Diverse Solutions Drive Digital Transformation at Lenovo

Arthur Hu, Senior VP and Global CIO, Lenovo

SAP Systems Help Lenovo Broaden Global Technology Reach

As a global company with customers in more than 160 countries, Lenovo has deployed SAP for its core transaction needs and its system of record. The first collaboration between Lenovo and SAP began in 1998 when Lenovo implemented SAP’s Enterprise Resource Planning (ERP) software to improve workflows and achieve efficiency by moving to an integrated platform. We chose SAP for its standardized processes, solid structure and best practices, which helped us during a period of rapid growth within China.

Now, nearly 20 years later, we have globalized our business as well as our IT systems; we’ve moved from being a China-centric company to a global Fortune 500 company. Today, our SAP deployment profile includes additional components, such as Customer Relationship Management (CRM), Supplier Relationship Management (SRM), Global Trade Service (GTS), Business Warehouse (BW), Hybris, and Advanced Planning and Optimizer (APO). These components run throughout our organization, and they’re helping strengthen our end-to-end workflows across our day-to-day operations.

Prior to our global SAP implementations, we shared many of the same pain points as other organizations with complex global processes and disparate sources of data. Deploying SAP systems as our system of record helped address specific issues around data consistency and availability by unifying our data and providing end-to-end visibility across Lenovo.

Today’s Changing Business Environment Demands Greater Flexibility and Hybrid Solution

Lenovo’s rapidly changing business environment creates new challenges that extend beyond the enterprise to include how we interact with partners, suppliers and customers. We are addressing these challenges by embracing digital transformation and seeking new, innovative solutions.

While SAP has many strengths, there are challenges to consider, starting with how to integrate SAP solutions with our upstream and downstream systems

In some cases, these solutions come from existing strategic partners such as SAP who supply some of our core application technology. For example, we are well along in our deployment of new solutions from SAP such as HANA and Fiori. In other cases, we are implementing new technologies and solutions from startups. Finally, we also build solutions in-house based on the ever-increasing availability of Open Source software, including a Supply Chain Control Tower (SCT) and an Order Visibility Portal (OVP). Taking this hybrid approach allows us to quickly implement multiple analytic solutions with open source tools and leverage big data to augment SAP’s offerings.

Balancing SAP’s Benefits with the Need for Customization and Speed

While SAP has many strengths, there are challenges to consider, starting with how to integrate SAP solutions with our upstream and downstream systems. Even within the same industry, no two companies have the same integration requirements, processes or best practices.

This factor drives customization requests and tests any company’s ability to be disciplined and use standardized, out-of-the box systems without some level of customization. Since customization impacts system performance, extensibility and future platform upgrades, every decision to customize carries the risk of long-term and potentially negative consequences.

The other challenge relates to agility. While one of the greatest strengths of a tightly coupled end-to-end system such as SAP is its ability to provide strong consistency and end-to-end visibility, this strength can become a weakness in environments that require frequent and rapid change, if not planned for and managed carefully.

As we differentiate ourselves from the competition and evolve from a traditional hardware company to a device cloud company across multiple different businesses (from PC to mobile to data center solutions), we carefully evaluate solutions on a case-by-case basis.

Moving Forward in the Era of Digital Transformation

Our SAP implementation focuses on more than simply installing software or thinking about it as “just another IT project”–it’s part of a shared vision with senior leaders in the business. As with all solutions, it must allow us to quickly adapt to changing market conditions and consumer demands.

We are glad to see SAP heading in the direction of de-coupling and providing solutions around its S/4 suite, such as Simple Finance and Simple Logistics, which will enable faster responses to market conditions. As with any technology change, the challenge will be the speed with which large companies can transition to gain the benefits and the ability to articulate the business case that comes with such simplification.

With this in mind, CIOs face difficult and complicated decisions in the digital transformation era. While SAP is a leader in supply chain and finance solutions, in today’s environment, no single company can be the one-stop technology shop.

Ultimately in our business, we must accelerate the pace of digital transformation and continue to improve our customers’ experience. This journey will involve solutions from software companies such as SAP, startups we don’t even know about or may not exist yet, and our own talented teams of developers. How we invest in and leverage technology solutions from all providers, including SAP, will drive our ability to compete going forward.