On top of that, 61 of the world’s 500 largest companies are based in China, according to Fortune’s “Global 500” list.
But beyond those indicators of sheer mass and scale, an even more powerful dynamic is profoundly reshaping the Chinese economy, currently the world’s second-largest: the countrywide commitment to evolve rapidly from a center of manufacturing to a global hub of research, design, and innovation.
To achieve that bold initiative, McDermott said in a keynote talk this week at SAP’s China SAPPHIRE NOW event, China’s privately held companies, its state-owned enterprises, and its public-sector organizations will need a new generation of technology to match the ambitious dreams of its current generation of business leaders and entrepreneurs.
In addition to the traditional IT solutions that help drive efficiency and automation in manufacturing and logistics, McDermott said, Chinese businesses will need to extend the boundaries of their enterprises out to their customers and to their customers’ consumers, to business partners and suppliers not only in China but around the world, and to appropriate governmental agencies.
And perhaps most important, all of that execution and engagement and analysis must be achieved in real time because that’s the only timetable that can meet the needs of today’s highly demanding, highly mobile, and always-on global economy.
“Like you here in China, SAP is committed to innovation,” McDermott told the standing-room-only audience in what is believed to be the largest IT event in China. “And we believe in the vision of a digitized economy that connects researchers and pharmaceutical companies with hospitals and doctors so that the right people get the right medications at the right time to lead healthier lives.
“In a digitized economy, schools have to have the right curriculum and the qualified teachers to be ensure that the education their students are getting is in synch with the needs of the economy and the workplace so that students can get good jobs when they graduate,” he said.
A digitized economy, McDermott said, gives researchers the information and connections they need to increase standards of nutrition for one of the world’s largest populations, and helps public-health officials determine where to build clinics to have the greatest impact on public health.
“And it’s the same for businesses,” McDermott said, “because this is exactly how companies do business: getting closer to their customers, and to the consumers who buy those customers’ products. With optimized supply chains based on demand so that eventually companies can get rid of warehouses and excess inventory because they’ve synchronized output with demand.”
As an example, McDermott cited Chinese beverage company Nongfu Spring, an early adopter of SAP HANA in-memory technology that has helped Nongfu Spring innovate and compete in ways never before possible.
Noting that Nongfu Spring is able get responses from its analytics systems 10,000 times faster than it did with its data mart made by an SAP competitor, McDermott said the bottled-water company has deep and real-time visibility into areas at which it could only have guessed in the past.
“HANA is helping Nongfu Spring achieve end-to-end digitization, and that means everyone in the company knows what their customers are buying, and mobile applications help them track their competitors with pricing and stocking and sales ratios, and the company can track sales targets and distribution plans immediately—and then they can adjust at the speed of thought,” he said.
In line with those types of opportunities throughout China, McDermott outlined SAP’s plans for engaging more closely with China in planning and creating a truly digitized economy.
SAP is spending more than $2 billion in China through 2015, is hiring thousands of people as it doubles the number of offices it has throughout China, is training more consultants and helping to educate young people to give them opportunities in China either with SAP, or with SAP’s customers, or with the rapidly expanding SAP ecosystem in that country.
“We will continue to invest in developing solutions in China for China, and then we’ll take those to the rest of the world,” said McDermott, noting that SAP China Labs has rapidly become one of the company’s largest development centers in the world.
“And those new solutions,” McDermott said, “will be designed in China, not just made in China—and by partnering with you, we will achieve this vision of a digitized economy.”
(Follow me on Twitter at bobevansSAP.) http://twitter.com/#!/bobevansSAP
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