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Disrupt With Digitization

Sven Denecken

Innovation requires reimagined processes – and the CIO needs to lead this transformation.

Enterprises today must be prepared for the transformation that the digital economy is forcing upon them.

Now, you might think, “Another digital buzzword article.” Well, yes, some dismiss it as a buzzword, but the challenge for many has just started. But let’s not look at only the problems; there are opportunities if seized right – and you can win big.

For example, competing for new business, or even exploring a new revenue stream by creating a new business model, are things you need to look out for constantly – and for sure you can learn from startups, because that is what they do: challenge the status quo. In a fast-moving digital economy, the window to capture these opportunities closes quickly; companies that are unprepared to pounce when occasions arise will likely get stuck on the road to irrelevance. In my job as product manager, my team constantly screens such opportunities, as innovation needs to be weighted fast and implemented via co-innovation even faster if there is a chance of success – and it must also be adapted fast if reality kicks in.

Successful companies need to be willing to change: They must assess whether they are truly in a position to reinvent business processes every day, not just every generation. And here is where the modern CIO comes in. Yes, digital officers arise at every corner of every industry, and they are needed ambassadors or agents of change. But today I think we should be clear: If every company will soon be a “software” company (which I very much believe, as data will rule the world) you need a modern chief information (and innovation) officer to help business and the company board of directors to make this change happen.

Here are 3 key lessons we have learned from the CIOs we constantly speak with during our co-innovation work. (Of course, there are also many lessons we learn from CIOs who are not embracing it – but will they still be CIO next year?)

Lesson #1: Four trends to check if you are on track

As I stated earlier, there are four inescapable trends are creating the pressures that shape today’s digital transformation:

  • The empowered customer: Whether your customers are Generation Z consumers or multi-national conglomerates, they all share one vitally important characteristic: Each demands to be treated as a unique segment of one. You have no choice but to meet that expectation.
  • Competitive and regulatory pressures: Transparency is a necessary part of business today, and that means competitors and regulators alike can dissect any business process. Staying ahead of the former and meeting the standards of the latter requires operational excellence and accountability at every step in the value cycle.
  • Globalization: More businesses today must be prepared to go global in order to remain relevant. Expanding into new markets can no longer be done effectively with costly, infrastructure-heavy international build-outs. Enterprises need a pay-as-you-go strategy with scalable capacity, which can be adjusted rapidly to meet market conditions in any region.
  • Technological progress: The tide of innovations and discoveries is unrelenting. Businesses must be agile enough to quickly adopt new strategies, and be steered by insightful, knowledgeable leadership that can sort winning inventions from dead-end novelties.

Lesson #2: Unprecedented levels of business agility

The need for an unprecedented level of business agility to match the rapid pace of innovation and transformation present in business is not restricted to a particular industry. Rather, we see entire markets, including transportation, logistics, and e-commerce, being reinvented on a seemingly daily basis. For any industry in which the production, shipment, and transaction of a product is still relevant, transformation supported by digitization is fast becoming a necessity.

Pressures to reshape the business using a digital template are likewise common across the industry spectrum. Companies — both in the business-to-business (B2B) and business-to-consumer (B2C) worlds — expect personalized interactions as a “segment of one,” which necessitates individualization of products and services, and freedom of choice. The business has no choice but to meet these demands — on the platform the customer chooses — or risk losing customers to a competitor.

The common solution that addresses these pressures is agility, and the way to achieve that agility is with a flexible, digital core at the heart of every organization that can meet the demands presented by increasing across-the-board disruption.

In my presentations I often state why we need to talk about a digital core: As long as something is produced (even if it is a service), as long as something is delivered or shipped, and as long as something will be paid – there is a need for a core. It is as simple as that. Every CIO surely knows that end-to-end processes often start at the edges or with systems of engagement, but they are of limited value if they do not connect with the core – the heart that makes your company run.

