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Accelerate Your Digital Transformation With Packaged Business Services

Meinolf Kaimann

From industry publications to TED Talks, it seems that people everywhere are talking about digitalization as the next big thing. Here’s a little secret, though: Digitalization isn’t coming. It’s already here.

Disruptive technological advances are shaking up businesses and markets. Although you may be expecting to do battle with your traditional competition, digitalization is making it easier for previously unseen challengers to sneak up and steal your market share. Just ask the competitors to Netflix, Airbnb, and Uber.

To avoid this fate, companies need to embrace new strategies that will help them speed their digital transformation. Meeting this goal requires partnerships with service providers that will support a laser focus on business outcomes while realizing quick wins that will help transform your enterprise. Skilled partners can help their clients save money, freeing up funds to allow companies to adopt additional innovation and unleash new business value. It’s a proven formula for maximum value, minimum risk, and rapid success.

Not all service providers are created equal

How can you choose the right service provider? Look for organizations offering services that act as accelerators, such as industrialized services, to deliver value faster. Most providers use product development as a starting point and adjust their services and processes to meet customer needs. Instead, select services that begin with best practices and proven processes that are designed for your specific industry. In other words, the center of the effort should always be your success, not the vendor’s convenience.

Predefined service packages that are based on best practices, methodologies, and tools can help you jump-start your digital transformation. When structured this way, these service packages also enable providers to systematize on service content and quality. This standardization is likely to provide consistent, positive business outcomes no matter which consultant is assigned to your initiative.

You should be able to tailor these reusable, renewable service packages to your organizational structures and preferred delivery methods. More important, each service offering should have a clear, outcome-driven scope, address the different phases of your transformation, and be delivered quickly and cost-effectively.

Industry expertise and benchmarks reveal progress

Most organizations can also benefit from a model company approach that defines the majority of processes for each industry or line of business. By combining best practices with integrated end-to-end processes, a model company approach not only acts as an accelerator, but also frees consultants to focus on any missing pieces identified during a fit-gap analysis. The expertise gathered from other customer implementation experiences helps your provider implement the latest innovations while sharply reducing implementation complexity, time, and cost.

Finally, keep in mind that it can be highly advantageous to include your software vendor in the search for services that accelerate digital transformation. Involving the vendor early in internal innovation initiatives can help you identify, prioritize, and refine ideas. With extensive knowledge of current industry best practices and familiarity with other deployments, the vendor can offer insight and recommendations that help pave the way for a successful transformation.

A software provider that supports your solution well beyond implementation is highly motivated to help your deployment succeed throughout the life of the software. This ongoing engagement provides the vendor with the opportunity – and privilege – to guide you through current and future transformations.

The importance of this customer vote of confidence cannot be overstated. Unlike a system integrator that considers your digital transformation a limited-term “project,” a software vendor views your success as a reflection on the value of the solutions and services delivered. What’s more, your software vendor can also help measure, assess, and analyze your outcomes compared with other customers, offering insight you can use to benchmark your true digital transformation progress.

Learn more about how SAP Digital Business Services can help you accelerate business opportunities through digital transformation and reduce capital expenditures, risk, and total cost of ownership.

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Meinolf Kaimann

About Meinolf Kaimann

Meinolf Kaimann is vice president, global head value assurance and premium engagements product management at SAP. You can follow him on LinkedIn.

Enterprise Information Management: The Foundational Core Of Digital Transformation Success

Paul Lewis

The definition and implementation of digital transformation has become so muddled that no two organizations are focusing on the same strategies and initiatives. Many companies choose to engage in e-commerce and social media to extend their customer base with engaging, personalized, and round-the-clock shopping experiences. Some eye operational efficiencies through the Internet of Things (IoT) and artificial intelligence. And a growing segment is enticed by game-changing insights from analytics and social sentiments.

No matter the digital strategy, data is the foundation of all of these efforts. The customer experience is about understanding clients and offering services that answer their needs. Decision making requires stored knowledge that can be easily shared, secured, and applied. Operational excellence runs on meaningful insight that drives performance and keeps workers safe.

In digital transformation, every change relies on converting data into actionable decisions. According to Capgemini, companies that act on an enterprise information management (EIM) strategy outperform their rivals by as much as 26%.

The EIM difference in digital transformation

A data point by itself may seem unrelated and inconsequential. But when enterprise data is united and managed as one asset, decision makers finally have trusted, complete, and relevant information they need to seize opportunities and avoid risks that were previously hidden in the background.

