The CIO role has evolved from serving as a technology supplier and member of a delivery team to becoming a strategy adviser, business partner, and facilitator of new business models. Increasingly, the chief information officers are becoming business enablers and facilitators by driving the transition of new business models. IT has become inseparable from the products and services. The commercialization of technology, especially smartphones, has enabled companies to influence client demand at the corporate level. But the upkeep of these systems is very high. Apart from being expensive, these systems also stifle workforce productivity. This article at IndustryWeek speaks about how CIOs running SAP systems can balance innovation and operations while efficiently cutting down its spending.
SAP Spending Can Stifle Innovation and Workforce Productivity
Working with systems that cannot be integrated and used with modern technology can pose major obstacles to workforce productivity. Alan Wong, the Global IT Director of Pulse Electronics, a San Diego-based electronics company with locations worldwide, divides his IT budget into three categories: operations, growth, and innovation. The uncertainty of 2020 has influenced the organization’s budgets and planning, as it does for most manufacturers. When it comes to inflation, innovation is the first thing to go. However, to set oneself apart from the competition, innovation is essential. Although budget constraints are suffocating innovation, during the epidemic, 71 percent of worldwide industrial manufacturing CIOs said that increasing the use of artificial intelligence and other digital advancements was a top priority.
Outsource to Innovate
Wong’s budget plan focused on reducing low-return expenses such as operating costs and application support. Business operations stood out when he looked at his budget’s tiers. SAP software charges, upgrade costs, and add-on fees are all areas of attention in that tier. Finance, operations, supply chain, and warehouse management are handled using SAP Business Suite and Business Objects at Pulse Electronics. Any downtime in SAP operations would result in a significant revenue loss and hamper workforce productivity. To turn around the situation, Wong decided on three things:
- Reducing the biggest expenditure related to SAP by using third-party support
- Reinvesting those savings in innovation
- Improving SAP customization and support quality at a low cost
To read the original article, click on https://www.industryweek.com/operations/article/21159755/how-manufacturing-cios-running-sap-systems-can-balance-innovation-and-operations