It's not just about manufacturing the tractor anymore, it's about the sensors that might be on the tractor that help you understand things about temperature or soil quality that help you become a better farmer, but also feed back into your product innovation process. What have you learned about what you need to do in the next generation of what you manufacture?
-Stacy Short
Episode Summary
As SAP and IBM reach 50 years of partnership, Kevin L. Jackson is celebrating with IBM’s Stacy Short by diving into how both companies work together to help customers on their digital transformation journey. Tune in to hear more about building technology roadmaps, business transformation as a service, closing the gap between sustainability strategy and results, how the value of data is reshaping industry objectives and more.
Episode Transcript
Intro/Outro (00:01):
Welcome to Digital Transformers, the show that connects you with what you need to build, manage, and operate your digital supply chain. Join your host in a timely discussion on new and future business models with industry leading executives. The show will reveal global customer expectations, real world deployment challenges, and the value of advanced business technologies like artificial intelligence, blockchain, and robotic process engineering. And now we bring you Digital Transformers.
Kevin L. Jackson (00:34):
Hello everyone. This is Kevin L. Jackson, and welcome to Digital Transformers on Supply Chain Now. Today is a celebration because we are highlighting an important joint milestone for two of the world’s most important companies, SAP and IBM. These behemoths are celebrating 50 years of being better together. And our way of engaging with this global celebration is to have Stacy Short from IBM Consulting on the show. She serves as the SAP Global Partnership Executive for IBM. Welcome to the show, Stacy.
Stacy Short (01:16):
Thanks for having me, Kevin. I’m excited to be here to talk about the IBM-SAP partnership.
Kevin L. Jackson (01:21):
No, I think I am too. But before we get into that boring supply chain stuff, can you please tell me a little bit about how you wound up at IBM?
Stacy Short (01:32):
Sure. Sure. So, actually, I started my career on the audit side, so I’m a CPA. But I realized really quickly there must be something more exciting than that, so I jumped over to technology and really have spent the last 25 years doing SAP implementations and working with SAP at a number of different consulting firms, including Andersen and BearingPoint and KPMG. But then, landed here at IBM and really have been managing this global partnership for the last 12 years.
Kevin L. Jackson (02:03):
Wow. So, I’ve done a little bit of research on this partnership and learned that it’s delivered quite a few amazing results, including for Volkswagen. Working together, you actually enabled them to get a transparent and unified view of their business processes. And in Lisbon, through Galp, you’ve enabled greater convenience for energy users there. And, in fact, the packing manufacturer, Mondi, was able to glean more actionable insights from their data. These specific instances seemed to be just at the tip of the iceberg when it comes to becoming an intelligent enterprise. So, what do these and many other companies – I’ve read about experience – when they undertake this journey towards these transformative rewards, how does IBM and SAP work together in doing this? And, in fact, I’ve heard a little bit about, I think, it’s RISE – it’s a new term to me. So, how is this done?
Stacy Short (03:13):
Yeah. So, yes, those are several great examples, Kevin. And, yes, you would be hard for us to find a longer, more enduring, more expansive partnership than the IBM one. And when we think about that, you know, we’re really partnering around so many facets. It’s not just about the consulting services, but it’s how are we putting our software technologies together or how are we leveraging hardware, our hardware, capabilities together, how are we leveraging our Cloud capabilities, as an example. So, you know, as you talked about those examples, these are all the elements we are using to really help customers on their transformation journeys.
Stacy Short (03:52):
And, yes, RISE. You can’t really say SAP these days without talking about RISE. So, let’s talk, really, a little bit about what RISE is. RISE is a business transformation as a service. That’s how SAP describes it. It really is about really enabling our customers on their Cloud transformation journey. So, basically, in the RISE construct, it’s basically packaging up SaaS-based licenses, Cloud infrastructure from IBM, or the other hyperscalers, and the technical managed service. So, that’s what you’re getting on one contract, Kevin, from SAP. But along with that, you’re also getting some additional capabilities around their network, so think things like the Ariba Network or additional capabilities around their technology platform, which we call BTP, Business Technology Platform. This would be capabilities that help us with integration or help us build the next generation of development with SAP and the next generation solutions that are no longer written in ABA, but these are cloud-based extensions. That’s what we’re building instead. So, RISE is really how we’re putting all these pieces together to really help our customers on those transformation journeys.
Kevin L. Jackson (05:09):
Wow. So, this technology, does it really help to accelerate in this digital transformation?
Stacy Short (05:16):
Yeah. Absolutely. Right. I mean, I think our customers are seeing tremendous benefits from cloud adoption, not only on sort of the cost side and the ability to scale up and scale down their cloud capabilities, but also it’s really being able to bring more of those true digital capabilities to life, whether we’re talking AI or whether we’re talking about really connecting processes across multiple platforms. Really, when we start to talk about some of the new technologies and some of the new ways we do integration, that becomes much easier to build end-to-end processes with some of these process intelligence tools, like what we use when we’re doing RISE with Signavio as an example, where we’re sort of connecting the dots in a process like lead to order or plan to manufacturer. So, yes, these technologies are definitely helping with these transformations.
