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).


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

Integrating Data Labs And Factories To Operationalize Advanced Analytics

Carsten Bange

Although explorative business intelligence requires different processes and approaches compared to traditional BI, it still has to be integrated with existing IT and BI structures to ensure analytics solutions are operationalized. Data labs design new analytics solutions and factories operationalize these solutions, and while they differ in terms of goals and methods, they can also share resources and approaches to foster integration.

Challenges for advanced and predictive analytics projects

According to the BARC Survey “Advanced & Predictive Analytics,” the most common problems that obstruct advanced analytics projects are:

  • a lack of resources in business and IT;
  • difficulty quantifying the business value of advanced analytics; and
  • poor understanding of a data-driven business culture.
factors inhibit your Advanced & Predictive Analytics

Figure 1: Which factors inhibit your Advanced & Predictive Analytics projects? (n=89) Source: BARC Survey “Advanced & Predictive Analytics” (n=200)

All of these factors create challenges when applying advanced analytics and putting analytics solutions into practice by turning them into reliable products and services. To understand why this is a challenge, we will look at how advanced analytics projects are conducted and how data labs and factories operate.

Conducting analytics projects

The “analytical cycle” (Figure 2) is a standard procedure for managing advanced analytics projects. It can be broken down into the following steps:

  • A problem definition provides clearly documented goals and serves as reference for the entire project.
  • Data understanding, data selection, and data preparation create a solid database for the task at hand.
  • Modeling & model validation aim to identify a suitable modeling approach. This may require various iterations with regard to data preparation.
  • Results evaluation is important for quality management. All prior steps are reviewed and checked to determine whether the project meets the business objectives, then a decision about utilization of the results is made. The choices are no utilization (i.e., cancellation or start over), onetime utilization, or operationalization.
  • Operationalization means deploying the model and integrating it into relevant IT systems to improve decisions, products, or services.
  • In the continuous model evaluation, the impact of advanced analytics solutions is measured. Model adaptations are carried out in response to changing conditions. Since this also implies checking the business assumptions and data sources, the cycle starts from the beginning.

Data labs and factories

Traditional BI tasks have been standardized and streamlined for many years in many organizations. A defined output of reports, dashboards, or data for analysis is provided to users in a defined quality and a defined output format for the least possible cost. This approach resembles a factory. Factories focus on high quality and often on high volume throughput, which is achieved by standardization, automation, and stable processes. Traditional BI systems correspond to systems of record that are best run in a factory approach that, organizationally, is often part of the IT department or organized in a cross-departmental BI competency center (BICCs).

The new demand for exploring data with advanced and predictive analytics does not usually suit this approach. Therefore, data labs are created that, like a laboratory in a research and development organization, provide for agile experimentation and discovery. Trial and error, as a typical approach to finding innovative solutions, is key. Explorative BI with advanced and predictive analytics in data labs or analytics labs corresponds to systems of innovation. The labs use agile methods for developing prototypes. Analytical solutions are often quickly discarded when they are used for discovery purposes, do not show promising results, or only provide a benchmark for further solutions. This often makes the value-add or return-on-investment hard to quantify, especially if it has to be defined upfront. Funding for these initiatives comes from innovation budgets.

While often operating in isolation, the factory and the lab approaches must work together when it comes to integrating analytics solutions into operational systems in a stable and sustainable way. The analytical cycle shows which tasks are assigned to which approach (see Figure 2).

Labs focus on the stages of problem definition, data understanding and preparation, modeling, and results evaluation, which may feed back to problem definition. Usually this cycle is repeated until a viable solution is found.

But the goal of advanced analytics initiatives is to operationalize analytical discoveries. Model deployment and integration in productive IT environments are tasks for factories. Here, the factory approach for implementing and running a solution with a focus on data governance, reliability, maintenance, scalability, and reusability is important.

