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Step-By-Step, How-To Guide To Digital Transformation

Florian Wagner

OK, maybe this headline exaggerated. There probably is no one step-by-step guide to digital transformation, but it’s safe to say that a thorough evaluation of five clearly defined areas can help companies assess digital business readiness based on a Digital Business Innovation framework developed by Digital Bridge Partners & SAP. This assessment of the key elements we have observed in successful digital innovation stories serves to identify strengths, weaknesses, gaps, and opportunities on the road to digital transformation.

A framework for success

The Digital Business Innovation (DBI) framework is a system of assessing the CIO’s and IT’s readiness for, and progress along, a digital transformation journey.

The framework consists of four pillars supported by DBI leadership:

  1. Define a digital strategy to raise awareness, set direction, and drive decision making
  2. Apply a best practice organizational innovation model and culture, including agile solution development processes to drive digital business value
  3. Establish a collaborative and agile IT operating model that allows for incubation of new approaches
  4. Deliver the right platforms ‒ technical and commercial ‒ to support enterprise-wide transformation and innovation required by digital business model changes

 Where should your digital transformation start?

According to the 2015 MIT Center for Information Systems Research survey, board members think that 32% of company revenues will be threatened by digital disruption by 2020. This should create a sense of urgency in any company. But preparing for transformation requires clarity in two areas: a strategy that outlines the scope, depth, and size of the change needed to realize your goals, and an assessment of what is required in terms of culture, capacity, leadership, models, and tools.

Many digital maturity assessments exist, but most are quite complex and time consuming, or lead toward a specific vendor’s solution. However, this assessment was designed to bring quick, clear focus to proven key success factors. The sample assessment questions below are a starting point for the conversations we have with technology leaders across a range of industries, so they are necessarily high-level. This approach focuses efforts on the degree to which maturity has been achieved and identifying strategic next steps rather than simplistic, tactical snapshots of the status quo.

The assessment

1. Leadership

  • To what degree do the CIO and IT recognize the importance of leading/driving a digital business innovation agenda?
  • To what degree is the CIO a key leader of digital business innovation?
  • How mature is IT’s drive of the digital business innovation function and culture?

2. Digital strategy

  • How well defined is the company-wide, CEO/board-driven business transformation agenda?
  • To what degree has the company committed to a comprehensive digital strategy that is aligned with your business transformation agenda?
  • To what degree does your leadership have a clear portfolio management approach to evaluate the risks and rewards of digital transformation?

3. Innovation model

  • To what degree do business peers look to IT as their co-innovation partner?
  • To what degree does your innovation model work enterprise-wide through agile, cross-functional teams working a well-managed portfolio of innovations?
  • To what degree is your organization ahead of competitors in its ability to leverage technology to drive innovation and financial results in both business processes and business models?

4. IT operations

  • To what degree has IT built a roadmap to close its tools and skills gaps between what is required and what is in place today to deliver on your digital strategy?
  • To what degree do business teams leverage IT’s tools and skills to drive digital business innovation?
  • To what degree does IT blend security, reliability, openness, and agility to support both ongoing operations and innovation work?

5. Platform

  • To what degree does IT have the end-to-end technical and commercial platforms required to facilitate effective digital transformation?
  • To what degree does IT have a clear plan for developing the technology platforms (owning or joining industry platforms, Big Data analytics, and APIs) required to facilitate value creation across your entire ecosystem?
  • To what degree is your organization clear about its relationship to the platform business models emerging in your value ecosystem (own, co-develop, join, counter)?

If a far more granular view would be helpful, use SAP’s Digital Innovation and Transformation Assessment.

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Florian Wagner

About Florian Wagner

Florian Wagner is marketing director for IT audience messaging at SAP. Together with his team, he is responsible to address the IT audience and to drive relevant thought leadership topics. He writes about technology trends on digital transformation, cloud and platform strategies with a focus on customer experiences.

