Cybersecurity: It’s More Than Just Technology

Stefan Guertzgen

Last week I visited the ARC Forum in Orlando, and cybersecurity was one of the most prominent topics throughout the whole event. Here are some key lessons I learned:

There are different categories of cyberattacks. On one end are high-frequency attacks perpetuated by attackers with low-level skills. Those typically have a low impact on your company and its operations.

On the other end are less frequent but high-impact attacks that affect critical operations or that target high-value data. Such attacks require a high skill set on the attacker’s side.

How do you protect yourself and your company from both types of attacks?

The first category includes such things as spam, common viruses, or Trojans, most of which you can to fight with technology like spam filters or anti-virus software. However, the boundaries are blurring. The more the attacks move toward the high-impact category, the more you need resources with special skill sets that at least match those of the cyberattackers.

In other words, technology, skilled resources, and executive-level commitment and support must go hand-in-hand to build a resilient cybersecurity and threat protection system.

Sid Snitkin, from ARC, presented a five-stage maturity model comprising the following levels:

  • Secure
  • Defend
  • Contain
  • Manage
  • Anticipate

The higher you climb on this “maturity ladder,” the more skilled resources come into play, and the more you have to break up silos within and beyond your company boundaries. Dan Rosinski, from Dow Chemical, stated that “it takes more than a village” to establish a strong cybersecurity. Fostering collaboration between IT, engineering, operations, legal, safety, purchasing, and business is a critical success factor.

Also, cybersecurity is not a one-off exercise. As hacker’s skill sets grow exponentially, you need to dynamically revisit your strategy and tools. Increasingly, new hardware and software are developed with embedded security and self-protection, especially tools that are used at the perimeter of a company’s environment. Hence, cybersecurity should be considered as a journey that just has started.

Share your experiences and thoughts on cybersecurity with us!

For more insight on cybersecurity technology, see Machine Learning: The New High-Tech Focus For Cybersecurity.

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About Stefan Guertzgen

Dr. Stefan Guertzgen is the Global Director of Industry Solution Marketing for Chemicals at SAP. He is responsible for driving Industry Thought Leadership, Positioning & Messaging and strategic Portfolio Decisions for Chemicals.

The Future Of Sales And Marketing In The Chemical Industry

Stefan Guertzgen

The chemical industry is at a crossroads. Faced with market unpredictability, increased regulations, and products that are quickly moving toward commoditization, it is becoming increasingly difficult to maintain reasonable margins. A few companies are finding success by developing breakthrough products, but true revolutionary innovations are hard to uncover.

Instead, most chemical manufacturers have responded by reducing costs with operational efficiencies. One area that is often overlooked, however, is sales and marketing. This department continues to deploy traditional approaches to selling, despite rising expenses. In fact, a recent study from McKinsey indicates that average sales, general, and administrative (SG&A) costs increased by as much as 10% over the last decade.

Fortunately, new technology solutions and data analytics are offering surprising models for selling products and related services. With these new strategies, chemical companies are finding it is possible to preserve margins while adding new revenue streams.

Traditional approach to sales and marketing

In the past, chemical companies developed specialty products that met individual customer requirements. To help justify the high purchase prices of these custom solutions, chemical companies included free, comprehensive support services. Rather than limiting top-tier services to top-tier customers who are willing to pay for them, the same deep level of service was provided to all customers. By following a “same level of service to all” approach, some chemical companies ended up hurting their own profitability and devaluing the provided services.

New approaches

The old-school approach still works well when there are strong margins and customers see value in both the customized products and the support services. However, when customers make purchasing decisions based on the lowest price and feel they no longer need support, chemical manufacturers must find new ways to add value and differentiate their offerings. Fortunately, some visionary companies are leading the way by combining the latest technology with insightful customer knowledge to develop innovative approaches to selling. Below are three examples of new sales approaches made possible by the digital economy that could bolster revenue:

  1. Offer multiple service levels: Rather than bundling the same service with all product purchases, chemical companies could offer multiple service levels at different price points based on customer need. For example, chemical companies could start by including only essential services with their standard products. To lower costs, technology could be used to automate and standardize business processes such as delivery and payment terms. However, in addition to basic services, chemical companies also offer additional layers of services if a customer wants to upgrade and pay for it. Data analytics can help provide direction as to which level of service would be most appealing to which customers. From an IT perspective, this requires customer segmentation supported by a thorough price waterfall analysis, along with real-time insights into prices and margins at customer and product level.
  1. Product-only pricing: Some customers view chemical products as pure commodities. To accommodate this mindset, chemical companies could unbundle services from their products. With this model, customers can purchase products only online. Digital technologies with artificial intelligence help determine the rules. Dow Corning adopted this approach in 2002 when it launched Xiameter, an online, low-cost sales channel for its silicone products. Through this online channel, Dow can meet the low-pricing demands of customers willing to buy in bulk that do not need support services. Seven years later, Dow Corning reported the new sales model resulted in five times the number of products sold and sales continue to grow (McKinsey & Company, May 2011). This is an ideal application for the IoT, where chemicals may be ordered machine-to-machine, and many sales may proceed entirely without human intervention.
  1. Separate business units: Developing a separate business unit often is an effective strategy to compete in situations with intense competitive pricing pressure. In this way, companies can be low-cost providers without the risk of “cross-contamination” with services they still provide to customers who are paying high prices for chemicals that retain specialty status. Using a separate business unit is clear cut and eliminates confusion in both customers and employees about the services provided as well as the processes used.