Kevin L. Jackson (06:09):
Well, 50 years is a long time. How do you guys start?
Stacy Short (06:16):
Yeah. I think, you know, it’s all about helping our customers with the roadmap, right, Kevin? There’s a lot of complexity in the world today, right? So, when we sit down and we start working with customers to gather, it’s helping them understand what are the steps in the process, what are the technology steps, what are the steps of what you want to do for your business, how do you want to evolve and change your business. Because at the end of the day, it’s all about tangible business outcomes. So, it’s really helping them with the roadmap to help them achieve whatever they’re trying to do in their business objectives.
Kevin L. Jackson (06:50):
I guess that’s the term I was looking for. You really give them that roadmap to get them here to there and with respect to the business process. But a lot in today’s world, sustainability is a very important aspect of the business. So, how does this roadmap or how do these improvements contribute to global sustainability goals?
Stacy Short (07:16):
Yeah. Absolutely. I mean, this is one of the most important topics we’re talking about with our customers. I mean, a study by IBM’s Institute for Business Value shows that 86 percent of companies have a sustainability strategy, but only 35 percent have actually taken action on that strategy. So, it’s exactly, for the reason you say, they’re really looking for the roadmap. And we know there are a number of inhibitors as well. We talk about the technology. We talk about access to data. We talk about even customer readiness, you know, customers want a brand that is socially open to sustainability, but do they want to pay a premium for their products and services if they’re a sustainable company? So, they’re wrestling with all of these things. And, really, when you look at what we’re doing, what we’re really doing now is creating solutions that help build that roadmap.
Stacy Short (08:11):
So, I’ll just give you an example. If we look at what we’re doing with Iberdrola as an example, we’re helping them understand how to build a supply chain, a really responsible sourcing partners. So, we help them using the Ariba solution they had, and then using some capabilities around their SAP analyst cloud, and some other capabilities. We’re able to now give each one of their suppliers a sustainability score, how are they meeting the sustainability characteristics that matter to Iberdrola. And then, we’re ensuring that they can then have, you know, sustainable vendors and suppliers. And then, we can also give those suppliers that might not be meeting those objectives today, the roadmap for what they need to do to become a sustainable supplier with Iberdrola. So, that’s one example of a roadmap.
Kevin L. Jackson (09:04):
No, no, I think that’s really important. And those suits up in the C-suite, they really like those comprehensive numbers and roadmaps. In fact, I saw a recent paper that IBM published that says U.S. Fortune 500 companies are willing to invest up to 22 billion a year in sustainability. But, I mean, let’s take it to ground here. The people that are really doing the work in supply chain from a supply chain management point of view, they are really focused on moving material and goods from point A to point B. And these networks now need to do much more of effect or be sustainable. But how can you pay the extra costs or time and processes of being sustainable while simultaneously keeping the related cost of managing your supply chain network to a minimum? How do you balance that?
Stacy Short (10:24):
Yeah. I mean, this is the struggle that all our clients are dealing with, right? I think, you know, one of the ways you do that is really kind of visibility and bringing new capabilities, like AI, to the forefront. So, when we’re thinking about, you know, S&OP planning processes, how do we get better data visibility, how do we get more scenarios factored in than the way AI can to reduce the best result at the lowest cost, but also the most sustainable result. So, we talked about just using one example. If we think about transport planning, and we think about the best mode of transport for the least carbon impact, then the way we do that is by now in a traditional S&OP process by giving a carbon impact score to each mode of transport. So, that can be another factor that’s saying, you know, this would be the more sustainable way to move your product. So, again, I think it’s using the data, the tools, and the new capabilities to really give new visibility to the options.
Kevin L. Jackson (11:30):
So, this data and these new business processes, you know, enable that visibility so the smart people can actually make decisions. The data’s not telling you what to do, but it’s presenting the options. And based upon the business at that time, you can make the right decision. I know organizations across all industries are trying to merge technology and platforms and experience in order to fuel digital transformation. But technology seems to be at its core because it creates the new opportunities. It actually enables growth and you can create these new business models. What are some of the other challenges that organizations are having with their supply chains as they go through this roadmap?
Stacy Short (12:28):
Well, I think bringing out the new business model example is a good one. Traditionally, if we just look at one example in a traditional manufacturing-based industry, they were very product-centric for years and years and years. What they’ve started to understand now is there’s a lot of value in the data they create. And so, what they can do is create a number of aftermarket services that actually give them completely new revenue streams. So, now, they’re more a services-based company offering aftermarket services, whether it be repairs or whether it be even use of data as the revenue stream. I think if you take one example in the farming industry and you think about it’s not just about manufacturing the tractor anymore, it’s about the sensors that might be on the tractor that help you understand things about temperature or soil quality that help you become a better farmer, but also feed back into your product innovation process, what have you learned about what you need to do in the next generation of what you manufacture. So, I think helping them understand how to create those new revenue streams and giving them the technology and the data to do it is really what’s key.