The handover from evaluating the results of a prototype in a lab to the factory for operationalization is the key aspect to consider when setting up advanced analytics initiatives. Whether this is working or not will make or break any analytics strategy.

different tasks for labs and factories
Figure 2: The analytical cycle, with different tasks for labs and factories

Common needs and resources

Despite their differing focus, labs and factories have commonalities. Labs require data engineers, often found in BICCs or in IT departments. They are important in the data understanding, data selection, and data preparation phases, which are the most time-consuming steps in analytics projects. On the other hand, do IT departments need data scientists for processes such as continuously checking model quality, model retraining, model adaptations, and support for users? Data scientists can also be useful when checking data quality. “Data artists” that are familiar with the visual representation of results are part of many BI teams but are also necessary for data labs that need to communicate complicated results to lines of business. Sometimes BI managers become BI and analytics managers, overlooking both processes and ensuring that labs and factories are integrated. Technology-wise, labs and factories are integrated when models or model results generated by explorative BI are displayed in BI systems or used in operational systems when processes are automated.


Labs and factories focus on different tasks in the analytical cycle, but both share a common goal – to turn insights from data into products and services. To do this, good communication between labs and factories is crucial, and this can be enhanced by sharing human resources between labs and factories.

Learn more: read other blogs in the “Enabling the Data-Driven Enterprise” series or review the BARC Survey “Advanced & Predictive Analytics.”

This blog was co-authored by Dr. Sebastian Derwisch, data scientist at the Business Application Research Center (BARC). Sebastian holds a PhD in economics and has extensive experience advising companies in the areas of use-case identification for data analytics, tool selection for advanced analytics, and the organization of data science teams.


Carsten Bange

About Carsten Bange

Dr. Carsten Bange is founder and managing director of the Business Application Research Center (BARC), an IT market analysis and consulting group he founded in 1999 and later merged with Le CXP and PAC to form CXP Group, the largest European IT analyst group. Carsten holds a PhD in management information systems, is a frequent speaker at IT conferences and seminars and has served as an analyst and management consultant on business intelligence, data management and digitalization strategy, organization, architecture and technology selection for over 20 years. He can be reached at

Moving To The Cloud For Compliance: No Magic Without Integration And Automation (Part 2)

Jerome Pugnet

We’re witnessing a strong trend towards cloud-based technology offerings in governance, risk and compliance (GRC) right now, particularly in the area of compliance and internal control systems. In last week’s blog,  I talked about how the resulting hype makes it sounds as if—by a sort of magic—moving to the cloud would solve the pains of managing compliance and controls that too many companies today still  experience. However, outdated ways of managing compliance and controls with traditional niche GRC solutions have simply been transposed to many of the new cloud-based offerings. So how can companies ensure they are achieving the promised benefits with their chosen solution?

So it’s time to move to the cloud

Provided certain conditions are met (see last week’s blog), choosing a cloud-based architecture can actually boost the advantages that a truly integrated, automated GRC system already delivers.

Naturally, it will depend on the overall cloud strategy that each company has defined, but for those who are looking to move to a another level for their compliance and internal control systems, away from manual processes (“spreadsheet hell”) or fragmented systems involving various niche solutions, opting for a world-class GRC solution in the cloud can be a great opportunity to reap the whole range of benefits.

After all, while you are about to make that move, why not go for the architecture that is seen to be the way forward for the longer term?

What are the benefits of a cloud-based solution for your compliance and controls?

There are, of course, the more generic benefits that the cloud architecture can bring for GRC just like for other areas of the business. These include a more accessible price for a world-class solution, maintenance cost savings, and better collaboration, the latter being very relevant for GRC where companies need a robust “three lines of defense” approach to bring together operations, risk, and compliance specialists and auditors.

There are other important advantages to consider:

  • Implementing their new integrated, automated GRC in the cloud can also make it easier for companies to deploy their compliance and internal control processes at their own pace, and progressively take advantage of shared best practices and content to automate their controls; for example, adding new workflows, implementing standardized forms to streamline assessments, responding to regulatory changes more easily, and so on.
  • They can benefit from product enhancements faster, bringing in more automation for greater efficiency. This also allows them to move to a much more real-time compliance and control management, preventing problems and anticipating better. The technology supports this further by enabling them to manage their GRC on any device—fixed, portable, or mobile.
  • Last but not least, as a number of tasks are being taken care of for them through the cloud solution, companies can better focus their critical resources on the core GRC business and decisions, making sure that important issues are solved quickly and effectively, and areas of higher risk are more closely monitored and properly mitigated.

