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New Technologies Empower Innovation

As global economic integration deepens, enterprises are experiencing intense competition in a changing business landscape. To adapt to this new environment, enterprises must transform their development, management, and business models for immediate effect. Finding the right time to transform the enterprise, however, is a challenge faced by executives and IT staff alike. Recent IT technology innovations continue to spark strong interest around the globe. But, how will these new-generation IT technologies really affect enterprises? And, what benefits can these IT technologies are expected to deliver?

New Economic Ecosystems

In the new economic ecosystem, many Chinese enterprises are facing six major issues: First, small size, Second, weak R&D capability, Third, inefficient management, Fourth, heavy resource consumption, Fifth, high operating costs, and sixth, slow market response. In order to successfully transform themselves to compete in global markets, Chinese enterprises must overcome these six issues.

The future, however, remains unpredictable. To stay competitive, enterprises must be willing to adapt to changing markets and growing global economic integration by adjusting their business models and implementing a wide range of business innovations.

E-commerce, mobile Internet, and IT technologies are bringing innovation to enterprises; however, the business of constructing IT systems is not simple. First, system development and implementation cycles are lengthy — so keeping up with escalating operational and market demands is a constant struggle. Second, IT systems built using traditional approaches are difficult to centrally manage, control, and maintain. Third, if IT systems are not planned as part of an overall business strategy, information silos will be created that hinder information sharing and management efficiency. Fourth, IT utilization remains low, resulting in a huge wastage of valuable resources. Fifth, IT investment costs are high. And sixth, IT system maintenance costs are high. Together, these issues can strangle enterprise growth at exactly the time when more adaptability is appropriate.

As market competition intensifies, traditional IT management approaches are neither timely nor flexible enough to meet changing market demands. Enterprises need dynamic IT systems designed to provide real-time, value-adding business support. As such, new-generation IT technologies such as cloud computing have emerged to help enterprises adapt quickly to changing times, technologies, and needs.

Helping Enterprises Transform

New-generation IT technologies include cloud computing, Big Data, mobile Internet, and Internet of Things (IoT). Of these, cloud computing serves as the foundation for the others — it makes Big Data analytics possible and underpins the mobile Internet and IoT. Cloud computing incorporates virtualization, standards compliance, and automation, which help enterprises adapt to new IT demands in complex business environments, forcing enterprises to rethink the economic impact of IT initiatives.

Because cloud computing i s a new type of methodology for constructing IT systems, however, enterprise managers and IT staff must first assess how best to use the technology for maximum benefit.

Cloud computing offers speedy and agile IT applications, borderless IT services, and unbreakable IT security. These benefits enable enterprises to transform their businesses, reduce operating costs, increase efficiency, and accelerate product Time-to-Market (TTM).

Cloud computing also creates a new type of shared network model for convenient, on-demand, and configurable computing resources. And, by combining internal data resources with external social data, Big Data becomes vitally important to the enterprise. With Big Data analytics, enterprises can identify and respond to changes to customers and markets, as well as create and optimize products and services. Thus, enterprises are able to reduce costs, increase efficiency, optimize resource allocation, and proactively manage risks.

Experiments have shown that new enterprise demands and customer segments are forcing enterprises to adopt more flexible business models and employ algorithmic automation to accelerate decision making. This means that, in the future, the core competitiveness of an enterprise will lie in its success devising innovative business models, providing innovative products and services, and managing massive amounts of data.

How is this accomplished? The implementation of cloud computing can be described in three keywords: intelligent resource modeling. To create cloud computing platforms that provide corporate-wide applications, Chief Information Officers (CIOs) must integrate diverse information resources. Chief Executive Officers (CEOs) must consolidate and translate all resources into a business models hosted on cloud computing platforms, and to disseminate these business models to employees inside their companies and to their customers and suppliers outside their companies.

What changes should enterprises undergo in order to reap the benefits offered by these new technologies? First, enterprises must develop feasible business strategies that best suit dynamic business environments. Second, enterprises must relentlessly innovate to sharpen their competitive edge. Third, enterprises must optimize their business and cost structures to make them more suitable for changing business strategies and market demands. Fourth, enterprises must maximize resource utilization and employee productivity. And fifth, enterprises must define enforceable and sustainable business plans.

CIOs must build on developments in cloud computing and remain familiar with leading technologies and suppliers. CIOs are then responsible for defining their own corporate-wide clouds with their own organization’s specific business requirements, including governance, collaboration policies, supply-chain management guidelines, and shared service protocols. Ultimately, it is the CIO who must develop the roadmap that ensures a smooth evolution from integrated data center management to cloud implementation.

How should a CIO get started? The first step in cloud implementation is integrated data center management. Data, network, and software virtualization turn traditional IT data centers into cloud-based data centers. This approach flattens the data center architecture and reduces operating costs. The migration to a cloud architecture, however, can not happen overnight: Integrated data center management to consolidate infrastructure resources must come first, then the gradual addition of virtualization and automation technologies, with the last phase focused on rolling out clouds for providing on-demand services.

Smarter Enterprises with Clouds

To be successful, an enterprise must transform itself into a smart enterprise by deploying more IT installations that incorporate cloud computing and Big Data. To reach this goal, the enterprise can take a four-pronged approach. First, plan IT implementations based on business strategies. Second, set up IT management and control systems to improve the IT leadership and the ability to execute tasks. Third, set up standardized IT systems that lay a solid foundation for business collaboration, data integration, and data sharing. And, fourth, involve IT in key projects for innovating enterprise governance and data integration.

Building World-Class Service Platforms

China National Pharmaceutical Group Corporation (Sinopharm), the largest pharmaceutical and healthcare company in China, recently announced a “155 Project” in its 12th Five-Year Plan to build a world-class cloud service platform.

As part of the “155 Project,” Sinopharm plans to set up five professional platforms that align with the company’s business strategies. The platforms form an integrated information platform for corporate-wide administration, decision making, analysis, and collaboration; a unified, corporate-wide Enterprise Resource Planning (ERP) platform; a centralized medical logistics and distribution information platform; an integrated information platform for global operations; and a healthcare service information platform. In addition, Sinopharm will set up five other IT systems, specifically, an IT management and control system, an IT standardized system, an information security system, a unified portal and information resource management system, and an IT talent assurance system. With the help of these IT systems, information from the five platforms can be incorporated into a single cloud service center.

Meanwhile, Sinopharm will streamline its data center platform using cloud and virtualization technologies — which alone is estimated to save many tens of millions of US dollars. Before the project, each system — even the smallest of Sinopharm’s systems — had dedicated database and application servers which increased O&M complexity and staff workloads. Sinopharm is currently consolidating nearly one hundred servers into a single unified platform that centralizes and automates resource management.

The Sinopharm supply-chain cloud service platform is expected to be completed by the end of the 2015. By that time, the entire supply-chain system will be optimized, and the new platform will provide services that will include Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS), in addition to legacy medical logistics services. The new supply-chain platform can also be scaled up to become a nationwide pharmacy network. The Sinopharm cloud service platform will consolidate distributor logistics and transportation management systems as well as multi-vendor resources for providing services according to diverse business models.

By Dr. Lei Wanyun

Director, Sinopharm, China National Pharmaceutical Group