Ask Approyo: How can SAP S/4HANA impact Consumer Products?
In today’s digital economy, consumer products (CP) companies face pressures from all sides. Consumers wield great power based on easy access to information about products, pricing, and availability. The barriers of entry for new players with the “next big product idea” are lower than ever. At the same time, channel partners, from big retailers to Amazon, are expanding their own private-label businesses. Added to all that, tremendous volatility persists in the basic costs of doing business, from raw materials, to labor, to shipping, and beyond.
So how can CP companies adapt to these new marketplace realities, using their legacy brand, innovation, and process strengths to expand their reach? It all starts with the journey “from carts to hearts,” as consumers seek a deeper connection with brands and products –often by way of digitally delivered apps and services that enhance their experience. Many CP companies are reimagining business models, business processes, and work itself to create entirely new drivers for growth based on three types of opportunities:
Consumer moments: Reaching consumers directly and immediately at the point of need with personalized engagement through digital
Customer moments: Driving category growth, increasing sales velocity, and ensuring on-shelf availability through digitally enabled collaboration with retailers and channel partners to simplify commerce and act in real time on demand dynamics
Market moments: Responding in moments of market disruption to capitalize on new opportunities with agile, flexible operations and business processes
To succeed, CP companies will need to put in place a coherent digital vision that is inextricably linked with –and developed in conjunction with –a differentiating growth strategy. This vision will need to connect seamlessly from R&D and innovation through procurement and agile manufacturing, and a real-time supply chain that enables visibility from source to sale. Equally important are the sales, marketing, and commerce capabilities that pull in consumers and make sure they’re satisfied once they engage.
To execute on such a vision, CP companies will not only need to reengineer their business processes, they will also have to evaluate if they have the right technology platform that can deliver on the vision. The winning platform will require an IT architecture that provides both stability and long-term reliability for core enterprise processes, while allowing for flexibility in areas of frequent change. The “digital core” is the foundation for the core processes that need to run consistently and flexibly. It provides uninterrupted, real-time transactions and analytics, the ability to work with Big Data, and connectivity to line-of-business (LoB) extensions that enable supporting processes, such as talent sourcing and networks.