{"id":6710,"date":"2024-01-23T18:13:54","date_gmt":"2024-01-23T18:13:54","guid":{"rendered":"https:\/\/solutionsreview.com\/enterprise-resource-planning\/?p=6710"},"modified":"2024-01-23T18:14:04","modified_gmt":"2024-01-23T18:14:04","slug":"becoming-software-centric-an-organizational-approach-to-digital-transformation","status":"publish","type":"post","link":"https:\/\/solutionsreview.com\/enterprise-resource-planning\/becoming-software-centric-an-organizational-approach-to-digital-transformation\/","title":{"rendered":"Becoming Software-Centric: An Organizational Approach to Digital Transformation"},"content":{"rendered":"

\"Becoming<\/p>\n

As part of Solutions Review’s Contributed Content Series<\/a>\u2014a collection of contributed articles written by our\u00a0enterprise tech thought leader community<\/a><\/span>\u2014Jiani Zhang, the Executive Vice President and Chief Software Officer at Capgemini Engineering, outlines a software-centric, organizational approach to digital transformation.<\/strong><\/em><\/p>\n

\"\"<\/a>For several years, the business and technology landscape has been inching closer to becoming a digital-first economy, with enterprises across industries putting software at the heart of their business models. This new digital era has made software adoption an imperative and has challenged many organizations to ask themselves, “What does it mean to be a software company?”<\/span><\/p>\n

The ongoing software-driven transformation organizations are facing will define the future of almost every industry. In fact, <\/span>new research<\/span><\/a> confirms that one-quarter of organizations already consider themselves software companies, with an additional 32 percent reporting that they expect to do so within the next three to five years. <\/span>As these enterprises transform themselves into software companies, they must reconstruct their business models around software and, in doing so, change their revenue models, business processes, and organizational structures. <\/span>\u00a0<\/span><\/p>\n

Revenue Models <\/span><\/b>\u00a0<\/span><\/h3>\n

On average, organizations <\/span>invest<\/span><\/a> 18 percent of their R&D budget in software initiatives, which is expected to continue rising. This growing investment has impacted the revenue models of enterprises in crucial ways, a trend that will continue for years to come. <\/span>To increase software and digital revenue, businesses must transform customer contracts and payment methods. This will involve integrating and scaling leasing, micro-payments, on-demand, and subscription models to utilize software-based capabilities and features. <\/span>\u00a0<\/span><\/p>\n

However, these enterprises will ultimately reap the benefits by unlocking new revenue streams and experiencing significant cost reductions. In fact, 90 percent of automotive organizations <\/span>have generated new revenue streams by deploying software-driven products and services. In comparison, 59 percent of industrial and capital goods companies have reduced costs by implementing a successful software transformation strategy. <\/span>\u00a0<\/span><\/p>\n

What’s more, low-cost airline EasyJet <\/span>is investing<\/span><\/a> in new aircraft software from Airbus that is designed to cut costs on jet fuel. By implementing this new capability, the airline will save more than 98,000 kg of fuel per year per aircraft across its European network. <\/span>\u00a0<\/span><\/p>\n

Business Architecture <\/span><\/b>\u00a0<\/span><\/h3>\n

Preparing your organization for a software transformation requires leadership to reevaluate the entire business architecture. New software-centric initiatives must be scalable and can interact with other systems across the company, such as communication channels, software stacks, computing infrastructure, hardware platforms, analytics, and beyond. <\/span>\u00a0<\/span><\/p>\n

Due to this complexity, enterprises must build a centralized architecture that can be specialized to the unique needs of individual business teams. This architecture must be standardized, flexible, and, most importantly, scalable. When selecting a business architecture, leaders should ensure a clearly defined roadmap, as the implications of this choice are far-reaching and long-lasting. <\/span>\u00a0<\/span><\/p>\n

Leaders should consider several key factors when selecting a business architecture:\u00a0<\/span>\u00a0<\/span><\/p>\n