digital core

What is a digital core?

A digital core is the technology platforms and applications that enable organizations to transform into digital businesses and meet the new needs of the digital economy.

A solid digital core supports next-generation workloads, such as advanced analytics, internet of things, artificial intelligence and machine learning. Such workloads are generally not suited to run on legacy IT infrastructure or to rely on traditional software technologies. Instead, such workloads require flexible, scalable platforms that can streamline data flows and integrate seamlessly with cloud services and other technologies.

A digital core is key to enabling organizations to implement digital transformation initiatives, which can improve existing business processes and support new business models. For example, a customer experience management application built on a solid digital core can provide faster and better insights into customer behavior and enable event-driven decision-making.

Transforming an organization's IT infrastructure to center on a digital core can be a complex undertaking that requires extensive planning and a clear strategy. A digital core project generally includes restructuring business practices and processes, implementing digital core platforms and transforming corporate culture through change management practices. Most projects require extensive involvement from platform or technology vendors and implementation partners, along with the development of new and advanced skill sets.

Benefits of a digital core

A solid digital core is essential to transforming business processes and supporting the needs of modern workloads. A digital core is also critical in achieving the level of agility necessary to accommodate evolving business needs and meet new challenges as they arise. To this end, a digital core can benefit an organization in a number of important ways:

  • Improved operations. A digital core provides real-time visibility into critical business processes, tying them together with the supported data systems and data streams. With a solid digital core in place, organizations gain a better understanding of their business processes and can more easily manage the systems and data.
  • Data transparency. A digital core ensures a single source of truth that provides stakeholders with a high degree of data transparency. They can seamlessly access the data at any time from any location, interact with the various systems and collaborate more effectively knowing that they're working with the best possible information.
  • Real-time insights. A digital core provides stakeholders with real-time insights into data. It enables them to predict and simulate anticipated events more accurately. They can use the data to perform advanced analytics that predict outcomes with greater accuracy, leading to deeper insights and more effective decision-making.
  • Modernization. A digital core plays a pivotal role in carrying out digital transformation and modernizing business processes. It supports a distributed, interconnected infrastructure that can span numerous types of environments, including multiple clouds, hybrid clouds and on-premises data centers. A digital core facilitates quick deployments and adaptable architectures, while helping the organization future-proof its digital infrastructure.
  • Flexibility. A digital core can be instrumental to an organization becoming more flexible and adaptable when faced with new opportunities, changing business conditions, recent innovations or unexpected challenges, such as the COVID-19 pandemic. A solid digital core can also support greater service and product diversity.
digital transformation goals diagram
Digital core technology can help organizations meet their digital transformation goals.

One of the main benefits of a digital core is that it enables organizations to integrate their back-office enterprise resource planning (ERP) systems with massive amounts of structured and unstructured data from various sources. Organizations can then perform advanced analytics against the data, enabling them to derive new insights, such as predicting outcomes or proposing new actions. Many of these processes or actions can operate automatically in near-real time.

Digital core providers

Numerous vendors offer products or services that promise to help organizations in their efforts toward a more solid digital core.

One of the most prominent vendors in this arena is SAP. In recent years, the company has been refining its portfolio to better support its customers' digital core initiatives. SAP's foundational digital core platforms include SAP S/4HANA and S/4HANA Cloud, which are next-generation ERP systems based on the SAP HANA database. Much of the integration between the SAP digital core and other systems and applications is done through SAP Cloud Platform.

enterprise resource planning (ERP) infographic
Digital core technologies enable ERP systems to better integrate huge amounts data from numerous sources to better service business goals and processes.

Other types of companies have also been promoting the importance of a digital core. For example, Accenture, a global professional services company, helps businesses, governments and other types of organizations transform and build their digital cores as part of a strategy for optimizing operations, enhancing services and driving growth. According to Accenture, an organization's digital core represents its primary source of competitive advantage and should be treated accordingly.

Equinix is another company that places high value on a digital core. The company's focus is on providing the digital infrastructure needed to support a strong digital core. Equinix offers organizations a way to colocate compute resources across a global landscape that includes over 240 data centers spread across six continents, making it possible to form an interconnected digital core that can support effective digital transformation and modernization.

Oracle also offers digital core services through its various Oracle Cloud software-as-a-service, platform-as-a-service and infrastructure-as-a-service platforms and applications. For example, Oracle's Customer Experience Cloud suite is a customer experience platform that enables organizations to engage their customers across physical and digital channels.

Learn about common use cases that can simplify your ERP research, and check out our ultimate guide to ERP. Explore must-read digital transformation books and digital transformation tips and best practices, and read about the top colocation providers.

This was last updated in May 2024

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