3 Considerations When Choosing A Cloud ERP Vendor

Himawan Prajogo

IT is always at the leading edge when it comes to innovating and adopting new technologies. But it is difficult to predict which trends will make it in the long run and which ones will fall by the wayside. The way I see it, any trend in IT follows the same cycle:

1.   Recognition (Hey, this is cool!)

2.   Commercialization (Hey, we can make money out of this!)

3.   Overhype (It’ll cure whatever ails ya!)

4.   Disillusionment (Hey, it doesn’t work as advertised!)

5.   And from here, it will either fall from grace (It doesn’t work—NEXT!) or go into the mainstream (It’s got its value if we use it right).

I believe that this whole cloud thing is hovering between the overhype and disillusionment phases. For every breathless vendor-authored white paper or LinkedIn post saying their cloud solution will have an ROI of 200% and can be implemented within 20 minutes, there will be comments from experienced consultants with real-world experience cautioning of potential pitfalls.

Let’s focus today on the cloud ERP phenomenon. Maybe it is time to take a reality check and see if it will fall from grace (like fidget spinners will do any day now), or become part of the mainstream. While my money is that it will enter the mainstream and in a not-too-far-off future and on-premise ERP will become a bit of an anomaly, keep in mind a few points when you are considering a cloud-based ERP system.

1. Rethink your implementation trade-offs

Business processes are complex beasts, and sometimes it doesn’t matter if you are a $10 million, $100 million, or a $1 billion company; the complexity cannot magically disappear with any system that you put in, regardless of how cloudy it is. Yes, the cloud systems are generally easier to implement and more user-friendly, but with that comes the loss of flexibility and the degree of customization allowed.

This is where you need to take a step back. How much business benefit will you get by putting in something quickly and easily with a cloud solution rather than waiting to design a “big bang,” heavily customized solution using your typical on-premise ERP implementation methods? Instead of spending months or years with an army of consultants at your premises, would it be easier to get up and running quickly on some part of your business, bringing other parts into the cycle as time goes by and reaping the benefits along the way?

When you select your implementation consultant, asking these questions will go a long way towards understanding their mindset and seeing if they are the right people to implement your cloud solution. I have found from personal experience that the cloud is not just a technical construct; it is a mindset. I have had to rewire my own thought processes to understand how this new world works, and you’d want people working on your businesses who truly understand this.

But wait, you say—does this mean I will end up with a hodgepodge of cloud solutions not talking to each other?

Excellent point, and this is a very common pitfall in any cloud ERP project. But fear not, look at my next point.

2. Completeness of solution is still important

Selecting a cloud ERP vendor these days is really like being a kid in a candy store. There will be tons of appealing videos on YouTube where office workers wearing soft pastel colors gaze blissfully at beautifully rendered ERP screens on their PCs or tablets. If you peruse their websites, each one will take you by the hand and show you how mundane tasks such as doing a vendor payment run pretty much feels like the Rapture. But being hardened industry professionals, we know we need to penetrate all this and understand what’s really importants: How can the vendor support our end-to-end business?

It doesn’t really make sense for a cloud ERP software to send your accounting staff to Rapture while still keeping your shop floor team in Hades.

This means we need to look for a vendor that can indeed support our whole business. To my first point above, this does NOT mean that you need to put everything in all at once. It does mean, though, that you should put completeness of portfolio as a high priority.

For example, does the vendor have a clear strategy on how it will support your central finance processes (and for most ERP vendors, this should be absolutely mandatory). How about your HR and payroll? Customer relationships? Projects? Manufacturing? Analytics? How about all this Big Data that you’ve been hearing about?

Oh, yes, and I read in some online paper that we also need to think about something called machine learning, whatever that is. You get the picture.

Any consultant will tell you that one of the more intractable problems in an ERP implementation is integration between systems. And common sense dictates that cross-vendor integration is much more difficult than getting two or more pieces of software made by the same vendor talk to each other. Keep this in mind when you do your vendor selection, and don’t base it just on how blissful the online demos are.

3. Cloud and on premise are not mutually exclusive

Unless we are living in the Matrix, you cannot completely leave the on-premise world behind. (Side note: isn’t the Matrix the ultimate evolution of the cloud?). Why? Because your machines, your customers, and your people are still going to be on premise for the foreseeable future. In fact, the latest trend is about the Internet of Things, and these Things are going to be on-premise, even if you are going to be processing Thing-generated data on the cloud.