One of my clients, Pravine Balkaran, global head of IT at Spin Master, one of the world’s largest toy and media entertainment companies, said it best: “It’s about being able to apply standardization and automation to the entire ecosystem to bring value and move the business forward.”

EIM derives new value by incorporating the traditional functions of data, including business intelligence, data science, analytics, data storage and archiving, data stewardship, and data mobility technology. The more data added, the more valuable the ecosystem becomes – without the complexity commonly experienced when searching for potentially valuable data across a diverse set of existing applications.

By applying EIM to the core of its digital strategy, companies like Spin Master are capturing and coalescing data from a variety of sources and turning it into actionable information to drive better decision making, innovate new products, enter new markets, and encourage a more responsive customer experience.

The EIM road map towards rapid creation of new value

Now for the hard part: Putting EIM into action and at the center of your digital transformation business strategy. There are five things you should do now before moving to a more digitalized and data-driven way of doing business.

1. Inventory available information

Most companies believe that their data resides in core databases and a data model of known entities such as claims, transactions, vendors, and suppliers. Although this is a widely used approach to determining the class of your information, it is only a small part of what you actually own. Structured, unstructured, and semi-structured data; log files; conversations; customer sentiment; and real-time information from suppliers and vendors, for example, should be integrated as part of the overall EIM philosophy.

2. Classify your inventory

Data typically can be classified with one or more of these six attributes:

  • Real-time, streaming data, which potentially comes from machines
  • Static data from production databases
  • Valuable data in real time once stored
  • Realizes value over time and as it changes
  • Relevant to a particular government mandate or legislative concern
  • Objective and relative importance to divisions of the overall enterprise, including customers and the business network

With this exercise, you can begin to understand the function that each data point serves and its usefulness in the future.

3. Encourage the business culture to appreciate the value of discovery

Data-driven decision making is not based on blind faith that data always tells the right story. Rather, it is asking the right questions, and knowing how to dig deep into the data helps us make the connections we need to get an accurate picture of the current situation. Once you discover those nuggets of insight gold, data science and advanced analytics can be applied to pinpoint the appropriate solution. Later, you can leverage data visualization tools to communicate findings and proposed action in a format that is quick and easy for all levels of the enterprise to consume.

4. Shift your focus from yesterday to today and beyond

Traditionally, data analysis is an exercise of looking backward to determine the how, what, when, and why an event happened. However, the pace of change in every aspect of the business has accelerated so much, that it’s rendered this retrospective approach to analytics nearly useless. Real-time access to data allows decision makers to know what’s happening in the moment and how it will impact the future to seize opportunities and mitigate risks.

The path to digital transformation is paved with data

The volume of data generated by people across the entire business network – from employee to consumer and everyone in between – represents a veritable trove of information, insights, and inspiration for innovation. But first, companies need to know where to find this data and how to best apply it to everyday decision making. With EIM, data can be broken down and reassembled into a manageable form that is meaningful, outcome-driven, and transformational.

Learn more about how to uncover Data – The Hidden Treasure Inside Your Business.

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Paul Lewis

About Paul Lewis

Paul Lewis is the Chief Technology Officer in Hitachi for the Americas, responsible for the leading technology trend mastery and evangelism, client executive advocacy, and external delivery of the Hitachi vision and strategy especially related to digital transformation and social innovation. Additionally, Paul contributes to field enablement of data intelligence and analytics; interprets and translates complex technology trends including cloud, mobility, governance, and information management; and represents the Americas region in the Global Technology Office, the Hitachi LTD R&D division. In his role of trusted advisor to the CIO community, Paul’s explicit goal is to ensure clients’ problems are solved and opportunities realized. Paul can be found at his blog, on Twitter, and on LinkedIn.

Business Innovation In Southeast Asia: Can Your Small Business Keep Up?

Roy Wakim

Despite the state of unpredictability and volatility in the world’s most powerful economies, the future looks bright to entrepreneurs in ASEAN member states. Southeast Asian business leaders are now more positive about sales increases, workforce expansion, and investment growth, according to the YPO Global Pulse Confidence Index Survey for Q4 2016.

Perhaps this optimism has a lot to do with the fact that Southeast Asia is one of the most promising emerging markets today, with a consumer class expected to increase from 67 million households in 2010 to 125 million in 2025. Whether you’re a current business owner or just about to start a business in Southeast Asia, you are in the best position to make the most out of this exciting business climate.

Southeast Asia: The region to beat?