Now building on top of this, with a digital core, organizations can do far more than simply meet these pressures at a minimum level of success. They can pivot in near real time to capitalize on innovations in areas such as cloud, Big Data, and business network connectivity to completely transform the business, whether it’s to keep up with the growing influence of emerging topics such as the Internet of Things (IoT), 3D printing, or augmented reality, or to defend against new competitors launching up all around them.

A digital core is an enabling platform for transformation and innovation, but what are its hallmarks? We find five key characteristics that make up a digital core:

  1. A digital core provides the enterprise with the capability to drive and anticipate business outcomes in real time.
  2.  It integrates the business seamlessly across all value chain processes such as client interaction, administration, production, and research and development.
  3.  The digital core increases efficiency by automating processes and distributing responsibility for customer insights across an intelligent business network.
  4. It increases effectiveness by converting signals in business data into tangible action, essentially bringing Big Data to the size and scale needed to turn insight into action for the everyday user.
  5. The digital core increases enterprise agility by elevating each employee’s view of the organization.

So how can the modern CIO help to disrupt with digitization?

Here is the modern CIO’s plan for success: They prioritize day-to-day operations that were formerly siloed lines of business to have complete visibility into the entire core business of the enterprise. Finance, sales, and manufacturing can then act in concert, basing decisions on the same information in real time. This is where the company wins big, and this is how the modern CIO will drive change for the better and help their company win in the digital economy.

Successful CIOs know that the race to digitization is on. Until recently, many of the clients I spoke with were still questioning the need for digitizing the enterprise. Now, they want to know the most efficient route to get there. And while SAP’s digital core S/4HANA Enterprise Management is certainly a monumental milestone, clients are surprised to discover that arriving at a digital core is not as difficult as it might seem to enable this level of transformation.

A digital core helps any business run faster and simpler, so getting there should not be as complicated as the siloed line-of-business applications and redundancies a business leaves behind.

Want more insight on digitization? See The Digitized Core At The Heart Of Reimagined Business.

Looking forward to your feedback! Follow me for the latest updates: @SDenecken (link to Twitter account).

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Sven Denecken

About Sven Denecken

Sven Denecken is Senior Vice President, Product Management and Co-Innovation of SAP S/4HANA, at SAP. His experience working with customers and partners for decades and networking with the SAP field organization and industry analysts allows him to bring client issues and challenges directly into the solution development process, ensuring that next-generation software solutions address customer requirements to focus on business outcome and help customers gain competitive advantage. Connect with Sven on Twitter @SDenecken or e-mail at sven.denecken@sap.com.

Olympics and Cloud Analytics: What’s The Connection?

Dan Vesset

As the 2016 Rio Olympics remains fresh in my mind, I’m reminded of the Olympic motto “Citius, Altius, Fortius” (faster, higher, stronger). Since their inception in 1896, the goal of the modern Olympics has been to provide an international forum where the world’s elite athletes could come together and compete. That is why the founder of modern Olympics Pierre de Coubertin said that “athletes need freedom of excess. That is why we gave them this motto … a motto for people who dare to try to break records.”

What does this have to do with business intelligence and analytics? There are lessons to be learned from the Olympic motto for those of us involved with business analytics. To be leaders and to compete at the highest level in today’s data-driven economy, organizations need to have a platform that enables top performance. Four years ago, I and my colleagues at IDC wrote about this platform in the context of in-memory computing – a capability that was then sweeping the business analytics market and has now became a pervasively accepted part of business analytics technology. Four years on (let’s try to stay with the cadence of Olympic games) we see another technology – cloud computing – have a similar impact on the evolution of business analytics capabilities.

Just a couple of years ago, spending on cloud business analytics represented a small fraction of this $40+ billion worldwide software market. However, today, we see rapid and unabated growth in the adoption of cloud business analytics solutions. IDC expects that over the next five years, the cloud business analytics portion of this worldwide software market will continue to grow five times faster than similar solutions deployed using any other methods.