What about security?

Security is a universal and key concern as companies look to move into the cloud, and this is sometimes a factor that slows down the process.

Security is particularly important in the GRC space, because it involves particularly sensitive data and processes, and breaches could create serious disruptions and expose a company’s reputation.

However, cloud-based solutions have made tremendous progress in providing high levels of security, so it’s absolutely a good time to consider the move.

But as you do so, the importance of security is another reason for to choose carefully the partner with whom you will manage your compliance and controls in the cloud. Make sure you’re going for one who is financially strong, experienced, and delivers the best practices and features, both in terms of security and functionality.

Find out more (whether on-premise or in the cloud)


From E-Business to V-Business

Josh Waddell, Pascal Lessard, Lori Mitchell-Keller, and Fawn Fitter

Some moments are so instantly, indelibly etched into pop culture that they shape the way we think for years to come. For virtual reality (VR), that moment may have been the scene in the 1999 blockbuster The Matrix when the Keanu Reeves character Neo learns that his entire life has been a computer-generated simulation so fully realized that he could have lived it out never knowing that he was actually an inert body in an isolation tank. Ever since, that has set the benchmark for VR: as a digital experience that seems completely, convincingly real.

Today, no one is going to be unaware, Matrix-like, that they’re wearing an Oculus Rift or a Google Cardboard headset, but the virtual worlds already available to us are catching up to what we’ve imagined they could be at a startling rate. It’s been hard to miss all the Pokémon Go players bumping into one another on the street as they chased animated characters rendered in augmented reality (AR), which overlays and even blends digital artifacts seamlessly with the actual environment around us.

Believe the Hype

For all the justifiable hype about the exploding consumer market for VR and, to a lesser extent, AR, there’s surprisingly little discussion of their latent business value—and that’s a blind spot that companies and CIOs can’t afford to have. It hasn’t been that long since consumer demand for the iPhone and iPad forced companies, grumbling all the way, into finding business cases for them.

sap_Q316_digital_double_feature1_images1If digitally enhanced reality generates even half as much consumer enthusiasm as smartphones and tablets, you can expect to see a new wave of consumerization of IT as employees who have embraced VR and AR at home insist on bringing it to the workplace. This wave of consumerization could have an even greater impact than the last one. Rather than risk being blindsided for a second time, organizations would be well advised to take a proactive approach and be ready with potential business uses for VR and AR technologies by the time they invade the enterprise.

They don’t have much time to get started.

The two technologies are already making inroads in fields as diverse as medicine, warehouse operations, and retail. And make no mistake: the possibilities are breathtaking. VR can bring human eyes to locations that are difficult, dangerous, or physically impossible for the human body, while AR can deliver vast amounts of contextual information and guidance at the precise time and place they’re needed.

As consumer adoption and acceptance drives down costs, enterprise use cases for VR and AR will blossom. In fact, these technologies could potentially revolutionize the way companies communicate, manage employees, and digitize and automate operations. Yet revolution is rarely bloodless. The impact will probably alter many aspects of the workplace that we currently take for granted, and we need to think through the implications of those changes.

sap_Q316_digital_double_feature1_images2Digital Realities, Defined

VR and AR are related, but they’re not so much siblings as cousins. VR is immersive. It creates a fully realized digital environment that users experience through goggles or screens (and sometimes additional equipment that provides physical feedback) that make them feel like they’re surrounded by and interacting entirely within this created world.

AR, by contrast, is additive. It displays text or images in glasses, on a window or windshield, or inside a mirror, but the user is still aware of and interacting with reality. There is also an emerging hybrid called “mixed reality,” which is essentially AR with VR-quality digital elements, that superimposes holographic images on reality so convincingly that trying to touch them is the only way to be sure they aren’t actually there.

