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.

Top 5 CIO Blogs Of November 2017

Jean Loh

A series of blogs about user experience design attracted a lot of interest in November, with two on the best-read list. Other popular topics: streamlining finance processes in shared service centers with machine learning, boosting procurement efficiency with artificial intelligence, and some really good suggestions on cybersecurity. Take a look if you missed any of these great blogs.

AI And Messaging Apps: What Every CIO Needs To Know About Trends In User Experience Design

Reshaping The Value Of Shared Services With Machine Learning

What Every CIO Needs To Know About User Experience Design Trends

Five Ignored Practices That Can Disarm Your Cybersecurity Time Bomb

It’s Time For Corporate Spending To Manage Itself

For more hot topics, read More Than Noise: Digital Trends That Are Bigger Than You Think.

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Jean Loh

About Jean Loh

Jean Loh is the director, Global Audience Marketing at SAP. She is an experienced marketing and communication professional, currently responsible for developing thought leadership content that is unbiased and audience-led while addressing market challenges to illuminate and solve the unmet needs of CFOs, CIOs, and the wider global finance and IT audience.

How Governments Are Building The Digital Future

Natalia Panina

Many governments now recognize that investing in the digital economy by providing digital channels, apps, and websites that link citizens to public bodies brings economic benefits.

The UK government’s Cloud First policy, for example, requires state departments to consider cloud solutions before alternatives. The Australian government procures $6 billion of information and communications technology (ICT) services annually. Combined with state and territory governments, public sector expenditure on ICT accounts for about 30% of the domestic market.

The Australian government wants to reduce the cost of its ICT by eliminating duplication and fragmentation. It intends to lead by example in using cloud services to reduce costs and lift productivity. Austria’s Federal Computing Center and Denmark’s equivalent body have built shared service centers to standardize and simplify the business processes of state departments. These governments are leading the way to a digital future.

Why are mature governments going digital?

Because advanced technologies now enable us to drive digital transformation to achieve the following:

  1. Enable the public sector to manage a country’s resources more efficiently
  1. Generate more value for citizens and businesses by using new business models and providing digital services
  1. Enable businesses to grow by means of public sector digitalization

There are plenty of projects that demonstrate how state departments have improved tax collection by collaborating online with taxpayers, optimized back-office processes, and saved money by preventing fraud. And they have increased income by better managing assets, like land and buildings, and improved construction planning and accounting.

It is important to prioritize strategic projects, such as building a digital infrastructure, setting up a national program to equip society with digital skills, creating the right economic environment, encouraging small business to increase productivity, and so on. To execute on their strategies, governments are establishing private cloud organizations to centralize operations across focus areas.

Many state agencies, which act on behalf of governments, have made infrastructure as a service (IaaS) or platform as a service (PaaS) their number-one priority. But real business value can only be achieved if a government’s strategy is amplified by a partnership with a trusted IT adviser that is able to advise on software as a service (SaaS), or even on a model for outsourcing business processes that is on top of the digital platform.

Companies around the globe demonstrate the benefits of data-driven management in state departments, unified processes, cooperation with citizens through the entire omnichannel platform, and embedding valuable Internet of Things (IoT) scenarios in the IT infrastructure. These and many other revolutionary solutions are creating frictionless government as an enabler of the digital economy.

Boosting efficiency and delivering better public services

Technology helps governments boost their efficiency and deliver better public services. The arrival of cloud computing comes at a time when many governments are urging their IT departments and agencies to optimize the cost of delivering IT services and, at the same time, become more flexible and responsive – in essence, to do more with less.

Building a management system for an entire government on one robust platform is definitely the way for the future, as it enables organizations to unify analytical reporting, gain insights from data, and discover new revenue streams.

The digital technologies available today make it possible to use historical data alongside predictive analytics augmented by machine learning so that people can work smarter. Meaningful information from data could be used in many business applications to optimize processes and assist employees. Another example of how technologies can make a real difference in the public sector is blockchain as a service. It can transform how governments and citizens interact by increasing trust and cutting the time it takes agencies to serve citizens.

Such advances have considerable potential in domains such as tax and revenue management, social security, and finance. The benefits could be replicated across all public services to considerable effect. That is why governments are now building private cloud platforms as part of their digital transformation strategy.