This trend is not only about lowering technology and related maintenance costs, although that is one of the key decision variables. Cloud business analytics solutions provide their users with other important benefits that help in promoting more pervasive use of BI and analytics technology throughout the organization. The move to the cloud includes a better ability to address changing system scalability and performance requirements, greater opportunity to monitor software usage patterns and encourage greater utilization of the software, an opportunity to take advantage of new, modern user interfaces (UIs), easier integration of cloud data sources, more efficient information sharing with external parties, and faster development cycles for new analytic applications.

Importantly, cloud business analytics also help is breaking data and software functionality siloes that have persisted for years but are finally being addressed more pervasively, thanks to growth in the availability of cloud business analytics solutions. The barrier, technical and organizations, that exist in any sizeable organization that has a multiple business analytics technology deployments, can be more easily taken down when there is a centralized cloud solution.

As Philip Kim, senior director of Big Data and Analytics at Under Armour, the sports clothing/accessories and Connected Fitness social network company, said in my discussion with him earlier this year, “our CIO’s strategy is cloud first. We need to have a very solid argument for why any particular application can’t be in the cloud. All of our mobile app data for 160 million athletes is in the cloud; most of our enterprise data is in the cloud. The cost of doing the same on-premises would be prohibitive.”
In Rio, whether you cheered for Michael Phelps or Usain Bolt or Yusra Mardini there is something we all can learn from these leaders. I propose that the business analytics community adopt the Olympic motto – in fact, I believe it has already done so by embracing in-memory processing (Faster), shifting to cloud computing (Higher), and with those capabilities enabling better decisions that help achieve desired goals (Stronger). The Olympics should be a reminder that that reinforces the need for organizations to reevaluate their existing, mostly on-premises, business analytics solutions. What is available today is a cloud business analytics technology platform that provides organization with that needed freedom of excess to support decision-making that fosters innovation, reduces costs, and drives revenue or other desired outcomes.

To learn more, join the upcoming webcast An IDC perspective on the future of cloud business analytics, 8th September at 7:00 a.m. PDT / 10:00 a.m. EDT / 3:00 p.m. BST.

This article originally appeared on The Guardian.

 

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Dan Vesset

About Dan Vesset

Dan Vesset is GVPGroup Vice President, of Analytics and Information Management at IDC. Vesset’s research and consulting is currently focused on business analytics, business intelligence, and data warehousing software markets. He is also the co-lead of IDC's Big Data research. Vesset has authored numerous research publications, is a frequent speaker at business analytics conferences and seminars worldwide, contributes to IDC’s Business Analytics and Big Data blog, and tweets at @danvesset.

The Ascendance Of Cloud In The Enterprise

Trent Weier

Cloud computing has long been common in the consumer space with companies like Apple driving rapid cloud user adoption around the globe. More recently it’s become a serious consideration in the enterprise; a Cloud Sherpas survey reported that 82% of C-level executives say a cloud strategy is essential to delivering business success. While some still see it as yet another marketing gimmick, for most, it is a powerful set of technologies that can deliver business advantage and genuine cost savings. In fact, where once small and midsized organizations were unable to compete due to the high cost of self-managed IT infrastructure, cloud holds enormous potential.

Why consider the cloud?

In working daily with business leaders in organizations both small and large, I see their underlying pressure to remove cost, and I’m often asked “help me do more for less.” Cloud is a very attractive proposition given the current economic environment. It offers the promise of accelerating time to value, driving higher adoption rates for new technologies, and even connecting value chains in real-time. Other immediate gains include significant operational cost savings, enhanced business agility and scalability, and the ability to move capital expenditure “capex” to operational expenditure “opex” in order to give a more stable and more predictable view of ongoing costs.