Although VR is a hot topic, especially in the consumer gaming world, AR has far more enterprise use cases, and several enterprise apps are already in production. In fact, industry analyst Digi-Capital forecasts that while VR companies will generate US$30 billion in revenue by 2020, AR companies will generate $120 billion, or four times as much.

Both numbers are enormous, especially given how new the VR/AR market is. As recently as 2014, it barely existed, and almost nothing available was appropriate for enterprise users. What’s more, the market is evolving so quickly that standards and industry leaders have yet to emerge. There’s no guarantee that early market entrants like Facebook’s Oculus Rift, Samsung’s Gear VR, and HTC’s Vive will continue to exist, never mind set enduring benchmarks.

Nonetheless, it’s already clear that these technologies will have a major impact on both internal and customer-facing business. They will make customer service more accurate, personalized, and relevant. They will reduce human risk and enhance public safety. They will streamline operations and smash physical boundaries. And that’s just the beginning.

Cleveland Clinic: Healing from the Next Room

Medicine is already testing the limits of learning with VR and AR.

sap_q316_digital_double_feature1_imageseightThe most potentially disruptive operational use of VR and AR could be in education and training. With VR, students can be immersed in any environment, from medieval architecture to molecular biology, in classroom groups or on demand, to better understand what they’re studying. And no industry is pursuing this with more enthusiasm than medicine. Even though Google Glass hasn’t been widely adopted elsewhere, for example, it’s been a big success story in the medical world.

Pamela Davis, MD, senior vice president for medical affairs at Case Western Reserve University in Cleveland, Ohio, is one of the leading proponents of medical education using VR and AR. She’s the dean of the university’s medical school, which is working with Cleveland Clinic to develop the Microsoft HoloLens “mixed reality” device for medical education and training, turning MRIs and other conventional 2D medical images into 3D images that can be projected at the site of a procedure for training and guidance during surgery. “As you push a catheter into the heart or place a deep brain stimulation electrode, you can see where you want to be and guide your actions by watching the hologram,” Davis explains.

The HoloLens can also be programmed as a “lead” device that transmits those images and live video to other “learner” devices, allowing the person wearing the lead device to provide oversight and input. This will enable a single doctor to demonstrate a delicate procedure up-close to multiple students at once, or do patient examinations remotely in an emergency or epidemic.

Davis herself was convinced of the technology’s broader potential during a demonstration in which she put on a learner HoloLens and rewired a light switch, something decidedly outside her expertise, under the guidance of an engineer wearing a lead HoloLens in the next room. In the near future, she predicts, it will help people perform surgery and other sensitive, detailed tasks not just from the next room, but from the next state or country.

Customer Experience: From E-Commerce to V-Commerce

Consumers are already getting used to sap_Q316_digital_double_feature1_images3thinking of VR and AR in the context of entertainment. Companies interested in the technologies should be thinking about how they might engage consumers as part of the buying experience.

Because the technologies deliver more information and a better shopping experience with less effort, e-commerce is going to give rise to v-commerce, where people research, interact with, and share products in VR and AR before they order them online or go to a store to make a purchase.

Online eyewear retailers already allow people to “try on” glasses virtually and share the images with friends to get their feedback, but that’s rudimentary compared to what’s emerging.

Mirrors as Personal Shoppers

Clothing stores from high-end boutiques to low-end fashion chains are experimenting with AR mirrors that take the shopper’s measurements and recommend outfits, showing what items look like without requiring the customer to undress.

Instant Designer Shows

Luxury design house Dior uses Oculus Rift VR goggles to let its well-heeled customers experience a runway show without flying to Paris.

Custom Shopping Malls

British designer Allison Crank has created an experimental VR shopping mall. As people walk through it, they encounter virtual people (and the occasional zoo animal) and shop in stores stocked only with items that users are most likely to buy, based on past purchase information and demographic data.

A New Perspective

IKEA’s AR application lets shoppers envisage a piece of furniture in the room they plan to use it in. They can look at products from the point of view of a specific height—useful for especially tall or short customers looking for comfortable furniture or for parents trying to design rooms that are safe for a toddler or a young child.

