Sustainability has shifted from a discussion largely driven by compliance to one at the centre of business strategy.

A new report by SAP and the Which-50 Digital Intelligence Unit, called Respond, Prepare and Reimagine , reveals the thinking of leading industry researchers like BCG, Gartner, Juniper, and Forrester. Each describes a strong shift to sustainability among the organisations they track.

Their research reveals that businesses should expect a period ahead of a much deeper consideration of strategy and cost structure to cope with a larger ecommerce market.

For instance, in its recent report, BCG argued that the current crisis has established a strong investment case for a digital supply chain. And it believes there is an urgent need to prioritise resilience as a core competency.

According to BCG, resilience has not previously been a key investment driver in Australia. Now, however, we are paying for complacency that prioritised cost efficiencies over genuine renewal.

Ironically, it is the country’s success avoiding many of the economic and political shocks felt in international markets over the last two decades that drove this complacency.

BCG believes global uncertainty is here to stay and companies need to adapt. This is the case irrespective of the current pandemic-induced disruption. Indeed, BCG argues that supply chains face an even greater risk of disruption in an uncertain world, where crises are more common.

Meanwhile, Christian Titze, Vice President Analyst with the Gartner Supply Chain Practice, argues that technology will drive much of the coming disruption. He flags hyper-automation, digital supply chain twins, and continuous intelligence among the top supply chain trends.

According to Titze, “The vast majority of organisations have a cautious approach to adopting supply chain applications and technologies. “Only 21 per cent are willing to consider, and often adopt early-stage technologies. However, even cautious supply chain leaders must keep an open mind and embrace long-term perpetual change.”

Juniper Research, likewise, is pushing the importance of resilience in equipping companies for growth. In a report called Fleet Tracking & Logistics: Key Challenges & Strategic Recommendations 2020-2025, the researchers found that growth in adoption will be driven by the need to increase resilience in supply chains due to the need for real-time data on location and delays to logistics operations.

Meanwhile, according to Stephanie Balaouras, VP and Group Director at Forrester, the pandemic has fundamentally changed the way business is done. “It has forced firms and policymakers to do things that were previously considered impossible. As a result, business leaders are quickly embracing new, iterative ways to engage with customers, adapting to new ways of working, investing in technology innovation, and revisiting their business resiliency plans for long-term success.”

“Supply chain logistics processes, particularly the inbound supply chain, have been disrupted,” says SAP’s Jon Wilson. “But supply chain managers will still need to plan ahead and ensure maximum utilisation of assets. You don’t want them sitting idle. It is a tradeoff between advanced planning versus the risk of being overstocked and overcapitalised, with warehouses full of assets not being utilised.”

Increasingly those assets are interconnected — on networks that bind the worlds of operational technology and information technology together.

And the trends which underpinned transformation over the last decade will continue.

Wilson argues that “Equipment has become a lot more complex. And the skills to support it are much more specialised. That will continue and, in turn, disrupt traditional ways of working.”

In the past, people spent their whole careers working on these machines. In the future this will be a specialist skillset and the business will not typically require the people with these skills to be on site all the time. It is more likely that external partners will simply be brought in when a job needs to be done.

According to the authors of Respond, Prepare and Reimagine, businesses also need to prepare for more complex environments generating huge data flows from their machinery — but capturing business value from that data through sophisticated and predictive analysis will prove a real challenge. Data ownership will be more complex as suppliers build data services into their product offerings.

Download the report today.

This article was written by Andrew Birmingham and published by Which-50’s Digital Intelligence Unit (DIU) on behalf of SAP. DIU members such as SAP pay to share their expertise and insights with Which-50’s audience of senior executives.

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