The role of technology and a 360° view of the customer

In order to define and implement the right service strategies for each customer segment, companies need the latest technology, not only to gain a deep understanding of customer needs, but also to drive seamless, end-to-end execution of process automation and execution along different channels. Here are a few examples:

  • Leverage sensors and telemetry to implement vendor/supplier-managed inventory concepts and completely automate the replenishment process (no- or low-touch order-to-delivery).
  • Monitor your customers’ manufacturing process parameters in real-time via sensor technology. Leverage advanced algorithms to correlate process parameters with quality of (semi-) finished products. Start selling first-pass quality as business outcome instead of selling products, which provides an opportunity to offer benchmark data as a service.
  • Use advanced algorithms to better understand customers’ buying behavior/patterns, adjust product and service portfolio, and identify cross-selling opportunities to increase customer loyalty and share of wallet. With this information, it is possible to better understand and respond to demand patterns without direct point-of-sale information.
  • Get visibility into customer/market sentiment via capturing and processing unstructured data from social media, then responding with appropriate marketing campaigns and innovative service offerings.

Commoditization in the chemical industry is not going away. To be successful, chemical companies must move beyond selling products. Instead, to improve profitability, they must be willing to transform their business models in a way that allows them to sell business outcomes and results. Top performers have already started bundling products with value-adding services that differentiate their offerings, increase customer loyalty, and grab a larger share of the customer wallet.

For more on marketing in a data-driven era, see Influencing Customers Through Infinite Personalization.

Original article posted on Manufacturing Today

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About Stefan Guertzgen

Dr. Stefan Guertzgen is the Global Director of Industry Solution Marketing for Chemicals at SAP. He is responsible for driving Industry Thought Leadership, Positioning & Messaging and strategic Portfolio Decisions for Chemicals.

Dulux: Moving Beyond EDI

Rick Price

As businesses take their first steps away from paper procure and payment, many are asking whether those first steps are enough. Australia’s leading paint and coatings company, DuluxGroup, is making new gains by taking a step beyond Electronic Data Interchange (EDI).

Time to leave paper behind

Ian Griffith, the head of procurement at DuluxGroup is absolutely clear: The company hit a point about three years ago when it was time to leave paper behind. He describes a labor-intensive process, a time-consuming process: “So paper, we’re getting invoices and typing them into the system. And when receiving goods at the factory they were having to type that data into the system.” And with all that manual data entry comes a higher chance of human error, with the possible extra cost of doing the job a second time.

First step

So Dulux took the first step beyond paper, implementing an Electronic Data Interchange system. As EDIBasics.com describes: “Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners. EDI Basics says the benefits include “reduced cost, increased processing speed, reduced errors, and improved relationships with business partners.” Griffith explains Dulux started with an EDI system because that’s what was available. “And that achieved efficiencies,” he says. “Once it’s up and running it’s very simple and cheap to run.”

Big investment, limited return

But that isn’t the whole story. Griffith explains, “The trouble you have is that it’s a lot of investment up-front to get it to work. And you need IT resources from your own side and the supply side in order to make it happen. So it’s really only practical for significant relationships. We had 14 suppliers who were willing and able to go down an EDI journey with us, so you’re looking at about a third of our total spend. Everybody else, it just wasn’t practical.” The need was there for a system that offered the benefits of EDI and then some, without the high up-front commitment in IT resources.

Looking to the cloud

Their quest led Dulux to the cloud, because companies can get the power of a cloud solution without a big investment in their own infrastructure and software – that all belongs to the solution provider. In this case, Dulux chose a collaborative supply chain module, which is focused on automating purchasing for raw materials, packaging and third-party manufacture. Griffith says, “We have an opportunity to get all of those suppliers onto a paperless processing system without the headache of going through an EDI implementation.”

The boss is happy

Was taking another step beyond paper the right thing to do? Griffith says that with EDI it took Dulux two and a half years to get 14 suppliers connected, and, with the module, they connected 60 suppliers in less than six months. He puts it this way: “So my boss is a pretty high-level guy. He would know about it if there were problems. But the fact is that there aren’t, he’s not hearing problems from people on the supply side or at the factories. He’s happy.”

Interested in why DuluxGroup wanted paperless procurement and what it’s doing for the company? Click here for more.

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Rick Price

About Rick Price

Rick Price is an Emmy Award-winning journalist who now works at SAP, where he tells stories of customers’ digital transformation.

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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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.