In 2013, ASEAN member states—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam—produced a combined GDP of USD 2.4 trillion. If it were a single country, it would be the seventh-largest economy in the world. Since its founding in 1967, ASEAN policies towards integration and liberalised trading deals within and outside the region have spurred economic growth as well as resilience against external shocks. Average government debt in the region, at 50 percent, remains a lot lower than the United States or the United Kingdom.

Investor confidence in the region has outpaced even its strong neighbour China, as foreign direct investment (FDI) inflows in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) increased by 7 percent in 2013 with USD 128.4 billion in FDI receipts. China had only  USD 117.6 billion.

Furthermore, business executives from the United States look forward to increased profits in their Southeast Asian operations in 2017, according to the latest ASEAN Business Outlook Survey. Although the withdrawal of the United States from the Trans-Pacific Partnership may affect future American business prospects, it may open up opportunities for other potential trade deals such as the Regional Comprehensive Economic Partnership, which includes the 10 ASEAN member states as well as trading partners China, India, Japan, Korea, Australia, and New Zealand.

And while China’s e-commerce landscape is largely monopolised by big players such as Alibaba and WeChat, Southeast Asia remains a fertile ground for Internet businesses, with no single player dominating its diverse market. With its 260-million-strong Internet user base expected to increase to 480 million in 2020, Southeast Asia’s Internet economy may be worth over USD 200 billion by 2025.

The rapid growth of small and midsize businesses in Southeast Asia

According to a 2015 report by the US-ASEAN Business Alliance for Competitive Small and Medium Sized Enterprises, small and medium enterprises (SMEs) comprise 96 percent of firms in ASEAN member states. Despite today’s many economic challenges, SMEs have experienced unprecedented growth in the region.

SMEs in Malaysia, for instance, have significantly contributed to the overall growth rate in ASEAN, contributing at least 30 percent to its own GDP, with SMEs alone growing at a rate of 8.4 percent. SMEs account for almost 50 percent of the country’s labour force, with most engaged in the services sector.

According to a report from Economics World, SMEs in Indonesia have made qualitative and quantitative strides for the country’s overall economy. Employment generation is one of the most significant contributions of Indonesian SMEs. They have always employed more than 96 percent of the country’s workforce, while consistently contributing no less than 50 percent to the country’s GDP.

While information on SME’s economic contribution in the Philippines is limited, the latest data from the Department of Trade and Industry shows that SMEs contributed to 25 percent of its exports in 2014. SMEs in the Philippines generated a total of 4.8 million jobs in 2014, which made up 62 percent of the total labour force.

Potentially the most promising emerging economy in Southeast Asia in the near future, Vietnam is estimated to experience up to 10 percent annual growth rates by 2025. A huge part of this growth is expected to come from SMEs, which have experienced an average of 20 percent profit growth rates over the past few years. A report from The Asia Foundation states that SMEs in Vietnam contribute over 40 percent to the country’s GDP, employ 77 percent of the workforce, and make up 80 percent of the entire retail market.

Meanwhile, in Singapore, 59 percent of polled businesses have experienced growth in 2015, despite economic uncertainty within the business community, according to the CPA Australia report.

Boosting business innovation among SMEs in Southeast Asia

The growing role of SMEs in any region’s overall economic development can be attributed to two separate but interrelated factors: policies and technology.

The implementation of the ASEAN Economic Community (AEC) in 2015, for example, opens up SMEs to a larger potential consumer base. As ASEAN member states integrate into a single market and production base, businesses can access much larger markets than before, rather than being limited to a single market within the country.

As for technology expansion? According to the 2014 ASEAN SME Policy Index, SMEs still face challenges accessing technology, finance, and competitive markets. In fact, the study shows that the biggest policy gap in the region is the promotion of technology and technology transfer in the different stages of a typical SME life cycle.

A country worth emulating in terms of technology adoption is Singapore, which ranks first among the most tech-ready countries in the world and is also the most innovative in Asia. Even non-tech firms in this city-state have embraced the digital revolution, taking advantage of social media, business analytics, and enterprise mobility.

If you’re an SME owner or aspiring entrepreneur in Southeast Asia, you need to maximise the existing technology infrastructure to grow your small business. While the Southeast Asian business landscape is ripe for SMEs, the environment is also getting more and more competitive. Business firms and even governments are aggressively moving towards modernisation and trade liberalisation, chasing the e-commerce “gold rush” and capturing markets even beyond national borders.

So, even with a growing potential customer base, solid technological infrastructure, and supportive policy environment, competing in this exciting business era may produce new challenges. A sudden increase in your customer base, for instance, may burden your staff, especially your customer service, IT, and finance personnel. Such disruptions, although generally positive, may compromise customer service as well as the quality of goods and/or services, making your business lose its momentum in the process.