Painless Do-it-Yourself Instructions

Instead of forcing customers to puzzle over a diagram or watch an online video, companies will be able to offer customers detailed VR or AR demonstrations that show how to assemble and disassemble products for use, cleaning, and storage.

sap_Q316_digital_double_feature1_images4Operations and Management: Revealing the Details

The customer-facing benefits of VR and AR are inarguably flashy, but it’s in internal business use that these technologies promise to shine brightest: boosting efficiency and productivity, eliminating previously unavoidable risks, and literally giving employers and managers new ways to look at information and operations. The following examples aren’t blue-sky cases; experts say they’re promising, realistic, and just around the corner.

Real-Time Guidance

A combination of AR glasses and audio essentially creates a user-specific, contextually relevant guidance system that confirms that wearers are in the right place, looking at the right thing, and taking the right action. This technology could benefit almost any employee who is not working at a desk: walking field service reps through repair procedures, guiding miners to the best escape route in an emergency, or optimizing home health aides’ driving routes and giving them up-to-date instructions and health data when they arrive at each patient’s home.

Linking to the Hidden

AR technology will be able to display any type of information the wearer needs to know. Linked to facial identification software, it could help police officers identify suspects or missing persons in real time. Used to visualize thermal gradients, chemical signatures, radioactivity, and other things that are invisible to the naked eye, it could help researchers refine their experiments or let insurance claims assessors spot arson. Similarly, VR will allow users to create and manipulate detailed three-dimensional models of everything from molecules to large machinery so that they can examine, explore, and change them.

Reducing the Human Risk

VR will allow users to perform high-risk jobs while reducing their need to be in harm’s way. The users will be able to operate equipment remotely while seeing exactly what they would if they were there, a use case that is ideal for industries like mining, firefighting, search and rescue, and toxic site cleanup. While VR won’t necessarily eliminate the need for humans to perform these high-risk jobs, it will improve their safety, and it will allow companies to pursue new opportunities in situations that remain too dangerous for humans.

Reducing the Commercial Risk

sap_Q316_digital_double_feature1_images5VR can also reduce an entirely different type of operational risk: that of introducing new products and services. Manufacturers can let designers or even customers “test” a product, gather their feedback, and tweak the design accordingly before the product ever goes into production. Indeed, auto manufacturer Ford has already created a VR Immersion Lab for its engineers, which, among other things, helped them redesign the interior of the 2015 Ford Mustang to make the dashboard and windshield wipers more user-friendly, according to Fortune. In addition to improving customer experience, this application of VR is likely to accelerate product development and shorten time to market.

Similarly, retailers can use VR to create and test branch or franchise location designs on the fly to optimize traffic flow, product display, the accessibility of products, and even decor. Instead of building models or concept stores, a designer will be able to create the store design with VR, do a virtual walkthrough with executives, and adjust it in real time until it achieves the desired effect.

Seeing in Tongues

At some point, we will see an AR app that can translate written language in near-real time, which will dramatically streamline global business communications. Mobile apps already exist to do this in certain languages, so it’s just a matter of time before we can slip on glasses that let us read menus, signs, agendas, and documents in our native tongue.

Decide with the Eye

More dramatically, AR project management software will be able to deliver real-time data at a literal glance. On a construction site, for example, simply scanning the area could trigger data about real-time costs, supply inventories, planned versus actual spending, employee and equipment scheduling, and more. By linking to construction workers’ own AR glasses that provide information about what to know and do at any given location and time, managers could also evaluate and adjust workloads.

Squeeze Distance

Farther in the future, VR and AR will create true telepresence, enhancing collaboration and potentially replacing in-person meetings. Users could transmit AR holograms of themselves to someone else’s office, allowing them to be seen as if they were in the room. We could have VR workspaces with high-fidelity avatars that transmit characteristic facial expressions and gestures. Companies could show off a virtual product in a virtual room with virtual coworkers, on demand.