Learn more about Running Future Cities on Blockchain.

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Natalia Panina

About Natalia Panina

Dr. Natalia Panina, is Vice President Middle& Eastern Europe Public services General Manager & Innovation Lead at SAP. Natalia has been working for SAP 20 years. Since 2014 Natalia is developing SAP business is Middle & Eastern countries launching SAP innovations to public organizations, supporting cross country best practice exchange and shaping the unique digital transformation roadmap for Governments.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Finance And HR: Friends Or Foes? Shifting To A Collaborative Mindset

Richard McLean

Part 1 in the 3-part “Finance and HR Collaboration” series

In my last blog, I challenged you to think of collaboration as the next killer app, citing a recent study by Oxford Economics sponsored by SAP. The study clearly explains how corporate performance improves when finance actively engages in collaboration with other business functions.

As a case in point, consider finance and HR. Both are being called on to work more collaboratively with each other – and the broader business – to help achieve a shared vision for the company. In most organizations, both have undergone a transformation to extend beyond operational tasks and adopt a more strategic focus, opening the door to more collaboration. As such, both have assumed three very important roles in the company – business partner, change agent, and steward. In this post, I’ll illustrate how collaboration can enable HR and finance to be more effective business partners.

Making the transition to focus on broader business objectives

My colleague Renata Janini Dohmen, senior vice president of HR for SAP Asia Pacific Japan, credits a changing mindset for both finance and HR as key to enabling the transition away from our traditional roles to be more collaborative. She says, “For a long time, people in HR and finance were seen as opponents. HR was focused on employees and how to motivate, encourage, and cheer on the workforce. Finance looked at the numbers and was a lot more cautious and possibly more skeptical in terms of making an investment. Today, both areas have made the transition to take on a more holistic perspective. We are pursuing strategies and approaching decisions based on what delivers the best return on investment for the company’s assets, whether those assets are monetary or non-monetary. This mindset shift plays a key role in how finance and HR execute the strategic imperatives of the company,” she notes.

Viewing joint decisions from a completely different lens

I agree with Renata. This mindset change has certainly impacted the way I make decisions. If I’m just focused on controlling costs and assessing expenditures, I’ll evaluate programs and ideas quite differently than if I’m thinking about the big picture.

For example, there’s an HR manager in our organization who runs Compensation and Benefits. She approaches me regularly with great ideas. But those ideas cost money. In the past, I was probably more inclined to look at those conversations from a tactical perspective. It was easy for me to simply say, “No, we can’t afford it.”

Now I look at her ideas from a more strategic perspective. I think, “What do we want our culture to be in the years ahead? Are the benefits packages she is proposing perhaps the right ones to get us there? Are they family friendly? Are they relevant for people in today’s world? Will they make us an employer of choice?” I quite enjoy the rich conversations we have about the impact of compensation and benefits design on the culture we want to create. Now, I see our relationship as much more collaborative and jointly invested in attracting and retaining the best people who will ultimately deliver on the company strategy. It’s a completely different lens.

Defining how finance and HR align to the company strategy

Renata and I believe that greater collaboration between finance and HR is a critical success factor. How can your organization achieve this shift? “Once the organization has clearly defined what role finance and HR must play and how they fundamentally align to the company strategy, then it’s more natural to structure them in a way to support such transformation,” Renata explains.

Technology plays an important role in our ability to successfully collaborate. Looking back, finance and HR were heavily focused on our own operational areas because everything we did tended to consume more time – just keeping the lights on and taking care of our basic responsibilities. Now, through a more efficient operating model with shared services, standard operating procedures, and automation, we can both be more business-focused and integrated. As a result, we’re able to collaborate in more meaningful ways to have a positive impact on business outcomes.

In our next blog, we’ll look at how finance and HR can work together as agents of change.

For a deeper dive, download the Oxford Economics study sponsored by SAP.

Follow SAP Finance online: @SAPFinance (Twitter)LinkedIn | FacebookYouTube

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Richard McLean

About Richard McLean

Richard McLean, regional CFO for SAP Asia Pacific Japan, oversees all key finance and administrative functions for field and regional headquarters, supporting more than 16,000 employees. He has more than 20 years of experience in senior finance roles with leading global companies across a range of industries, including financial services, investment banking, automotive, and IT. He joined SAP in 2008.