A more fundamental strategic advantage of moving to cloud is enabling an organization to focus on its core competencies by outsourcing IT and application services that can be better and more cost-effectively delivered by a specialist cloud provider. This reallocation of funds and business focus is a key factor in ensuring the appropriate “share of wallet” is attributed to business innovation and market-making activities. Additionally, removing these challenges faced by the internal IT function can strengthen the relationship between IT and the business, as IT now becomes the interface between the technology and the business delivering on its promises.

What cloud computing services are available?

With more and more services, collaboration, and applications moving to the cloud, organizations will need to evaluate exactly which delivery model will help them continue to innovate faster.

  • Software as a Service (SaaS) is a subscription-based software license delivery model in which the software is hosted on a remote server.
  • Platform as a Service (PaaS) provides an entire computing platform for customers to develop, run, and manage applications in the cloud.
  • Infrastructure as a Service (IaaS) hosts hardware, software, servers, storage, and other infrastructure components on behalf of its users without spending significant capital expense. This is possible through IaaS like SAP Hana Enterprise Cloud and Amazon Web Services.

Advantages of cloud over on-premises

The value to enterprise of cloud computing continues to evolve, with the reasons for moving to cloud just three years ago very different from those we see in 2016. The worldwide cloud computing market grew 28%, to $110B in revenue, in 2015. Synergy Research Group found that public IaaS/PaaS services attained the highest growth rate – 51% – followed by private & hybrid cloud infrastructure services, which grew at 45%.

A driving force behind this growth is an increasing perception by enterprise that the current cost of traditional enterprise software is disproportionate to the value it creates. Cloud analytics delivers 1.7 times the ROI than on-premises applications, reports Nucleus Research. This has in turn forced a higher degree of financial interrogation on perpetual on-premises software licenses, in light of emerging “pay as you go” cloud computing licensing models. According to Aberdeen Group research, cloud ERP delivers three times the profitability improvement of on-premise applications.

Corporate leadership wants to extract value directly from IT. Time, for many businesses, has created an environment of overly complex enterprise architectures that are costly and difficult to manage. With the value of solutions no longer determined by the available functionality, but by user experience and the way users interact with the solutions, simplicity is the key, In fact, Aberdeen Group said 59% of executives acknowledged a “lower TCO” as the main reason for moving applications to the cloud.

Making the move to cloud

As we have seen, the case for cloud is strong but there are a number of fundamental questions you need to consider in your journey:

  • What cloud adoption strategies should you consider?
  • How will you create a compelling cloud vision?
  • Which functions will you move to the cloud?
  • What use cases will drive the most impact?
  • How should you measure business value?
  • What skills and organizational structures are required to drive cloud innovation?
  • What does your roadmap look like?

Even if you’re not asking these questions of your business, your competitors are. Miss this opportunity, and it could mean your business. That’s a fact.

Learn more about SAP & the Cloud

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Trent Weier

About Trent Weier

Trent brings 15 years of technology strategy, execution and digital value creation experience to SAP and its many customers. As a member of the industry value engineering team, Trent is focused on the chemicals, energy and natural resources sectors, showcasing to customers the business value of challenging traditional business models while creating disruption through industry leading innovation.

The Robotics Race

Stephanie Overby

As robotic technologies continue to advance, along with related technologies such as speech and image recognition, memory and analytics, and virtual and augmented reality, better, faster, and cheaper robots will emerge. These machines – sophisticated, discerning, and increasingly autonomous – are certain to have an impact on business and society. But will they bring job displacement and danger or create new categories of employment and protect humankind?

We talked to SAP’s Kai Goerlich, along with Doug Stephen of the Institute for Human and Machine Cognition and Brett Kennedy from NASA’s Jet Propulsion Laboratory, about the advances we can expect in robotics, robots’ limitations, and their likely impact on the world.

SAP_Robotics_QA_images2400x16002

qa_qWhat are the biggest drivers of the robot future?

