The term “digital core” can have different meanings depending on the context in which it is used. Here are a couple of interpretations followed by a combined perspective:
1. Focus on the ecosystem: a digital core is a central enterprise digital ecosystem of platforms designed to facilitate seamless processes and integrated data flows across various systems and interfaces.
This was for instance highlighted in a SAP blog post from 2015 as: “Companies can overcome complexity and drive business innovation with a digital core. A digital core empowers companies with real-time visibility into all mission critical business processes and processes around customers, suppliers, workforce, Big Data and the Internet of Things. This integrated system enables business leaders to predict, simulate, plan and even anticipate future business outcomes in the digital economy.”
Many organizations often refer to ERP systems as a digital core to manage and streamline various business processes. This includes enabling capabilities to support business functions such as finance, human resources, supply chain management, and more. The digital core in this context is the central hub (or hubs) that connects and manages data across different departments, providing a unified and efficient way to run the business.
One thing for sure is that such digital core ecosystem is always more than one platform or system. And, for instance, a platform might cover multiple business capabilities implemented through multiple apps, connected through multiple interfaces, based on multiple architectural patterns and infrastructures. This also applies to the PLM ecosystem which, per its contextual cross-functional definition, spans across data and processes embedded in PDM, ERP, CRM, MES and connecting the dots through multiple Digital Threads.
2. Focus on data assets and analytics: digital core is a robust data foundation which includes collecting, processing, analyzing data from various sources to derive meaningful insights that can inform decision-making.
Effective business insights often imply combining a mesh of structured and unstructured data sets underpinning the innovation portfolio performance, while facilitating both data continuity and continuous process improvement. It is a matter of defining key performance indicators (KPIs) and insights required to support decision-making—connecting strategic dashboards with continuous delivery to drive effectiveness and data-driven productivity.
While integrating enterprise platforms is a significant aspect of a digital strategy, it’s not solely about connecting different systems. A comprehensive digital core also involves the capability to drive cross-functional analytics independently of the data sources. In other words, a robust digital core not only facilitates the seamless flow of data across various platforms but also empowers organizations to perform analytics that span different functional areas.
Effective trusted insights involves integrating data from diverse sources across the organization. This includes pulling data from secured enterprise systems, covering data from product specifications, supply chains, compliance, financial performance, customer feedback, marketing plans, and other operational platforms, internal and external standards. The integration of such data sets requires a comprehensive view of the operating model of an organization—based on its business model and operating maturity. In turn, this data foundation is often essential for achieving a seamless integration of processes, facilitating collaboration, and enabling an organization to adapt to a rapidly evolving digital landscape.
Combining the two perspectives: a digital core refers to enabling technologies combined with data continuity and the associated insight foundation to power the business operating model.
Simply put, the goal of establishing a digital core is to enhance efficiency, collaboration, and data consistency by connecting various business functions and systems. It enables organizations to have a more holistic view of their operations, streamlining processes, and making data-driven decisions.
- How to balance the need for data and process automation with the need for effective insights?
- How to ensure that operating processes are optimum while consistently connecting data insights used to drive effective decisions?
- Which enterprise data needs to be structured, and how to maintain the associated standards and governance?
- How to combine enterprise data models with unstructured data sets, and leverage artificial intelligence (AI) and machine learning (ML) engines to inform and accelerate decision-making?
This concept is often associated with digital transformation efforts, where organizations leverage technology to optimize their operations and stay competitive in a rapidly evolving digital landscape. In this case, it refers to the fundamental technology infrastructure and capabilities that enable an organization to leverage digital technologies for innovation and efficiency. This could include cloud computing, data analytics,AI, and many more technologies that form the foundation for digital initiatives.
In summary, the meaning of “digital core” depends on the specific domain or industry in which it is used. It could refer to the central components of an integrated business ecosystem, its overarching data assets and analytics platform(s), or the combined foundational technologies enabling digital transformation. Product and service innovators need embedded their PLM strategy into their digital core tapestry to drive operations through master data consistency and integrity.
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