stood more broad­ly. Here, I’m going to break down the ratio­nale for Indus­try Cloud.

A Com­plex Process with Many Mov­ing Parts

Con­sid­er a bicy­cle. You start with a sta­ble frame — with­out that, the bike won’t hold up, and its mov­ing parts won’t work togeth­er. Then, you need the wheels to cycle for­ward. The bicycle’s chain is con­nect­ed to cogs on its ped­als and the rear wheel. By ped­al­ing, you move the chain, which moves the rear wheel — and the entire bike. The chain and the cogs are key; they need care and reg­u­lar main­te­nance for a smooth ride. To turn left or right, you turn han­dle­bars, con­nect­ed to the front wheel. 

There are many types of bicy­cles: moun­tain bikes, city bikes, fold­ing bikes. All are avail­able in var­ied sizes and col­ors to fit any spec­i­fi­ca­tions. Every few years, an inno­va­tion emerges that changes the way we all ride bikes — like e‑bikes, for exam­ple. Soft­ware sys­tems also need to be high­ly inter­con­nect­ed and well-oiled to run smooth­ly and pro­vide cus­tomers with val­ue. In addi­tion, dif­fer­ent solu­tions or ser­vices must include or inte­grate the struc­tures that cus­tomers both need and have in place, to effec­tive­ly col­lect and store their data across all lines of business. 

SAP has a long his­to­ry of serv­ing cus­tomers in dif­fer­ent indus­tries, opti­miz­ing their core busi­ness­es by find­ing the right solu­tions and tai­lor­ing these solu­tions. You can com­pare this to the kinds of bicy­cles that exist. A 25-year-old woman in a big city needs a dif­fer­ent bike for her com­mute than a 50-year-old man tour­ing the mountains.

Aware of the range of solu­tions cus­tomers require, SAP and its part­ner ecosys­tem col­lab­o­rate to extend its core ERP with mod­u­lar solu­tions that address the spe­cif­ic needs of indus­try cus­tomers. These build­ing blocks are designed to help cus­tomers take a more incre­men­tal, agile approach to dig­i­tal trans­for­ma­tion and on-going innovation. 

What Is Indus­try Cloud?

Indus­try Cloud, in short, is the open inno­va­tion space where SAP, its ecosys­tem part­ners, and its cus­tomers lever­age SAP Busi­ness Tech­nol­o­gy Plat­form (BTP) to address busi­ness chal­lenges. Think of the ​“dig­i­tal core” as a sta­ble bicy­cle frame, around which you can add mov­ing parts to accel­er­ate the over­all business.

Around a con­tin­u­ous­ly evolv­ing dig­i­tal core, SAP and its part­ners build indus­try-spe­cif­ic capa­bil­i­ties via cloud-native apps, con­nect­ing them with SAP BTP. The dig­i­tal core sup­ports cus­tomers by keep­ing their core infra­struc­ture clean and easy to main­tain, let­ting cus­tomers mod­i­fy oth­er appli­ca­tions and tech­nolo­gies to their par­tic­u­lar busi­ness and indus­try-spe­cif­ic requirements.

Co-inno­va­tion is key to SAP’s busi­ness strat­e­gy, allow­ing the com­pa­ny to col­lab­o­rate with part­ners to co-cre­ate solu­tions that align with best prac­tices and allow cus­tomers to run mis­sion-crit­i­cal and admin­is­tra­tive process­es more effec­tive­ly across all indus­tries. Oppor­tu­ni­ty maps help SAP decide which solu­tions will be cre­at­ed by SAP and which will be cre­at­ed by part­ners. All solu­tions are mapped out in SAP Solu­tion Man­ag­er to sup­port cus­tomers when decid­ing which solu­tions best fit their needs.

The Indus­try Cloud port­fo­lio, fea­tur­ing 370+ indus­try cloud solu­tions, focus­es on inno­v­a­tive and trans­for­ma­tive appli­ca­tions that help cus­tomers run their busi­ness­es. SAP cur­rent­ly sup­ports 26 indus­tries with SAP and part­ner solu­tions; around 80 per­cent of the appli­ca­tions in the SAP Indus­try Cloud come from part­ners, giv­ing cus­tomers the depth and breadth of resources required to remain at the fore­front of inno­va­tion for their indus­tries. A wide selec­tion of busi­ness process­es is built into SAP Indus­try Cloud solu­tions, informed by over­ar­ch­ing best prac­tices for dig­i­tal trans­for­ma­tion in addi­tion to spe­cif­ic indus­try functions. 

Future-Proof­ing Busi­ness Models

By using SAP Indus­try Cloud, SAP’s cus­tomers can ben­e­fit from mod­u­lar solu­tions and intro­duce inno­va­tion step-by-step. This mod­u­lar con­sump­tion mod­el is sup­port­ed by an Indus­try Cloud Enter­prise Agree­ment, which enables the cus­tomers to con­sume sev­er­al Indus­try Cloud solu­tions to tai­lor SAP solu­tions to their com­pa­ny. SAP offers the lat­est tech­no­log­i­cal advance­ments – includ­ing AI – to enrich indus­try-spe­cif­ic busi­ness process­es and empow­er cus­tomers to both nav­i­gate their cloud jour­neys and steer their busi­ness­es with agility. 

In com­bi­na­tion with RISE with SAP, GROW with SAP, and SAP S/4HANA, Indus­try Cloud is a strong dif­fer­en­tia­tor in the mar­ket, dri­ving cus­tomers’ dig­i­tal trans­for­ma­tions with an indus­try busi­ness focus. You can think of RISE, GROW, and S/4HANA as elec­tric bike bat­ter­ies that give cus­tomers a fur­ther per­for­mance boost, lift­ing data into the cloud and struc­tur­ing it there. RISE and GROW also give cus­tomers access to future inno­va­tions that no one else will be able to con­sume, such as AI ser­vices with­in Indus­try Cloud solu­tions. This helps cus­tomers go much fur­ther, faster. 

SAP enables com­pa­nies to future-proof their busi­ness mod­els by estab­lish­ing and sup­port­ing inter­nal process­es, as well as by replac­ing lega­cy sys­tems with mod­ern cloud appli­ca­tions. The lead­ing com­pa­nies of tomor­row will be dig­i­tal­ly con­nect­ed with stan­dard­ized data mod­els in the cloud. And Indus­try Cloud solu­tions pro­vide the point of dif­fer­en­ti­a­tion cus­tomers need to remain com­pet­i­tive in their indus­tries and beyond.

With the dig­i­tal core, SAP BTP, and Indus­try Cloud work­ing in tan­dem, we believe that busi­ness­es will have all the parts they need to cycle for­ward – no mat­ter the terrain.

Kai Finck is SVP and Head of Indus­try Cloud at SAP.