Kai Goerlich: Several trends will come together to drive the robotics market in the next 15 to 20 years. The number of connected things and sensors will grow to the billions and the data universe will likewise explode. We think the speed of analytics will increase, with queries answered in milliseconds. Image and voice recognition – already quite good – will surpass human capabilities. And the virtual and augmented reality businesses will take off. These technologies are all building blocks for a new form of robotics that will vastly expand today’s capabilities in a diversity of forms and applications.

Brett Kennedy: When I was getting out of school, there weren’t that many people working in robotics. Now kids in grade school are exposed to a lot of things that I had to learn on the job, so they come into the workplace with a lot more knowledge and fewer preconceptions about what robots can or can’t do based on their experiences in different industries. That results in a much better-trained workforce in robotics, which I think is the most important thing.

In addition, many of the parts that we need for more sophisticated robots are coming out of other fields. We could never create enough critical mass to develop these technologies specifically for robotics. But we’re getting them from other places. Improvements in battery technology, which enable a robot to function without being plugged in, are being driven by industries such as mobile electronics and automotive, for example. Our RoboSimian has a battery drive originally designed for an electric motorcycle.

qa_qDo you anticipate a limit to the tasks robots will be able to master as these core technologies evolve?

Goerlich: Robots will take over more and more complex functions, but I think the ultimate result will be that new forms of human-machine interactions will emerge. Robots have advantages in crunching numbers, lifting heavy objects, working in dangerous environments, moving with precision, and performing repetitive tasks. However, humans still have advantages in areas such as abstraction, curiosity, creativity, dexterity, fast and multidimensional feedback, self-motivation, goal setting, and empathy. We’re also comparatively lightweight and efficient.

Doug Stephen: We’re moving toward a human-machine collaboration approach, which I think will become the norm for more complex tasks for a very long time. Even when we get to the point of creating more-complex and general-purpose robots, they won’t be autonomous. They’ll have a great deal of interaction with some sort of human teammate or operator.

qa_qHow about the Mars Rover? It’s relatively autonomous already.

Kennedy: The Mars Rover is autonomous to a certain degree. It is capable of supervised autonomy because there’s no way to control it at that distance with a joystick. But it’s really just executing the intent of the operator here on the ground.

In 2010, DARPA launched its four-year Autonomous Robotic Manipulator Challenge to create machines capable of carrying out complex tasks with only high-level human involvement. Some robots completed the challenge, but they were incredibly slow. We may get to a point where robots can do these sorts of things on their own. But they’re just not as good as people at this point. I don’t think we’re all going to be coming home to robot butlers anytime soon.

Stephen: It’s extremely difficult to program robots to behave as humans do. When we trip over something, we can recover quickly, but a robot will topple over and damage itself. The problem is that our understanding of our human abilities is limited. We have to figure out how to formally define the processes that human beings or any legged animals use to maintain balance or to walk and then tell a robot how to do it.

You have to be really explicit in the instructions that you give to these machines. Amazon has been working on these problems for a while with its “picking challenge”: How do you teach a robot to pick and pack boxes the way a human does? Right now, it’s a challenge for robots to identify what each item is.

qa_qSo if I’m not coming home to a robot butler in 20 years, what am I coming home to?

Goerlich: We naturally tend to imagine humanoid robots, but I think the emphasis will be on human-controlled robots, not necessarily humanshaped units. Independent robots will make sense in some niches, but they are more complex and expensive. The symbiosis of human and machine is more logical. It will be the most efficient way forward. Robotic suits, exoskeletons, and robotic limbs with all kinds of human support functions will be the norm. The future will be more Iron Man than Terminator.

qa_qWhat will be the impact on the job market as robots become more advanced?

SAP_Robotics_QA_images2400x16004Goerlich: The default fear is of a labor-light economy where robots do most of the work and humans take what’s left over. But that’s lastcentury thinking. Robots won’t simply replace workers on the assembly line. In fact, we may not have centralized factories anymore; 3D printing and the maker movement could change all that. And it is probably not the Terminator scenario either, where humanoid robots take over the world and threaten humankind. The indicators instead point to human-machine coevolution.