To my last point, consider a solution that has a clearly defined strategy around integration with the on-premise components of your business cycle. Sometimes a hybrid solution will be the best. There’s no need to be overzealous in moving everything to the cloud where it does not make sense.

In conclusion, when you consider your cloud ERP journey, consider your options carefully. Look for a vendor that does not just provide a quick fix in one part of your business while leaving other areas in the cold. Do not underestimate the cost and complexity of integrations with your various systems.

To follow discussions and updates on issues and events impacting the SAP ecosystem in Australia and New Zealand, join the SAP ANZ Linkedin Group.

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Himawan Prajogo

About Himawan Prajogo

Iwan Prajogo has been developing, supporting, implementing and selling Enterprise Business Software for 20 years. He has gone through many implementations of business systems including ERP, Analytics and Technology Migrations. Iwan currently runs the General Business Presales team for Australia, Indonesia and the Philippines for SAP Asia Pacific, and he retains a deep interest in helping customers of all sizes unlock their true potential through the correct application of technology. He has a Bachelor’s in Computer Science from the University of Texas at Austin and an MBA from the University of Texas at San Antonio.

What Really Matters In An Event-Monitoring Product

Jeff Adams

What really matters in IT event management? Short answer: meaningful alerts. A bit longer answer: a single pane of glass combining real-time event analytic visualizations with contextual alerts sent in real time. Why? Event-monitoring systems show their true value only when a component is trending towards failure or has already failed (for example, a solid-state storage device [SSD] in a rack-mounted storage array).

With proper configuration and pertinent events streaming in, event-monitoring systems can continually perform single-level and multilevel analytics to determine if anomalies are occurring, if thresholds are about to be breached, or if they have already been breached. When such a condition exists and it continues to exist for a user-specified period, meaningful alerts can be sent via appropriate channels to assist with prompt resolution of the issue.

This is all that really matters.

I can hear you asking, “But what about all the beautiful visualizations I display on my wall monitors showing the state of my systems?”

They’re great – if someone happens to be looking at them when issues are beginning to occur. After the fact, these displays are of minimal value given the likelihood of cascade failures. They do look great on the walls, though!

When an alert is received, the ability to quickly synchronize the alert time with the visualizations is key. That’s when the visualizations show their true worth. A skilled practitioner looks at them and needs to figure out what is causing the issue. The ability to quickly view the alerting component, associated components, and drill down quickly are the hallmarks of useful analytic visualizations.

Key capabilities of an event-monitoring system

Meaningful alerts and analytic visualizations that can be synchronized with the alert time are the two primary criteria that must be evaluated when selecting an event-monitoring system. If an event monitoring system has top-tier capabilities in these two areas, it will be used, and its return on investment (ROI) will be easy to measure.

The reason is simple.

The underlying cause(s) of the alert will eventually be determined. Once the causes are identified, additional analytic processing will be set up to monitor those components for the condition that caused the original alert. A library of analytic-processing workflows will be built over time that continually monitor the component problem signatures associated with previous issues.

All systems will improve over time, as the continual monitoring becomes better at noticing issues before they become problems. For example, a storage array manufacturer might set up up different analytic processing workflows for different SSD manufacturers or batches of SSDs based on previous issues.

Additional capabilities

Other event-monitoring system criteria to evaluate, in decreasing order of importance, are:

  • Ease of creating analytic processing on input data streams
  • Richness of analytic library functions (statistical, predictive, and so on)
  • Scaling capability with increases in input volumes
  • Alert hierarchies (like a rack of SSDs versus individual SSDs)
  • Security

How easy it is to set up input streams, parse input streams, create users, and so on are all necessary features. However, they don’t constitute the core value that is needed for effective IT event management.

SAP’s IT operations analytics focuses on what is important. It leverages the analytic power, processing speed, and scaling capabilities of the SAP HANA platform. And that’s why it deserves to be on your evaluation short list. To find out more about IT operations analytics:

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Jeff Adams

About Jeff Adams

Jeff is a Senior Solution Engineer for Digital Platform at SAP with a record of positive material impact in business management, leading new product development, and business development. With more than 20 years of product management and software development experience, Jeff is uniquely positioned to drive partner integration and customer implementations with a focus on business value. Since graduating from electrical engineering at the University of Southern California, Jeff has held a wide range of both technical and business roles in enterprise and startup environments.