Reduce Carbon Footprint

If nothing else, true telepresence could practically eliminate business travel costs. More critically, though, in an era of rising temperatures and shrinking resources, the ability to create and view virtual people and objects rather than manufacturing and transporting physical artifacts also conserves materials and reduces the use of fossil fuel.

Employees: Under Observation

The strength of digitally enhanced reality—and AR in particular—is its ability to determine a user’s context and deliver relevant information accordingly. This makes it valuable for monitoring and managing employee behavior and performance. Employees could, for example, use the location and time data recorded by AR glasses to prove that they were (or weren’t) in a particular place at a particular time. The same glasses could provide them with heads-up guided navigation, alert employers that they’re due for a legally mandated break, verify that they completed an assigned task, and confirm hours worked without requiring them to fill out a timesheet.

However, even as these capabilities improve data governance and help manage productivity, they also raise critical issues of privacy and autonomy (see The Norms of Virtual Behavior). If you’re an employee using VR or AR technology, and if your company is leveraging it to monitor your performance, who owns that information? Who’s allowed to use it, and for what purposes? These are still open legal questions for these technologies.

Another unsettled—and unsettling—question is how far employers can use these technologies to direct employees’ work. While employers have the right to tell employees how to do their jobs, autonomy is a key component of workplace satisfaction. The extent to which employees are required to let a pair of AR glasses govern their actions could have a direct impact on hiring and retention.

Finally, these technologies could be one more step toward greater automation. A warehouse-picking AR application that guides pickers to the appropriate product faster makes them more productive and saves them from having to memorize hundreds or even thousands of SKUs. But the same technology that can guide a person will also be able to guide a semiautonomous robot.

The Norms of Virtual Behavior

VR and AR could disrupt our social norms and take identity hacking to a new level.

The future of AR and VR isn’t without its hazards. We’ve all witnessed how distracting and even dangerous smartphones can be, but at least people have to pull a phone out of a pocket before getting lost in the screen. What happens when the distraction is sitting on their faces?

This technology is going to affect how we interact, both in the workplace and out of it. The annoyance verging on rage that met the first people wearing Google Glass devices in public proves that we’re going to need to evolve new social norms. We’ll need to signal how engaged we are with what’s right in front of us when we’re wearing AR glasses, what we’re doing with the glasses while we interact, or whether we’re paying attention at all.

More sinister possibilities will present themselves down the line. How do you protect sensitive data from being accessed by unauthorized or “shadow” VR/AR devices? How do you prove you’re the one operating your avatar in a virtual meeting? How do you know that the person across from you is who they say they are and not a competitor or industrial spy who’s stolen a trusted avatar? How do you keep someone from hacking your VR or AR equipment to send you faulty data, flood your field of vision with disturbing images, or even direct you into physical danger?

As the technology gets more sophisticated, VR and AR vendors will have to start addressing these issues.

Technical Challenges

To realize the full business value of VR and AR, companies will need to tackle certain technical challenges. To be precise, they’ll have to wait for the vendors to take them on, because the market is still so new that standards and practices are far from mature.

sap_Q316_digital_double_feature1_images6For one thing, successful implementation requires devices (smartphones, tablets, and glasses, for now) that are capable of delivering, augmenting, and overlaying information in a meaningful way. Only in the last year or so has the available hardware progressed beyond problems like overheating with demand, too-small screens, low-resolution cameras, insufficient memory, and underpowered batteries. While hardware is improving, so many vendors have emerged that companies have a hard time choosing among their many options.
The proliferation of devices has also increased software complexity. For enterprise VR and AR to take off, vendors need to create software that can run on the maximum number of devices with minimal modifications. Otherwise, companies are limited to software based on what it’s capable of doing on their hardware of choice, rather than software that meets their company’s needs.

The lack of standards only adds to the confusion. Porting data to VR or AR systems is different from mobilizing front-end or even back-end systems, because it requires users to enter, display, and interact with data in new ways. For devices like AR glasses that don’t use a keyboard or touch screen, vendors must determine how to enter data (voice recognition? eye tracking? image recognition?), how to display it legibly in any given environment, and whether to develop their own user interface tools or work with a third party.