How to modernise your small business with cloud ERP

To address these issues, SMEs can harness the benefits of technology. Free flow of information through digitised platforms improves not only business-to-customer communications but also business-to-business transactions. SMEs can also benefit from online payment solutions, as customers become more mobile and digitally savvy. Tools that improve day-to-day tasks help streamline business processes, speeding up workflows and improving service delivery. To ease the need for physical technology infrastructure while improving data security, more firms are turning to cloud-based enterprise resource planning (ERP) solutions.

Different aspects of your business like customer relationship management, finance, and supply chain management can benefit from cloud-based ERP solutions in several ways:

  1. More room for innovation and expansion. A cloud-based ERP solution can take multiple aspects of your business into a single platform that is more customisable as your business grows and diversifies. As processes are streamlined, information flows faster and more smoothly, allowing you to make quicker business decisions. It also frees up your technological infrastructure while reducing labour costs typically spent for IT professionals responsible for network maintenance.
  1. Minimised costs from interruptions and glitches. Running a business will not always be smooth-sailing. A lot of business owners and managers end up spending too much time making sure that everything is running perfectly, on top of the time spent solving actual problems. A system that quickly identifies glitches, such as past due bills, late shipments, or accounting anomalies, allows business owners and managers to focus more on solving problems while spending less time finding them.
  1. Integration with old systems. Along with business expansion comes the need to modify and customise existing ERP systems. Older ERP systems, however, may not have this capability. Switching to an entirely different platform can also be costly, especially for SMEs. A good cloud-based ERP allows you to keep existing data and processes from old systems while allowing you to adapt to changing business needs through new, expanded ERP solutions.
  1. Realtime data visibility. As transactions are stored in the cloud in real time, cloud-based and mobile-enabled ERP solutions allow business owners and managers to access their business data anywhere—even on their mobile devices in the middle of rush hour traffic. This facilitates faster, smarter business decisions necessary in a fast-paced business climate.

Without realising the potential opportunity costs, a lot of SME owners initially hesitate to grow their business with cloud-based ERP. SMEs may risk getting left behind, not only by their larger counterparts but also by other SMEs that choose to invest in cloud computing technology. With a conducive policy environment and thriving business landscape, now is the best time to take advantage of the potential gains from modernising your business.

To maximise your SMEs potential in todays rapidly changing business climate, explore SAP Business One and how it perfectly suits your business needs.

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Roy Wakim

About Roy Wakim

Roy Wakim is Director of SAP Business One (Southeast Asia)at SAP. He is responsible for the growth and expansion of this ERP solution within the region. Roy has 15 years of leadership experience, driving innovative sales strategies and execution across Asia Pacific. He has an MTech degree in Technology Management from the University of Western Sydney.

How Emotionally Aware Computing Can Bring Happiness to Your Organization

Christopher Koch


Do you feel me?

Just as once-novel voice recognition technology is now a ubiquitous part of human–machine relationships, so too could mood recognition technology (aka “affective computing”) soon pervade digital interactions.

Through the application of machine learning, Big Data inputs, image recognition, sensors, and in some cases robotics, artificially intelligent systems hunt for affective clues: widened eyes, quickened speech, and crossed arms, as well as heart rate or skin changes.




Emotions are big business

The global affective computing market is estimated to grow from just over US$9.3 billion a year in 2015 to more than $42.5 billion by 2020.

Source: “Affective Computing Market 2015 – Technology, Software, Hardware, Vertical, & Regional Forecasts to 2020 for the $42 Billion Industry” (Research and Markets, 2015)

Customer experience is the sweet spot

Forrester found that emotion was the number-one factor in determining customer loyalty in 17 out of the 18 industries it surveyed – far more important than the ease or effectiveness of customers’ interactions with a company.


Source: “You Can’t Afford to Overlook Your Customers’ Emotional Experience” (Forrester, 2015)


Humana gets an emotional clue

Source: “Artificial Intelligence Helps Humana Avoid Call Center Meltdowns” (The Wall Street Journal, October 27, 2016)

Insurer Humana uses artificial intelligence software that can detect conversational cues to guide call-center workers through difficult customer calls. The system recognizes that a steady rise in the pitch of a customer’s voice or instances of agent and customer talking over one another are causes for concern.

The system has led to hard results: Humana says it has seen an 28% improvement in customer satisfaction, a 63% improvement in agent engagement, and a 6% improvement in first-contact resolution.