Kevin L. Jackson (13:39):
You know, I really like the way you brought in manufacturing, because, traditionally, you’re right, they were really focused on the product, that physical assembly line, or putting the pieces together and putting it in a box, pushing it out, and then sort of wiping their hands, and go on building the next thing. But if you are looking at how the product is being used, then you have to somehow get data about how it’s being used. And you are not physically there, it seems to be a virtual extension of the core company. So, this part of digital transformation, what are you seeing when it comes to the virtual enterprise and sustainability, for example?
Stacy Short (14:29):
Yeah, 100 percent. I mean, data is the critical element here. And you think about the evolution, you know, we’ve been exchanging data for different reasons for a long time, going back to the way we did it with facts and then [inaudible]. And, now as we move into platforms, you know, this is the most critical thing of sharing data between companies getting additional visibility that help each of you develop better products and services for your customer. So, really, it is about sort of working together on a whole new level and, really, the platform technology gives us the ability to do that.
Kevin L. Jackson (15:07):
Yeah. Yeah. When I first started my podcast a couple of years ago, and I thought I was being cool by saying digital transformers. And the whole purpose was to highlight companies and executives like you, that are leading their industries into the future of, of digital transformation. But, now, it’s more like a cliche, because everybody is talking about it. But how do you think about it? How do you define digital transformation?
Stacy Short (15:41):
So, certainly, at IBM, we define digital transformation as delivering these tangible business outcomes for our customers. So, whether it’s the ability – like what we just talked about – to move a traditionally products-based company into a completely new revenue stream by allowing them to use data or aftermarket services to just realize a whole new opportunity for their company, this is what we are trying to create when we talk about digital transformation that we’re moving them to the next level in the evolution of their company.
Kevin L. Jackson (16:17):
Wow. So, the future of supply chain is going to look very different than it does today. You have to merge that physical tracking and tracing of the product to tracking and tracing your data, I guess, and leveraging that data to enhance the product. And as technology changes, you really don’t have to change how you use technology, this has to be a consistent mindset. So, if you agree, how can organization embrace this idea of constant transformation?
Stacy Short (16:57):
Right. Right. Yes. That is the only constant right now is change. So, again, it’s about sort of looking at the data, looking at the data quality within your four walls, but also understanding the data capture that’s required outside your four walls. And you touch on the sustainability topic again, but we’ll talk about measurement of carbon impact. You’re being asked to report not only what you’re doing inside your four walls, but also what your suppliers are doing or what others are doing. So, this need to share, and this need for transparency of data is only going to become more and more critical, both for regulatory and for optimization of business processes. So, yes, I think it’s a big future around understanding how to help customers with that data transparency and with making sure that they’re capturing the right data to add value to the processes.
Kevin L. Jackson (17:58):
This is amazing. And you’re really showing a light on the importance and the value of IBM and SAP. You’ve gone through this over the past 50 years. And, in fact, I understand SAP was actually founded by IBM’ers a long time ago.
Stacy Short (18:19):
That’s right. Five IBM’ers in 197, and that’s when the partnership was actually formed. Yeah.
Kevin L. Jackson (18:26):
Amazing. I mean, thank you for your time. I mean, I could talk to you all day about this, but unfortunately our time has come to an end. But before we go, how can the audience learn more about IBM, SAP, and your astounding joint capabilities?
Stacy Short (18:46):
Sure. Yes. Lots of ways to do that, Kevin. Certainly, you can check us out on social media. On the SAP side, they’ll reference the IBM partnership. And certainly on the IBM side, referencing the SAP partnership. Also, talk to your reps, either on the SAP or the IBM side, they will absolutely know about the partnership. And then, you can always look me up on LinkedIn as well, Kevin.
Kevin L. Jackson (19:11):
Oh, thank you very much. And I’ll be sure to put those links in the show notes. So, thank you for spending your time with us, Stacy. So, in closing, I would like to invite everyone to check out a wide variety of industry thought leadership at supplychainnow.com. You can find Digital Transformers and Supply Chain Now wherever you get your podcast, so be sure to subscribe. On behalf of the entire team here at Supply Chain Now, this is Kevin L. Jackson wishing all of our listeners a bright and transformational future. We’ll see you next time on Digital Transformers.
Intro/Outro (19:57):
Thank you for supporting Digital Transformers and for being a part of our global Supply Chain Now community. Please check out all of our programming at supplychainnow.com. Make sure you subscribe to Digital Transformers anywhere you listen to or view the show, and follow us on Facebook, LinkedIn, Twitter, and Instagram. See you next time on Digital Transformers.
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Stacy Short is a Vice President in IBM’s Consulting business. She leads IBM’s SAP Global Partnership for Consulting and IBM’s Evolution Partnership with SAP. Stacy has over 25 years of SAP experience through her consulting and alliance management roles and has completed 15 SAP implementations. In her current role, Stacy uses her deep SAP experience, her process background and her strong SAP relationships to work collaboratively with customers and IBM and SAP leaders to help clients deliver their digital transformation journeys. Connect with Stacy on LinkedIn.
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