Finally, delivering convincing digital enhancements to reality demands such vast amounts of data that many networks simply can’t accommodate it. Much as videoconferencing didn’t truly take off until high-speed broadband became widely available, VR and AR adoption will lag until a zero-latency infrastructure exists to
support them.

sap_Q316_digital_double_feature1_images7Coming Soon to a Face Near You

For all that VR and AR solutions have improved dramatically in a short time, they’re still primarily supplemental to existing systems, and not just because the software is still evolving. Wearables still have such limited processing power, memory, and battery life that they can handle only a small amount of information. That said, hardware is catching up quickly (see The Supporting Cast).

The Supporting Cast

VR and AR would still be science fiction if it weren’t for these supporting technologies.

The latest developments in VR and AR technologies wouldn’t be possible without other breakthroughs that bring things once considered science fiction squarely into the realm of science fact:

  • Advanced semiconductor designs pack more processing power into less space.
  • Microdisplays fit more information onto smaller screens.
  • New power storage technologies extend battery life while shrinking battery size.
  • Development tools for low-latency, high-resolution image rendering and improved 3D-graphics displays make digital artifacts more realistic and detailed.
  • Omnidirectional cameras that can record in 360 degrees simultaneously create fully immersive environments.
  • Plummeting prices for accelerometers lower the cost of VR devices.

Companies in the emerging VR/AR industry are encouraging the makers of smartglasses and safety glasses to work together to create ergonomic smartglasses that deliver information in a nondistracting way and that are also comfortable to wear for an eight-hour shift.

The argument in favor of VR and AR for business is so powerful that once vendors solve the obvious hardware problems, experts predict that existing enterprise mobile apps will quickly start to include VR or AR components, while new apps will emerge to satisfy as yet unmet needs.

In other words, it’s time to start thinking about how your company might put these technologies to use—and how to do so in a way that minimizes concerns about data privacy, corporate security, and employee comfort. Because digitally enhanced reality is coming tomorrow, so business needs to start planning for it today. D!

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.



Make No Mistake – Social Media is Massively Affecting The Sales Process (And Here's Why)

Malcolm Hamilton

These days, if your business strategy isn’t aligned with your social media plan, you are needlessly making both your sales and marketing teams work overtime. This can end up costing your company HUGE amounts of money. One extensive study shows that 60% to 80% of today’s B2B technology and vendor selection processes are conducted in the digital world, which often are invisible to your company and your sales teams. This is why it is critical that your company brand and value proposition are highly visible to these invisible buyers across as many social media platforms as possible.

Studies show that B2B companies that have effective sales and marketing alignment are:

  • Outgrowing their peer group competitors by 5.4%
  • 38% better at closing proposals
  • Lowering their churn rates by 36%

The trouble is that it can be hard to get sales and marketing on the same page because the nature of their work is so different. It’s no one’s fault, but sales needs to rely on marketing to do more outbound lead generation, advertising, and outreach, and marketing needs sales to quickly follow up on marketing-generated leads, hand back stalled leads for nurture tailored to each buyer’s journey, and close deals. There has rarely been much love between sales and marketing departments, because each one often thinks the other one is either slacking off or simply not adding value.

The fact is digital & social marketing is at the heart of sales, the lines between sales and marketing have been steadily blurring, and social media and digital marketing are at the heart of this intersection. Social sales means that marketing has to drive awareness in order to help develop a company’s brand and the brand’s value proposition, a process that relies extra heavily on the marketing department. Let’s take a closer look at how marketing can offer sales a lot of help in today’s world of social media.

How marketing can help sales win more deals

Salespeople need to lean on the marketing team for a variety of things in order to make sure that they are using social media in the best ways. For example, marketing can:

  • Help sales teams come up with social updates that foster engagement with new clients and actually work
  • Generate tailored and compelling content that will move customer prospects that are frozen in the sales pipeline
  • Lend a hand with creating content that their prospects will value and respond to
  • Figure out a way to make the company really stand out from the crowd on social media
  • Listen to the ideas that sales team members have and put them to work
  • Help sales team members position themselves as thought leaders in their target industry sectors
  • Help keep all social media messaging on-brand across platforms
  • Use analytics to track performance across platforms – salespeople love to see results

So how does marketing help accomplish these goals? Here are two tools that can help sales and marketing teams stay on top of their social media game.