Spread happiness across the organization

Source: “Happiness and Productivity” (University of Warwick, February 10, 2014)

Employers could monitor employee moods to make organizational adjustments that increase productivity, effectiveness, and satisfaction. Happy employees are around 12% more productive.




Walking on emotional eggshells

Whether customers and employees will be comfortable having their emotions logged and broadcast by companies is an open question. Customers may find some uses of affective computing creepy or, worse, predatory. Be sure to get their permission.


Other limiting factors

The availability of the data required to infer a person’s emotional state is still limited. Further, it can be difficult to capture all the physical cues that may be relevant to an interaction, such as facial expression, tone of voice, or posture.



Get a head start


Discover the data

Companies should determine what inferences about mental states they want the system to make and how accurately those inferences can be made using the inputs available.


Work with IT

Involve IT and engineering groups to figure out the challenges of integrating with existing systems for collecting, assimilating, and analyzing large volumes of emotional data.


Consider the complexity

Some emotions may be more difficult to discern or respond to. Context is also key. An emotionally aware machine would need to respond differently to frustration in a user in an educational setting than to frustration in a user in a vehicle.

 


 

download arrowTo learn more about how affective computing can help your organization, read the feature story Empathy: The Killer App for Artificial Intelligence.


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Christopher Koch

About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing. Share your thoughts with Chris on Twitter @Ckochster.

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In An Agile Environment, Revenue Models Are Flexible Too

Todd Wasserman

In 2012, Dollar Shave Club burst on the scene with a cheeky viral video that won praise for its creativity and marketing acumen. Less heralded at the time was the startup’s pricing model, which swapped traditional retail for subscriptions.

For as low as $1 a month (for five two-bladed cartridges), consumers got a package in the mail that saved them a trip to the pharmacy or grocery store. Dollar Shave Club received the ultimate vindication for the idea in 2016 when Unilever purchased the company for $1 billion.

As that example shows, new technology creates the possibility for new pricing models that can disrupt existing industries. The same phenomenon has occurred in software, in which the cloud and Web-based interfaces have ushered in Software as a Service (SaaS), which charges users on a monthly basis, like a utility, instead of the typical purchase-and-later-upgrade model.

Pricing, in other words, is a variable that can be used to disrupt industries. Other options include usage-based pricing and freemium.

Products as services, services as products

There are basically two ways that businesses can use pricing to disrupt the status quo: Turn products into services and turn services into products. Dollar Shave Club and SaaS are two examples of turning products into services.

Others include Amazon’s Dash, a bare-bones Internet of Things device that lets consumers reorder items ranging from Campbell’s Soup to Play-Doh. Another example is Rent the Runway, which rents high-end fashion items for a weekend rather than selling the items. Trunk Club offers a twist on this by sending items picked out by a stylist to users every month. Users pay for what they want and send back the rest.

The other option is productizing a service. Restaurant franchising is based on this model. While the restaurant offers food service to consumers, for entrepreneurs the franchise offers guidance and brand equity that can be condensed into a product format. For instance, a global HR firm called Littler has productized its offerings with Littler CaseSmart-Charges, which is designed for in-house attorneys and features software, project management tools, and access to flextime attorneys.

As that example shows, technology offers opportunities to try new revenue models. Another example is APIs, which have become a large source of revenue for companies. The monetization of APIs is often viewed as a side business that encompasses a wholly different pricing model that’s often engineered to create huge user bases with volume discounts.

Not a new idea

Though technology has opened up new vistas for businesses seeking alternate pricing models, Rajkumar Venkatesan, a marketing professor at University of Virginia’s Darden School of Business, points out that this isn’t necessarily a new idea. For instance, King Gillette made his fortune in the early part of the 20th Century by realizing that a cheap shaving device would pave the way for a recurring revenue stream via replacement razor blades.

“The new variation was the Keurig,” said Venkatesan, referring to the coffee machine that relies on replaceable cartridges. “It has started becoming more prevalent in the last 10 years, but the fundamental model has been there.” For businesses, this can be an attractive model not only for the recurring revenue but also for the ability to cross-sell new goods to existing customers, Venkatesan said.

Another benefit to a subscription model is that it can also supply first-party data that companies can use to better understand and market to their customers. Some believe that Dollar Shave Club’s close relationship with its young male user base was one reason for Unilever’s purchase, for instance. In such a cut-throat market, such relationships can fetch a high price.

To learn more about how you can monetize disruption, watch this video overview of the new SAP Hybris Revenue Cloud.

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