Taking Learning Back to School

Dan Wellers

 

Denmark spends most GDP on labor market programs at 3.3%.
The U.S. spends only 0.1% of it’s GDP on adult education and workforce retraining.
The number of post-secondary vocational and training institutions in China more than doubled from 2000 to 2014.
47% of U.S. jobs are at risk for automation.

Our overarching approach to education is top down, inflexible, and front loaded in life, and does not encourage collaboration.

Smartphone apps that gamify learning or deliver lessons in small bits of free time can be effective tools for teaching. However, they don’t address the more pressing issue that the future is digital and those whose skills are outmoded will be left behind.

Many companies have a history of effective partnerships with local schools to expand their talent pool, but these efforts are not designed to change overall systems of learning.


The Question We Must Answer

What will we do when digitization, automation, and artificial intelligence eject vast numbers of people from their current jobs, and they lack the skills needed to find new ones?

Solutions could include:

  • National and multinational adult education programs
  • Greater investment in technical and vocational schools
  • Increased emphasis on apprenticeships
  • Tax incentives for initiatives proven to close skills gaps

We need a broad, systemic approach that breaks businesses, schools, governments, and other organizations that target adult learners out of their silos so they can work together. Chief learning officers (CLOs) can spearhead this approach by working together to create goals, benchmarks, and strategy.

Advancing the field of learning will help every business compete in an increasingly global economy with a tight market for skills. More than this, it will mitigate the workplace risks and challenges inherent in the digital economy, thus positively influencing the future of business itself.


Download the executive brief Taking Learning Back to School.


Read the full article The Future of Learning – Keeping up With The Digital Economy

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Dan Wellers

About Dan Wellers

Dan Wellers is the Global Lead of Digital Futures at SAP, which explores how organizations can anticipate the future impact of exponential technologies. Dan has extensive experience in technology marketing and business strategy, plus management, consulting, and sales.

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Why Millennials Quit: Understanding A New Workforce

Shelly Kramer

Millennials are like mobile devices: they’re everywhere. You can’t visit a coffee shop without encountering both in large numbers. But after all, who doesn’t like a little caffeine with their connectivity? The point is that you should be paying attention to millennials now more than ever because they have surpassed Boomers and Gen-Xers as the largest generation.

Unfortunately for the workforce, they’re also the generation most likely to quit. Let’s examine a new report that sheds some light on exactly why that is—and what you can do to keep millennial employees working for you longer.

New workforce, new values

Deloitte found that two out of three millennials are expected to leave their current jobs by 2020. The survey also found that a staggering one in four would probably move on in the next year alone.

If you’re a business owner, consider putting four of your millennial employees in a room. Take a look around—one of them will be gone next year. Besides their skills and contributions, you’ve also lost time and resources spent by onboarding and training those employees—a very costly process. According to a new report from XYZ University, turnover costs U.S. companies a whopping $30.5 billion annually.

Let’s take a step back and look at this new workforce with new priorities and values.

Everything about millennials is different, from how to market to them as consumers to how you treat them as employees. The catalyst for this shift is the difference in what they value most. Millennials grew up with technology at their fingertips and are the most highly educated generation to date. Many have delayed marriage and/or parenthood in favor of pursuing their careers, which aren’t always about having a great paycheck (although that helps). Instead, it may be more that the core values of your business (like sustainability, for example) or its mission are the reasons that millennials stick around at the same job or look for opportunities elsewhere. Consider this: How invested are they in their work? Are they bored? What does their work/life balance look like? Do they have advancement opportunities?

Ping-pong tables and bringing your dog to work might be trendy, but they aren’t the solution to retaining a millennial workforce. So why exactly are they quitting? Let’s take a look at the data.

