Software AG: “Product offers feature and function. Platform offers innovation.”

Last week, Software AG held a media roundtable discussing digital transformation within the region. Hosted by CTO Dr. Wolfram Jost, APJ VP Partner Sales Anneliese Schulz and Technology and Solutions Director Jigar Bhansali, they were keen to highlight the importance of driving digitisation from not just a technological standpoint, but also bringing the innovation to the businesses as well.

Software AG currently has a regional support centre for Asia Pacific in Malaysia with a team of 66 people locally in Malaysia in all aspects from pre sales to support and services, and aims to grow to 100 man strong in the next 2 years. With more that 40% sales revenue generated in the Asia region, they are adamant to have the right partners in order to deliver the best experience for their customers.

The company is working closely with MDEC on technological solutions as well as establishing talents in the country. To help grow the company within the region, they are recruiting extra resources by working with talent corps as well as training programmes and educational institutions.

Schulz and Bhansali shared with us that they are currently looking to move some of their R&D into the Malaysian office, as well as looking to work with various sectors including banking, oil & gas, telecoms as well as government agencies utilising their Digital Business Platform.

“A lot of these organisation wants the transform and lead the way into the digital journey. We help analyse and change the current business model to be agile and quickly adopt to the business model that they are looking at by taking advantage of the platform that we have.”

Bhansali emphasised that it’s not all about the technology. “The most important thing is customer experience, and this applies for any industry. They are looking to improve customer experience, and the biggest challenge most organisation has is having a single view of the customers. They have the information across various applications.”

“The is the core component of our platform – it’s about integration and helping companies have a clearer view of the customer profiles, to help understand their behaviour and be more specific to the demands of the customer. It’s not only about application to application, we also bring your supplier, vendor, partners, corporate customers into the system.”

To Bhansali, the most important thing is efficiency in operations. He explains that currently many companies do not target their marketing strategies well. It is important to begin looking at automating processes and optimise efficiency in operations by having real time insights that are relevant to customers.

He adds that risk elements shouldn’t be forgotten. There is an increase in customers understanding the advantages of digitising and using platform offerings such as Software AG. However, customers will still be concerned about the risk elements, and want to understand what controls are put into the system to prevent breaks in the organisational ecosystem. 

Of course, with so many different types of infrastructures, data are held in silos. To enable free movement of data between these silos are easier said than done. However, government agencies are increasingly in talks about integration initiatives to make sure the silos are connected. Software AG see that most of their customers are looking to transform digitally and have investment plans for the next few years. However, it depends at how architecturally the infrastructure response.

As Schulz points out, “Integration of silos is just one aspect – the most important thing is the business, and the business as well as the IT needs to align, not only do the capabilities need to survive integration of the application but also involved in defining how the future of the company should be run and how it compares against the current innovation and IT landscape.”

 “Customers want to differentiate from their competitors, and this is a common trend across all sectors. People travel and people are international – so you have to look at businesses no longer only locally but globally, and I think that’s why a lot of CxOs are looking to change their business models.”

With talk on changes, Bhansali is aware that many companies are afraid of cost issues. However, Dr. Jost analyses that companies shouldn’t be driven by profit alone. “You can’t become a digital company through cost cutting. Cutting cost is not a scalable activity. Grow your business to be more competitive. It’s not actually about competing within the industry, it’s about surviving.”

Dr. Jost explains that many companies including banks that used to dominate the market are wary of smaller startups with technologies like fintech that have the potential to overthrow their existence in the market, as startups may have more leverage in way of new innovations.

Indeed, Bhansali notes that the priorities have changed. “The focus is on customer experience, it’s no longer just about revenue, or cost reduction. Companies want to know how to improve the customer journey through using technological solutions. It’s not to say that money is not a priority – it’s still important, but it’s no longer the number one on the priority list.”

Dr. Jost elaborates “Companies used to have assets and that was the security for the future. But today, look at companies like Uber and Airbnb, they don’t need assets to enter into the market or the time invested to manufacture those assets. They are selling services. Of course cost is important but if they lose in the market, they’re done.”

Looking at recent market trends, and increasing amount of services rely on applications. Service providers of these applications only act as an intermediary between the company and the customer. They don’t own assets but they own the customer experience, providing a digital platform where people can interact.

However, it’s not to say running a single analytics system such as the ERP would be enough to support the entire business and customer base. That approach is no longer sustainable and there are a host of different applications that specialise in analysing different data. Dr. Jost strongly believes that innovation should come from the business and not straight out of a box.

“Standardising processes does not give differentiation in the market, it comes from your own innovation. Think about your own services. Innovation has to now come back to the company. You can outsource hardware and software but you cannot outsource digital innovation. Companies are now hiring software developers – essentially, all businesses department will in one way or another become a software startup. Take Bosch for example: they are hiring 14000 new staff, and 12000 are related to IT.”

Having the courage and the culture to explore, and thinking out of the box is as important as having the right solutions. Hybrid integration, agile end to end process, intelligent real time decision, differentiating digital app and integrated portfolio are 5 crucial areas for the Digital Business Platform to work. Dr. Jost emphasises that “DBP is not a product – it’s a set of technology to implement tools for digital transformation. Companies have to develop new application. Customer facing apps cannot be bought from the shelves.”
“People are too focused on technology but not the business. They think that they can solve everything with technology, having technology but you can’t use it in the right way, then there’s no use. Integration is about connecting each endpoint so that companies can make decisions faster. It’s all about learning from data, for the future. But it’s not replacing the human mind. With the right mechanisms it will support human decision making better than the past.”

Software AG started developing the idea of DBP 5 years ago, and now it’s a stable concept and one of the company’s flagship offerings. Being customer centric, Dr. Jost advices that the choice and flexibility should always be left to the customers. “Give customer the choice of what they need – vendors shouldn’t just blindly keep adding features. There should be more flexibility for the end users.”

It shouldn’t be thought that cost or the size of the company becomes a hindrance though. As all 3 executives agree, digitisation is not only for big companies with a dedicated tech department. Just as banks appoints agents, Software AG works with a lot of partners to bring their services to the ground level.

“Today it’s easier than ever to use technology and you can do a lot out of the cloud. The flexibility and agility that cloud provides means it’s easier and cheaper to consume software, giving your business an opportunity for a broader reach. You don’t need an army of people to get customers. Through a digital platform, you can do a lot more.”

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