There’s no denying that advances in robotics and artificial intelligence will displace some jobs performed by humans today. But for every repetitive job that is lost to automation, it’s possible that a more interesting, creative job will take its place. This will require humans to focus on the skills that robots can’t replicate – and, of course, rethink how we do things and how the economy works.

qa_qWhat can businesses do today to embrace the projected benefits of advanced robotics?

Kennedy: Experiment. The very best things that we’ve been able to produce have come from people having the tools an d then figuring out how they can be used. I don’t think we understand the future well enough to be able to predict exactly how robots are going to be used, but I think we can say that they certainly will be used. Stephanie Overby is an independent writer and editor focused on the intersection of business and technology.

Stephanie Overby  is an independent writer and editor focused on the intersection of business and technology

To learn more about how humans and robots will co-evolve, read the in-depth report Bring Your Robot to Work.

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What Is The Key To Rapid Innovation In Healthcare?

Paul Clark

Healthcare technology has already made incredible advancements, but digital transformation of the healthcare industry is still considered in its infancy. According to the SAP eBook, Connected Care: The Digital Pulse of Global Healthcare, the possibilities and opportunities that lie ahead for the Internet of Healthcare Things (IoHT) are astounding.

Many health organizations recognize the importance of going digital and have already deployed programs involving IoT, cloud, Big Data, analytics, and mobile technologies. However, over the last decade, investments in many e-health programs have delivered only modest returns, so the progress of healthcare technology has been slow out of the gate.

What’s slowing the pace of healthcare innovation?

In the past, attempts at rapid innovation in healthcare have been bogged down by a slew of stakeholders, legacy systems, and regulations that are inherent to the industry. This presents some Big Data challenges with connected healthcare, such as gathering data from disparate silos of medical information. Secrecy is also an ongoing challenge, as healthcare providers, researchers, pharmaceutical companies, and academic institutions tend to protect personal and proprietary data. These issues have caused enormous complexity and have delayed or deterred attempts to build fully integrated digital healthcare systems.

So what is the key to rapid innovation?

According to the Connected Care eBook, healthcare organizations can overcome these challenges by using new technologies and collaborating with other players in the healthcare industry, as well as partners outside of the industry, to get the most benefit out of digital technology.

To move forward with digital transformation in healthcare, there is a need for digital architectures and platforms where a number of different technologies can work together from both a technical and a business perspective.

The secret to healthcare innovation: connected health platforms

New platforms are emerging that foster collaboration between different technologies and healthcare organizations to solve complex medical system challenges. These platforms can support a broad ecosystem of partners, including developers, researchers, and healthcare organizations. Healthcare networks that are connected through this type of technology will be able to accelerate the development and delivery of innovative, patient-centered solutions.

Platforms and other digital advancements present exciting new business opportunities for numerous healthcare stakeholders striving to meet the increasing expectations of tech-savvy patients.

The digital evolution of the healthcare industry may still be in its infancy, but it is growing up fast as new advancements in technology quickly develop. Are you ready for the next phase of digital transformation in the global healthcare industry?

For an in-depth look at how technology is changing the face of healthcare, download the SAP eBook Connected Care: The Digital Pulse of Global Healthcare.

See how the digital era is affecting the business environment in the SAP eBook The Digital Economy: Reinventing the Business World.

Discover the driving forces behind digital transformation in the SAP eBook Digital Disruption: How Digital Technology is Transforming Our World.

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Paul Clark

About Paul Clark

Paul Clark is the Senior Director of Technology Partner Marketing at SAP. He is responsible for developing and executing partner marketing strategies, activities, and programs in joint go-to-market plans with global technology partners. The goal is to increase opportunities, pipeline, and revenue through demand generation via SAP's global and local partner ecosystems.