Millennials’ common reasons for quitting

In order to gain more insight into the problem of millennial turnover, XYZ University surveyed more than 500 respondents between the ages of 21 and 34 years old. There was a good mix of men and women, college grads versus high school grads, and entry-level employees versus managers. We’re all dying to know: Why did they quit? Here are the most popular reasons, some in their own words:

  • Millennials are risk-takers. XYZ University attributes this affection for risk taking with the fact that millennials essentially came of age during the recession. Surveyed millennials reported this experience made them wary of spending decades working at one company only to be potentially laid off.
  • They are focused on education. More than one-third of millennials hold college degrees. Those seeking advanced degrees can find themselves struggling to finish school while holding down a job, necessitating odd hours or more than one part-time gig. As a whole, this generation is entering the job market later, with higher degrees and higher debt.
  • They don’t want just any job—they want one that fits. In an age where both startups and seasoned companies are enjoying success, there is no shortage of job opportunities. As such, they’re often looking for one that suits their identity and their goals, not just the one that comes up first in an online search. Interestingly, job fit is often prioritized over job pay for millennials. Don’t forget, if they have to start their own company, they will—the average age for millennial entrepreneurs is 27.
  • They want skills that make them competitive. Many millennials enjoy the challenge that accompanies competition, so wearing many hats at a position is actually a good thing. One millennial journalist who used to work at Forbes reported that millennials want to learn by “being in the trenches, and doing it alongside the people who do it best.”
  • They want to do something that matters. Millennials have grown up with change, both good and bad, so they’re unafraid of making changes in their own lives to pursue careers that align with their desire to make a difference.
  • They prefer flexibility. Technology today means it’s possible to work from essentially anywhere that has an Internet connection, so many millennials expect at least some level of flexibility when it comes to their employer. Working remotely all of the time isn’t feasible for every situation, of course, but millennials expect companies to be flexible enough to allow them to occasionally dictate their own schedules. If they have no say in their workday, that’s a red flag.
  • They’ve got skills—and they want to use them. In the words of a 24-year-old designer, millennials “don’t need to print copies all day.” Many have paid (or are in the midst of paying) for their own education, and they’re ready and willing to put it to work. Most would prefer you leave the smaller tasks to the interns.
  • They got a better offer. Thirty-five percent of respondents to XYZ’s survey said they quit a previous job because they received a better opportunity. That makes sense, especially as recruiting is made simpler by technology. (Hello, LinkedIn.)
  • They seek mentors. Millennials are used to being supervised, as many were raised by what have been dubbed as “helicopter parents.” Receiving support from those in charge is the norm, not the anomaly, for this generation, and they expect that in the workplace, too.

Note that it’s not just XYZ University making this final point about the importance of mentoring. Consider Figures 1 and 2 from Deloitte, proving that millennials with worthwhile mentors report high satisfaction rates in other areas, such as personal development. As you can see, this can trickle down into employee satisfaction and ultimately result in higher retention numbers.

Millennials and Mentors
Figure 1. Source: Deloitte


Figure 2. Source: Deloitte

Failure to . . .

No, not communicate—I would say “engage.” On second thought, communication plays a role in that, too. (Who would have thought “Cool Hand Luke” would be applicable to this conversation?)

Data from a recent Gallup poll reiterates that millennials are “job-hoppers,” also pointing out that most of them—71 percent, to be exact—are either not engaged in or are actively disengaged from the workplace. That’s a striking number, but businesses aren’t without hope. That same Gallup poll found that millennials who reported they are engaged at work were 26 percent less likely than their disengaged counterparts to consider switching jobs, even with a raise of up to 20 percent. That’s huge. Furthermore, if the market improves in the next year, those engaged millennial employees are 64 percent less likely to job-hop than those who report feeling actively disengaged.

What’s next?

I’ve covered a lot in this discussion, but here’s what I hope you will take away: Millennials comprise a majority of the workforce, but they’re changing how you should look at hiring, recruiting, and retention as a whole. What matters to millennials matters to your other generations of employees, too. Mentoring, compensation, flexibility, and engagement have always been important, but thanks to the vocal millennial generation, we’re just now learning exactly how much.

What has been your experience with millennials and turnover? Are you a millennial who has recently left a job or are currently looking for a new position? If so, what are you missing from your current employer, and what are you looking for in a prospective one? Alternatively, if you’re reading this from a company perspective, how do you think your organization stacks up in the hearts and minds of your millennial employees? Do you have plans to do anything differently? I’d love to hear your thoughts.

For more insight on millennials and the workforce, see Multigenerational Workforce? Collaboration Tech Is The Key To Success.

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