Business Innovation Predictions for 2023

At SAP, we expect that the innovations that emerged throughout 2022 will take hold throughout this year and new disruptions will continue to accelerate digital transformation. In this context, it is important that companies are prepared to embrace these new disruptions and adapt quickly to changes in the market. Companies that do not respond to these innovations risk being left behind and losing their competitiveness in the market.

The technological situation in Mexico during 2023 will be characterized by a greater adoption of cloud solutions by companies, which will offer greater scalability, flexibility and efficiency, becoming an attractive panorama for organizations of all sizes and sectors. In addition, with the increasing importance of compliance and privacy regulations, cloud technology also provides a higher level of security for companies' data.

During two years at the helm of SAP Mexico, I have witnessed that the cloud remains the key ally of Mexican organizations to be more innovative and competitive. Overall, SAP's financial results in Mexico last year demonstrate that our customers have adjusted their businesses to today's challenging environment, adopting new collaboration models and increasing automation through intelligent  headlight

SAP's global predictions will also strongly replicate in our country in 2023 and provide the keys for organizations to capitalize on them to the maximum and improve their transition to digitalization. These are:

1. Artificial intelligence, which will be more robust through programming without code or low-code, which will allow more and more program development processes to be guided and written by other software. Business users will be able to create applications, even if they do not have programming knowledge, which will free up the workload of IT specialists, who will have more time to deal with more strategic tasks. We have seen this in Mexican companies that seek to identify customer satisfaction through the purchasing patterns and behavior of AI systems.

The retail sector, which accounts for more than 18% of Mexico's Gross Domestic Product (GDP), is undergoing rapid digital transformation. From SAP, we saw with great optimism how in 2022 its adoption of our portfolio increased to triple digits. More and more retail stores are adopting innovative technologies so it continues to strengthen its investments, as well as brands such as Soriana, a Mexican chain of department stores and supermarkets with more than 750 points of sale, which acquired SAP Commissions from the SAP Human Capital Management portfolio to maximize the effectiveness of commercial teams. With this solution, the  organization will be able to implement incentive measures and strategic compensation that keep its  sales force motivated, and thus improve their experience, in addition to promoting merchandise through the creation of customized plans.

2. The new commercial networks and regional supply chains, which is on everyone's lips, since after two years of the health emergency, interruptions in logistics chains and the increase in consumer demand caused a change in transport and logistics prices. In addition, based on events such as the war in Ukraine, many countries will seek to decentralize their operations. As an example, in the United States, 62% of manufacturers have begun to replace their production facilities and are expected to relocate almost 350,000 jobs by the end of the year.

In the country, moving toward digital transformation with cloud-based platforms will help diversify supply chains and gain a more distributed set of sourcing options. It is estimated that companies moving toward Industry 4.0 improve the efficiency in inventory forecasting by 85% and the experience of employees by 30%. In Mexico, this was reflected in the triple-digit increase in SAP Digital Supply Chain. An example is Dportenis, a Mexican chain with more than 200 sports fashion stores and more than 30 years of operations in the country. With the opening of its new distribution center, the company adopted SAP Extended Warehouse Management to more efficiently manage its inventory management and standardize its logistics processes, allowing them to make more accurate and agile decisions focused on covering multichannel demands. 

3. The path to sustainability through the cloud will be called the ”green tsunami”, becoming a priority scheme across industries, including oil and gas, as well as utilities. As a result of stricter regulations, new environmental and social governance laws and reports known as ESG will become more specific, and companies will be more involved in generating more and better actions by leveraging the efficiency of the cloud to meet their sustainable goals during 2023, focusing not only on achieving financial performance, but also to generate a positive environmental and social impact.

It's a pivotal year: the real opportunity for CIOs is to lead this change in their companies by 2023 in a real and tangible way. The talent management business line at SAP grew by double digits during 2022. A clear example is Grupo Flexi, a Mexican company dedicated to the manufacturing, distribution and retail of footwear with more than 80 years of operations in the country, which acquired SAP SuccessFactors Employee Central Payroll to simplify and upload to the cloud the human resources processes for its more than 5,000 employees.  In this way, the organization will automate and accelerate its payroll system, with a platform that will allow it to make payments to its workforce on time, efficiently and reducing the risk of errors.

4. The number of light passenger cars will reach pre-pandemic levels, as continued consumer demand for new electric vehicle (EV) models will create opportunities for suppliers to differentiate and scale, accounting for the good, bad and unknown of the automotive space. Challenges for automotive manufacturers and suppliers are deepening. More cities around the world will adopt planning software to be more efficient, and Mexico is no exception.

The automotive sector, which accounts for about 3% of the country's GDP, increased its technology adoption by triple digits with SAP. A reference is Borgwarner, a company in the sector,whose Industry 4.0 is transforming and potentiating its business through the monetization of data; that is, in the  implementation of technologies that make it possible to review the information backward in time as well as toward the future and to be able to predict what will be the new products or services that the consumer will require.

In short, 2023 is shaping up to be a year in which technologies will continue to evolve and transform business and everyday life. Companies that embrace and adapt innovation to their business models will have a competitive advantage and will be able to offer more personalized and efficient user experiences.