  • GaggleAmp enables companies to aggregate social media updates and quickly and easily send notifications out to team members that they can share on various social media platforms with just a couple of clicks. The app can even keep track of how many shares a post is getting and then let you compare certain posts with others to see which is performing better. It’s a pretty cool way to keep sales and social media interested in the same game.
  • helps sales and social media intermingle by leveraging the power of your teams to send out consistent, effective posts. It breaks down the interactions that are happening on different networks and with different posts and helps you understand which ones your audience is engaging with most so you can refine your marketing strategy.

How sales can help marketing do an even better job

Sales can also help marketing move its goals along when it comes to success on social media. Salespeople can:

  • Communicate in a clear manner so marketing understands what they need
  • Openly share numbers and forecasts so marketing has a better grasp of how you are succeeding and where you’re falling short
  • Offer tips for keeping messaging more on-point
  • Provide regular feedback into how lead generation and follow-up are going
  • Hand stalled leads back to marketing for further nurture
  • Hang back and let them work their magic
  • Provide direction to marketing on the current buying drivers for prospects and target businesses

How social media marketing and sales can work together

There are some definite steps that these two teams can take to make sure they are working together in the most effective way. Here are a few tips for helping the teams stay on the same page:

  • Regular meetings: It sounds simple enough, but actually getting sales and marketing teams together to talk regularly can work wonders for both. It’s incredibly important for keeping your social media game on point and helps to resolve any miscommunication or issues that might be happening on either side. Research shows that businesses that are sales and marketing aligned grow five percent to 10% faster than their peer group.
  • Content process: Sales reps engage with prospects all of the time, but to be effective they need to know what will get prospects excited. Teams can stay in the loop by making sure there is a process in place to create content for social media by gathering info at weekly brainstorming sessions, using shared docs to collect ideas, and coordinating an editorial calendar so everyone knows what content you are putting out there and when.
  • Get schedules in sync: Social media is a great way to put new offers and content out there, but the sales team needs to stay up-to-date with promotions so they can respond to leads in the right way. Keep promotions on a shared calendar, and keep sales teams looped in on whatever offers your company is putting out there. It’s also helpful for sales staff to have talking points on the offer and its value to the customer.
  • Listen: At the end of the day, teams just need to listen to each other to get better at their jobs. It’s a great way to learn about what customers really want and need and to get ideas for future social media content creation.

The bottom line is that social media is a huge part of how sales teams are drumming up high-quality leads today, so it’s more important than ever for marketing and sales teams to stay aligned.

The caveat

I believe I have one of the best marketing jobs in the world as a global channel marketing manager for the world’s leading business software company, SAP. I get to travel around the globe delivering leading-edge knowledge transfer workshops to our business partners, where we share these trends and guidance on how to initiate the necessary change management to capitalize on the incredible power of digital and social media marketing

And I am witnessing a very definite trend. Those partners that are aligning and applying these digital and social marketing best practices after attending the workshops are experiencing significant uplift in net new business. There is a BUT. Measurable impact and ROI are not always felt overnight, so leadership has to exercise patience. Build a 12-month strategic plan that captures objectives for your digital and social media go to market and measure, measure, measure.

Stop confining social media to marketing. To boost returns, it must be embedded into how companies do business. In a Live Business, Social Gets Its MBA.


Malcolm Hamilton

About Malcolm Hamilton

Malcolm Hamilton is Director of Global Strategic Initiatives for Global Indirect Channel Marketing (GIC) team at SAP. He has a proven track record of building and executing leading edge Channel Marketing & Sales & enablement programs. During a career that spans close to two decades, Malcolm is widely regarded as an IT industry thought leader and innovator with international experience in working with channel partners.